California Water Service Group (CWT) 2022 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the California Water Service Group Q4 and Year-End 2022 Earnings Call. I would now like to turn the call over to Tom Scanlon, Corporate Controller.

女士們，先生們，感謝你們的支持，歡迎來到加州水務集團第四季度和 2022 年年終財報電話會議。我現在想把電話轉給公司財務總監 Tom Scanlon。

Welcome, everyone, to the 2022 Year-end Fourth Quarter Earnings Results Call for California Water Service Group. With me today is Martin Kropelnicki, our President and CEO; Thomas Smegal, our Vice President and Chief Financial Officer; and Greg Milleman, our Vice President of Rates and Regulatory Affairs. Replay dial-in information for this call can be found in our year-end earnings release, which was issued earlier today. The replay will be available until May 1st, 2023. As a reminder, before we begin the company has a slide deck to accompany the earnings call this quarter. The slide deck was furnished with an 8-K yesterday afternoon and is also available at the company's website at www.calwater.com.

歡迎大家參加加州水務集團 2022 年底第四季度財報電話會議。今天和我在一起的是我們的總裁兼首席執行官 Martin Kropelnicki；我們的副總裁兼首席財務官 Thomas Smegal；以及我們的利率和監管事務副總裁 Greg Milleman。可以在我們今天早些時候發布的年終收益報告中找到有關此電話的重播撥入信息。重播將持續到 2023 年 5 月 1 日。提醒一下，在我們開始之前，公司有一個幻燈片來配合本季度的財報電話會議。幻燈片平台昨天下午配備了 8-K，也可以在公司網站 www.calwater.com 上找到。

Before looking at this year's results, we'd like to take a few minutes to cover forward-looking statements. During the course of the call, the company may make certain forward-looking statements. Because these statements deal with future events, they are subject to various risks and uncertainties, and actual results may differ materially from the company's current expectations. Because of this, the company strongly advises all current shareholders as well as interested parties to carefully read and understand the company's disclosures on risks and uncertainties found in our Form 10-K, Form 10-Q, press releases and other reports filed from time to time with the Securities and Exchange Commission.

在查看今年的結果之前，我們想花幾分鐘時間介紹一下前瞻性陳述。在通話過程中，公司可能會做出某些前瞻性陳述。由於這些陳述涉及未來事件，因此受到各種風險和不確定性的影響，實際結果可能與公司當前的預期存在重大差異。因此，公司強烈建議所有現有股東和利益相關方仔細閱讀和理解公司在我們的 10-K 表格、10-Q 表格、新聞稿和其他不時提交的報告中對風險和不確定性的披露。與證券交易委員會的時間。

I want to start by pointing out Note 16 in the Form 10-K the company filed yesterday. During the fourth quarter of 2022, the company identified an immaterial error for regulatory liability and corresponding decreases to operating revenue and deferred income taxes that were not recorded in 2019. This is associated with customer refunds. The error does not impact customer billings or cash refunded to customers. The company corrected the error in the financial statements through a restratement of opening retained earnings balance to the year ended December 31st, 2020. For more details, please see the filed 10-K. I'm going to pass it over to Tom Smegal.

我想首先指出公司昨天提交的 10-K 表格中的註釋 16。在 2022 年第四季度，公司發現了監管責任的非重大錯誤以及 2019 年未記錄的營業收入和遞延所得稅的相應減少。這與客戶退款有關。該錯誤不會影響客戶賬單或退還給客戶的現金。公司通過重述截至 2020 年 12 月 31 日止年度的期初留存收益餘額更正了財務報表中的錯誤。有關詳細信息，請參閱提交的 10-K。我要把它交給 Tom Smegal。

I'm going to walk through as I usually do, the results of our full year and our fourth quarter, and I'm going to start on Page 5 of the slide deck, which is the table of our financial results. And starting at the bottom of that table, our EPS for the year went from $1.96 in 2021 to $1.77 in 2022, a decrease of $0.19. Our net income attributable to California Water Service Group declined by $5.1 million or 5.1%. The capital investments I do want to highlight, we'll be talking about that a little bit on the call today, increased $34.6 million to a new record of $327.8 million of CapEx for the year.

我將像往常一樣介紹我們全年和第四季度的結果，我將從幻燈片的第 5 頁開始，這是我們的財務結果表。從該表的底部開始，我們當年的每股收益從 2021 年的 1.96 美元下降到 2022 年的 1.77 美元，減少了 0.19 美元。我們歸屬於加州水務集團的淨收入下降了 510 萬美元或 5.1%。我確實想強調的資本投資，我們將在今天的電話會議上稍微討論一下，今年的資本支出增加了 3460 萬美元，創下了 3.278 億美元的新紀錄。

To try to describe the full year financial results on the next page, remember that the big impact to the year that we've had is an $11 million negative unrealized change in the valuation of our nonqualified retirement plan assets. That was the big impact for the year. Obviously, it's also the third year of the California General Rate Case Cycle. And typically, in that third year, we see that rate increases don't keep up with the operating expense increases, and that was certainly the case here in 2022.

要在下一頁描述全年財務結果，請記住，對我們這一年的重大影響是我們不合格退休計劃資產估值的 1100 萬美元未實現的負面變化。這是當年的重大影響。顯然，這也是加州綜合利率案例週期的第三年。通常，在第三年，我們會看到利率的增長跟不上運營費用的增長，而 2022 年的情況確實如此。

I want to jump then to the next slide and talk about the fourth quarter on Slide 7. In the fourth quarter, we did see, and I know we talked in the first three quarters of the year about our unbilled revenue. We did see that unbilled revenue bounce right back up to where we had expected it to be as we talked about.

然後我想跳到下一張幻燈片，談談幻燈片 7 上的第四季度。在第四季度，我們確實看到了，而且我知道我們在今年的前三個季度討論了我們的未開票收入。我們確實看到未入賬收入反彈到我們所談論的預期水平。

And the quarter was much better than the fourth quarter of 2021. Our EPS for the quarter was $0.35 per share as compared to $0.07 per share in 2021. And the net income for the quarter in '22 was $19.6 million. That's an increase of $16.1 million. As I said and flipping to Slide 8, the primary driver there was the reversal of the unbilled revenue. You saw that we had an increase of 11.1. And overall for the year, we had an increase of about $1.7 million in unbilled revenue. That's fairly typical for us to have anywhere from positive $1 million or $2 million to negative $1 million or $2 million that used wash us out with that factor.

該季度比 2021 年第四季度好得多。我們本季度的每股收益為 0.35 美元，而 2021 年為每股 0.07 美元。22 年該季度的淨收入為 1960 萬美元。這增加了 1610 萬美元。正如我所說並翻到幻燈片 8，那裡的主要驅動因素是未開票收入的逆轉。你看到我們增加了 11.1。全年，我們的未開票收入增加了約 170 萬美元。這對我們來說是相當典型的，從正的 100 萬或 200 萬美元到負的 100 萬或 200 萬美元，這些都用這個因素把我們淘汰了。

We did, again, for the quarter, see a increased operating expenses for a variety of reasons, and we continue to see a little bit of general rate increase associated with that GRC step increase that we got at the first of the year in 2022. The bridges describe those items that I just talked about, and I'll leave those for you to look at, again, the big factors on the year is the market-to-market, the big factor on the quarter is the increase in the unbilled getting that back to normal.

我們再次看到，由於各種原因，本季度的運營費用有所增加，我們繼續看到與我們在 2022 年年初獲得的 GRC 步進增長相關的總體利率略有上升。橋樑描述了我剛才談到的那些項目，我會把那些留給你看，再一次，今年的重要因素是市場對市場的影響，季度的重要因素是增加unbilled 讓它恢復正常。

We have a lot of regulatory matters to report on. We have Greg Milliman here with us, and I'm going to start with Greg talking about our California cost of capital case.

我們有很多監管事項要報告。格雷格·米利曼 (Greg Milliman) 和我們在一起，我將從格雷格開始談論我們的加州資本成本案例。

On Page 11, we discuss the cost of California cost of capital. There's really not much to report since the last quarterly report. There is no new news from the commission. As of today, the following commission process, the earliest that we could see a final decision would be April of '23. And I'll turn it back to you, Tom Smegal.

在第 11 頁，我們討論了加州的資本成本。自上次季度報告以來，確實沒有太多要報告的。委員會沒有新消息。截至今天，以下委託流程，我們最早可以看到最終決定將是 23 年 4 月。我會把它還給你，Tom Smegal。

And because of the delay in issuing a decision, the company can't determine whether the commission is factoring in changes in market conditions or other reasons for reviewing the cost of capital for this long. We really can't say where the cases in terms of the timing, as Greg mentioned, as well as the outcome. And as we've been talking about on the third bullet there on Slide 11, given the success of our financing program, we know that we had lower cost of debt that was in the application.

並且由於發布決定的延遲，公司無法確定委員會是否考慮了市場狀況的變化或其他原因來審查這麼長時間的資金成本。正如 Greg 提到的那樣，我們真的無法說出案件在時間和結果方面的位置。正如我們在幻燈片 11 的第三個項目符號中所討論的那樣，鑑於我們的融資計劃取得了成功，我們知道我們在申請中的債務成本較低。

And we don't yet know whether the commission would apply retroactivity to the eventual cost of capital decision. We've seen and we've talked about a few things that lead us to conclude that, that is not probable given the facts and circumstances that we have right now. But if the commission were to go back and go back to the beginning of '22 we would expect that the reduction in cost of debt alone would be an $11 million annual negative impact for the company, but that would be reported in any current period when we do see a final decision from the commission if they go retroactive. Greg, I turn it back to you for the rate case update.

而且我們還不知道委員會是否會對最終的資本成本決策應用追溯力。我們已經看到並討論了一些事情，這些事情使我們得出結論，鑑於我們目前的事實和情況，這是不可能的。但如果委員會要回到 22 年初，我們預計僅債務成本的減少就會對公司產生 1100 萬美元的年度負面影響，但這將在任何當前期間報告如果它們具有追溯力，我們確實會看到委員會的最終決定。格雷格，我將它轉回給你以獲取最新的費率案例。

On Slide 12 is the California General Rate Case update. As of today, the decision is two months late. There is no new news on when we will see a proposed decision. However, since the decision is late, we have opened an interim rates memo accounts that will allow us to track the difference between the current rates and the final rates that come out of the decision, which is effective of January 1st, 2023.

幻燈片 12 是加州一般費率案例更新。截至今天，該決定已經晚了兩個月。關於我們何時會看到擬議的決定，目前還沒有新消息。然而，由於決定晚了，我們已經開設了一個臨時利率備忘賬戶，這將使我們能夠跟踪當前利率與決定得出的最終利率之間的差異，該決定將於 2023 年 1 月 1 日生效。

Additionally, we received approval to increase rates in most of our districts by 4% that we will commence starting April 15th, 2023.

此外，我們獲准將大部分地區的費率提高 4%，我們將從 2023 年 4 月 15 日開始。

Moving on to Slide 13 where the focus on decoupling. As a reminder that at the start of this year, we are no longer decoupled. We will be back to pre-2008 conditions.

轉到幻燈片 13，重點放在去耦上。提醒一下，在今年年初，我們不再脫鉤。我們將回到 2008 年之前的狀態。

Because there is no decoupling. There'll be annual variability in the sale and production, the water sales revenues as well as the production costs, but we knew that was coming.

因為沒有解耦。銷售和生產、水銷售收入以及生產成本每年都會發生變化，但我們知道這種情況即將到來。

To mitigate this in our 2021 rate case, we addressed it primarily by shipping more recovery at fixed cost to fix service charge of more of our revenue to fixed service charge and then also use more realistic water mix from various sources to have a more realistic water production costs. And I'll turn it to you now, Martin.

為了在我們的 2021 年費率案例中緩解這一問題，我們主要通過以固定成本運輸更多回收來解決這個問題，以將我們更多收入的服務費固定為固定服務費，然後還使用來自各種來源的更真實的水混合以獲得更真實的水生產成本。馬丁，我現在就交給你了。

As we talked about in the last conference call, late in the third quarter. Governor Newsom did sign in California on September 30th, a new law asking the CPUC to reconsider decoupling, which was a big win for the water industry, the industrial water industry in the state of California. Shortly after that law was signed by the Governor, the California Public Utilities Commission filed a motion to dismiss our California Supreme Court case base that it was down all on the way based on the new law signed by the Governor.

正如我們在上次電話會議中談到的那樣，在第三季度末。 9月30日，州長紐森確實在加州簽署了一項新法律，要求CPUC重新考慮脫鉤，這對水行業來說是一個巨大的勝利，加州的工業水行業。州長簽署該法律後不久，加利福尼亞州公用事業委員會提出動議，駁回我們加州最高法院的案件基礎，即根據州長簽署的新法律，該案件已全部取消。

We disagree with that notion, and I'm very happy to report that the court dismissed the PUC's motion to dismiss. And so we are moving forward with our case with the California Supreme Court here during the first quarter of 2023.

我們不同意這個觀點，我很高興地報告法院駁回了 PUC 的駁回動議。因此，我們將在 2023 年第一季度在加州最高法院審理我們的案件。

The case has been fully briefed, and we anticipate having oral arguments infront of the State Supreme Court, no later in the midyear of this year. That court case is moving forward. I think all indications are going in the right direction, and we look forward to having our discussion with the courts here sometime over the next quarter or so. Greg, do you want to go through the California tracker status for 2023 of the delayed rate case?

該案已得到全面介紹，我們預計將在今年年中晚些時候在州最高法院進行口頭辯論。該法庭案件正在向前推進。我認為所有跡像都在朝著正確的方向發展，我們期待在下個季度左右的某個時候在這裡與法院進行討論。格雷格，你想查看 2023 年延遲費率案例的加州追踪器狀態嗎？

On Slide 14 you will see various mechanisms or trackers that the commission allows to track lost revenues and expenses. These will all become effective January 2023. All but two of them cannot be calculated until the 2021 rate case is finalized, and the component parts and pieces are set by the final commission decision.

在幻燈片 14 上，您將看到委員會允許跟踪損失的收入和支出的各種機製或跟踪器。這些都將在 2023 年 1 月生效。在 2021 年費率案例最終確定之前，除了其中兩個之外，其他所有都無法計算，並且組成部分和部件由最終佣金決定確定。

The first two items, however, the incremental cost balancing account and the conservation balancing account, we settled with public advocates in this case on the component parts of those accounts. And so we're able to calculate those now. The other mechanisms, we'll need to get the final commission decision before we can actually calculate them.

然而，前兩項，即增量成本平衡賬戶和保護平衡賬戶，在這種情況下，我們與公眾倡導者就這些賬戶的組成部分達成和解。所以我們現在能夠計算這些。其他機制，我們需要在實際計算之前獲得最終的佣金決定。

But the mechanisms themselves are not in dispute.

但這些機製本身並沒有爭議。

I believe it goes to you now, Martin.

我相信它現在交給你了，馬丁。

I want to give everyone an update on where we are with the drought if everyone has been following the storms during the first quarter of 2023. It's been a wet and wild winter in California. Having said that, a storm really is a drop in the bucket. We had a lot of rain in the first two weeks of the year as the atmosphere River hit the West Coast all up and down the state, which was good news from a water supply perspective.

如果每個人都在關注 2023 年第一季度的暴風雨，我想向每個人通報一下我們在乾旱方面的最新進展。加州經歷了一個潮濕而狂野的冬天。話雖如此，一場風暴真的是杯水車薪。今年前兩週我們下了很多雨，因為大氣河襲擊了整個州的西海岸，從供水的角度來看，這是個好消息。

Filled up a lot of the reservoirs in Northern California. And then we had a very, very dry February up until this week where we got more snow and lignite conditions in the Sierras. I think as many of you know, groundwater levels rack very slowly to seasonal changes. And one storm really doesn't kind of change things. Snowpack is very, very healthy right now, well above 100%.

填滿了北加州的許多水庫。然後我們經歷了一個非常非常乾燥的二月，直到本週我們在 Sierras 遇到了更多的降雪和褐煤條件。我想你們很多人都知道，地下水位隨著季節變化的變化非常緩慢。一場風暴真的不會改變事情。 Snowpack 現在非常非常健康，遠高於 100%。

But the thing to really watch as we go into the spring is what happens to the snowpack during the month of April. If you remember, during April last year, when we lost the majority of our snowpack and melted quickly as the weather warmed up.

但隨著我們進入春天，真正值得關注的是 4 月份積雪發生的情況。如果你還記得，去年四月，當天氣變暖時，我們失去了大部分積雪並迅速融化。

And that's the part that's really driven by climate change. The other thing I would say is that the economics of water in California haven't changed. You still have 40-plus million people, you are on a large Ag-based state in the union and you have a very strong industrial base being the fourth largest economy in the world.

這才是真正受氣候變化驅動的部分。我要說的另一件事是，加利福尼亞州的水資源經濟學沒有改變。你仍然有 40 多萬人口，你在聯盟中以農業為主的大州，你擁有非常強大的工業基礎，是世界第四大經濟體。

People get really excited about the storms we do as well. We're happy to see the rain. But the reality is we're far from harvesting. And the thing to really look at is kind of what's the effect of climate change longer term of the state. And that's why monitoring that snowpack and how long that snowpack last for will become really, really important.

人們也對我們遇到的風暴感到非常興奮。我們很高興看到下雨。但現實是我們離收穫還很遠。真正要看的是氣候變化對國家的長期影響。這就是為什麼監控積雪和積雪持續多長時間將變得非常非常重要。

Conservation continues and our customers did a good job. Some of you may have seen we put a press release out earlier this week that our customers had nine straight months of conservation savings. Overall, for Q4 2022 was 8.2% lower than last year and 17% below adaptive. Again, that's the work of the conservation team, all the conservation messaging taking place throughout the state. Our drought expenditures for the quarter were about $500,000. They're reported in the memorandum accounts. They're expensed in the period, but we're allowed to track them.

保護工作仍在繼續，我們的客戶做得很好。你們中的一些人可能已經看到我們本週早些時候發布了一份新聞稿，稱我們的客戶連續九個月節省了能源。總體而言，2022 年第四季度比去年低 8.2%，比適應性低 17%。同樣，這是保護團隊的工作，所有保護信息都在全州進行。我們本季度的抗旱支出約為 500,000 美元。他們在備忘賬戶中報告。它們在此期間被計入費用，但我們可以跟踪它們。

Our total balance and that account is just under $2 million as of right now. All eyes are on April to see what happens with the snowpack. Hopefully, we get more rain and snow between now and then. But really, we have to see how long it lasts. And I think that the big thing that's really changed kind of over the last year has been the heightened awareness of the issues with the Colorado River. And while that doesn't have a per se direct effect on Cal Water, it does affect some of our wholesalers in Southern California where we get water from.

截至目前，我們的總餘額和該賬戶還不到 200 萬美元。所有的目光都集中在四月，看看積雪會發生什麼。希望從現在到那時我們會得到更多的雨雪。但實際上，我們必須看看它能持續多久。我認為去年真正發生變化的大事是人們對科羅拉多河問題的認識提高了。雖然這對 Cal Water 本身沒有直接影響，但它確實影響了我們在南加州的一些批發商，我們從那裡取水。

And so we will continue to monitor that. And obviously, our drug efforts work hand in hand with our wholesalers to make sure we have enough supply for Southern California. There'll be more to come on the drought as we move into spring.

因此，我們將繼續對此進行監控。顯然，我們的藥物工作與我們的批發商攜手合作，以確保我們有足夠的供應給南加州。隨著我們進入春天，乾旱還會有更多。

Moving on to Page 16. I want to talk a little bit about capital investment. As Tom said, I think the silver lining to what has been a challenging year has been the capital investment. We had a revenue record of $328 million of total capital invested which is very, very healthy, frankly, better than what we thought we would do, kudos to the procurement, engineering and operations team for getting that capital on the ground. There are many supply chain challenges during 2022 that we had to overcome to keep that capital flowing.

轉到第 16 頁。我想談談資本投資。正如湯姆所說，我認為資本投資是充滿挑戰的一年的一線希望。我們的總資本投資收入創下了 3.28 億美元的記錄，這非常非常健康，坦率地說，比我們預期的要好，感謝採購、工程和運營團隊將這些資本落實到位。 2022 年我們必須克服許多供應鏈挑戰，以保持資金流動。

Q4 capital spending increased given the good weather conditions up until the first of the year. And also, we've had more capital being invested in our subsidiary companies. We think that's a very, very good sign as our business development endeavors continue to pay off, and we add new service connections and other states. We are putting more capital in those other states and bring those service connections up to our standards.

鑑於今年年初之前的良好天氣條件，第四季度的資本支出有所增加。而且，我們有更多的資金投資於我們的子公司。我們認為這是一個非常非常好的跡象，因為我們的業務發展努力繼續獲得回報，並且我們添加了新的服務連接和其他狀態。我們正在向其他州投入更多資金，並使這些服務連接達到我們的標準。

We expect an increase in capital expenditures and non-California utilities during 2023, again, with our subsidiary companies. We expect that level of capital investment to continue to move up, albeit not as the size of California in terms of total dollars as a percent of increases the capital expenditures and the subsidiaries are growing at a very, very healthy plethora.

我們預計到 2023 年，我們的子公司將再次增加資本支出和非加州公用事業。我們預計資本投資水平將繼續上升，儘管就總美元而言，資本支出增加的百分比不如加州那麼大，而且子公司的增長速度非常非常健康。

I'll come back and talk about that, the minute we talk about some BD exercises. If you go over to Page 17 on the business development side, we have highlighted in yellow kind of what has changed since we last talked and I'll just go through the changes here quickly. Keauhou in Hawaii, which is a wastewater management system that adds 1,500 equivalent units or basically 1,500 customers to our wastewater base in Hawaii. That adds 24% of the connection base for our Hawaii operations.

當我們談論一些 BD 練習時，我會回來談論它。如果你翻到業務發展方面的第 17 頁，我們已經用黃色突出顯示了自我們上次談話以來發生的變化，我將快速瀏覽一下這裡的變化。夏威夷的 Keauhou，這是一個廢水管理系統，為我們在夏威夷的廢水基地增加了 1,500 個等效單位或基本上 1,500 個客戶。這為我們的夏威夷業務增加了 24% 的連接基礎。

Up in the Pacific Northwest in Washington, we added Stroh’s Water and Bethel Green Acres . They were approved by the WTC in January of this year. That will add 3% to the customer base for our connections in the state of Washington. And if you go down to the very bottom of the page, the white section in New Mexico, we announced in January 2023, a definitive agreement, and that is being filed with the New Mexico Public Commission. That will add 5,000 connections or 58% to our connection base in New Mexico.

在太平洋西北部的華盛頓，我們增加了 Stroh's Water 和 Bethel Green Acres。它們於今年 1 月獲得了 WTC 的批准。這將為我們在華盛頓州的聯繫增加 3% 的客戶群。如果你走到頁面的最底部，新墨西哥州的白色部分，我們在 2023 年 1 月宣布了一項最終協議，並且正在向新墨西哥州公共委員會提交。這將為我們在新墨西哥州的連接基地增加 5,000 個連接或 58%。

We continue to have good luck on the business development side in growing our business outside the state of California, and we'll look forward to updating you on these business development endeavors as we move forward in 2023.

在業務發展方面，我們在加利福尼亞州以外的地區發展業務方面繼續保持好運，我們期待在 2023 年向前邁進時向您介紹這些業務發展工作的最新情況。

I'll just give a quick update on our capital investment and rate base slides, on Slide 18. We've shown the capital investment for 2022. We continue to achieve CapEx that is 3x our depreciation rate.

我將在幻燈片 18 上快速更新我們的資本投資和利率基礎幻燈片。我們已經展示了 2022 年的資本投資。我們繼續實現資本支出，即折舊率的 3 倍。

That's now a total of seven years where we've been doing that case, CapEx. And you'll see that remember, 2023 and 2024 are dependent upon the CPUC decision and direction that we get from the CPUC in California with respect to the 2021 general rate case.

現在我們已經做了 7 年的時間，資本支出。你會看到，請記住，2023 年和 2024 年取決於 CPUC 的決定和我們從加利福尼亞 CPUC 獲得的關於 2021 年一般費率案例的方向。

There have been no changes to Slide 19. Again, that's our estimated regulated rate base, particularly as it relates to California, we're awaiting a ruling as we talked about, that would determine what the regulated rate base is in 2023 as well as 24 and 25.

幻燈片 19 沒有變化。同樣，這是我們估計的受監管利率基數，特別是與加利福尼亞州相關的情況，我們正在等待我們談到的裁決，這將決定 2023 年的受監管利率基數以及24 和 25。

Martin, I'll turn this back to you.

馬丁，我會把這個還給你。

I'm on Page 20 for the wrap-up and what's going to happen during 2023 looking forward. First and foremost, as we talked about on this call, not a lot of new news on the cost of capital in the general rate case, we are waiting as are most of the water utilities in the state of California that are regulated by the PUC.

我在第 20 頁進行總結，展望 2023 年將會發生什麼。首先，正如我們在本次電話會議上談到的那樣，在一般費率案例中沒有太多關於資本成本的新消息，我們正在等待加利福尼亞州大多數受 PUC 監管的自來水公司.

That will create some short-term regulatory uncertainty as we wait for the two key decisions. We continue to work with the commission, and we'll do everything we can to get those decisions out as quickly as possible. But ultimately, the ball is in their court.

在我們等待兩個關鍵決定的過程中，這將造成一些短期的監管不確定性。我們將繼續與委員會合作，我們將盡我們所能盡快做出這些決定。但最終，球在他們的球場上。

Likewise, as we go into the end of the first quarter, it means the financial reporting is going to be a little bit more challenging because we are officially decoupled from decoupling, but you don't have a rate order that has all your mechanisms laid out yet, as Greg mentioned.

同樣，當我們進入第一季度末時，這意味著財務報告將更具挑戰性，因為我們正式與脫鉤脫鉤，但你沒有一個包含所有機制的利率指令正如格雷格提到的那樣，還沒有出來。

Like we've done in previous year, GRCs, where we have anticipated mechanisms and trackers that we think will be using when ultimately approved, we will provide as much information on kind of both sides of the fence, so to speak. You can see what the numbers are kind of preimposed based on what we think those trackers are going to be.

就像我們在去年所做的那樣，GRCs，我們有預期的機制和跟踪器，我們認為最終批准後會使用這些機制和跟踪器，可以這麼說，我們將提供盡可能多的關於圍欄兩側的信息。你可以看到這些數字是根據我們認為這些追踪器將會是什麼而預先設定的。

If we can just ask everyone to bear with us until we get through the two decisions. Once the decisions, that will clear a lot of it up, but it will be a little choppy, making sense of all this in the interim, while we are no longer decoupled in waiting for a GRC decision that will ultimately approve all of the trackers as well as cap structure, cost of capital, et cetera.

如果我們可以請大家耐心等待，直到我們通過這兩個決定。一旦做出決定，這將清除很多問題，但它會有點不穩定，在此期間理解所有這些，同時我們不再等待最終批准所有跟踪器的 GRC 決定脫鉤以及上限結構、資本成本等。

We'll stay focused on regulation. Clearly, we're going to continue making progress in business development. The business development team has been very busy. We have a very full pipeline. We'll also continue to stay focused on risk management and paying attention to our supply chain issues throughout climate change issues that affect the company long term.

我們將繼續專注於監管。顯然，我們將繼續在業務發展方面取得進展。業務開發團隊一直很忙。我們有一個非常完整的管道。我們還將繼續專注於風險管理，並在長期影響公司的氣候變化問題中關注我們的供應鏈問題。

We will be publishing our third ESG report here over the next few weeks. We look forward to sharing that everyone on the progress we have made on our battles with climate change and what we're doing to ensure sustainability for our customers.

我們將在接下來的幾週內在這裡發布我們的第三份 ESG 報告。我們期待與大家分享我們在應對氣候變化方面取得的進展，以及我們為確保客戶的可持續性所做的工作。

Lastly, I want to deviate a little bit and some of you might be thinking who in the heck is this Tom Scanlon guy and what the heck happened to Dave Healey. Dave Healey retired as our Corporate Controller, some of you probably saw the 8-K last year. It was a planned retirement. We're lucky to have Tom Scanlon. Tom has a undergraduate degree from finance from Marquette University in Wisconsin, and MBA from the University of Illinois. He is a CPA and has a strong background in financial reporting and construction management.

最後，我想稍微偏離一下，你們中的一些人可能會想這個 Tom Scanlon 到底是誰，以及 Dave Healey 到底發生了什麼事。 Dave Healey 從我們的公司財務總監退休，你們中的一些人可能在去年看到了 8-K。這是一個有計劃的退休。我們很幸運有 Tom Scanlon。湯姆擁有威斯康星州馬凱特大學金融學學士學位和伊利諾伊大學工商管理碩士學位。他是一名註冊會計師，在財務報告和施工管理方面擁有深厚的背景。

Tom has been our Director of Financial Reporting since 2010. He has been part of our succession planning process here at Cal Water, certainly very, very well qualified. And frankly, with strong background in construction accounting, he was a big add for us when we added him in 2010 since construction and getting capital is a big part of what we do. Tom, welcome.

Tom 自 2010 年以來一直擔任我們的財務報告總監。他一直是我們在 Cal Water 的繼任計劃過程的一部分，當然非常非常合格。坦率地說，憑藉在建築會計方面的深厚背景，當我們在 2010 年加入他時，他對我們來說是一個很大的補充，因為建築和獲得資金是我們工作的重要組成部分。湯姆，歡迎。

I also want to note that Justin Skarb, was promoted to Vice President of Community and Governmental Affairs; Justin joined Cal Water in 2009. He was promoted to Director in 2017 and became an officer of the company effective January 1st with Tom Scanlon. Justin has his BS in political science from Arizona State University, a masters in communication from Cal State Hayward and he's currently finished up his Juris Doctorate, which he expects to have in 2024.

我還想指出，Justin Skarb 已晉升為社區和政府事務副總裁； Justin 於 2009 年加入 Cal Water。他於 2017 年晉升為董事，並於 1 月 1 日與 Tom Scanlon 一起成為公司的高級職員。賈斯汀在亞利桑那州立大學獲得政治學學士學位，在加州州立大學海沃德分校獲得傳播學碩士學位，目前他已完成法學博士學位，預計將於 2024 年獲得。

Likewise, you may have saw a press release from a couple of weeks ago, announcing Shawn Bunting has joined the company as our Vice President and General Counsel. Shawn will be replacing Lynne McGhee who will officially retire at the end of this month after 19 years of service with the company. Shawn has been with American Water Works for 15 years, serving in several various senior leadership roles. Shawn has a Bachelor of Arts in Criminal Justice from Gettysburg College and a Juris Doctor from the University of Pittsburgh Law School. He's also a U.S. Marine Corp vet.

同樣，您可能已經看到幾週前的新聞稿，宣布 Shawn Bunting 已加入公司，擔任我們的副總裁兼總法律顧問。 Shawn 將接替為公司服務 19 年後於本月底正式退休的 Lynne McGhee。 Shawn 在 American Water Works 工作了 15 年，擔任過多個高級領導職務。 Shawn 擁有葛底斯堡學院的刑事司法文學學士學位和匹茲堡大學法學院的法學博士學位。他還是美國海軍陸戰隊的獸醫。

Officially, welcome to Tom, Justin and Shawn. And then lastly, I want to close out by just thanking Lynne and Dave. We've been very blessed at Cal Water to have a smart, thoughtful and creative leadership team. And although leadership changes are never easy because we all get used to working together, and this has just been a marvelous team to have together for the last number of years without having any changes. We also understand and we encourage people to go retire and enjoy life. One of the great things that working on a company like Cal Water is we do have excellent benefits and excellent retirement program.

正式地，歡迎來到湯姆、賈斯汀和肖恩。最後，我想通過感謝 Lynne 和 Dave 來結束。我們很幸運在 Cal Water 擁有一支聰明、深思熟慮和富有創造力的領導團隊。儘管領導層的變動絕非易事，因為我們都習慣了一起工作，但在過去的幾年裡，這一直是一個了不起的團隊，沒有任何變化。我們也理解並鼓勵人們退休並享受生活。在像 Cal Water 這樣的公司工作的一大好處是我們確實擁有極好的福利和出色的退休計劃。

As much as change is painful to see our good friends and colleagues go, it's a good thing because it gives people room to move up and succession planning is a core competency of management of the Board here at Cal Water that we take very, very seriously.

儘管看到我們的好朋友和同事離開是件痛苦的事情，但這是一件好事，因為它給了人們晉升的空間，繼任計劃是我們非常非常重視的 Cal Water 董事會管理的核心能力.

With Dave and Lynne, we just want to say thank you for all you've done for us over the years. You've been a major part of our team. You will be dearly, dearly missed, and we wish you all the best in your retirement.

對於 Dave 和 Lynne，我們只想對你們多年來為我們所做的一切表示感謝。你一直是我們團隊的重要組成部分。我們會非常非常想念您，我們祝愿您退休後一切順利。

With that finally, we want to open it up to questions, please.

最後，我們想公開提問。

The floor is now open for your questions.

現在可以提問了。

(Operator Instructions) We'll now take a moment to render our roster. We have a question from the line of Agnieszka Storozynski from Seaport.

（操作員說明）我們現在花點時間來渲染我們的名冊。 Seaport 的 Agnieszka Storozynski 提出了一個問題。

I wanted to start with the fact that the decoupling mechanism went away, but you are still under the conservation mandate. Again, I'm just trying to understand where the exposure is, right? Because under the conservation mandate, the sales volume or changes in sales forecast is not something that should impact your earnings.

我想從脫鉤機制消失的事實開始，但你仍然處於保護授權之下。再一次，我只是想了解曝光在哪裡，對嗎？因為根據保護規定，銷售量或銷售預測的變化不會影響您的收入。

Again, I'm just trying to understand the, where is the sensitivity here given the conservation mandate is still in place?

同樣，我只是想了解，考慮到保護授權仍然存在，這裡的敏感性在哪裡？

And Greg, if you could fill in when I get to the end of my knowledge here, we do have a filed account, one of the accounts that Greg mentioned, it's called the "Dreamer," which is the drought loss essentially lost revenue memorandum account. And that is something for the nondecoupled companies like in SJW or some of the other smaller companies. That's been in place with them for some years. It does allow us to track and record lost sales during a declared drought. And so we are in a declared drought right now. Governor Newsom declared the drought a couple of years ago, and we've mentioned that we're tracking the costs associated with that.

格雷格，如果你能在我的知識結束時填寫，我們確實有一個歸檔賬戶，格雷格提到的賬戶之一，它被稱為“夢想家”，這是乾旱損失基本上損失的收入備忘錄帳戶。這對於像 SJW 或其他一些較小的公司這樣的非解耦公司來說是件好事。他們多年來一直這樣做。它確實使我們能夠在宣布的干旱期間跟踪和記錄銷售損失。因此，我們現在處於宣布的干旱之中。州長 Newsom 幾年前宣布了乾旱，我們已經提到我們正在追踪與此相關的成本。

If you're not decoupled, you do get to track lost revenue and potentially recover that later. There's a couple of things about that. One is that it's subject to a little bit of an earnings haircut, I think, a 20 basis point reduction in ROE associated with that.

如果您沒有分離，您確實可以跟踪損失的收入並可能在以後恢復。這有幾件事。一個是它會受到一些收益削減的影響，我認為，與此相關的 ROE 減少 20 個基點。

And then the thing that is unknown at this time because we've had such a wet winter to date is whether or when the Governor might declare that the drought is over. Now there's obviously, as Martin mentioned, major water supply challenges in California, particularly in Southern California at the moment with the Colorado River supply. We're not sure if and when the Governor might declare the drought over.

然後，由於迄今為止我們經歷了一個如此潮濕的冬天，目前未知的是州長是否或何時可能宣布干旱結束。正如馬丁所提到的，現在顯然加利福尼亞面臨著重大的供水挑戰，特別是目前在科羅拉多河供水的南加州。我們不確定州長是否以及何時會宣布干旱結束。

But if and when that happens, that account would no longer track the lost revenue. Greg, do you have anything to add to that?

但如果發生這種情況，該賬戶將不再追踪損失的收入。格雷格，你有什麼要補充的嗎？

Previously, you looked at the fourth quarter slides from previous years. You guys had the slide where you showed us the, I would call it, a simplified math for your earnings. And I understand that this one this year, it's difficult given that you're waiting for at least two major decisions.

以前，您查看了前幾年的第四季度幻燈片。你們有一張幻燈片，你向我們展示了，我稱之為，你收入的簡化數學。我知道今年的這一決定很困難，因為您至少要等待兩個重大決定。

But can you actually at least give us a sense, for example, what is the non-California rate base? How should we think about those other drivers as you typically have? Well, I know that a lot is unknown, but at least what would help us estimate the earnings power for this year?

但是你能不能至少給我們一個感覺，例如，非加州利率基數是多少？我們應該如何考慮您通常擁有的其他驅動程序？好吧，我知道有很多未知數，但至少有什麼可以幫助我們估計今年的盈利能力？

We don't report in segments. And so from our filed documents, it's a little bit difficult to get the non-California rate base. We've described the company as being somewhere between 90% and 92% of our revenue and our businesses in California. And so that would tend to be about true with rate base as well, but I don't have the numbers in front of me, and I don't know that we describe them publicly.

我們不分段報告。因此，從我們提交的文件中，要獲得非加州利率基礎有點困難。我們將該公司描述為占我們在加利福尼亞州的收入和業務的 90% 至 92%。因此，對於利率基礎來說，這也往往是正確的，但我手邊沒有這些數字，我不知道我們是否公開描述過它們。

There is obviously calculations that are embedded in that number on Slide 19, which is the rate base. And I want to say that, that follows that pattern as well, where about 90% of that rate base that's being shown there is projected rate base for 23, four and five is the California rate base.

顯然，幻燈片 19 上的那個數字中嵌入了計算，這是費率基礎。我想說的是，這也遵循這種模式，其中顯示的 23、4 和 5 的預計利率基數中約有 90% 是加州利率基數。

But I can't get into much more detail than that. There are a lot of systems and unfortunately, the regulations are different in all states. And so in some cases, we have projected rate base. In some cases, we have reported rate case, it gets a little complicated.

但我不能比這更詳細了。有很多系統，不幸的是，各個州的規定都不同。因此，在某些情況下，我們有預計的利率基礎。在某些情況下，我們報告了費率案例，它變得有點複雜。

California is fairly obvious because it will be written in the decision, what the rate base in California is.

加州是相當明顯的，因為它將寫在決定中，加州的利率基礎是什麼。

You've been very active with acquisitions of assets. How are you financing those acquisitions? That's one. And number two is, what was the actual equity ratio at the California utility at the end of 2022?

您一直非常積極地收購資產。您如何為這些收購融資？那是一個。第二，到 2022 年底，加州公用事業公司的實際股本比率是多少？

The answer to the first question is that most of these acquisitions, if you look back to the acquisition, Slide 17, are relatively small. We've been funding those with the corporate cash that's obtained through retained earnings and the ATM equity program as well as the lines of credit that we have.

第一個問題的答案是，如果您回顧幻燈片 17 中的收購，這些收購中的大多數都相對較小。我們一直在用通過留存收益和 ATM 股權計劃以及我們擁有的信貸額度獲得的公司現金為這些人提供資金。

The biggest acquisition that is on the list currently is probably the Lake Section at the very bottom, and we just announced that acquisition.

目前名單上最大的收購可能是最底部的 Lake Section，我們剛剛宣布了收購。

We actually haven't paid for it yet. And so that will come out of those sources later on. As far as the equity layer at California Water Service Company, Tom across the table with me with the calculator. We don't have that information published. We'll have to calculate that and trying to get that out in another way. We don't have that information right now.

我們實際上還沒有付錢。因此，稍後會從這些來源中得出。至於加州供水服務公司的股權層，湯姆和我坐在桌子對面用計算器。我們沒有發布該信息。我們將不得不對其進行計算並嘗試以另一種方式將其解決。我們現在沒有那個信息。

But if I were to say that it's around 50%, would that be?

但如果我說它在 50% 左右，那是什麼？

I think yes, I think as of the third quarter, that was trending upward. And as you know, one of the issues in the cost of capital case was whether the capital structure was appropriate and it certainly was getting close to 50% as of the third quarter, I remember calculating, but I don't have that number unfortunately for year-end.

我認為是的，我認為截至第三季度，它呈上升趨勢。正如你所知，資本成本案例中的一個問題是資本結構是否合適，截至第三季度它肯定接近 50%，我記得計算過，但不幸的是我沒有那個數字年終。

Our next question comes from the line of Jonathan Reeder from Wells Fargo.

我們的下一個問題來自富國銀行的 Jonathan Reeder。

I was hoping you could elaborate a little bit on the drivers of the substantial 35% increase and other operating expense. I think it was about $30 million higher than '21. Are there items in there that are not likely to recur? Or is that a good base to assume '23 grows off of?

我希望您能詳細說明大幅增加 35% 的驅動因素和其他運營費用。我認為這比 21 年高出約 3000 萬美元。那裡有不太可能重複出現的項目嗎？或者這是假設'23 成長的良好基礎？

The increase in other operation expense, a good portion of that relates to a requirement of deferral based on accounting guidance that we look at the future and estimate the collection of receivables and anything that's over 24 months, we have to defer the revenue and cost.

其他運營費用的增加，其中很大一部分與基於會計準則的延期要求有關，即我們著眼於未來並估計應收賬款的收取以及超過 24 個月的任何事情，我們必須推遲收入和成本。

Each quarter, we reforecast that out, reverse it and rebook it. And because of our anticipated collections, we've reversed out revenue and cost, and that's the largest adjustment in the other operations expense.

每個季度，我們都會重新預測、反轉並重新預訂。由於我們預期的收款，我們已經扭轉了收入和成本，這是對其他運營費用的最大調整。

Also, we record our conservation expense in that category. And since we're at the end of our GRC, we have a conservation balancing account in which there's a number of programs that were accelerated during the final year of our rate case. And again, note that the conservation expenses are covered by a balancing account. We also had an increase in bad debt expense or the reserve that we take for uncollectible accounts. Midyear in 2022, we were allowed to begin turning off service for nonpayment.

此外，我們在該類別中記錄我們的保護費用。由於我們處於 GRC 的末尾，我們有一個保護平衡賬戶，其中有許多計劃在我們的費率案例的最後一年得到加速。再次注意，保護費用由平衡賬戶支付。我們還增加了壞賬費用或我們為無法收回的賬戶準備的準備金。 2022 年年中，我們被允許開始關閉未付款服務。

But we have a number of accounts that are under review, and it's going to take some time to turn off a non-payment. And so those were the primary drivers of the increase in the other operating expense.

但是我們有很多賬戶正在審核中，關閉未付款項需要一些時間。因此，這些是其他運營費用增加的主要驅動因素。

It sounds like a lot of that increase you have associated kind of revenue impact as well or revenue increase?

聽起來很多增長都與收入影響或收入增長有關？

That's right,

這是正確的，

And then I don't know if this is for Martin, but why did the Board only go at a 4% dividend increase in '23?

然後我不知道這是否適合馬丁，但為什麼董事會在 23 年只增加了 4% 的股息？

I know it had been increasing it more like an 8% pace the last three years and the payout ratio on, at least what should be a normalized EPS power. I know 23 is going to be a little messy, but it's still pretty low, maybe around like 50%. Why did the dividend kind of not grow as fast as it has been historically?

我知道它在過去三年裡一直在以 8% 的速度增長，派息率至少應該是正常化的 EPS 功率。我知道 23 會有點亂，但它仍然很低，可能在 50% 左右。為什麼股息沒有像歷史上那樣快速增長？

Obviously, we keep our payout ratio pegged within a certain band. Clearly, it's just uncertainty right now, right? We're pinning the rate case, we're pinning the cap structure. And we think one of the most important things we do as a company besides serving customers is getting the capital on the ground, right?

顯然，我們將派息率保持在一定範圍內。顯然，現在只是不確定性，對嗎？我們正在確定利率情況，我們正在確定上限結構。我們認為，作為一家公司，除了服務客戶之外，我們所做的最重要的事情之一就是讓資金落地，對吧？

That's the benefit for stockholders as we're growing that rate base. And so given the uncertainty that we've seen at the commission, we thought it was more prudent to have a lower dividend increase this year and keep ploughing that capital back into the ground.

這對股東來說是有好處的，因為我們正在增加利率基礎。因此，鑑於我們在委員會看到的不確定性，我們認為今年降低股息增長並繼續將這些資本投入到地下更為謹慎。

And obviously, as things change, we'll reevaluate that. We've increased the dividend every year for the past 70-some-odd years, I don't see us kind of changing directions from something like that. But we just felt it was time to be a little bit conservative until we get through these two hurdles here with what the California Public Utilities Commission.

顯然，隨著情況的變化，我們將重新評估這一點。在過去的 70 多年裡，我們每年都增加股息，我不認為我們會改變方向。但我們只是覺得是時候有點保守了，直到我們通過加州公用事業委員會解決這兩個障礙。

And then just lastly, that Lake Section, New Mexico acquisition, is there anything that you can disclose in terms of the purchase price or associated rate base amount there? And is that a deal that you expect to close in 2023?

最後，關於收購新墨西哥州 Lake Section 的收購，您有什麼可以透露的購買價格或相關費率基數嗎？您希望在 2023 年完成這筆交易嗎？

We think it will close in 2023. Obviously, we haven't filed it yet with the New Mexico Public Utilities Commission. When we do, we'll be able to talk more about the purchase price. But I will say this, and Jonathan, you know how we are from a business development standpoint. We are value buyers. We're not interested in buying something at 3, 4, 5x rate base. We look at the cost per connection. We look at how much headroom our availability there is to invest in that system to bring them up to our standards, et cetera.

我們認為它會在 2023 年關閉。顯然，我們還沒有向新墨西哥州公用事業委員會備案。當我們這樣做時，我們將能夠更多地討論購買價格。但我要說的是，喬納森，從業務發展的角度來看，你知道我們的情況。我們是價值買家。我們對以 3 倍、4 倍、5 倍的基本利率購買東西不感興趣。我們查看每個連接的成本。我們會查看我們的可用性有多少淨空來投資該系統以使其達到我們的標準等。

Keep in mind, when we look at all our business development efforts, we have a pretty strong value slant on how we buy things. I think once we file the application with the commission, we'll be able to talk more about it. But until then, I really can't say what the purchase price is. Other than that I would say it's not material at all, it's a 5,000 connection system. They're not really big numbers here that are going to really kind of dent anything.

請記住，當我們審視我們所有的業務發展努力時，我們對如何購買東西有相當強烈的價值傾向。我想一旦我們向委員會提交了申請，我們就可以就此進行更多討論。但到那時，我真的不能說收購價格是多少。除此之外，我會說它根本不重要，它是一個 5,000 連接系統。他們在這裡並不是真正會削弱任何東西的大數字。

Our final question comes from the line of Davis Sunderland from Baird.

我們的最後一個問題來自貝爾德的戴維斯桑德蘭。

I wanted to ask about visibility into the current supply chain environment. I know you guys mentioned maybe having an impact that was greater last quarter than this quarter, and it sounds like you overcame some difficulties. But I just wanted to ask maybe specifically on lead times for lead piping or anything else significant?

我想問一下當前供應鏈環境的可見性。我知道你們提到上個季度的影響可能比本季度大，聽起來你們克服了一些困難。但我只是想具體問一下鉛管道或其他重要事項的交貨時間？

And if you think that's going to have any impact on the capital investment this year? And then I have a brief follow-up.

如果您認為這會對今年的資本投資產生任何影響？然後我有一個簡短的跟進。

Well, I think I got supply chain tattooed on my arm which has been a key focus of what I've worked on with the procurement team and the engineering team throughout the last two years. First, we're not buying any lead pipe. Let me just set the record straight. There's no lead pipe.

好吧，我想我在手臂上紋了供應鏈，這是過去兩年我與採購團隊和工程團隊一起工作的重點。首先，我們不購買任何鉛管。讓我澄清一下。沒有鉛管。

We have seen substantial changes in lead time requirements for ductile iron PVC, et cetera. And those look like they may have peaked in the third to fourth quarter. Ductile iron used to be able to order it four to six weeks out, and you'd be find it in a job site. In some cases, it's up to a year lead time now. Part of what happens behind that, and I've met with the majority of our suppliers is they cannot ramp up production that quickly at their plant sites. They try to match their supply with the demand and not have overcapacity because the cost within their margins are fairly tight. But we are seeing the suppliers ramp up production.

我們已經看到球墨鑄鐵 PVC 等的交貨時間要求發生了重大變化。這些看起來可能在第三至第四季度達到頂峰。過去，球墨鑄鐵可以在四到六週後訂購，而且您可以在工作現場找到它。在某些情況下，現在長達一年的準備時間。這背後發生的部分原因是，我會見了我們的大多數供應商，他們無法在他們的工廠迅速提高產量。他們試圖使供應與需求相匹配，並且不會出現產能過剩，因為他們的利潤範圍內的成本相當緊張。但我們看到供應商正在提高產量。

It's been about 12 months coming. They started working on it early on. We're seeing some of that production come into queue, which is going to speed things up. The other thing that has helped tremendously is we have been a consistent buyer of that type from our wholesalers. And so those relationships really make a difference when there's been a kind of a scramble and everyone out there trying to buy stuff that we've gotten bumped up to the top of the list because of our relationships and our consistency of ordering goods and services from certain vendors.

大約 12 個月過去了。他們很早就開始研究它。我們看到一些產品進入隊列，這將加快速度。另一件幫助很大的事情是，我們一直是批發商的這種類型的穩定買家。因此，當出現某種爭奪戰並且每個人都試圖購買由於我們的關係以及我們從其訂購商品和服務的一致性而被推到榜首的東西時，這些關係確實會產生影響某些供應商。

I think we've peaked. I think it's starting to get better. We have seen a pretty big increase in some of the costs. We've seen increases in our year-over-year inventory balance as well. As we found excess supply available, the team would grab it and we would go store it. I think it's easy to talk about on earnings call, but the reality is that the procurement team and the engineering team really did a fantastic job. And if you go back and listen to our earnings calls through last year, we were softly saying it's a tough year for capital. It's a tough year for capital. It's a tough year for capital. And clearly, it was.

我認為我們已經達到頂峰。我認為它開始變得更好。我們已經看到一些成本大幅增加。我們也看到了同比庫存餘額的增加。當我們發現供應過剩時，團隊會抓住它，我們會去儲存它。我認為在財報電話會議上談論很容易，但現實是採購團隊和工程團隊確實做得非常出色。如果你回頭聽聽我們去年的財報電話會議，我們會輕聲說今年對資本來說是艱難的一年。今年對資本來說是艱難的一年。今年對資本來說是艱難的一年。顯然，它是。

But in the fourth quarter, we had a record fourth quarter, which resulted in a record year. The team has done a fantastic job. We are seeing price increases, obviously, with all the inflationary pressures as well. But I think we're managing through it, and I hope we're through the worst of it. The indications I have seen so far is that it's starting to get a little bit better now.

但在第四季度，我們創下了創紀錄的第四季度，創下了創紀錄的一年。該團隊做得非常出色。顯然，我們看到價格上漲，同時還有所有的通脹壓力。但我認為我們正在渡過難關，我希望我們已經度過了最糟糕的時期。到目前為止，我看到的跡像是它現在開始好轉了一點。

Barring any other major disruptive global events, I think we'll be on the downside of the problem, and hopefully things will start leveling off.

除非有任何其他重大的破壞性全球事件，我認為我們將處於問題的不利方面，希望事情會開始趨於平穩。

And my follow-up question would just be about the business development project pipeline. Obviously, very excited to hear about New Mexico. And just wanted to ask if there's anything in particular that, to the extent you can share, of course, that you are looking into or weighing options as far as water versus wastewater or certain geographies that are more attractive? Any details there would be great.

我的後續問題只是關於業務發展項目管道。顯然，聽到新墨西哥州的消息非常興奮。只是想問一下，在您可以分享的範圍內，是否有任何特別的事情，當然，您正在研究或權衡水與廢水或某些更具吸引力的地區的選擇？那裡的任何細節都會很棒。

At 50,000 feet, we've closed deals in all five states, including Texas. I think the market continues to be decent. The pipeline continues to be full. Sellers' expectations and buyers' expectations. That's always where the challenge is going to be. We're doing deals on both sides, water and wastewater. We've had very good growth in Texas. We've, obviously, in the state of California and in the state of Washington, it's been more kind of water systems in Hawaii.

在 50,000 英尺高度，我們已經完成了包括德克薩斯在內的所有五個州的交易。我認為市場繼續保持良好狀態。管道繼續充滿。賣方的期望和買方的期望。這始終是挑戰所在。我們正在雙方做交易，水和廢水。我們在德克薩斯州的增長非常好。很明顯，在加利福尼亞州和華盛頓州，夏威夷的供水系統更為豐富。

And Texas has been more wastewater systems. We're growing on both sides of it, and it just depends on where the market is and where the growth is happening. As I mentioned to Jonathan's question, we're very kind of value focused on a system. We're not interested in buying a system over paying for it and then not having the ability to invest more capital into that system. And that is a lose-lose situation for stockholders and for our company.

而得克薩斯州已有較多的污水處理系統。我們在這兩個方面都在增長，這取決於市場在哪里以及增長發生在哪裡。正如我在 Jonathan 的問題中提到的，我們非常注重系統的價值。我們不想花錢購買一個系統，然後又沒有能力向該系統投入更多資金。這對股東和我們公司來說都是雙輸的局面。

We like to buy it on a value basis where we got room to invest to make capital improvements bring somebody up to our operating standards. And then the selling shareholder of the entity gets their buyout. We get the asset at a fair price, not an inflated price but a fair price. And then our stockholder gets the ability to invest capital in that system, which allows us to start generating our rate of return. I'm still kind of bullish on the BD side. Obviously, inflation is going to be a factor in what happens with the economy in 2023, but the BD team has been hot, and it's been hot in all five states, and I don't see our momentum slowing down.

我們喜歡在價值基礎上購買它，我們有投資空間來進行資本改進，使某人達到我們的運營標準。然後實體的出售股東得到他們的買斷。我們以公平的價格獲得資產，不是虛高的價格而是公平的價格。然後我們的股東有能力在該系統中投資，這使我們能夠開始產生我們的回報率。我仍然有點看好 BD 方面。顯然，通貨膨脹將成為 2023 年經濟發展的一個因素，但 BD 團隊一直很火爆，而且在所有五個州都很火爆，我認為我們的勢頭不會放緩。

And having said that, these aren't really big deals either. But obviously, they're big deals to the subsidiary companies because they're growing exponentially with these deals. I think '23 is going to be another decent year for business development barring any global catastrophic kind of changes in the market.

話雖如此，這些也不是真正的大交易。但很明顯，它們對子公司來說是大交易，因為它們通過這些交易呈指數級增長。我認為除非市場出現任何全球性災難性變化，否則 23 年將是業務發展的又一個不錯的年份。

I would now like to turn the call over to Martin Kropelnicki for closing remarks.

我現在想將電話轉給 Martin Kropelnicki 以作結束語。

Well, obviously, as we move into the first quarter, all eyes around the California Public Utilities Commission, resolving the cost of capital and getting a PD out and hopefully getting a general rate case decision out sometime in 2023. The other two things we're focused on clearly is our Supreme Court case with the caliber Supreme Court on decoupling. And then as I mentioned earlier, everybody watched the snowpack. That's going to be our key to answering questions about the drought what happens to the snowpack during the month of April.

好吧，很明顯，當我們進入第一季度時，所有的目光都集中在加州公用事業委員會，解決資本成本並獲得 PD，並希望在 2023 年的某個時候做出一般費率案件的決定。另外兩件事我們'重點顯然是我們的最高法院案件與最高法院脫鉤的口徑。然後正如我之前提到的，每個人都看著積雪。這將是我們回答有關四月份積雪會發生什麼情況的干旱問題的關鍵。

With that, thanks for joining us for another year-end conference call. We appreciate everyone's support, and we'll look forward to updating everyone at the end of the first quarter at the end of April.

有了這個，感謝您加入我們的另一個年終電話會議。我們感謝大家的支持，我們期待在 4 月底的第一季度末為大家更新。

Thank you, ladies and gentlemen. This does conclude today's call. Thank you for your participation. You may now disconnect.

謝謝你們，女士們，先生們。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。