California Water Service Group (CWT) 2025 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the California Water Service Group first quarter 2025 earnings call. (Operator Instructions)

女士們、先生們，感謝你們的支持。我叫 Desiree，今天我將擔任您的會議主持人。現在，我歡迎大家參加加州水務集團 2025 年第一季財報電話會議。（操作員指示）

I would now like to turn the conference over to James Lynch, Senior Vice President, Chief Financial Officer, and Treasurer. You may begin.

現在，我想將會議交給高級副總裁、財務長兼財務主管詹姆斯·林奇 (James Lynch)。你可以開始了。

Thank you, Desiree. Welcome everyone to the first quarter of 2025 results call for California Water Service Group. With me today is Martin Kropelnicki, our Chairman and CEO. Replay dial in information for this call can be found in our quarterly results earning release which was issued earlier today. The call replay will be available until June 30, 2025.

謝謝你，Desiree。歡迎大家參加加州水務集團 2025 年第一季業績電話會議。今天和我一起的是我們的董事長兼執行長馬丁‧克羅佩爾尼茨基 (Martin Kropelnicki)。本次通話的重播撥入資訊可以在我們今天稍早發布的季度業績報告中找到。通話重播將保留至 2025 年 6 月 30 日。

As a reminder before we begin, the company has a slide deck to accompany today's earnings call. The slide deck was furnished with an 8-K and is also available on the company's website at www.calwatergroup.com.

在我們開始之前提醒一下，該公司有一個幻燈片來配合今天的收益電話會議。幻燈片配有 8-K，也可在公司網站 www.calwatergroup.com 上取得。

Before looking at our first quarter of 2025 results, I'd like to cover forward-looking statements. During our call, we may make forward-looking statements, and because these statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the company's current expectations.

在回顧我們 2025 年第一季的業績之前，我想先介紹一下前瞻性陳述。在電話會議中，我們可能會做出前瞻性陳述，並且由於這些陳述涉及未來事件，因此它們受各種風險和不確定性的影響，實際結果可能與公司目前的預期有重大差異。

As a result, we strongly advise all current shareholders and interested parties to carefully read the company's disclosures on risks and uncertainties found in our Form 10K, Form 10, press releases, and other reports filed from time to time with the Securities and Exchange Commission.

因此，我們強烈建議所有現有股東和相關方仔細閱讀公司在 10K 表格、10 表格、新聞稿以及不時向美國證券交易委員會提交的其他報告中有關風險和不確定性的揭露。

And now I'll turn the call over to Martin.

現在我將把電話轉給馬丁。

Thanks, Jim. Good morning, everyone, and thanks for dialling in this morning to review our Q1 2025 results. We have a few items on the agenda today. One, we'll talk about the strong first quarter and just to remind everyone, we are in the third year of the general rate case in the state of California, which is our largest subsidiary, and typically the first quarter is one of our more challenging quarters,

謝謝，吉姆。大家早安，感謝您今天早上撥通電話來查看我們 2025 年第一季的業績。我們今天的議程有幾個事項。首先，我們將討論第一季的強勁表現，需要提醒大家的是，我們正處於加州一般利率案例的第三年，加州是我們最大的子公司，通常第一季是我們最具挑戰性的季度之一，

But the Q1 of this year actually we did surprisingly well. We want to talk, give you an update on our progress with the 2024 general rate case, which remains on track. Talk about a couple of favorable decisions that we've had in both California and Hawaii on some other regulatory items and finally give you an update on what's happening with the annual water supply in the West.

但今年第一季我們的表現其實出奇地好。我們想談談，向您通報 2024 年一般稅率案件的進展情況，該案件目前仍在按計劃進行。談談加州和夏威夷州在其他一些監管項目上做出的幾個有利決定，最後向您介紹西部年度供水情況的最新情況。

And so, before going into our topics of today, I'm going to turn it over to Jame to walk us through the financials, which Jame, I think are a little confusing. But I think in the press release in the back there's a reconciliation there that I found very helpful. I know I was preparing for today. So, Jame, I'm going to turn it over to you.

因此，在討論我們今天的主題之前，我將讓 Jame 向我們介紹財務狀況，Jame，我認為這些財務狀況有點令人困惑。但我認為後面的新聞稿中有一個和解，我發現這非常有幫助。我知道我正在為今天做準備。那麼，Jame，我要把它交給你了。

Thanks, Martin. And what Martin was referring to is we did present non-GAAP information in our press release, and we'll be discussing some non-GAAP information on today's deck as it relates to 2024. As we've discussed on previous calls, the company's delayed 2021 general rate case decision resulted in interim rate relief, which was recorded in 2024.

謝謝，馬丁。馬丁指的是，我們確實在新聞稿中提供了非 GAAP 信息，我們將在今天的演示文稿中討論一些與 2024 年相關的非 GAAP 信息。正如我們在先前的電話會議上討論過的，該公司推遲了 2021 年一般費率案件的決定，導致了臨時費率減免，該減免記錄在 2024 年。

In reporting the first quarter of 2025 results, we present both GAAP and non-GAAP financial measures with the non-GAAP financial measures in place to remove the impact of the 2023 interim rate relief from the 2024 results.

在報告 2025 年第一季業績時，我們同時採用了 GAAP 和非 GAAP 財務指標，並採用非 GAAP 財務指標來消除 2023 年中期利率減免對 2024 年業績的影響。

On a GAAP basis, operating revenue for the quarter was $204 million compared to $270.7 million in the first quarter of 2024, and net income attributed to Group was $13.3 million or $0.22 per diluted share compared to $69.9 million or $1.21 per diluted share in Q1 of 2024.

依照 GAAP 標準，本季營業收入為 2.04 億美元，而 2024 年第一季為 2.707 億美元；集團淨利潤為 1,330 萬美元，即每股攤薄收益 0.22 美元，而 2024 年第一季為 6,990 萬美元，即每股攤薄收益 1.21 美元。

Interim rate relief recorded in the first quarter of 2024 that related to 2023 included revenue of $90.3 million and net income of $65.8 million for $1.14 per share. When we adjust for the Q1 2024 interim rate relief, first quarter revenue increased 13% over non-GAAP 2024 revenue of $180.5 million.

2024 年第一季記錄的與 2023 年相關的臨時費率減免包括 9,030 萬美元的收入和 6,580 萬美元的淨收入，每股 1.14 美元。當我們根據 2024 年第一季的臨時費率減免進行調整時，第一季的營收比 2024 年非 GAAP 收入 1.805 億美元增加了 13%。

In addition, first quarter net income and diluted earnings per share increased 225% and 214% respectively over Q1 2024 non-GAAP income of $4 million, 4.1 million, and non-GAAP earnings per share of $0.07.

此外，第一季淨收入和每股攤薄收益分別比 2024 年第一季非 GAAP 收入 400 萬美元、410 萬美元和非 GAAP 每股收益 0.07 美元增加 225% 和 214%。

Moving to our diluted earnings per share bridge, the primary drivers for first quarter of 2024 were rate changes and increases and increased customer usage, which contributed $0.20 per share, and approval of two advice letters, one to recover drought expenses and one to recover expenses related to the Palace Verdes pipeline project that together contributed $0.07 per share.

轉向我們的稀釋每股收益橋樑，2024 年第一季的主要驅動因素是費率變化和增加以及客戶使用量的增加，這貢獻了每股 0.20 美元，以及兩封建議信的批准，一封用於收回乾旱費用，另一封用於收回與 Palace Verdes 管道項目相關的費用，合計貢獻了每股 0.07 美元。

Expense offsets included water production, wholesale costs, and customer usage increases of $0.08 per share, and $0.04 per share and higher depreciation expense due to new assets placed in service. We're really pleased with the outcome of both the Palace Verdes and drought advice letter decisions, and Martin going to provide some more information on these decisions a little bit later in his remarks.

費用抵銷包括水生產、批發成本和客戶使用量增加 0.08 美元/股，以及由於新資產投入使用而導致的每股 0.04 美元和更高的折舊費用。我們對 Palace Verdes 和乾旱建議信函的決定結果感到非常滿意，馬丁稍後將在發言中提供有關這些決定的更多資訊。

Turning to slide 7, we continue to make significant investments in our water infrastructure to ensure the delivery and safe, reliable water service. Company capital investments during the quarter totaled $110.1 million a pace that was consistent with the record quarter we reported in Q1 of 2024.

翻到第 7 張投影片，我們持續對水利基礎設施進行大量投資，以確保供水服務的安全可靠。本季公司資本投資總額為 1.101 億美元，速度與我們報告的 2024 年第一季創紀錄的成長速度一致。

As a reminder, our capital investments do not include estimated $222.5 million of remaining PFAS project expenditures. Also, estimates for 2025 through 2027 are predicated in part on the outcome of our 2024 general rate case in California and normal capital needs in our other subsidiaries. We expect our annual capital expenditures to increase during the next 5 years due to the continuing need to replace and maintain our water infrastructure.

提醒一下，我們的資本投資不包括預計 2.225 億美元的剩餘 PFAS 項目支出。此外，2025 年至 2027 年的估計部分取決於我們 2024 年加州一般稅率案例的結果以及我們其他子公司的正常資本需求。由於需要不斷更換和維護我們的水利基礎設施，我們預計未來 5 年我們的年度資本支出將會增加。

Turning to slide 8, the positive impact of our capital investment program is demonstrated in our regulated rate-based growth presented on the slide. If approved as requested, the 2024 California GRC, and infrastructure improvement plan with our other planned capital investments in other states would result in a compounded annual rate-based growth of approximately 11.7%.

轉到投影片 8，我們的資本投資計畫的正面影響體現在投影片中呈現的基於受監管利率的成長。如果按要求獲得批准，2024 年加州 GRC 和基礎設施改善計劃以及我們在其他州的其他計劃資本投資將導致每年複合增長率約為 11.7%。

Moving to slide 9, we continue to maintain a strong liquidity profile. As of March 31, 2025, we had $44.5 million in unrestricted cash, $45.7 million in restricted cash, and $315 million in availability on our credit lines.

轉到投影片 9，我們繼續保持強勁的流動性狀況。截至 2025 年 3 月 31 日，我們擁有 4,450 萬美元的非限制現金、4,570 萬美元的限制現金和 3.15 億美元的可用信用額度。

We continue to maintain strong equity and debt credit ratings, and with the cost of capital extension in California through 2026, our authorized 10.27% ROE will be applied to a supportive equity percentage in our authorized capital structure of 53.4%. With that, I'll turn the call over to Martin for a few additional remarks.

我們繼續保持強勁的股權和債務信用評級，隨著加州的資本成本延長至 2026 年，我們授權的 10.27% ROE 將應用於我們授權資本結構中 53.4% 的支持性股權百分比。說完這些，我將把電話轉給馬丁，讓他再說幾句。

Thanks, Jame. I am on slide 10, and I'm pleased to report that yesterday our board of directors approved our 321 consecutive quarterly dividend from the amount of $0.30 a share. As a reminder, in January this year, we announced a dividend increase of $0.08 a share plus a special one-time increase of $0.04 a share, bringing the annual dividend from $1.24 up from $1.12.

謝謝，詹姆斯。我現在在第 10 張幻燈片上，我很高興地報告，昨天我們的董事會批准了我們連續第 321 個季度的股息，每股 0.30 美元。提醒一下，今年 1 月，我們宣布每股股息增加 0.08 美元，另加每股特別一次性增加 0.04 美元，年度股息從 1.12 美元增加到 1.24 美元。

The dividend increase for 2025 represents about a 10.7% dividend increase and gives us a five-year annual growth rate of 7.7% on the dividend line, which we think is a is a very healthy number.

2025 年的股息成長意味著股息成長約 10.7%，並使我們的五年年股息成長率達到 7.7%，我們認為這是一個非常健康的數字。

The special one-time dividend was meant and approved by our board of directors to reward our stockholders who dealt with the delayed 2021 General rate case and the financial challenges that it brought forth with it, including deciphering some of the financial reporting that Jim's been working on. I think he's done a good job with the financial statements this quarter.

這項特別一次性股息是董事會批准併計劃發放的，目的是獎勵那些處理延遲的 2021 年一般費率案及其帶來的財務挑戰的股東，包括解讀 Jim 一直在處理的一些財務報告。我認為他本季的財務報表做得很好。

Looking to slide 11, moving on to some stuff on the regulatory side. The California 2021 General Rate case continues to move forward on schedule following the issuance from the California Public Advocates, they're basically review or their report of our Rate case. We submitted our rebuttal testimony, and we participated in settlement discussions during the month of April.

翻到第 11 張投影片，討論監管方面的一些內容。繼加州公共辯護律師發布消息後，加州 2021 年一般稅率案件繼續按計劃推進，他們基本上正在審查或報告我們的稅率案件。我們提交了反駁證詞，並在四月參加了和解討論。

Well, we are not able to reach a global settlement with the California Public Advocates. We are now working to identify areas of agreement in order to streamline the upcoming evidentiary hearings, which will take place this month, the month of May. We may, we remain confident in in our testimony that we provided in the rate case.

嗯，我們無法與加州公益辯護律師達成全球和解。我們目前正在努力確定達成一致的領域，以簡化將於本月（五月）舉行的證據聽證會。我們可以，我們對我們在利率案中提供的證詞仍然充滿信心。

I think, as most of we, we've. The last 3 cycles we've invested heavily in how we plan for capital and execute our capital programs, and we remain confident in our testimony, and we look forward to moving into the evidential hearing phase of the process with the commissioner and with the judge.

我想，我們大多數人都是這樣的。在過去的三個週期中，我們在如何規劃資本和執行資本計劃方面投入了大量資金，我們對我們的證詞仍然充滿信心，我們期待著與專員和法官一起進入該程序的證據聽證階段。

Moving on to slide 12, a couple other things that are noteworthy on the regulatory side. First and foremost, as part of the 2021 general rate case decision, we're authorized to, get, what's called an annual escalation rate. And so, for 2025 that was filed. It is subject to an earnings test, and I'm very pleased to report that the majority of our districts passed that earnings test.

繼續看第 12 張投影片，監管方面還有其他值得注意的事情。首先，作為 2021 年一般費率案件判決的一部分，我們有權獲得所謂的年度上漲率。因此，對於 2025 年來說，這個數字已經提交。它需要經過收入測試，我很高興地報告，我們大多數地區都通過了收入測試。

And it represents a $27.2 million additional revenue requirement that was adopted for this year. These rates went into effect on January 1st. In addition, in California, the Palos Verdes, excuse me, Palos Verdes Peninsula Water reliability Project, that's what happens when you let engineers name projects. They get really long.

這意味著今年將需要額外增加 2,720 萬美元的收入。這些費率於 1 月 1 日生效。此外，在加利福尼亞州，帕洛斯弗迪斯，對不起，是帕洛斯弗迪斯半島水資源可靠性項目，這就是讓工程師命名項目時發生的事情。它們真的很長。

So, I call it the Palos Verdes Project. It was the largest project in the company's history, which is replacing about 15 miles of Maine, and kind of downtown Palos Verdes and kind of urban LA area. In January, we received a final decision approving the inclusion of $14.2 million in incremental capital costs for this project. So that's been added to rate base. In addition, the decision allows us for a temporary surcharge to recover $3.8 million of carrying costs associated with that project.

所以，我稱之為 Palos Verdes 計畫。這是該公司歷史上最大的項目，將取代緬因州約 15 英里的區域、帕洛斯弗迪斯市中心和洛杉磯市區。一月份，我們收到最終決定，批准為該專案增加 1,420 萬美元的增量資本成本。因此，這已被添加到費率基礎中。此外，該決定還允許我們收取臨時附加費，以收回與該項目相關的 380 萬美元的持有成本。

These new base rates were implemented in February, and the surcharge will begin in April, so last month. In addition, in California, in January, we received approval to recover $1.4 million in drought-related costs that have been tracked through the DRMA account.

這些新的基本費率已於二月實施，附加費將於四月開始，也就是上個月。此外，在加州，我們於 1 月獲得批准，追回透過 DRMA 帳戶追蹤的 140 萬美元乾旱相關成本。

Related surcharges were implemented on April 1st of this year. Looking at a couple other regulatory events that are happening around our systems, turning to Hawaii, during the first quarter, we reached a settlement with the Ka’anapali General Rate Case with the Hawaii Consumer Advocates. The settlement that's attached to your revenue $7.5 million so that's a $1.1 million increase in revenue, so that'll be going into effect later this month.

相關附加費已於今年4月1日起實施。回顧我們系統周圍發生的其他一些監管事件，轉向夏威夷，在第一季度，我們與夏威夷消費者權益保護協會就卡阿納帕利一般費率案達成了和解。和解協議與您的 750 萬美元收入相關，這意味著收入增加了 110 萬美元，該協議將於本月稍後生效。

And then lastly kind of looking on to slide 13. Looking at our water supply going into the spring, that's always a hot topic out west with climate change. Overall, it's been a very healthy winter out here on the West Coast. We have a strong snowpack and overall, in California. It was 99% of normal for the month of April. For those of you that know the topography associated with California, the Sierras, it's a very long range.

最後我們來看第 13 張投影片。看看我們春天的水供應情況，這在西部氣候變遷中始終是一個熱門話題。總體而言，西海岸的這個冬天非常健康。加州總體而言都有著厚厚的積雪。四月份的產量為正常水準的 99%。對於那些了解加州地形的人來說，內華達山脈是一個非常長的山脈。

And so, you can be as far south as Southern California down in LA and all the way up, well past Tahoe into northern California. So, the range within the range is 85% to 120%, but overall, we're about 99% of normal on the snowfall for the state of California. This coupled with a very heavy rainfall during the winter and spring months.

因此，您可以最南到達南加州的洛杉磯，然後一路向北，穿過太浩湖到達北加州。因此，範圍內的範圍是 85% 到 120%，但總體而言，加州的降雪量約為正常水平的 99%。再加上冬季和春季的強降雨。

Has put us in really good shape, and the major reservoirs remain above historical averages, and we feel really good about the position California is going into the summer months. We do not expect any other water supply issues in other states including Washington, New Mexico, and for the majority of Hawaii, although in West Maui continues to be in a drought and targeted conservation efforts are underway, but we do not expect any material issues in that area.

讓我們處於非常好的狀態，主要水庫的水位仍然高於歷史平均水平，我們對加州進入夏季的情況感到非常滿意。我們預計華盛頓州、新墨西哥州和夏威夷大部分地區等其他州不會出現供水問題，儘管西毛伊島持續遭受乾旱，並且有針對性的保護工作正在進行中，但我們預計該地區不會出現任何重大問題。

Hawaii is a state. That we're spending, maybe, let me say it this way, taking a lot of the lessons learned in California in our conservation programs and applying that to states that have newer issues associated with drought and drought management. So, we're taking a lot of the lessons learned in California and applying those in our conservation programs in the West Maui area.

夏威夷是一個州。我們可以這樣說，我們正在投入大量資金，從加州的保育計畫中吸取經驗教訓，並將其應用於面臨乾旱和乾旱管理相關新問題的州。因此，我們吸取了加州的許多經驗教訓，並將其運用到西毛伊島地區的保育計畫中。

So, with that moving to slide number 14 looking at the year ahead, as I mentioned in the beginning, it is the third year, the rate case cycle in California. This is historically a period where we see heightened regulatory lag and that coupled with market volatility, inflation, and the potential for tariff effects on a lot of the goods and services we use during our construction projects means that tight management and controllable expenses remains a priority and it will be throughout the year.

因此，我們轉到第 14 張投影片來展望未來一年，正如我在開始時提到的，這是加州利率案件週期的第三年。從歷史上看，這是一個監管滯後加劇的時期，再加上市場波動、通貨膨脹以及關稅對我們在建築項目中使用的許多商品和服務的潛在影響，意味著嚴格管理和可控費用仍然是我們的首要任務，而且全年都將如此。

In addition to staying focused on the budget and execution of the capital plans, keeping the general rate case on focus and to avoid any major delays like we saw in 2021, I will say I've been generally pleased with the feedback we've been getting from the advocates, the commissioner's office, and the judge offices in terms of doing everything they can to keep the rate case on schedule, which I think is really good news.

除了繼續關注預算和資本計劃的執行、關註一般費率案件並避免像 2021 年那樣出現任何重大延誤之外，我要說的是，我對我們從倡導者、專員辦公室和法官辦公室得到的反饋總體上感到滿意，他們竭盡全力確保費率案件按計劃進行，我認為這確實是個好消息。

Look at our growth strategy, the ongoing greenfield development that we have in Texas is continuing to develop very well and continues strong results. So, we plan to stay focused in that South Austin corridor which continues to grow, and we're also continuing to evaluate a number of domestic M&A opportunities.

看看我們的成長策略，我們在德克薩斯州正在進行的綠地開發項目正在繼續良好發展並繼續取得強勁成果。因此，我們計劃繼續關注不斷發展的南奧斯汀走廊，我們也將繼續評估一些國內併購機會。

Although I just want to be clear, the main growth objective of the California Water Service Group really is the rate-based growth that Jim talked about earlier on the slide deck and that 11.7% compound annual growth rate. So, M&A is a supplemental growth process for us.

雖然我只是想明確一點，但加州水務集團的主要增長目標實際上是 Jim 之前在幻燈片上談到的基於利率的增長以及 11.7% 的複合年增長率。因此，併購對我們來說是一個補充成長過程。

Additionally, as we go into the warmer summer months, we want to maintain our best in class customer service and our water quality goal goals of no primary or secondary water quality violations.

此外，隨著進入溫暖的夏季，我們希望維持一流的客戶服務和不出現初級或次級水質違規現象的水質目標。

Obviously, we got a lot of infrastructure investment to do over the remaining 9 months of 2025, especially coming out of a wet winter. As Jame referenced, we kept with the same pace that we had last year in the quarter on the capital investment. Which we're very happy with, given the fact it was a very wet winter in California, and that tends to slow us down on the construction management side.

顯然，我們在 2025 年剩下的 9 個月裡有很多基礎設施投資要做，特別是在經歷了一個潮濕的冬天之後。正如 Jame 所提到的，我們在本季的資本投資保持了與去年相同的步伐。我們對此感到非常高興，因為加州的冬天非常潮濕，這往往會減慢我們在施工管理方面的進度。

And of course, lastly, today being May 1st, believe it or not, it is the official start of the fire season. And so, our teams are busy, doing all the wildfire hardening projects that we do, clearing brush, etc. Getting all the equipment ready for the long dry summer months that lie ahead. So, with that overall, it was a very good quarter. We're very pleased with the results, financial results.

當然，最後，今天是 5 月 1 日，不管你信不信，這是火災季節的正式開始。因此，我們的團隊非常忙碌，進行所有的野火加固項目、清理灌木叢等，為即將到來的漫長乾燥的夏季做好所有設備的準備。所以，總體而言，這是一個非常好的季度。我們對結果、財務結果非常滿意。

Again, I'll apologize that they're confusing, but again, that was, nothing that the company can control, and again I would just call your attention to the non-GAAP, information that Jame provided in the decks to look at the quarters on a more normalized basis. And so, Desiree, with that, let's open it up to questions, please.

再次，我很抱歉它們令人困惑，但再次，這不是公司可以控制的，再次，我只是想提請您注意 Jame 在演示文稿中提供的非 GAAP 信息，以便以更規範的基礎來查看季度。那麼，Desiree，現在讓我們開始提問吧。

Thank you. (Operator Instructions)

謝謝。（操作員指示）

And our first question comes from the line of Angie Storozynski with Seaport. Your line is open.

我們的第一個問題來自 Seaport 的 Angie Storozynski。您的線路已開通。

Thank you. So, I wanted to talk about the, California, Jersey. We haven't seen a settlement even though we were hoping for one. Just, so just wonder, I mean, can you just give us a sense, for example, what are the key points of contention here? Is it, decoupling, is it O&M expense, CapEx? Just any sense of, or maybe, from a different angle where you know where, what can you agree on with the consumer advocate. Thank You.

謝謝。所以，我想談談加州、澤西島。儘管我們一直希望達成和解，但我們至今尚未看到。只是，所以只是好奇，我的意思是，您能否讓我們了解一下，例如，這裡爭論的關鍵點是什麼？它是解耦的嗎？它是 O&M 費用嗎？它是資本支出嗎？只是任何感覺，或者也許，從不同的角度，你知道在哪裡，你能與消費者權益倡導者達成什麼一致。謝謝。

Yeah, thanks, Angie. As I mentioned in my previous comments, obviously we did not reach a global settlement with the cattle advocates and Because there are settlement discussions, I really can't get into the details of that, but to the comments I made, we're obviously going through a process right now and identifying areas that were non-contested, and that will be submitted to the judge in the pre-hearing conference as we move into the hearing part of the process.

是的，謝謝，安吉。正如我在之前的評論中提到的，顯然我們並沒有與養牛倡導者達成全球和解，而且由於有和解討論，我真的無法透露細節，但就我所發表的評論而言，我們現在顯然正在經歷一個過程，並確定沒有爭議的領域，並將在進入聽證會階段時在聽證前會議上提交給法官。

So, we really can't say a whole lot other than, it's moving forward and again, even with a not able to reach a global settlement with the commission. The commissioner, the judge, and the advocates have all indicated a desire to keep the rate case on schedule. So, I anticipate this next phase going through the hearing components will continue to move on schedule as the rest of the rate case. So can't really say much more than that right now, but obviously we'll be filing briefs and stuff, etc. With the PUC here during the month of May.

因此，我們真的不能說太多，除了事情正在向前推進，甚至無法與委員會達成全球和解。專員、法官和辯護律師均表示希望按計劃完成該費率案件。因此，我預計下一階段的聽證會將像利率案件的其餘部分一樣繼續按計劃進行。所以現在真的不能說太多，但顯然我們會在五月向 PUC 提交簡報等資料。

Okay, that's all I have. Thank you.

好的，這就是我所知道的全部。謝謝。

Thanks, Angie, have a good day.

謝謝，安吉，祝你有美好的一天。

Our next question comes from the line of Davis Sunderland with Baird. Your line is open.

我們的下一個問題來自貝爾德的戴維斯桑德蘭 (Davis Sunderland)。您的線路已開通。

Hey Martin, Jame, good morning, guys. Thank you for taking my question.

嘿，馬丁、詹姆，大家早安。感謝您回答我的問題。

Maybe if I could start, I actually like to pay you back on Angie's question just about the GRC and thank you Martin for the updates on this. Just trying to get a frame of reference for the 2021 GRC and when you guys were able to see for the first time, hey, this might get delayed or it's getting off the rails a little bit, how is this case progressing relative to that one and I guess any insight to compare the two or what that inflection point was if you can see what I'm getting at would be helpful and then I have maybe one follow up.

也許如果我可以開始的話，我實際上想回答 Angie 關於 GRC 的問題，並感謝 Martin 對此的更新。只是想為 2021 年 GRC 尋找一個參考框架，當你們第一次看到，嘿，這可能會被推遲，或者有點偏離軌道，這個案子相對於那個案子進展如何，我想任何比較兩者的見解或者那個拐點是什麼，如果你能明白我的意思，那將會很有幫助，然後我可能會有一個後續行動。

Sure, that's a very good question, Davis. The, 2021 rate case right out of the chute, there were significant disagreements with advocates and us and not only disagreements, it was hard to even get people in a room to even really talk about it.

當然，這是一個非常好的問題，戴維斯。2021 年利率案一出，倡議者和我們之間就存在重大分歧，不僅存在分歧，甚至很難讓人們聚集在一個房間裡真正地討論它。

So, you had that, and you had COVID and the fact that the commission was still on a work remote basis.

所以，你遇到了這種情況，並且遇到了 COVID，委員會仍然處於遠端辦公狀態。

There's just a lot of different factors then to now. To me, the most significant factor that that I'm tracking is kind of what are people saying? And so, I go back to, the commissioner Baker's clearly indicated in public comments he thinks California needs to do a better job getting rate cases done on time. I think that's a big positive comment. We didn't have that before in the last rate case.

那時和現在有很多不同的因素。對我來說，我追蹤的最重要的因素是人們在說什麼？因此，我回想一下，貝克專員在公開評論中明確表示，他認為加州需要更好地按時完成費率案件。我認為這是一個非常積極的評論。在上一次利率案例中我們還沒有遇到這種情況。

The fact that the CA advocates in our discussion, even though we couldn't reach a global settlement, have indicated they want to do everything they can to get the rate case out on time. And then the judge, I think the judge that we have assigned to this case, I think he is unbiased. I think he is very focused on the procedural. Law, which I think is a very good thing, and he's driving the rate case process really hard.

事實上，儘管我們無法達成全球和解，但我們討論中的 CA 倡導者已表示，他們希望盡一切努力按時解決利率案件。然後是法官，我認為我們指派負責此案的法官，我認為他是公正的。我認為他非常注重程序。法律，我認為這是一件非常好的事情，他正在努力推動利率案件的進程。

So, I think to me the big thing is kind of what the parties are saying involved in the process and the fact they're saying it. You didn't have a whole lot of that going on in the last rate case, and I think a big stumbling block was the fact You were coming out of COVID, and you know people could not get in a room to even talk. So, I look at how the comments are lining up. They're very consistent. Everyone's indicating a desire to get this rate case done on time.

所以，我認為對我來說最重要的是各方在這過程中所說的話以及他們所說的事實。在上一個利率案例中，你並沒有遇到太多這樣的情況，我認為一個很大的障礙是你剛剛擺脫 COVID，你知道人們甚至無法進入一個房間交談。因此，我查看了評論的排列。他們非常一致。每個人都表示希望能準時完成這個利率案件。

I didn't have comments like that in the last rate case cycle, so I'm a lot more bullish this time. Now, obviously you can hit a procedural snag as you go through the process. But look, we're almost a year and I guess we're 10 months into a 18 month process and so far, every indication we've had has been is staying on schedule, which I think is a good sign.

在上一次利率案例週期中我沒有發表過這樣的評論，因此這次我更加樂觀。現在，顯然您在執行該過程時可能會遇到程序障礙。但看看，我們已經快一年了，我想我們已經進入了 18 個月流程中的 10 個月，到目前為止，所有跡像都表明我們的進展正在按計劃進行，我認為這是個好兆頭。

That is super helpful and thank you for that and then maybe if I could just ask one more, you mentioned tariffs and potential impacts and managing costs throughout the rest of the year. I don't know if you could share any more just about how you guys are baking in potential elevated costs or the impact of rerouting supply chains into your outlook for the year or specifically if there's any, meaning for year your comps the rest of the year that we should consider as it relates to costs, and thank you again guys.

這非常有幫助，謝謝你，然後如果我可以再問一個問題，你提到了關稅和潛在影響以及在今年剩餘時間內管理成本。我不知道你們是否可以分享更多關於你們如何將潛在的成本上升或供應鏈重新安排的影響納入今年的展望中，或者俱體來說，是否有任何影響，這意味著今年剩餘時間的比較我們應該考慮與成本相關的因素，再次感謝你們。

Yeah, it, that's another good question. I think it's still too early to tell if you look at the volatility associated with comments coming from the administration about the effects of tariffs, who's going to be tariffed, who's not going to be tariff, what's going to be tariffed, which companies are which countries are negotiating, which countries are not.

是的，這是另一個好問題。我認為，如果從政府關於關稅影響的評論的波動性來看，現在下結論還為時過早，例如誰將被徵收關稅，誰不會被徵收關稅，什麼將被徵收關稅，哪些公司和哪些國家正在談判，哪些國家沒有談判。

So, I still think it's a little too early to tell, obviously in what we do and especially given our large construction project. And we have stuff that comes from all around the world, panel boards have chips. Chips come from Taiwan. We have steel and pipe and, both PVC and steel that's manufactured domestically, and some of it comes from foreign sources.

因此，我仍然認為現在下結論還為時過早，顯然，就我們所做的事情而言，特別是考慮到我們的建設項目規模很大。我們擁有來自世界各地的產品，面板上有晶片。晶片來自台灣。我們有鋼材和管道，還有 PVC 和鋼材，都是國內生產的，有些來自國外。

Some of the steel that's manufactured domestically has iron ore that comes from Europe. So, it's a very kind of murky situation. What I would say, and this is why I remain guardedly optimistic, is, we went through supply strain constraints during COVID and our materials management team and our engineering management team, program management teams were able to navigate those supply constraints without disrupting our capital flow and our ability to get capital on the ground.

部分國內生產的鋼鐵所用的鐵礦石來自歐洲。所以，這是一個非常模糊的情況。我想說的是，這也是我保持謹慎樂觀的原因，我們在 COVID 期間經歷了供應緊張的限制，我們的材料管理團隊、工程管理團隊和專案管理團隊能夠應對這些供應限制，而不會擾亂我們的資本流動和獲取資本的能力。

So, up to this point we've managed it. Likewise, we've had, a fair amount of inflation in the last two years. We've been able to manage absorbing that inflation and still, maintain our earnings momentum and our growth momentum.

所以，到目前為止我們已經成功了。同樣，過去兩年我們也經歷了相當程度的通貨膨脹。我們能夠設法吸收通貨膨脹，同時仍保持獲利動能和成長動能。

So, I remain, guardedly optimistic, but I would be lying to you if I had a crystal ball, Davis and I look at the economic. Indicators and say, oh, there's clear sailing ahead because clearly the market's not saying that. And so, for us it's, continue to button down the hatches, continue to make sure that you're managing your overtime, your expenses. Obviously, we have things like wildfire management programs we have to do. We're not going to cut costs on that.

因此，我仍然保持謹慎樂觀，但如果我有一個水晶球，戴維斯和我一起觀察經濟，那我就是騙你了。指標顯示，哦，前方一帆風順，因為顯然市場並沒有這麼說。因此，對我們來說，就是繼續嚴陣以待，繼續確保管理好你的加班時間和開銷。顯然，我們必須進行諸如野火管理計劃之類的工作。我們不會削減這方面的成本。

But do everything we can to keep everyone focused on kind of a disciplined budgetary approach and then being able to adapt to those things when they happen. And soy Waters had a good history of being able to hit their budgets during difficult times and will maintain. Jim, anything that you want to add on that. Yeah.

但我們會盡一切努力讓每個人都專注於嚴謹的預算方法，然後能夠在事情發生時進行調整。並且，沃特斯公司在困難時期一直能夠達到預算目標，並將繼續保持這一良好勢頭。吉姆，你還有什麼要補充的嗎？是的。

I think, Marty, the only other thing I would mention, Davis is, the financial markets have been whipsawed over the last, well, since April, the beginning of April, and we're continuing to keep an eye on what's happening in the in the debt markets as well as the equity markets in terms of our future financing.

馬蒂，我想提到的另一件事是，戴維斯，金融市場自四月份，也就是四月初以來，一直處於震盪之中，我們將繼續關注債務市場和股票市場在未來融資方面的情況。

Right now there's a lot of volatility out there and so, we're hoping that as we go from the second to the third quarter that volatility kind of settles down and we'll have a better sense of what's. Available in the timing with which we want to enter the debt and equity markets.

目前存在著很大的波動性，因此，我們希望隨著從第二季度到第三季度，波動性能夠逐漸穩定下來，我們能夠更好地了解情況。在我們想要進入債務和股票市場的時機可用。

But to where we are right now, we're in a really strong position in terms of our short-term availability of financing to continue our strategic initiatives and so we'll just kind of keep an eye and hope for the best in terms of getting a little more. I guess settle down financial markets that we can take advantage of later in the year, yeah.

但就目前情況而言，我們在短期融資方面處於非常有利的地位，可以繼續我們的策略計劃，因此，我們會密切關注並希望能夠獲得更多資金。我想，金融市場穩定下來之後，我們就可以在今年稍後利用這一點了，是的。

This is great, thank you I appreciate it.

這太棒了，謝謝，我很感激。

Thanks, Davis. Have a good day.

謝謝，戴維斯。祝你有美好的一天。

Our next question comes from the line of Jonathan Reeder with Wells Fargo. Your line is open.

我們的下一個問題來自富國銀行的喬納森·里德。您的線路已開通。

Hey, good morning team.

嘿，大家早安。

So, it sounds like Marty, the Q1 results were a little better than your internal expectations, can you just kind of elaborate on like what drove that beyond, what the waterfall chart shows, was it higher usage now that you're no longer decoupled or were there perhaps some favorable expense timing, issues?

因此，聽起來 Marty，第一季的結果比你的內部預期要好一些，你能詳細說明一下是什麼推動了這一結果嗎？瀑布圖顯示了什麼，是因為現在你們不再脫鉤，使用率更高了，還是有一些有利的費用時機問題？

You Know Jonathan, it was a number of things. One, obviously, when we had to delayed general rate case, Jim did a really good job with the financing really buttoning down the budgets.

你知道喬納森，有很多事情。首先，顯然，當我們不得不推遲一般費率案時，吉姆在融資方面做得非常出色，確實控制了預算。

And so, while the Rate case was delayed, we really just, we cut spending every place we could until we got the Rate case decision kind of put in place. So, we had to really prioritize our capital where we're spending it and any of the discretionary spend that the company had.

因此，在利率案被推遲期間，我們實際上只是在各方面削減開支，直到利率案的裁決得以實施。因此，我們必須真正優先考慮我們的資金支出以及公司可自由支配的任何支出。

So, I think, in operations, the team has continued to do a good job. With their budgets, even though we've loosened some of those budgets up once we got the rate case resolved. So, I think you can kind of start with that.

因此，我認為，在營運方面，團隊繼續做得很好。儘管我們在解決了利率問題後已經放寬了部分預算，但仍然有他們的預算。所以，我認為你可以從那裡開始。

In addition to that, I think, the water mix in this rate case is, it's much more closely aligned to what actual is. And if you recall when we were decoupled, you had some big, differences between adopted and actual. So, the fact that the water mix is tracking closely together means that the rate cases is a more accurate forecast. I think that's helping us.

除此之外，我認為，這種速率情況下的水混合物與實際情況更加接近。如果你還記得我們脫鉤的時候，你會發現採用的和實際的之間有很大的差異。因此，水混合物緊密追蹤的事實意味著速率情況是一個更準確的預測。我認為這對我們有幫助。

I mean, you're absolutely right, Jonathan, you followed us for a while. Usually when it's the third year of the rate case, we always tell people, hey, don't expect anything in the first quarter. And so, I was really happy with the quarterly results that the year-by-year increase in earnings. And we'll just have to keep executing, to the plan.

我的意思是，你完全正確，喬納森​​，你跟踪我們有一段時間了。通常，當利率案例進入第三年時，我們總是告訴人們，嘿，不要對第一季抱有任何期望。因此，我對季度業績和收益逐年增長感到非常滿意。我們只需要繼續執行計劃。

And again, to the question that Davis just asked, there's going to be curveballs thrown at us with everything that we're seeing in the market, and I think our ability to absorb those curveballs are positioned really well, whether it's liquidity in the balance sheet that we have right now or our ability to reprioritize capital and expenses to meet our obligations and goals for the company for the year.

再次回答戴維斯剛才提出的問題，我們看到的市場上的一切都給我們帶來了意想不到的困難，我認為我們吸收這些困難的能力已經非常強大，無論是我們目前資產負債表中的流動性，還是我們重新調整資本和支出優先順序以履行公司今年的義務和目標的能力。

So, water mix, rate case, and tariff differences is what I would attribute to you as well as good kind of budget management by the operating teams within Cal Water.

因此，我認為水組合、費率案例和關稅差異是你們的功勞，也是加州水務公司營運團隊良好的預算管理的功勞。

Yeah, and then we did get from a from a usage perspective, we were at. I authorized into the first couple of months. The third month in March, we got a little bit of wet weather, colder weather as compared to last year, and so that brought us back kind of close to where we were last year, about the same time.

是的，然後我們確實從使用角度得到了我們所在的位置。我授權進入前幾個月。三月份，我們遇到了一些潮濕的天氣，與去年相比天氣更冷，所以這讓我們的氣溫回到了去年同期的水平。

So, year over year, a little better usage than we saw. We were hoping for a little bit better usage than what we saw. But I think it didn't not having the RAM did not hurt us in any way in Q1.

因此，與去年同期相比，使用情況比我們看到的要好一些。我們希望其使用效果比我們所看到的要好一些。但我認為在第一季度，沒有 RAM 並沒有對我們造成任何傷害。

Yeah, Jim. I think the other thing that's noteworthy too is are the step increases and you know that $27 million in step increases. You're starting to see the effect of that, into the tariffs. And it used to be if you go back to rate cycles, our step increases, would be $4 million maybe $10 million. And so, because we've done a much better job at executing our capital plan.

是的，吉姆。我認為另一件值得注意的事情是逐步增加，你知道逐步增加 2700 萬美元。你開始看到關稅的影響了。如果你回顧利率週期，你會發現我們的步幅成長將是 400 萬美元，甚至是 1000 萬美元。這是因為我們在執行資本計劃方面做得更好。

The amount of uptake that we get on our step increase has been a lot higher and that step increase is basically an inflationary offset, but it is subject to an earnings test, and that earnings test is based on invested capital. So, that plays into this as well, yeah.

我們獲得的逐步增加的金額要高得多，而且逐步增加基本上是一種通貨膨脹的抵消，但它要經過收益測試，而收益測試是基於投資資本的。是的，這也與此有關。

I guess Marty's initial comments were, well, it's a lot of things, Jonathan. We're just, we're kind of going through some of them, but we can't point to one individual kind of pop that that benefited the company in Q1. It's just a culmination of a number of items.

我想馬蒂最初的評論是，嗯，有很多事情，喬納森。我們正在研究其中的一些，但我們無法指出哪一種流行趨勢對公司在第一季有利。這只是許多項目的總結。

All right, great. Yeah, it sounds, like things are on track and, hopefully you can keep them that way throughout the remainder of the year. I did want to shift quickly to the GRC, previously you mentioned that a settlement could potentially come, either before or after the hearings. As such, do you believe a more expansive settlement, or even a global settlement could still be achievable or, is based on the comments you're making today is that ship sailed.

好的，太好了。是的，聽起來事情正在步入正軌，希望您能在今年剩餘時間保持這種狀態。我確實想快速轉到 GRC，之前您提到過，可能會在聽證會之前或之後達成和解。因此，您是否認為更廣泛的解決方案，甚至是全球解決方案仍然可以實現，或者，根據您今天所發表的評論，這艘船是否已經起航了。

You know I don't know if I can really honestly answer that, Jonathan. I mean, one of the things we did when we couldn't reach a global settlement, we went back and we looked at previous rate cases with other water utilities in the state, and it's really been a mixed bag. I mean, we've seen.

你知道我不知道我是否能誠實地回答這個問題，喬納森。我的意思是，當我們無法達成全球和解時，我們所做的事情之一就是回過頭來研究該州其他水務公司的先前費率案例，結果確實好壞參半。我的意思是，我們已經看到了。

Where there's been a fully reached settlement, but then it takes, 12 months to a year and a half to get that the settlement approved within the commission. We've seen, two of the companies get a settlement and get being done close to being on time.

雖然已經達成了完全和解，但需要 12 個月到一年半的時間才能獲得委員會的批准。我們看到，其中兩家公司已經達成和解，並且接近按時完成。

So, it's been really kind of a mixed bag and that's why I go back to kind of in my analysis what's the commissioner saying because the commissioner believe the assigned hearing officer, what's the judge saying and what are the advocates saying? And I suppose there's always a chance you could still, reach a global settlement here during the month of May,

所以，這確實有點混亂，這就是為什麼我在我的分析中回到專員說了什麼，因為專員相信指定的聽證官，法官說了什麼，辯護律師說了什麼？我認為，在五月份，我們仍然有機會達成全球和解。

But the indicators we are as we're moving into the kind of the pre-conference hearings and taking their report and our report and things that are identified that there's no disagreement on, we're identifying those, and we'll submit that to the judge and then see what he says. So, I suppose there's always hope, but from my position I'm happy things are tracking on schedule.

但是，當我們進入會前聽證會並聽取他們的報告和我們的報告時，我們會發現一些指標，這些指標表明雙方沒有分歧，我們會將這些指標提交給法官，然後看看他怎麼說。所以，我想總是有希望的，但從我的角度來看，我很高興事情正在按計劃進行。

Couldn't reach a global settlement. Can we still reach something hard to tell, but we need to proceed as if we're not going to and head into the hearings in May and see where it goes from there. But generally, very happy with the fact that the commissioner, the advocates, and the judge have all been aligned, saying the same thing. We're going to do everything we can to get this rate case done on time.

無法達成全球和解。我們是否還能達成一些難以預測的協議，但我們需要繼續前進，就好像我們不會達成協議一樣，並參加 5 月的聽證會，看看事情會如何發展。但總體而言，我們很高興看到專員、辯護律師和法官都達成了一致，說了同樣的話。我們將竭盡全力按時完成此費率案件。

I guess the only thing I'd add, Jonathan is remember there, there's kind of two areas that where there were significant differences between us and the advocate that being the approach to the to decoupling, and the second is, we identified some significant capital expenditures that are required in our system, and those two. Aspects of our rate case are kind of permeate throughout a lot of the different elements within the rate case.

我想我唯一要補充的是，喬納森記得，我們​​和倡導者在兩個方面存在顯著差異，一是脫鉤方法，二是我們確定了我們的系統所需的一些重大資本支出，就是這兩個方面。我們的費率案例的各個方面都滲透到了費率案例中的許多不同要素中。

And so, there was a big difference between where we were coming from and where Cal Afica was coming from on the larger issues. And so, it's not really a surprise that we weren't able to get a global settlement, but I think if we can knock out some of the smaller items that that Marty was talking about, it puts us in a good position, I think, to move forward timely on the case.

因此，在更大的問題上，我們的立場和 Cal Afica 的立場有很大差異。因此，我們未能達成全球和解並不奇怪，但我認為，如果我們能夠解決馬蒂談到的一些較小的問題，我們就處於有利地位，可以及時推進此案的審理。

Yeah, so I mean that that's what I was going to say like I mean in the past you've kind of reached like, called a partial settlement, I mean it sounds like that's what you've kind of got here again with some of these undisputed items that, take those off the table.

是的，我的意思是，這就是我要說的，就像我過去所說的那樣，你已經達成了所謂的部分和解，我的意思是，這聽起來就像你在這裡再次達成的一些無爭議的項目，將這些項目從談判桌上拿走。

But like you said, Jim, I mean, based on the last GRC CapEx decoupling, those are major, issues that ultimately had to get fully litigated and, sounds like that's where we are again this time around.

但就像你說的，吉姆，我的意思是，基於上次 GRC 資本支出脫鉤，這些都是重大問題，最終必須經過全面訴訟，聽起來我們這次又處於同樣的情況。

Yeah, I think that's right, Jonathan. I think that's right. And that's why this next step looking at their report, our report lining up things that there's no disagreement on it and submitting that to the judge, that may very well take those elements off the table, and then we just focus on the major areas of disagreement, which would be kind of rate design, decoupling, etc.

是的，我認為是對的，喬納森。我認為那是對的。這就是為什麼下一步要查看他們的報告，我們的報告會列出沒有分歧的事情，並將其提交給法官，這很可能會將這些因素排除在外，然後我們只關注主要的分歧領域，即利率設計、脫鉤等。

Yeah, okay, and then last question for me and I apologize if you did mention it, but where do you stand on renewing the ATM program and what size do you think you'll need when you do renew it?

是的，好的，然後是我的最後一個問題，如果您確實提到了這個問題，我很抱歉，但是您對更新 ATM 程式有什麼看法，以及您認為更新時需要多大的規模？

So we're in the process of kind of working with banks and whatnot. We do intend to renew it, and it'll probably be this spring sometime early this spring. We always like to have that availability for us to take advantage of the equity markets when opportunities and the timing is right for us to do so.

因此，我們正與銀行等機構合作。我們確實打算續簽，時間可能是在今年春天的某個時候。當機會和時機成熟時，我們總是希望能夠利用股票市場。

At this point we're still in the process of reviewing with our finance committee of the size of it of the ATM and the different features that we may want to pursue on it, but I would expect we would announce something probably early spring here in the not too distant future.

目前，我們仍在與財務委員會一起審查 ATM 機的規模以及我們可能想要在其上實現的不同功能，但我預計我們會在不久的將來於早春宣布一些消息。

Okay, great. Thanks so much for the time this morning.

好的，太好了。非常感謝您今天上午抽出時間。

All right, thanks.Johnathan

好的，謝謝。約翰納森

There are no more further questions at this time. I would like to turn the call back over to Martin Karpelnicki for closing remarks.

目前沒有其他問題。我想將電話轉回給馬丁·卡佩爾尼茨基 (Martin Karpelnicki) 來做最後一次演講。

Great, thanks, Desiree. Well, thanks everyone for joining us today. Q1 is done and in the books, as they say, and we'll move on to Q2 and obviously as things change with the General Rate case, we'll look forward to updating everyone in July for our second quarter earnings call. So, thanks for calling in today. Any questions, feel free to reach out and everybody have a great day.

太好了，謝謝，Desiree。好吧，感謝大家今天的參加。正如他們所說，第一季已經結束並記錄在案，我們將進入第二季度，顯然隨著一般費率案例的變化，我們期待在 7 月份的第二季度收益電話會議上向大家更新最新情況。所以，感謝您今天的來電。如有任何疑問，請隨時聯絡我們，並祝大家有個愉快的一天。

Thank you.

謝謝。

This concludes today's conference call. Thank you all for joining and you may now disconnect.

今天的電話會議到此結束。感謝大家的加入，現在可以斷開連線了。