H2O America (HTO) 2025 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to SJW Group first-quarter 2025 financial results call. (Operator Instructions) Please be advised that today's conference is being recorded. I would like now to turn the conference over to Ann Kelly, Chief Accounting Officer. Please go ahead.

女士們，先生們，感謝大家的支持，歡迎參加 SJW 集團 2025 年第一季財務業績電話會議。 （操作員指示）請注意，今天的會議正在錄音。現在我想將會議交給首席會計官安凱利 (Ann Kelly)。請繼續。

Thank you, Michelle. Welcome to the first quarter 2025 financial results conference call for SJW Group. I will be presenting today with Eric Thornburg, Chair of the Board, President and Chief Executive Officer; Andrew Walters, Chief Financial Officer and Treasurer; Bruce Hauk, Chief Operating Officer; and Kristen Johnson, Senior Vice President and Chief Administrative Officer. For those who would like to follow along, slides accompanying our remarks are available on our website at sjwgroup.com.

謝謝你，米歇爾。歡迎參加SJW集團2025年第一季財務業績電話會議。今天我將與董事會主席、總裁兼首席執行官 Eric Thornburg 一起出席演講；安德魯·沃爾特斯 (Andrew Walters)，首席財務官兼財務主管；布魯斯·豪克 (Bruce Hauk)，首席營運官；以及高級副總裁兼首席行政官克里斯汀·約翰遜 (Kristen Johnson)。對於想要跟隨的人，可以在我們的網站 sjwgroup.com 上找到我們評論的幻燈片。

Before we begin today, I would like to remind you that this presentation and the related materials posted on our website can contain forward-looking statements. These statements are based on estimates and assumptions made by the company in light of its experience, historical trends, current conditions, and expected future results, as well as other factors that the company believes are appropriate under the circumstances.

在我們今天開始之前，我想提醒您，本簡報和我們網站上發布的相關資料可能包含前瞻性陳述。這些聲明是基於公司根據其經驗、歷史趨勢、當前狀況和預期未來結果以及公司認為在當前情況下適當的其他因素所做的估計和假設。

Many factors could cause the company's actual results and performance to differ materially from those expressed or implied by the forward-looking statements. For a description of some of the factors that could cause actual results to be different from the statements in this presentation, we refer you to the financial results press release and to our most recent forms 10-K, 10-Q, and 8-K filed with the Securities and Exchange Commission, copies of which may be obtained on our website.

許多因素可能導致公司的實際結果和績效與前瞻性陳述所表達或暗示的結果和績效有重大差異。有關可能導致實際結果與本簡報中的陳述不同的某些因素的描述，請您參閱財務業績新聞稿以及我們向美國證券交易委員會提交的最新 10-K、10-Q 和 8-K 表格，您可以在我們的網站上取得這些表格的副本。

All forward-looking statements are made as of today, and SJW Group disclaims any duty to update or revise such statements. You will have an opportunity to ask questions at the end of the presentation. This webcast is being recorded, and an archive of the webcast will be available until July 21, 2025. You can access the press release and the webcast at SJW Group's website.

所有前瞻性陳述均截至今日作出，SJW 集團不承擔更新或修改此類陳述的任何義務。演示結束時您將有機會提問。本次網路直播正在錄製中，網路直播存檔將保留至 2025 年 7 月 21 日。您可以在 SJW 集團的網站上存取新聞稿和網路直播。

In addition, some of the information discussed today includes the non-GAAP financial measures of adjusted net income and adjusted diluted earnings per share that have not been calculated in accordance with generally accepted accounting principles in the United States or GAAP. These non-GAAP financial measures should be considered as a supplement to the financial information prepared on a GAAP basis rather than an alternative to the respective GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the table in the appendix of our presentation.

此外，今天討論的一些資訊包括非 GAAP 財務指標，即調整後淨收入和調整後稀釋每股收益，這些指標尚未按照美國公認會計原則或 GAAP 計算。這些非 GAAP 財務指標應被視為依照 GAAP 編製的財務資訊的補充，而不是對應 GAAP 財務指標的替代。這些非 GAAP 財務指標與最直接可比較的 GAAP 財務指標的對帳情況已列於我們簡報附錄中的表格中。

I will now turn the call over to Andrew.

現在我將電話轉給安德魯。

Thank you, Ann. Welcome, everyone, and thank you for joining us. I am honored to serve as Chief Financial Officer and Treasurer of SJW Group, and I'm looking forward to becoming the Chief Executive Officer following Eric Thornburg's planned and well-deserved retirement on July 1. I want to add my sincere gratitude to Eric for his leadership and fellowship over the years.

謝謝你，安。歡迎大家，感謝你們的加入。我很榮幸擔任 SJW 集團的財務長和財務主管，並期待在 Eric Thornburg 於 7 月 1 日按計劃退休後擔任執行長。我要對 Eric 多年來的領導和友誼表示最誠摯的感謝。

I look forward to continued partnership with Bruce, Kristen, Ann, and Willie and my colleagues at SJW Group as we chart our course for a journey of continuous improvement and excellence through servant leadership. I'm pleased to share that in the first quarter of 2025, we continue to meet drinking water and environmental regulations, deliver on our public health and environmental stewardship commitments, and provide high quality water and service to customers.

我期待與 Bruce、Kristen、Ann、Willie 以及 SJW 集團的同事們繼續合作，共同規劃透過僕人式領導不斷改進和追求卓越的旅程。我很高興地告訴大家，在 2025 年第一季度，我們將繼續滿足飲用水和環境法規，履行我們的公共衛生和環境管理承諾，並為客戶提供高品質的水和服務。

We also delivered strong financial results, including a nearly 41% increase in net income from the first quarter of 2024 on a GAAP basis. Our performance reflects our continued execution of our proven growth strategy focused on investments in our infrastructure and water systems across our national footprint and constructive engagement and consensus building with key local stakeholders, all with an eye on affordability.

我們也取得了強勁的財務業績，其中以 GAAP 計算，淨收入較 2024 年第一季成長近 41%。我們的績效反映了我們持續執行行之有效的成長策略，重點是投資全國範圍內的基礎設施和供水系統，並與當地主要利益相關者進行建設性接觸和建立共識，同時著眼於可負擔性。

Some highlights from the first quarter. San Jose Water 2025 to 2027 general rate case was delivered on time and was effective on January 1. Connecticut Water's Water Infrastructure and Conservation Adjustment and Water Revenue Adjustment filings were approved. Maine Water's petitioned to unify our 10 different rate districts and our rate case for the Camden Rockland division are progressing before the Maine Public Utilities Commission. Texas Water's second System Improvement Charge application is before the Public Utilities Commission of Texas. And quarter one $78 million was invested in water and wastewater utility infrastructure across all four states, and we are on track to meet our 2025 capital plan.

第一季的一些亮點。聖荷西水務公司 2025 年至 2027 年一般費率案已按時交付，並於 1 月 1 日生效。康乃狄克水務公司的水基礎設施和保護調整以及水收入調整申請已獲得批准。緬因水務公司請求統一我們的 10 個不同費率區，而我們的卡姆登羅克蘭分部費率案正在緬因州公共事業委員會面前審理。德州水務公司的第二份系統改善費用申請已提交給德州公共事業委員會。第一季度，我們已在四個州的水和污水處理設施基礎設施上投資了 7,800 萬美元，預計將實現 2025 年資本計畫。

Importantly, we continue to create long-term shareholder value with earnings per diluted share of $0.49 and adjusted non-GAAP earnings per diluted share of $0.50 in the first quarter. And as you will hear later, we remain laser focused on operating efficiency. And we recognize colleagues in each local operation for their contributions to our safety culture. As expected, 2025 looks to be a strong year for SJW Group as we build on our foundation for sustained growth and long-term value creation. And I want to thank our talented team across the nation for making that happen.

重要的是，我們繼續創造長期股東價值，第一季每股攤薄收益為 0.49 美元，調整後非 GAAP 每股攤薄收益為 0.50 美元。正如您稍後會聽到的，我們仍然專注於營運效率。我們認可每個當地營運部門的同事為我們的安全文化所做的貢獻。正如預期的那樣，2025 年對於 SJW 集團來說將是強勁的一年，因為我們將奠定持續成長和長期價值創造的基礎。我要感謝我們全國各地的優秀團隊，是他們讓這個目標成為現實。

The completion of successful general rate cases in our two largest jurisdictions in 2024 has reduced potential regulatory risk for the next couple of years. These two states generated 90% of our water utility services net income in 2024. Our 2025 capital plan is a 34% increase over 2024 actual spend. We don't foresee any significant issues from current US economic conditions. The vast majority of our supplies are domestic, with some use components and materials from other countries.

2024 年，我們兩個最大司法管轄區內成功完成的一般費率案件降低了未來幾年的潛在監管風險。這兩個州在 2024 年創造了我們 90% 的供水服務淨收入。我們的 2025 年資本計畫比 2024 年實際支出增加 34%。我們預計當前美國經濟狀況不會有任何重大問題。我們的供貨絕大多數是國產的，有些則使用其他國家的零件和材料。

The leadership transition Eric announced last quarter is progressing smoothly. Our new team is complete with the exception of a new Chief Accounting Officer to assume Ann's duties as she becomes our new Chief Financial Officer effective July 1. Kristen will also share details about the newest impactful leader who just joined our team last week. Our long-term growth strategy beyond 2025 will continue to focus on timely recovery of our robust $2 billion dollars five-year capital plan that is needed to maintain reliable service and high-quality water, as well as solid regulatory relationships that are built on outcomes that serve customers and capital providers.

埃里克上個季度宣布的領導層過渡進展順利。我們的新團隊已經完整，除了一位新的首席會計官將接替安的職責，她將於 7 月 1 日成為我們的新財務長。克里斯汀還將分享有關上週剛加入我們團隊的最新有影響力的領導者的詳細資訊。我們 2025 年以後的長期成長策略將繼續專注於及時恢復我們強勁的 20 億美元五年資本計劃，該計劃對於維持可靠的服務和高品質的水源以及建立在服務客戶和資本提供者成果基礎上的穩固監管關係至關重要。

While not in our baseline growth plan, we will continue to pursue opportunistic acquisitions that benefit our customers and make financial and strategic sense. We will do that with a focus on financial discipline and a steadfast commitment to affordability. We are leveraging our scale, operational efficiencies, and technological advancements to manage costs while providing for our systems to remain robust, resilient, and reliable.

雖然不在我們的基準成長計劃中，但我們將繼續尋求有利於我們的客戶並具有財務和策略意義的機會性收購。我們將以財政紀律和堅定不移地致力於負擔能力為重點來實現這一目標。我們利用我們的規模、營運效率和技術進步來管理成本，同時確保我們的系統保持穩健、有彈性和可靠。

As evidence of our financial discipline, S&P raised the credit outlook for SJW Group to stable. We will continue to focus on important credit metrics as we are committed to maintaining our A category credit rating. We'll discuss all this in more detail later in the call, but for now, let me turn the call back to Ann to take you through our financial results.

作為我們財務紀律的證明，標準普爾將 SJW 集團的信用展望上調至穩定。我們將繼續專注於重要的信用指標，致力於維持我們的 A 類信用評級。我們將在稍後的電話會議中更詳細地討論所有這些問題，但現在，讓我將電話轉回給安，讓她向您介紹我們的財務結果。

Thank you, Andrew. Yesterday, after the market closed, we released our first-quarter operating results. As Andrew mentioned, we were pleased to report $0.49 of GAAP diluted EPS and $0.50 adjusted diluted EPS for the first quarter.

謝謝你，安德魯。昨天，股市收盤後，我們發布了第一季的經營業績。正如安德魯所提到的，我們很高興地報告第一季的 GAAP 稀釋每股收益為 0.49 美元，調整後稀釋每股收益為 0.50 美元。

With these strong first-quarter results, we are affirming our 2025 guidance range of adjusted diluted earnings per share of $2.90 to $3. We are also affirming SJW Group's 5% to 7% earnings growth rate through 2029, and we expect to be in the top half of the range.

憑藉第一季的強勁業績，我們確認 2025 年調整後每股攤薄收益指引範圍為 2.90 美元至 3 美元。我們也確認 SJW 集團在 2029 年的獲利成長率將達到 5% 至 7%，並且我們預計其獲利成長率將處於該範圍的上半部。

Turning to slide 9. In the first quarter, we reported revenue of $167.6 million, a 12% increase over the $149.4 million reported in 2024, primarily reflecting the rate increases in California and Connecticut that Andrew referred to. This increase in sales along with prudent cost management resulted in GAAP net income of $16.6 million, which increased 41% over 2024. An adjusted net income was $16.7 million, a 43% increase over the prior year. We also reported a 39% increase in our adjusted diluted EPS of $0.50.

翻到幻燈片 9。第一季度，我們報告的收入為 1.676 億美元，比 2024 年報告的 1.494 億美元增長 12%，主要反映了安德魯提到的加州和康乃狄克州的費率上漲。銷售額的成長加上審慎的成本管理使 GAAP 淨收入達到 1,660 萬美元，比 2024 年成長 41%。調整後的淨收入為 1,670 萬美元，比上一年增長 43%。我們還報告稱，調整後稀釋每股收益成長了 39%，達到 0.50 美元。

The factors impacting 2024 earnings per share are shown on slide 10. At a high level, increased revenue from rates and usage drove a revenue increase of $0.41. The revenue increase was partially offset by higher water production expense of $0.16, other operating expense of $0.06, an increase in interest expense of $0.02, and an additional $0.02 due to an increase in the number of shares outstanding.

影響 2024 年每股盈餘的因素顯示在投影片 10 上。從高層次來看，費率和使用量帶來的收入增加推動了 0.41 美元的收入成長。收入成長部分被以下因素所抵銷：水生產費用增加 0.16 美元、其他營運費用增加 0.06 美元、利息費用增加 0.02 美元，以及由於流通股數量增加而額外增加 0.02 美元。

Turning to the next slide, I'll provide more detail on each of these areas. As I mentioned earlier, our revenues increased 12% in the first quarter. Rate increases from the general rate cases in California and Connecticut along with increases from our infrastructure mechanisms in Connecticut, Maine, and Texas contributed $11.9 million to the revenue increase. $5.3 million is attributable to pass through water costs for our wholesalers as these costs continue to increase each year.

翻到下一張投影片，我將提供有關每個領域的更多細節。正如我之前提到的，我們的營收在第一季成長了 12%。加州和康乃狄克州一般費率的提高，以及康乃狄克州、緬因州和德州基礎設施機制的增加，為收入成長貢獻了 1,190 萬美元。 530 萬美元歸因於我們批發商的轉嫁水成本，因為這些成本每年都在增加。

Higher customer usage added another $1 million as increased usage in California more than offset a reduction in taxes due to the increasing severity of the drought. And revenue increases associated with new customer growth was offset by a reduction in regulatory mechanisms. With the new rate case in effect in California and lower authorized usage, we would expect regulatory mechanisms to be less pronounced in the current rate structure.

由於乾旱加劇導致加州使用量增加，稅收減少，因此客戶使用增加又增加了 100 萬美元。新客戶成長帶來的收入增加被監管機制的減少所抵消。隨著加州新費率案的生效和授權使用量的降低，我們預計現行費率結構中的監管機制將不再那麼明顯。

Water production expenses increased 14% in the quarter and was primarily driven by an increased cost of $5.6 million from our water wholesaler. However, these costs are largely offset in revenue and $2.4 million in expense associated with higher production volumes. For the quarter, we reported a 4% increase in other operating expenses. General and administrative expenses increased $2 million, primarily driven by customer credit losses and insurance costs, along with $800,000 increase in maintenance costs and $200,000 of other cost increases.

本季水生產費用增加了 14%，主要原因是我們的水批發商成本增加了 560 萬美元。然而，這些成本在很大程度上被收入和與更高產量相關的 240 萬美元支出所抵消。本季度，我們報告其他營運費用增加了 4%。一般及行政開支增加了 200 萬美元，主要原因是客戶信用損失和保險費用，以及維護成本增加 80 萬美元和其他成本增加 20 萬美元。

On the financing side, in the first quarter, we raised approximately $27 million of our $120 million to $140 million expected annual equity proceeds through our at-the-market program, or ATM. At the end of the quarter, we had $153 million drawn on our $350 million bank lines of credit, which left $197 million available for short-term financing of utility plant additions and operating activities.

在融資方面，第一季度，我們透過市場計畫（ATM）籌集了約 2,700 萬美元，預計年度股權收益為 1.2 億至 1.4 億美元。截至本季末，我們從 3.5 億美元的銀行信用額度中提取了 1.53 億美元，剩餘 1.97 億美元可用於公用事業工廠擴建和營運活動的短期融資。

We were also pleased to see that the average borrowing rate for our line of credit advances in the first quarter was approximately 5.47% compared to 6.54% in the prior year. And on the tax front, consolidated income tax rates were pretty steady quarter-over-quarter with a 1% increase in our effective tax rate, primarily due to higher pre-tax earnings.

我們也很高興看到，第一季我們的信用額度預付款平均借款利率約為 5.47%，而去年同期為 6.54%。在稅收方面，綜合所得稅率季維持穩定，有效稅率增加 1%，這主要歸因於稅前收益增加。

Turning to slide 15. In addition to affirming our long-term growth rate and EPS guidance mentioned earlier on the call, we are also affirming equity issuances of $120 million to $140 million planned through our ATM, excluding any acquisition growth and our $473 million capital plan in 2025. We are now seeing construction activity pick up with the return of warmer weather, especially in Connecticut and Maine.

翻到第 15 張投影片。除了確認我們在電話會議上早些時候提到的長期成長率和每股盈餘指引外，我們還確認計劃透過 ATM 發行 1.2 億至 1.4 億美元的股票，不包括任何收購成長和我們 2025 年 4.73 億美元的資本計畫。隨著天氣變暖，我們現在看到建築活動正在回暖，尤其是在康乃狄克州和緬因州。

And lastly, I'd like to take a moment to reiterate our long-term targets. We are affirming our 5% to 7% long-term growth rate and continue to expect to be in the top half of the range. We have established a robust five-year $2 billion capital plan, and we continue to focus on our credit metrics with a target FFO to debt of 12% by 2028, which will give us 100 basis points of cushion over our 11% downgrade threshold from S&P.

最後，我想花點時間重申我們的長期目標。我們確認長期成長率為 5% 至 7%，並繼續預期處於該範圍的上半部。我們制定了一項強有力的五年期 20 億美元資本計劃，並將繼續關注我們的信用指標，目標是到 2028 年將 FFO 與債務之比設為 12%，這將為我們在標準普爾 11% 的降級門檻上提供 100 個基點的緩衝。

And with that, I will turn the call over to Bruce to discuss the state updates.

說完這些，我將把電話轉給布魯斯，討論國家的最新情況。

Thank you, Ann. As Andrew mentioned earlier, new rates went into effect for San Jose Water on January 1, 2025, as planned. The new rates support $450 million in capital expenditures for the three years covered by this general rate case and $53.1 million or 9.4% total revenue increase at the 2025 through 2027 authorized sales and customer forecast.

謝謝你，安。正如安德魯之前提到的，聖荷西水務公司的新費率將按計劃於 2025 年 1 月 1 日生效。新的費率支持該一般費率案例涵蓋的三年內 4.5 億美元的資本支出，並支持 2025 年至 2027 年授權銷售和客戶預測中的 5310 萬美元或 9.4% 的總收入增長。

We will also see greater revenue recovery through the service charge now at 48% and further alignment of authorized actual usage through a lower sales forecast. The approved 2025 rate increase is $21.3 million or 3.91%. The annual step increases for 2026 and 2027 are $14.4 million and $17.4 million, respectively.

我們還將透過目前 48% 的服務費看到更大的收入恢復，並透過較低的銷售預測進一步調整授權實際使用量。經批准的 2025 年費率增幅為 2,130 萬美元，即 3.91%。 2026 年和 2027 年的年度遞增分別為 1,440 萬美元和 1,740 萬美元。

I also want to note that our ongoing advanced metering infrastructure project is separate from the GRC capital plan. AMI is a $100 million project with the bulk of the spending planned for 2025 and 2026. Our spend for this project will be recovered via annual rate base offset filings with the California Public Utilities Commission to become effective on July 1. We anticipate filing for recovery in May 2025 for rates effective July 2025, and I will share more details during the second quarter call.

我還想指出，我們正在進行的先進計量基礎設施項目與 GRC 資本計劃是分開的。 AMI 是一個耗資 1 億美元的項目，大部分支出計劃在 2025 年和 2026 年完成。我們在該項目上的支出將透過向加州公用事業委員會提交年度費率基準抵銷申請來收回，該申請將於 7 月 1 日生效。我們預計將於 2025 年 5 月提交收回申請，並於 2025 年 7 月生效的費率，我將在第二季電話會議上分享更多細節。

Turning to Connecticut. Last month, the Connecticut Public Utilities Regulatory Authority authorized a $1.6 million revenue increase in the company's water infrastructure and conservation adjustment. The increase was effective on April 1. The cumulative WICA surcharge is now 4.9%.

轉向康乃狄克州。上個月，康乃狄克州公用事業監管局批准為該公司的水利基礎設施和保護調整增加 160 萬美元的收入。此次上調於 4 月 1 日生效。 WICA 附加費累計目前為 4.9%。

PURA also approved Connecticut Water's proposed annual reconciliation of the water revenue adjustment to collect the 2024 revenue shortfall. The approved adjustment reconciled 2024 revenues as authorized in Connecticut Water's June 2024 general rate case and provides for recovery of an additional $627,000 as a result of achieving performance metrics established by PURA in the 2024 GRC decision. The amount is prorated and only covers the period between July 1, 2024, and December 31, 2024. The performance-based revenue opportunity for a full year is approximately $1.1 million.

PURA 也批准了康乃狄克水務公司提出的年度水費收入調整以彌補 2024 年的收入缺口。核准的調整與康乃狄克水務公司 2024 年 6 月一般費率案中授權的 2024 年收入相一致，並規定由於達到 PURA 在 2024 年 GRC 決議中確定的績效指標而額外收回 627,000 美元。該金額按比例分配，僅涵蓋 2024 年 7 月 1 日至 2024 年 12 月 31 日之間的期間。全年基於績效的收入機會約為 110 萬美元。

Connecticut Water has applied for approximately $19.4 million and drinking water state revolving fund loans. That the company plans to use for water system improvements and a lead service line identification program. Sara issued a proposed final decision on April 11, 2025, approving our request.

康乃狄克水務公司已申請約 1,940 萬美元的飲用水州循環基金貸款。該公司計劃利用它進行供水系統改進和鉛服務線識別計劃。 2025 年 4 月 11 日，Sara 發布了擬議的最終決定，批准了我們的請求。

A final decision is forthcoming -- taking advantage of lower interest loan programs when they make sense is another way we work to maintain affordability for customers. We are continuing to work with state lawmakers and regulators on a with-a-like mechanism called the water quality and treatment adjustment that would allow cost recovery for water treatment and remediation infrastructure between general rate cases. If enacted, it would help smooth rate impacts for PFAS compliance by distributing costs more predictably over time.

最終決定即將做出——在合理的情況下利用低利率貸款計劃是我們努力保持客戶負擔能力的另一種方式。我們將繼續與州立法者和監管機構合作，制定一種稱為水質和處理調整的類似機制，以便在一般費率案例之間收回水處理和修復基礎設施的成本。一旦頒布，它將透過更可預測地隨時間分配成本來幫助平滑 PFAS 合規性的費率影響。

The bill has been voted out of committee, we expect a decision on the WQTA by the time the Connecticut legislature adjourns on June 4. We in Maine, our petition to unify the company's 10 different rate districts into a single tariff is pending before the main Public Utilities Commission. If approved, it would streamline general rate case and water infrastructure charge application, which are currently filed on a district-by-district basis. A decision is expected in the fourth quarter of this year.

該法案已在委員會中被否決，我們預計康乃狄克州議會將於 6 月 4 日休會時就 WQTA 做出決定。在緬因州，我們要求將公司的 10 個不同費率區統一為單一費率的請願書正在等待主要公共事業委員會的審議。如果獲得批准，該法案將簡化目前按區提交的一般費率案件和水基礎設施收費申請。預計今年第四季做出決定。

Our general rate case for the Camden Rockland division is also pending before the PUC. We are requesting a revenue increase of $1.1 million or 15.9% above current authorized revenue. A decision is expected in this quarter. In our Texas service area, we have been experiencing significant and persistent draw. As we discussed on our last call, we have a multi-pronged approach to make our Texas water more resilient in this quarter. As we discussed on our last call, we have a multi-pronged approach to make our Texas water systems more resilient to weather extremes so that we can enhance system reliability and availability of water supply for our current customers.

我們針對卡姆登羅克蘭分部的一般費率案件也正在等待公共事業委員會的審理。我們要求將收入增加 110 萬美元，即比目前授權收入高出 15.9%。預計將於本季做出決定。在我們的德州服務區，我們一直經歷著顯著且持續的吸引力。正如我們在上次電話會議上討論的那樣，我們採取了多管齊下的方法來提高本季度德克薩斯州的水資源彈性。正如我們在上次電話會議上討論的那樣，我們採取了多管齊下的方法來使我們的德克薩斯州供水系統更能抵禦極端天氣，以便我們能夠提高系統可靠性和為現有客戶提供供水的可用性。

Our highest priority is bringing the 6,000 acre feet of water supply online from our KT Water acquisition to serve customers by the end of 2026. However, this is a multiphase, multiyear project that requires approximately 6 miles of transmission main storage and pump stations. This project represents a significant investment that is reflected in our capital budget.

我們的首要任務是到 2026 年底將我們收購的 KT Water 提供的 6,000 英畝英尺的供水系統投入使用，為客戶服務。然而，這是一個多階段、多年的項目，需要大約 6 英里的輸電主儲存和泵站。該項目代表著一項重大投資，這反映在我們的資本預算中。

Turning to regular, Texas water second system improvement charge application was pending before the Public Utilities Commission of Texas. We have requested 4.1 million in revenue. A hearing was held on our application last month and we could see a decision as early as this quarter

回到常規情況，德州第二水務系統改進收費申請正在德州公共事業委員會審議中。我們已請求410萬的收入。上個月就我們的申請舉行了聽證會，我們最早可能在本季度得到決定。

With that, I will turn the call over to Kristen.

說完這些，我會把電話轉給克里斯汀。

One moment, please. We are experiencing technical difficulties.

請稍等一下。我們遇到了技術困難。

Thank you, Bruce. Turning into slide 22. As Bruce mentioned, our capital investments are increasing to meet higher water quality standards and evolving customer expectations. At the same time, we know affordability is essential. Our customers don't have unlimited resources. And we're committed to ensuring every dollar we invest delivers maximum value.

謝謝你，布魯斯。轉到第 22 張投影片。正如 Bruce 所提到的，我們的資本投資正在增加，以滿足更高的水質標準和不斷變化的客戶期望。同時，我們知道負擔能力至關重要。我們的客戶沒有無限的資源。我們致力於確保我們投資的每一美元都能發揮最大價值。

That's why we're laser focused on efficiency, scrutinizing every aspect of our business to ensure we're operating as effectively as possible. By leveraging our national scale and optimizing operations, we're creating the financial flexibility needed to support these critical investments, while helping to moderate future rate increases.

這就是為什麼我們專注於效率，仔細審查業務的各個方面，以確保我們盡可能有效地運作。透過利用我們的全國規模和優化運營，我們正在創造支持這些關鍵投資所需的財務靈活性，同時幫助緩和未來的利率上漲。

One of the biggest opportunities to improve efficiency is through business transformation. As we continue to enhance our operations, we are investing in standardized enterprise-wide platforms to drive efficiencies, improve service and support long-term growth.

提高效率的最大機會之一是透過業務轉型。隨著我們不斷加強運營，我們正在投資標準化的企業範圍平台，以提高效率、改善服務並支持長期成長。

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

這項工作的關鍵部分是過渡到統一的客戶服務系統，這意味著為客戶提供更快、更有效率的服務，更有彈性的員工隊伍，員工可以支援不同地點的運營，並最終提高服務的可靠性。

And as you heard earlier, we're investing in Advanced Metering Infrastructure in San Jose and the majority of our customers in Texas are already experiencing the benefits of this technology. AMI will reduce operating costs, improve billing accuracy, enhanced leak detection and generate long-term savings for both our customers and our company.

正如您之前所聽到的，我們正在聖荷西投資先進的計量基礎設施，我們在德州的大多數客戶已經體驗到了這項技術的好處。 AMI 將降低營運成本、提高計費準確性、增強洩漏檢測並為我們的客戶和公司帶來長期節約。

We are currently considering the development of AMI, in Connecticut and Maine. These technology advancements aren't just upgrades. They're part of our broader strategy to drive efficiencies that translate directly into cost savings for customers and long-term system resilience.

我們目前正在考慮在康乃狄克州和緬因州開發 AMI。這些技術進步不僅僅是升級。它們是我們更廣泛策略的一部分，旨在提高效率，直接轉化為客戶的成本節約和長期的系統彈性。

A strong execution strategy requires strong leadership, and we continue to build a world-class team. Last week, we welcomed another highly accomplished leader to SJW Group. Ken New is our new Chief Human Resources Officer. She joins us from Avangrid, where she recently served as Vice President of Rewards and Employee Experience. Ken brings deep expertise in human resources, and I know she'll make a positive impact on our people and our culture.

強而有力的執行策略需要強而有力的領導，我們不斷打造一支世界級的團隊。上週，我們歡迎了另一位非常有成就的領導者加入 SJW 集團。 Ken New 是我們新任的人力資源長。她來自 Avangrid，最近擔任該公司的獎勵和員工體驗副總裁。肯在人力資源方面擁有深厚的專業知識，我知道她會對我們的員工和文化產生正面的影響。

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

說完這些，我會把電話轉給 Eric。

Thank you, Kristen. We continue to prioritize building a culture of safety, because protecting our people and the communities we serve is foundational to everything we do.

謝謝你，克里斯汀。我們繼續優先建立安全文化，因為保護我們的員工和我們服務的社區是我們所做的一切的基礎。

Whether our employees are in the office, in the field or at a construction site we want them to return home safely each day. And we want the public to feel confident that the work we do is being done with care, integrity and safety top of mind. Safety isn't just a checklist. It's really a mindset.

無論我們的員工是在辦公室、在現場或建築工地，我們都希望他們每天都能安全回家。我們希望公眾相信，我們所做的工作是謹慎、誠信和安全至上的。安全不僅僅是一份清單。這確實是一種心態。

And when your team understands how essential water is to the health and strength of the community, it can be tempting to jump in and solve problems quickly. But we know that doing things the right way sometimes means slowing down, assessing risk and putting safety first.

當您的團隊了解到水對於社區健康和力量的重要性時，您會忍不住立即採取行動並解決問題。但我們知道，以正確的方式做事有時意味著放慢速度、評估風險並將安全放在第一位。

In March, our State President of National Leadership Team recognized four employees whose actions protected co-workers, contractors and community members alike. These included Exercising Stop Work Authority, requiring contractors to follow safety tailboards and taking the time to educate others on the consequences of unsafe practices.

三月份，我們州國家領導團隊主席表彰了四名員工，他們的行動保護了同事、承包商和社區成員。這些措施包括行使停工權、要求承包商遵守安全尾板以及花時間教育其他人不安全操作的後果。

As I close my final earnings remarks as CEO, I want to express how proud I am of this team, the care you bring to your work each day, your integrity, your discipline and your heart is what makes this company special. We talk often about our purpose to protect what's precious. That means water, yes, but it also means people, our employees, our customers and the communities who count on us every single day.

當我以執行長的身份結束我的最後一次收益演講時，我想表達我對這個團隊的自豪，你們每天對工作的關心、你們的正直、你們的紀律和你們的心使這家公司與眾不同。我們經常談論保護珍貴事物的使命。是的，這意味著水，但它也意味著人，我們的員工，我們的客戶和每天依賴我們的社區。

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

現在，我將把電話轉回給米歇爾，以便回答問題。

(Operator Instructions) Richard Sunderland, JPMorgan Securities.

（操作員指示）摩根大通證券的理查德桑德蘭。

Hi, good morning, can you hear me?

嗨，早安，你聽得到我說話嗎？

Yes, we can, Richard. Thanks for joining us today.

是的，我們可以，理查德。感謝您今天加入我們。

Great. Thanks Eric. And best of luck with the retirement here. I know it's not quite the end for you yet, but the last earnings call, so best of luck.

偉大的。謝謝埃里克。祝您退休後一切順利。我知道這對你來說還不是終點，但這是最後一次收益電話會議了，所以祝你好運。

Yes. Thank you, brother. I appreciate that very much.

是的。謝謝你，兄弟。我非常感激。

So just trying to unpack the results a little bit and thinking about both revenue uptick on the quarter and I guess the Texas drought impacts to the business as well. Are you able to frame kind of where you're trending relative to guidance for the year? Is this a matter of kind of the rate impacts, particularly California and the fixed charge there? And is there any offset to Texas? Or are you trending kind of ahead in any areas? Thank you.

因此，我只是嘗試稍微分析一下結果，並思考本季的營收成長以及德州乾旱對業務的影響。您能否根據今年的指導方針來概括您的趨勢？這是否與利率影響有關，特別是加州和那裡的固定費用？對德克薩斯州有補償嗎？或者您在某些領域是否處於領先地位？謝謝。

Yes, I'll take that. Thanks. I would say we are trending right on plan for this year and in connection with our guidance, so still expect to be in the $2.90 to $3. A couple of things just to talk about this year versus being some other quarters. As you mentioned, we do have full year rate cases. So for California and Connecticut, we both have a full year starting on Jan 1. So that is helpful.

是的，我接受。謝謝。我想說，我們今年的趨勢與計劃和指導方針一致，因此預計價格仍將在 2.90 美元至 3 美元之間。我想談今年與其他季度相比的一些事情。正如您所說，我們確實有全年利率案例。因此，對於加州和康乃狄克州來說，我們都從 1 月 1 日開始全年。這很有幫助。

We do have a little bit more front loading this year compared to previous years. The WCMA, which is the adjustment mechanism in San Jose, does have some volatility with it doesn't exactly follow the trend of our revenues, but we do expect it for the full year to come in line with plan.

與前幾年相比，今年我們的前期投入確實更多。 WCMA 是聖荷西的調整機制，它確實存在一些波動，並且不完全遵循我們的收入趨勢，但我們確實預計全年它將符合計劃。

And then when you think about 2023 and 2024, there were some variability between the quarters, especially related to some tax adjustments for the tax accounting method changes and some release of uncertain tax reserves. So you wouldn't expect those to happen this year. So just to summarize, we're on track and expect a great year.

然後，當您考慮 2023 年和 2024 年時，各個季度之間存在一些差異，特別是與稅務會計方法變化的一些稅收調整以及一些不確定稅收儲備的釋放有關。所以你不會期望這些事情會在今年發生。總而言之，我們的工作進展順利，並期待迎來輝煌的一年。

And Ann, as I recall, when we built the business plan for 2025, we did assume that Texas would remain in drought. Is that correct?

安，我記得，當我們制定 2025 年的商業計劃時，我們確實假設德州將繼續遭受乾旱。對嗎？

We did assume some level of job for this year. Yes, you're right.

我們確實承擔了今年一定程度的工作。是的，你說得對。

Correct. Thank you. Thank you, Richard.

正確的。謝謝。謝謝你，理查。

Understood. And then the WQTA opportunity, could you speak a little bit about what the earnings impact of that mechanism might be, how it could impact regulatory strategy in the states? Any other thoughts or considerations? Thank you.

明白了。然後是 WQTA 機會，您能否稍微談談該機制對收益的影響，以及它將如何影響各州的監管策略？還有其他想法或考慮嗎？謝謝。

Thank you, Richard. I'll start with Bruce, and then I'll ask Ann to make some comments as well.

謝謝你，理查。我先從布魯斯開始，然後我會請安也發表一些評論。

Thank you, Richard. WQTA, as I mentioned in my prepared remarks, made it out of a committee, and we're hopeful that that will be settled June 4 of the year. That mechanism is going to be very much like our existing WICA-like mechanism in Connecticut.

謝謝你，理查。正如我在準備好的演講中提到的那樣，WQTA 已經透過委員會解決了這個問題，我們希望這個問題能夠在今年 6 月 4 日解決。該機制將與我們康乃狄克州現有的 WICA 機制非常相似。

However, it is designated for those environmental incremental improvements that we need to make from a capital standpoint for recovery. So if you put that in perspective, we had $130 million plus I believe, in Connecticut and another $110 million in California. So we would expect that that $130 million would be recovered in future filings that would be considered WTTA filings.

然而，它是為那些從資本角度來看我們需要為恢復而進行的環境漸進式改善而指定的。所以如果你從這個角度來看，我相信我們在康乃狄克州有 1.3 億美元以上，在加州還有 1.1 億美元。因此，我們預計這 1.3 億美元將在未來被視為 WTTA 申請的申請中收回。

So, when you look at the entire capital picture, it really improves the regulatory lag that would have may have existed with that type of investment that we didn't have a vehicle other than a general rate case to recover. So, it actually streamlines the improvements, streamlines the recovery and enhances our regulatory capabilities for return in terms of timeliness of recovery.

因此，當你審視整個資本狀況時，它確實改善了這種投資可能存在的監管滯後現象，除了一般利率案例外，我們沒有其他工具來恢復這種投資。因此，它實際上簡化了改進，簡化了恢復，並增強了我們在恢復及時性方面的監管能力。

And I don't expect that, that would have an impact on 2025, but rather reducing the regulatory lag in the outer years?

我不認為這會對 2025 年產生影響，而是會減少未來幾年的監管落後？

Bruce, can you refresh my memory on that? Is there a percent cap in the bill currently anticipated? I don't recall.

布魯斯，你能幫我回憶一下嗎？目前預計該法案中是否有百分比上限？我不記得了。

There was a cap set at 15%. Obviously, things can change in a regulatory process, but we are hopeful that that will continue to go through as was approved through committee. To put that in perspective, our WTTA mechanism has a 10% cap.

上限設定為 15%。顯然，監管過程中的事情可能會發生變化，但我們希望它能夠繼續按照委員會批准的方式進行。為了更清楚地說明這一點，我們的 WTTA 機制有 10% 的上限。

Please stand by. We are experiencing a technical issue.

請稍候。我們遇到了技術問題。

Operator, this is Andrew. I'm still on.

接線員，我是安德魯。我仍在。

Operator, are there any other questions for the leadership team here?

接線員，還有其他問題想問這裡的領導團隊嗎？

Angie Storozynski, Seaport.

安吉·斯托羅津斯基，海港。

Thank you. Congratulations Eric and to all of you guys, actually. So, just one question. So Andrew, you keep talking about potential M&A or you willing necessarily acquire assets. And I'm just wondering, do you have any state in mind. It's not actually easy to find the sizable water or wastewater assets that would be available for sale in your core states?

謝謝。事實上，我要祝賀 Eric 以及你們所有人。所以，只有一個問題。所以安德魯，你一直在談論潛在的併購或你願意收購資產。我只是想知道，你心裡有什麼狀態嗎？在您的核心州找到可供出售的大量水或廢水資產實際上並不容易嗎？

Angie, it's an excellent question. And I would start off by saying that there are opportunities within the states that we operate in, and particularly the state of Texas is a place that we have had a number of successful acquisitions close with a very positive impact on our business. So that is a prime area that I would expect to see continued activity. In addition to that, we are expanding our views in California. Connecticut may be more restrained on certainly the big opportunities, but there are some additional smaller opportunities that we will continue to work on as well as in Maine.

安吉，這是一個非常好的問題。首先我想說的是，我們經營所在的州內存在著機遇，特別是在德克薩斯州，我們已經完成了許多成功的收購，對我們的業務產生了非常積極的影響。因此，我期望看到該領域繼續保持活躍。除此之外，我們正在擴大我們在加州的視野。康乃狄克州在重大機會方面可能會更加克制，但我們將繼續努力掌握一些較小的機遇，就像在緬因州一樣。

As for other states, we always remain open to other states. As you highlighted, it's not like you just go to the grocery store and you pick a water company off the shelf, they are something that comes by from time-to-time. But that being said, there are still a number of solid opportunities out there for a company our size to be able to look at and engage in, and I would expect us to continue to do that as time goes on. So, I think the key that we stay focused on, Angie, is making sure that we deliver the financial results, and that the accretion happens in the timeframe as well as the leverage does not go beyond what our stated goals are.

至於其他州，我們始終對其他州保持開放。正如您所強調的，這並不像您只是去雜貨店並從貨架上挑選一家水務公司，它們是時不時出現的。但話雖如此，對於我們這樣規模的公司來說，仍然有很多不錯的機會值得關注和參與，我希望隨著時間的推移，我們能夠繼續這樣做。因此，安吉，我認為我們要集中精力的關鍵是確保我們實現財務成果，並且成長在規定時間內發生，槓桿率也不會超出我們既定的目標。

Very good. That’s all I have. Thank you.

非常好。這就是我所擁有的一切。謝謝。

Thank you, Angie.

謝謝你，安吉。

I show no further questions in the queue at this time. I would now like to turn the call back over to Eric Thornburg for closing remarks.

目前隊列中沒有其他問題。現在我想將電話轉回給 Eric Thornburg 做最後發言。

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

再次感謝您今天加入我們。 SJW 集團第一季表現非常強勁，我們對 2025 年剩餘時間的表現更加期待。隨著水務產業資本需求的持續成長，我們將繼續致力於投資基礎設施並探索保持可負擔的解決方案。

SJW Group proudly leverages our national platform to support our distinct local operations, all united by a shared mission, delivering reliable service and high-quality water to 1.6 million people across four states. At the same time, we continue executing our growth strategy and delivering shareholder value, including our unwavering commitment to the dividend, which we paid for more than 80 consecutive years. Our success is built on a culture of service to our customers, communities, the environment and shareholders, and I couldn't be prouder of our team whose dedication makes it all possible.

SJW 集團自豪地利用我們的國家平台來支持我們獨特的本地業務，所有這些業務都團結在一個共同的使命下，為四個州的 160 萬人提供可靠的服務和高品質的水。同時，我們繼續執行成長策略並為股東創造價值，包括我們堅定不移地承諾派發股息，我們已經連續 80 多年派發股息。我們的成功建立在為客戶、社區、環境和股東服務的文化之上，我為我們團隊的奉獻精神使這一切成為可能而感到無比自豪。

This is my last financial results call as President and CEO of SJW Group. It's been an honor of my lifetime to serve in this industry for more than 43 years and I've been blessed with a very talented group of people surrounding me here at SJW Group. I have great confidence that Andrew, Bruce, Kristen and Ann and the rest of the highly motivated and passionate teams across the country will build on the solid foundation that we've laid to continue delivering for customers, employees, communities, shareholders and the environment.

這是我擔任 SJW 集團總裁兼執行長的最後一次財務業績電話會議。能夠在這個行業服務 43 多年是我畢生的榮幸，我很幸運在 SJW 集團身邊有一群才華橫溢的人。我非常有信心，安德魯、布魯斯、克里斯汀和安以及全國其他積極進取、充滿熱情的團隊將在我們奠定的堅實基礎上繼續為客戶、員工、社區、股東和環境提供服務。

Andrew, Bruce, Kristen and Ann are always available for follow-up. As for me, I'll be around until June 30. We appreciate your interest and trust in SJW Group. God bless.

Andrew、Bruce、Kristen 和 Ann 隨時可以跟進。至於我，我會待到 6 月 30 日。我們感謝您對 SJW 集團的關注與信任。上帝保佑。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。