H2O America (HTO) 2025 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the H2O America third quarter financial results call. (Operator Instructions) Please be advised that today's conference is being recorded.

您好，感謝您的耐心等待。歡迎參加H2O America第三季財務業績電話會議。（操作人員指示）請注意，今天的會議正在錄音。

I would now like to hand the conference over to your speaker today, Ann Kelly, Chief Financial Officer and Treasurer. Please go ahead.

現在我謹將會議交給今天的發言人，財務長兼財務主管安·凱利。請繼續。

Thank you, operator. Welcome to the third quarter 2025 financial results conference call for H2O America. I will be presenting today with Andrew Walters, Chief Executive Officer; and Bruce Hauk, President and Chief Operating Officer. For those who would like to follow along, slides accompanying our remarks are available on our website at h2o-america.com.

謝謝接線生。歡迎參加 H2O America 2025 年第三季財務業績電話會議。今天我將與執行長 Andrew Walters 和總裁兼營運長 Bruce Hauk 一起進行演講。對於那些想要跟進的人，我們發言時附帶的幻燈片可以在我們的網站 h2o-america.com 上找到。

Before we begin today, I would like to remind you that this presentation and related materials posted on our website may 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. Many factors could cause the company's actual results and performance to differ materially from those expressed or implied by the forward-looking statements.

在今天的會議開始之前，我想提醒各位，本次簡報以及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自身經驗、歷史趨勢、當前狀況和預期未來業績以及公司認為在當前情況下適當的其他因素所作出的估計和假設。許多因素可能導致公司的實際業績與前瞻性聲明中明示或暗示的內容有重大差異。

For a description of some of the factors that could cause actual results to be different from 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. All forward-looking statements are made as of today, and H2O America disclaims any duty to update or revise such statements. You will have an opportunity to ask questions at the end of the presentation.

有關可能導致實際結果與本簡報中的陳述不同的一些因素的說明，請參閱財務業績新聞稿以及我們最近向美國證券交易委員會提交的 10-K 表格、10-Q 表格和 8-K 表格，這些表格的副本可在我們的網站上取得。所有前瞻性聲明均截至今日，H2O America 不承擔更新或修改此類聲明的任何義務。演講結束後，您將有機會提問。

This webcast is being recorded, and an archive of the webcast will be available until January 19, 2026. You can access the press release and the webcast at H2O America's website. 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 the generally accepted accounting principles in the United States or GAAP.

本次網路直播正在錄製，直播錄影將保留至 2026 年 1 月 19 日。您可以在 H2O America 的網站上查看新聞稿和網路直播。此外，今天討論的一些資訊包括非GAAP財務指標，如調整後淨收入和調整後攤薄每股收益，這些指標並非按照美國公認會計原則（GAAP）計算得出。

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.

這些非公認會計準則財務指標應被視為依照公認會計準則編製的財務資訊的補充，而不是對相應公認會計準則財務指標的替代。這些非GAAP財務指標與最直接可比較的GAAP財務指標的調節表列於我們簡報附錄的表格中。

I will now turn the call over to Andrew.

現在我將把通話轉給安德魯。

Thank you, Ann. Welcome, everyone, and thank you for joining us. Before we discuss our third quarter 2025 progress to date, I would like to share that earlier this month, we welcomed another highly accomplished leader to H2O America. Jonathan Reeder is our new Senior Director of Treasury and Investor Relations. Many of you know Jonathan from his time as an equity research analyst at Wells Fargo Securities, where he covered the utility sector, including leading the teams water utility coverage.

謝謝你，安。歡迎各位，感謝你們的參與。在我們討論 2025 年第三季迄今為止的進展之前，我想分享一下，本月初，我們迎來了另一位成就卓著的領導者加入 H2O America。喬納森·里德是我們新任的財務和投資者關係高級總監。你們中的許多人可能都認識喬納森，因為他曾在富國證券擔任股票研究分析師，負責公用事業板塊的研究，包括領導團隊對水務公用事業的報告。

Jonathan has a deep understanding of the industry from his more than two decades of experience covering utility stocks, making him an outstanding addition to our team. He shares our commitment to culture, service and investor outreach, and we look forward to introducing him to many of you in the future. I am pleased to share that in the third quarter of 2025, we delivered strong financial results, including net income of $1.27 per share on an adjusted or non-GAAP basis, an 8% increase over the third quarter of 2024.

喬納森擁有二十多年報道公用事業股票的經驗，對該行業有著深刻的理解，這使他成為我們團隊的傑出成員。他與我們一樣致力於文化、服務和投資者拓展，我們期待在未來將他介紹給大家。我很高興地宣布，2025 年第三季度，我們取得了強勁的財務業績，經調整或非 GAAP 基準計算，每股淨收入為 1.27 美元，比 2024 年第三季度增長了 8%。

Our performance reflects our continued execution of our proven growth strategy, which focuses on making the much-needed water infrastructure investments across our national footprint of systems while constructively engaging our key local stakeholders, any consensus building process to provide timely regulatory recovery while maintaining customer affordability.

我們的績效反映了我們持續執行行之有效的成長策略，該策略著重於在我們遍布全國的系統範圍內進行急需的水基礎設施投資，同時積極與我們的主要地方利益相關者進行建設性接觸，達成共識，以在保持客戶負擔能力的同時，及時實現監管復甦。

Some highlights from the third quarter. Starting with the infrastructure surcharges, the application for Connecticut Water's infrastructure and conservation adjustment was approved and filed, while Texas Water filed its third system improvement charge just after the quarter ended. I am also happy to share that we are trending ahead of the CapEx plan we guided to earlier in 2025. We have invested $358 million in water and wastewater utility infrastructure across all four states through September 30. This is 74% of our upwardly revised $486 million budget.

第三季的一些精彩時刻。首先是基礎設施附加費，康乃狄克水務公司的基礎設施和節水調整申請已獲批准並提交，而德州水務公司在季度結束後不久提交了其第三份系統改進費申請。我也很高興地告訴大家，我們的資本支出計畫進展順利，超過了我們先前在 2025 年設定的目標。截至9月30日，我們已在四個州的水務和污水處理基礎設施方面投資了3.58億美元。這相當於我們向上修訂後的 4.86 億美元預算的 74%。

Finally, on the M&A front, we announced two Texas deals. First, we -- was the transformational Quad Best deal at the start of the third quarter, followed by the tuck-in acquisition of Cibolo Valley wastewater treatment plant and related collection system in Comal County Texas, which was announced in late August. Bruce will provide updates on the Quad Best deal approval process and year-to-date connection growth as well as share more on the Cibolo Valley wastewater treatment plant acquisition later in the call. Overall, it's been a strong year thus far, both strategically and financially with more to come.

最後，在併購方面，我們宣布了兩項德克薩斯州的交易。首先，我們在第三季初完成了具有變革意義的 Quad Best 交易，隨後在 8 月下旬宣布收購了位於德克薩斯州科馬爾縣的 Cibolo Valley 污水處理廠及相關收集系統。Bruce 將在電話會議稍後提供 Quad Best 交易審批流程和年初至今連接增長的最新信息，並分享更多關於 Cibolo Valley 污水處理廠收購的信息。總體而言，今年迄今無論從戰略上還是財務上來說都是強勁的一年，而且未來還有更大的發展空間。

With that, I will turn it over to Ann to walk through our financial results.

接下來，我將把發言權交給安妮，讓她來介紹我們的財務表現。

Thanks, Andrew. Yesterday, after the market closed, we released our third quarter operating results. As Andrew mentioned, we are pleased to report diluted EPS and adjusted diluted EPS of $1.27 for the quarter. On a year-to-date basis, we earned adjusted EPS of $2.53 per share, a 14% increase over the nine months ended September 2024. With these strong results, we are narrowing our 2025 guidance range of adjusted diluted earnings per share to $2.95 to $3.

謝謝你，安德魯。昨天，市場收盤後，我們發布了第三季經營業績。正如 Andrew 所提到的，我們很高興地宣布本季稀釋後每股收益和調整後稀釋後每股收益均為 1.27 美元。截至目前，我們調整後的每股收益為 2.53 美元，比截至 2024 年 9 月的九個月成長了 14%。鑑於這些強勁的業績，我們將 2025 年調整後稀釋每股盈餘的預期範圍縮小至 2.95 美元至 3 美元。

This represents the upper half of our original $2.90 to $3 range and demonstrate our team's commitment to delivering on our financial targets. We are also reaffirming H2O America's 5% to 7% EPS CAGR through 2029 with the continued expectation that we will deliver on the top half of the range. This excludes any impact from the pending quads acquisition, which we expect to be accretive in 2028 and to our long-term growth rate. We are very pleased with our strong performance in 2025. As we look ahead, we remain focused on disciplined execution to meet our annual and long-term growth targets.

這代表了我們最初設定的 2.90 美元至 3 美元區間的上半部分，也體現了我們團隊致力於實現財務目標的決心。我們也重申 H2O America 在 2029 年每股盈餘複合年增長率為 5% 至 7%，並繼續預期我們將實現該範圍的上半部分。這不包括即將進行的四極桿收購帶來的任何影響，我們預計該收購將在 2028 年帶來收益，並提高我們的長期成長率。我們對2025年的出色表現非常滿意。展望未來，我們將繼續專注於嚴謹執行，以實現年度和長期成長目標。

The factors contributing to the 8% increase in third quarter earnings per share are shown on slide 9. At a high level, increased revenue from rates and usage drove a $0.42 increase, while other income, which primarily reflects higher AF UDC equity and pension non-service credit, added $0.13. These positives were partially offset by higher water production expense of $0.07 other operating expense of $0.18, $0.10 to an increase in the number of shares outstanding and an $0.11 delta due to the absence of the benefit from the third quarter 2024 tax accounting method change.

導致第三季每股收益成長 8% 的因素請見投影片 9。從總體上看，費率和使用量收入的成長推動了每股收益增加 0.42 美元，而其他收入（主要反映了更高的 AF UDC 權益和退休金非服務性抵免）增加了 0.13 美元。這些利多因素部分被以下因素抵消：水生產成本增加 0.07 美元；其他營運成本增加 0.18 美元；流通股數量增加導致每股收益增加 0.10 美元；以及由於 2024 年第三季度稅務會計方法變更帶來的收益缺失而導致的每股收益差額 0.11 美元。

Turning to the next slide, I will provide more detail on each of these areas. Our revenues increased 7% in the third quarter. Rate increases in the general rate case in California, along with increases from our infrastructure mechanisms in Connecticut, Maine and Texas contributed $14.6 million to the revenue increase.

接下來，我將在下一張投影片中詳細介紹這些方面。第三季我們的營收成長了7%。加州一般費率案件的費率上漲，以及康乃狄克州、緬因州和德州基礎設施機制的費率上漲，為收入成長貢獻了 1,460 萬美元。

$6.6 million is attributable to higher pass through water costs from our wholesale suppliers as these costs continue to increase each year. Higher customer usage added another $700,000 of increased usage in Connecticut in Texas, more than offset a reduction in California. And these revenue increases were partially offset by a reduction in regulatory mechanisms and other factors.

其中 660 萬美元是由於批發供應商的水費上漲造成的，因為這些成本每年都持續成長。更高的客戶使用量使康乃狄克州和德克薩斯州的消費額增加了 70 萬美元，超過了加州消費額的減少。而這些收入成長部分則被監管機制的削弱和其他因素所抵銷。

Water production expenses increased 3% in the quarter and was primarily driven by an increase in the average per unit cost for purchased water and groundwater extraction of $5.1 million that are largely offset in revenue and a $1.1 million increase in cost due to mix as there was a decrease in the availability of the lower-cost surface water. These increases were partially offset by lower production volume of 2.7 million as well as a 900,000 impact from regulatory adjustments.

本季水生產支出增加了 3%，主要原因是購買水和地下水開採的平均單位成本增加了 510 萬美元，這在很大程度上被收入抵消；此外，由於低成本地表水的可用性下降，導致成本組合變化，成本增加了 110 萬美元。這些增長被產量下降 270 萬輛以及監管調整帶來的 90 萬輛的影響部分抵消。

Turning to slide 12. For the quarter, we reported an increase of 9% in other operating expenses. General and administrative expenses increased $5.6 million, primarily driven by pension costs, salaries and wages as well as other inflationary increases. Depreciation and amortization for new utility plant placed in service increased $1.3 million, and we experienced a small increase in property taxes and other non-income taxes. These increases were partially offset by lower maintenance costs in the quarter.

翻到第12張投影片。本季度，其他營運費用成長了 9%。一般及行政費用增加 560 萬美元，主要原因是退休金成本、薪資和其他通貨膨脹成長。新投入使用的公用設施的折舊和攤提增加了 130 萬美元，同時我們的房產稅和其他非所得稅也略有增加。本季維護成本的下降部分抵消了這些成長。

The factors impacting the $0.32 earnings per share increase for the year-to-date period are shown on slide 13. At a high level, increased revenue from general rate cases and infrastructure recovery mechanisms drove a revenue increase of $1.48. This includes the increase or pass-through water supply costs. The revenue increase was partially offset by higher water production expenses of $0.54. Operating expenses increased $0.46, primarily driven by higher A&G expenses as well as increased customer credit losses.

影響今年迄今每股收益成長 0.32 美元的因素請見第 13 頁。從總體上看，一般費率案件和基礎設施回收機制帶來的收入增加推動了收入成長 1.48 美元。這其中包括增加或轉嫁的供水成本。收入成長部分被每單位水生產成本增加 0.54 美元所抵銷。營運成本增加 0.46 美元，主要原因是 A&G 成本增加以及客戶信用損失增加。

As a reminder, during the second quarter of 2024, we received a onetime benefit from California's arrearage payment plan. The remaining drivers related to the share increase taxes and other are consistent with those in the quarterly variance discussed earlier. Breakdowns of revenue, water production expense and other operating expense for the first nine months of 2025 are available in the appendix of our slide presentation.

提醒一下，在 2024 年第二季度，我們從加州的欠款支付計劃中獲得了一次性收益。與股份增加稅和其他相關的剩餘驅動因素與前面討論的季度差異中的驅動因素一致。2025 年前九個月的收入、水生產支出和其他營運支出明細可在我們的幻燈片簡報附錄中找到。

On the financing side, through the first nine months, we took advantage of investor interest and raised approximately $108 million of equity through our ATM program. At the end of the quarter, we had $126 million drawn on our $370 million bank lines of credit, leaving $244 million available for short-term financing of utility plant additions and operating activities.

在融資方面，前九個月，我們利用投資者的興趣，透過我們的 ATM 計畫籌集了約 1.08 億美元的股權。截至季末，我們從 3.7 億美元的銀行信貸額度中提取了 1.26 億美元，剩餘 2.44 億美元可用於公用事業工廠擴建和營運活動的短期融資。

For the first nine months of 2025, the average borrowing rate for our line of credit advances has been approximately 5.42%, compared to 6.53% in the prior year. As for long-term debt, Texas Water issued a 30-year promissory note in September for a principal amount of $40 million at a fixed interest rate of 6.8%. And earlier today, Connecticut Water issued $60 million of 30-year debt at a fixed rate of 6.8%. With respect to taxes, our consolidated income tax rate was 14% on a year-to-date basis compared to 10% in the same period of 2024. This difference in rate was primarily due to higher pretax income in 2025 and the tax accounting method change in 2024.

2025 年頭九個月，我們的信貸額度貸款平均借款利率約為 5.42%，而前一年為 6.53%。至於長期債務，德州水務公司於 9 月發行了一張 30 年期本票，本金為 4,000 萬美元，固定利率為 6.8%。今天早些時候，康乃狄克水務公司發行了 6,000 萬美元的 30 年期債券，固定利率為 6.8%。就稅收而言，我們今年迄今的綜合所得稅率為 14%，而 2024 年同期為 10%。這種稅率差異主要是由於 2025 年稅前收入較高以及 2024 年稅務會計方法的變化所造成的。

And with that, I will turn the call over to Bruce to provide updates on key state regulatory developments in the Quad West and Cibolo Valley acquisitions.

接下來，我將把電話交給布魯斯，讓他介紹 Quad West 和 Cibolo Valley 收購案中重要的州監管進展。

Thank you, Ann. I am pleased to share that our constructive engagement with regulators continues to create value for our customers and the company. At Connecticut Water, our request for a $3.1 million revenue increase and the wicked surcharge for capital invested in pipeline replacement was approved as submitted and on time with new rates effective October 1. Progress is being made in Maine Water's rate unification proceeding. In September, we filed a rate design proposal that would bring our 10 different districts into a single tariff.

謝謝你，安。我很高興地告訴大家，我們與監管機構的建設性互動持續為我們的客戶和公司創造價值。康乃狄克水務公司提出的增加 310 萬美元收入和對管道更換投資徵收的巨額附加費的請求已按提交和時間獲得批准，新費率於 10 月 1 日生效。緬因州水務公司的費率統一過程正在取得進展。9 月份，我們提交了一份費率設計方案，該方案將把我們的 10 個不同地區合併為一個統一的費率體系。

The rate design proposal is revenue neutral. But if approved, it would feature our first affordability tariff in May. We expect a decision on rate unification in the first quarter of 2026. After the quarter closed, Texas Water filed for a $5.1 million increase in the system improvement charge for completed water and wastewater projects. We expect a decision on the application in the first half of 2026.

此費率設計方案不會增加收入。但如果獲得批准，我們將在五月推出首個可負擔電價方案。我們預計將在 2026 年第一季就利率統一問題作出決定。季度結束後，德州水務公司申請將已完成的供水和污水處理專案的系統改進費用增加 510 萬美元。我們預計將於 2026 年上半年對該申請作出決定。

As alluded to earlier, we have increased our planned 2025 capital spend to $486 million from $473 million. The increase primarily reflects the momentum of our successful advanced metering infrastructure deployment in California and our plans to accelerate the pace of implementation of the project. We will provide a holistic refresh of our 2026 and beyond CapEx budget in our year-end 2025 uptake in February when we roll forward our five year plan. We'll now turn to an update on our planned Texas acquisitions. The Quad West deal approval process remains in the early stages.

如前所述，我們已將 2025 年的計畫資本支出從 4.73 億美元增加到 4.86 億美元。這一增長主要反映了我們在加州成功部署先進計量基礎設施的勢頭，以及我們加快專案實施步伐的計劃。我們將於 2025 年 2 月底公佈 2026 年及以後的資本支出預算，屆時我們將推進五年計畫。接下來，我們將介紹我們計劃在德克薩斯州進行的收購項目的最新進展。Quad West交易的審批流程仍處於早期階段。

We expect to receive the fair market valuation determination, which will be the average of the three PUCT appointed appraiser valuations in December. Shortly after receipt, we will file the formal deal approval, known as the sales transfer merger application with the PUCT, and we expect to close the deal by mid-2026. While the FMV reports are not publicly disclosed in the interest of transparency and to help the investment community more accurately model the deal's impact, we plan to disclose the determined FMV early next year. Meanwhile, we continue to see robust connection growth in the Quad West system, which now has more than 52,400 active connections as of September 30, 2025. This represents an 11.5% increase since the end of 2024.

我們預計將在 12 月收到公允市場估值決定，該決定將是 PUCT 指定的三位評估師估值的平均值。收到後不久，我們將向公共事業委員會提交正式的交易批准文件，即銷售轉讓合併申請，我們預計將在 2026 年年中完成交易。雖然出於透明度的考慮，為了幫助投資界更準確地模擬交易的影響，我們不會公開披露 FMV 報告，但我們計劃在明年初披露已確定的 FMV。同時，Quad West 系統的連線數量持續強勁成長，截至 2025 年 9 月 30 日，該系統已擁有超過 52,400 個活躍連線。這比 2024 年底成長了 11.5%。

And as Quad West converts its under contract and pending development pipeline into active connections, it is worth noting that the pool of future connections continues to be replenished and then some. Of course, future connection growth will vary based on a number of conditions. So this is no guarantee of future growth rates. However, these results are in line with our range of expectations, and we believe solid growth will continue in the greater Houston area, which is the second fastest growing metropolitan area in the United States. Our other pending Texas deal, which we announced in late August is the acquisition of the Cibolo Valley wastewater treatment plant.

隨著 Quad West 將其已簽訂合約和待開發項目轉化為實際連接，值得注意的是，未來的連接數量不僅不斷增加，而且還在持續增長。當然，未來的連結成長將取決於多種因素。所以這並不能保證未來的成長率。然而，這些結果符合我們的預期範圍，我們相信大休士頓地區將繼續保持穩健成長，該地區是美國成長速度第二快的都會區。我們在 8 月下旬宣布的另一項待定的德州交易是收購 Cibolo Valley 污水處理廠。

The acquisition would bring approximately 1,500 active connections and the opportunity for more than 250 additional ones that are under contract and pending construction. The acquisition is in the heart of our existing service territory, and we already provide water service, wastewater billing and customer service to these customers on a contract basis. We have filed with the PUCT to use fair market value for the silo deal, and we expect this transaction to close in the fourth quarter of 2026. Between Quad West and Cibolo Valley, we're excited about our long-term growth potential in Texas.

此次收購將帶來約 1500 個活躍連接，並有機會新增 250 多個已簽訂合約、正在建設中的連接。此次收購位於我們現有服務區域的核心地帶，我們已經以合約形式為這些客戶提供供水服務、污水處理計費和客戶服務。我們已向德州公共事業委員會 (PUCT) 提交申請，要求對筒倉交易採用公允市場價值，預計該交易將於 2026 年第四季完成。我們對 Quad West 和 Cibolo Valley 在德克薩斯州的長期成長潛力感到興奮。

With that, I will turn it back over to Andrew.

這樣，我就把任務還給安德魯了。

Thank you, Bruce. Just a couple of weeks ago, Newsweek notified us that H2O America has been selected for the second consecutive year as one of America's greenest companies. We are one of only two water utilities selected for this prestigious recognition. Only companies that meet the European Union strict sustainability criteria considered to be the most advanced globally were eligible. This recognition reflects the passion and dedication of our people who take our responsibility to our customers and the environment very seriously.

謝謝你，布魯斯。就在幾週前，《新聞週刊》通知我們，H2O America 連續第二年被評為美國最環保的公司之一。我們是僅有的兩家獲此殊榮的水務公司之一。只有符合歐盟嚴格的可持續發展標準，且被認為是全球最先進的公司才有資格參與。這項榮譽體現了我們員工的熱情和奉獻精神，他們非常認真地履行對客戶和環境的責任。

This passion is also reflected in our 2024 sustainability report, which has been posted to our website. Among the highlights, we achieved a 43% reduction in Scope 1 and 2 emissions from the 2019 baseline, which is strong progress toward our 2030 goal of 50%. We increased solar generation by 73%, with eight new solar projects, including the first in Texas, owning and solar generation lowered our operating cost for customers and provides a return for investors. Finally, we also achieved world-class customer satisfaction rate of 85.2% and expanded our flexible payment plans and rate assistance programs. Last, but certainly not least, Governor Lamont appointed four new commissioners to the Connecticut Public Utility Regulatory Authority.

這種熱情也體現在我們的 2024 年永續發展報告中，該報告已發佈在我們的網站上。其中最值得一提的是，我們實現了範圍 1 和範圍 2 排放量較 2019 年基準減少了 43%，這朝著我們 2030 年減少 50% 的目標邁出了堅實的一步。我們新增了 8 個太陽能發電項目，使太陽能發電量提高了 73%，其中包括德州的第一個太陽能發電項目。擁有太陽能發電降低了客戶的營運成本，並為投資者帶來了回報。最後，我們還實現了 85.2% 的世界一流客戶滿意度，並擴大了我們的彈性付款計劃和費率援助計劃。最後，但同樣重要的是，州長拉蒙特任命了四名新的委員加入康乃狄克州公共事業監理局。

We extend a warm welcome to Thomas Well, Janice Beecher, Holly Chisman; Everett Smith on their appointments. We look forward to working with the new commissioners to address the challenges facing water utilities, including the need to balance affordability with Connecticut's extensive investment requirements to replace aging infrastructure and treat emerging contaminants, all while providing high-quality water and reliable service.

我們熱烈歡迎 Thomas Well、Janice Beecher、Holly Chisman 和 Everett Smith 的任命。我們期待與新任委員合作，共同應對供水企業面臨的挑戰，包括在康乃狄克州為更換老化的基礎設施和處理新出現的污染物而進行的大量投資需求之間取得平衡，同時提供高品質的水和可靠的服務。

In closing, the third quarter was a strong quarter for H2O America, and we have even more to look forward to in the home stretch of 2025. We remain focused on driving shareholder and customer value through a disciplined approach to infrastructure investment and executing on our financial goals, advancing the Quad West and Cibolo Valley acquisitions, deepening our strong partnerships with local stakeholders and our unrelenting pursuit of operational excellence and identifying creative and sustainable solutions to serve generations to come while maintaining a focus on affordability.

總而言之，第三季度對 H2O America 來說是一個強勁的季度，我們對 2025 年的最後階段還有更多值得期待的事情。我們將繼續專注於透過嚴謹的基礎設施投資方式和執行財務目標來提升股東和客戶價值，推進 Quad West 和 Cibolo Valley 的收購，深化與當地利益相關者的牢固合作關係，不懈追求卓越運營，並尋找創新和可持續的解決方案來服務子孫後代，同時保持對經濟適用性的關注。

And now I will turn the call back over to the operator for questions.

現在我將把電話轉回給接線員，回答您的問題。

(Operator Instructions)

（操作說明）

Angie Storozynski, Seaport.

安吉·斯托羅津斯基，海港。

Jonathan, congratulations. I can't wait to work with you on the other side. That's quite a change. Anyway, so let's start with Texas. So first, the Quad West deal, I mean the fact that you guys are going to provide disclosures on the FMV only in January, you said or early the first quarter, why -- I mean just -- why such a long wait. So that's number one.

喬納森，恭喜你。我迫不及待地想和你一起工作。這變化真不小。總之，我們就從德州開始吧。首先，關於 Quad West 的交易，我的意思是，你們說要等到 1 月或第一季初才會披露 FMV，為什麼——我的意思是——為什麼要等這麼久。這是第一點。

Number two is on the back of the American Water Essential merger yesterday, you are gaining a big player in the Texas water market. I'm just wondering if it has any bearing on how you see the growth in that market.

第二點是，由於昨天美國水務公司（American Water Essential）的合併，德州水務市場迎來了一位重量級玩家。我只是想知道這是否對您如何看待該市場的成長有任何影響。

And then three, we're waiting for a poor decision in Connecticut on the acquisition of Aquarion. I'm just wondering if you still have any appetite for this asset if it were to -- if the commission were to reject the current sale process.

第三，我們還在等待康乃狄克州在收購 Aquarion 一事上做出糟糕的決定。我只是想知道，如果委員會否決目前的出售流程，您是否仍然對這項資產感興趣。

Right. So first, why don't you take us through the Quat West and FMV and then we'll go from there to Aquarion.

正確的。首先，不如你帶我們參觀一下 Quat West 和 FMV，然後再從那裡進入 Aquarion。

Yeah. Thanks, Angie, for your question. And as it relates to the FMV process, I think we're still on the same time line that we disclosed when we first announced the deal. So the time line for those appraisals to come in is in December and then shortly thereafter, we'll file the STM. So that's right on schedule as expected. So it's the soonest that we'll have the information and can disclose it.

是的。謝謝安吉的提問。至於 FMV 流程，我認為我們仍然按照當初宣布這筆交易時披露的時間表進行。因此，這些評估報告的出爐時間預計在 12 月，之後不久，我們將提交 STM。所以一切都按計劃進行，正如預期的那樣。所以這是我們能夠盡快掌握資訊並予以公佈的時間。

Okay. And so now you have absolutely no sense, right? Because the appraisals are still working, right? So they haven't basically submitted anything.

好的。所以你現在完全沒有常識了，對吧？因為評估工作仍在進行，對吧？所以他們基本上什麼都沒提交。

Correct. In order for the appraisers to complete their work, they need the resident engineering firm to perform the RC and LD, which is the most extensive process. and creating the cost approach. So the net income and the market approach are pretty easy in terms of the process, but the most extensive process is the cost approach, which requires a full addressing of the assets by the engineer. And that's the process that we're in. That's not yet been completed.

正確的。為了使評估師能夠完成他們的工作，他們需要駐場工程公司進行RC和LD（這是最廣泛的過程），並制定成本方法。因此，淨收入法和市場法在流程上都比較容易，但最複雜的流程是成本法，這需要工程師對資產進行全面評估。這就是我們目前正在經歷的過程。這件事還沒完成。

Okay. And then American Water, acquiring a Texas utility?

好的。然後是美國水務公司收購了一家德州的公用事業公司？

Well, certainly, there's a lot of interest in Texas by a lot of our peers and competitors. But the beautiful thing about Texas is a big state, and there's a lot of opportunity in Texas. And our biggest opportunity is something that we're very focused on and keenly addressing, which is the Quad West acquisition. We're excited about that and that's our focus.

當然，我們的許多同行和競爭對手都對德克薩斯州很感興趣。但德州的美妙之處在於它幅員遼闊，而且充滿機會。而我們最大的機遇，也是我們目前非常關注且積極應對的事情，就是收購 Quad West。我們對此感到興奮，這也是我們關注的重點。

Competition has always been in our industry, and we've shown that we can be a formidable competitor, and we'll continue to do deals that make sense for us to come our way as long as they meet our investment criteria in the settings that we've put in forth in place for us to move forward with in terms of tuck-ins or other opportunistic opportunities that come along.

競爭在我們這個行業一直存在，我們已經證明我們可以成為一個強大的競爭對手，只要符合我們的投資標準，並且符合我們為推進收購或其他機會性收購而製定的規則，我們就會繼續進行對我們來說有意義的交易。

And I think -- Angie, I was just going to add to that. Like if you think about acquisitions in general, our company will meet its growth forecast without a single acquisition. And so as you think about that, that is on purpose, right? So we don't have to worry about this idea of using growth as a lever in order to meet our growth forecast. I think that put us in a really strong position, quite frankly.

我想——安吉，我正要補充一點。例如，如果你從整體考慮收購問題，我們公司即使不進行任何收購也能實現成長預期。所以你仔細想想，這其實是故意的，對吧？因此，我們不必擔心利用成長作為槓桿來實現成長預期。坦白說，我認為這讓我們處於非常有利的地位。

The other thing too essential is a very strong competitor all by themselves. And combined with America, are they more formable, absolutely. That being said, there's only a certain amount of financial formability that goes into any acquisition to start with. And if somebody can afford to pay more, than not to that business belongs to be with. And we will not stretch beyond what we've already stated, which is we want to have our accretion goals, and we will not do so at the expense of our balance sheet.

另一個至關重要的因素是自身擁有一個非常強大的競爭對手。如果它們與美國合併，是否更容易形成？絕對是。也就是說，任何收購一開始都只需要一定的財務實力。如果有人有能力支付更高的價格，那麼就應該選擇與這家企業合作。我們不會超出我們已經宣布的範圍，那就是我們要實現成長目標，而且我們不會以犧牲資產負債表為代價來實現這一目標。

So I think those are the things we will continue and a very fair question, but I don't see our growth rate changing because of those two coming together. And quite frankly, I'm looking forward to having that strength actually benefit the industry. So I think it's good for the industry. I think it's good for both companies. And it also addresses affordility for the customers of those companies because as they continue to invest in their systems, they can do so where the customers are not paying the full cost. And I think that is a formula that works for every water company.

所以我認為我們會繼續做這些事，這是一個非常合理的問題，但我並不認為這兩件事結合起來會改變我們的成長率。坦白說，我期待這種優勢能真正造福整個產業。所以我認為這對業界來說是件好事。我認為這對兩家公司都有好處。而且，這也解決了這些公司客戶的負擔能力問題，因為隨著他們不斷投資自己的系統，他們可以在客戶無需支付全部成本的情況下進行投資。我認為這套方法適用於所有自來水公司。

Any other question on those two or just Aquarion?

關於這兩部作品或只有《創世紀》還有其他問題嗎？

No, just Aquarion. Actually, Aquarion in both -- how you see acquisitions and the financing of them vis-a-vis your stock's performance? It seems like your stock is not really reacting to the strong results you're printing. Some of it could be the Aquarion overhang. But just if you could talk to us about given the stock price, and how you see accretion from both the Quad West deal and any capacity you would have for additional transactions?

不，只有《創聖戰記》。實際上，Aquarion 在這兩方面都存在問題——您如何看待收購及其融資與貴公司股票表現之間的關係？看來你的股票並沒有對你公佈的強​​勁業績做出正面反應。其中一些可能是水瓶座的懸垂部分。但如果您能和我們談談鑑於目前的股價，您如何看待 Quad West 交易帶來的收益成長，以及您是否有能力進行其他交易，那就太好了？

Yeah. Look, it's a great question. So first of all, I'll start with Aquarion. Would that make strategic sense for us, for our customers? The answer is yes. But we also are occupied fully with the Quad West acquisition. We do not have additional capacity in the straight equity market. So if we were to do a deal, and I'm not -- first of all, like I very early, so to speak, to say that the deal is not going to happen. Nobody that I'm around have said that the deal is not going to happen, but if it didn't happen, then it would have to meet -- Eversource would have to decide whether they want to sell it, they would have to decide whether they have alternative ways of raising the equity or whatever else they wanted to do with those proceeds. And that's obviously all for them.

是的。你看，這是一個很好的問題。首先，我先從《創世紀》說起。這對我們和我們的客戶來說是否具有戰略意義？答案是肯定的。但我們也正全力以赴地進行 Quad West 的收購。我們在股票市場沒有額外的融資能力。所以如果我們要達成協議，而且我——首先，我不會很早就說這筆交易不會發生。我身邊沒有人說過這筆交易不會發生，但如果交易沒發生，那麼就必須滿足以下條件——Eversource 必須決定是否要出售，他們必須決定是否有其他方式籌集股權，或者他們想用這些收益做什麼。顯然，這就是他們所得到的全部了。

But for us, that leaves us with how would we do something like this. And I think that the way we've always talked about this, is there would be three areas that we would go for equity. One is straight equity, second place is hybrid debt markets and the third place is partner equity. If I take the straight equity off that leaves us with hybrid debt as well as partner equity. But it doesn't change our accretion goals.

但對我們來說，這就引出了一個問題：我們該如何做這樣的事情呢？我認為，我們一直以來討論這個問題的方式是，我們將從三個方面著手實現公平。第一種是直接股權融資，第二種是混合債務市場融資，第三種是合夥人股權融資。如果扣除直接股權，剩下的就是混合債務和合夥人股權。但這並不改變我們的成長目標。

It doesn't change our goals that we have from a balance sheet protection perspective. So for me, nothing changes. And quite frankly, what this allows us to do is to do the same thing that Essential and American are doing, which is in order to take cost out of the system, which allows us to invest in those systems where the customers do not have to pay the full cost of the bills. So it is a very good model to use as long as people don't get aggressive on the other side.

從資產負債表保護的角度來看，這不會改變我們的目標。對我來說，一切照舊。坦白說，這樣做使我們能夠像 Essential 和 American 一樣，降低系統成本，從而投資於那些客戶不必支付全部帳單費用的系統。所以，只要對方不採取攻擊性行為，這就是一個非常好的模式。

Okay. Understood. And then one last question maybe for Ann. And maybe you have addressed it, and I wasn't paying full attention, what's the -- I mean, when I look at your narrowed guidance and year-to-date results that would imply really low earnings in the fourth quarter. Could you remind me what it is that we on those fourth quarter expectations to get to the midpoint of the narrow guidance?

好的。明白了。最後，或許我想問安一個問題。也許您已經解釋過了，但我沒有完全注意，我的意思是，當我看到您縮小的業績預期和年初至今的業績時，這意味著第四季度的盈利會非常低。您能否提醒我一下，我們對第四季業績的預期是什麼，才能達到先前給出的窄幅指引的中點？

Sure, Angie, good question. There are a number of factors that are driving the $0.27 to $0.32 reduction in EPS quarter over quarter. For first, we have some timing of gross margin and the regulatory adjustments. I should also ask you to keep in mind that the Connecticut Water rate case went into effect in July of 2024. So we experienced that additional favorability year over year in the first half of this year, but we're not experiencing that currently because it was already in rates last year.

當然，安吉，問得好。導致每股收益環比下降 0.27 至 0.32 美元的因素有很多。首先，我們需要了解毛利率和監管調整的一些時間表。我還想提醒您，康乃狄克州水費案於 2024 年 7 月生效。因此，今年上半年我們經歷了同比額外的優惠，但目前我們沒有經歷這種優惠，因為去年的利率已經包含了這些優惠。

Second, we expect continuation of higher expense items that we've been reporting on as well as some additional operating expenses to advance our strategic priorities. And lastly, we expect to see the continued trend of higher year over year depreciation, interest, taxes and also some dilution from an additional shares.

其次，我們預期先前報告的較高支出項目將繼續存在，同時為了推動我們的策略重點，還會產生一些額外的營運支出。最後，我們預期折舊、利息、稅收將繼續逐年增加，新增股份也會導致一些股權稀釋。

Okay. And what is this $0.20 of year-to-date other income? And again, I should have -- should have listened. Yeah, it's about $0.20, I think, no?

好的。那麼，這0.20美元的年初至今其他收入是什麼呢？我又一次應該──應該聽從別人的。是的，大概是 0.20 美元，對吧？

Let me just may take a look.

讓我看看吧。

Also, it's $0.12 or --

另外，它是 0.12 美元或--

$0.13. And that is primarily -- one of the biggest contributors there is AFUDC even some of our substantial investments primarily in Texas, where we have longer-term construction cycles. And so those investments are earning AFUDC for a longer period of time.

0.13 美元。這主要是——其中最大的貢獻者之一是 AFUDC，甚至包括我們的一些重大投資，主要集中在德克薩斯州，那裡的建設週期較長。因此，這些投資可以在更長的時間內獲得 AFUDC 收益。

(Operator Instructions)

（操作說明）

Ian Rap, Bank of America.

伊恩‧拉普，美國銀行。

Echo Angie's comments on adding Jonathan, obviously, a really good pickup for the team, looking forward to working with him again, ports there. And then I think you hit on most of them, but I think maybe just to clarify, have you refreshed or roll forward the EPS guidance through '29 kind of at the high end of 5% to 7%. But I think if I heard you correctly, you're also going to refresh the full sort of CapEx schedule on 4Q. Would you say at this point that the EPS guidance fully bakes expectations for that CapEx refresh, or are you planning to sort of refresh that EPS guidance view on fourth quarter as well?

Echo Angie 對 Jonathan 的加入表示贊同，顯然，這對球隊來說是一個非常好的引援，期待再次與他合作。我認為你已經提到了大部分問題，但為了澄清一下，你是否已經更新或將 2029 年的 EPS 預期值調整到 5% 至 7% 的高端水平？但我認為，如果我理解正確的話，你們還會在第四季更新完整的資本支出計畫。您認為目前的每股盈餘預期是否已完全反映了資本支出調整的預期，還是您計劃在第四季也對每股盈餘預期進行調整？

You're talking about, just to make sure I'm asking the right question or answering the right question. Ian, you're talking about the long-term guidance, right, and whether when we refresh the CapEx, whether that's that long-term guidance would be refreshed at that point as well.

你這麼說，只是為了確保我問的問題或回答的問題是正確的。伊恩，你指的是長期指引，對吧？當我們更新資本支出時，長期指引是否也會隨之更新？

Correct. Yeah. I see in the slides that you have the 5% to 7% anchored to the high end through 2029 in the slides. I just wanted to check if that was fully baked for expectations for the CapEx refresh?

正確的。是的。我從幻燈片中看到，你們將 5% 到 7% 的成長率與 2029 年的高端成長率掛鉤。我只是想確認一下，這是否完全符合資本支出更新的期望？

Look, I think our refresh on the long-term growth is going to be impacted by two factors. One will be our CapEx, but it will also be the view on where we'll come out from a Quad West acquisition, right? So we will look at those areas as to what our future long-term growth rate is. And until we come out with that, then that's when everything will be refreshed all at one fell swoop. It's not going to be done incrementally.

我認為，我們對長期成長的重新檢視將受到兩個因素的影響。一方面是我們的資本支出，另一方面也是我們對收購 Quad West 後前景的看法，對吧？因此，我們將研究這些領域，以確定我們未來的長期成長率。在我們推出那個方案之前，一切都將一舉煥然一新。這件事不會循序漸進地完成。

Got it. That makes sense. And then just maybe two quick ones on the fair market value process. So it sounds like that's kind of the primary date for determining financing needs to finance this acquisition? A, is that correct?

知道了。這很有道理。然後，也許可以簡單介紹一下公平市場價值評估過程。所以聽起來這似乎是決定此次收購融資需求的主要日期？A，是這樣嗎？

And then b, does the fair market value process or that it's kind of structured allow you to fully capture these customer connection growth rates that you're highlighting? Or would that be something that would maybe be more reflected in a future rate case?

其次，公平市場價值流程或這種結構化的方式是否能讓你充分捕捉到你所強調的這些顧客聯繫成長率？或者，這或許會在未來的利率調適案中得到更充分的體現？

Yeah. So let me take the first one, burst. -- we've agreed to the $540 million. So that is not going to determine the financing cost of the transaction. The only thing that we will address or adjust is depending on the markets, right? It has nothing to do with FMV. We will address how much debt or how much equity we will do in the transaction. So that's the only thing that's going to be kind of adjusted, which is going to be market dependent. As it relates to the FMV, I'm going to have Bruce address the idea of kind of these new customers that are coming on, what the cutoff date are for those customers and how that will be reflected in FMV B today versus FMV in the future.

是的。那就讓我先說第一個問題，爆發吧。 ——我們已經同意支付5.4億美元。所以這不會決定交易的融資成本。我們唯一需要調整或改變的，就是根據市場情況而定，對吧？這和全動態影像（FMV）沒有任何關係。我們將討論在交易中將採用多少債務融資或多少股權融資。所以，唯一需要調整的地方就是這一點，而這又將取決於市場狀況。關於 FMV，我將請 Bruce 談談這些新客戶的情況，這些客戶的截止日期是什麼，以及這將如何反映在今天的 FMV B 和未來的 FMV 中。

Yeah. Thank you, Andrew. As it relates to the FMV, we've got all three appraisers signed up to the same time line in terms of the valuation of the assets. And so that's a terminus date of effective July 1, 2026, I believe. So that's that cutoff date in terms of the valuation of assets. So it's not really connections that make that number. It's really the actual assets that have been invested in and are available for valuation. So that's really the determining value or determining point of the fair market value. So it will be all those assets, including construction work in progress to that point.

是的。謝謝你，安德魯。關於公允市場價值，我們已經讓三位評估師按照相同的時間表對資產進行估值。因此，我認為終止日期是 2026 年 7 月 1 日。所以，這就是資產估值的截止日期。所以，真正決定這個數字的並不是連結數。真正值得估值的是已經投資並可供估值的實際資產。所以，這才是真正決定價值或決定公平市場價值的關鍵點。所以，它將包括所有這些資產，包括當時正在進行的建築工程。

And if I can just follow up on what Andrew said. I mean it's absolutely correct. I mean the amount of equity that we will issue in connection with the transaction is not dependent on the fair market value what we alluded to was that we did feel that it was important for investors to understand the fair market value. So that they could adequately model the transaction going forward. And we think that will be helpful for us in the equity raise going forward.

我能否就安德魯剛才說的話做個後續說明？我的意思是，這完全正確。我的意思是，我們將在本次交易中發行的股權數量並不取決於公允市價。我們之前提到的是，我們認為投資人了解公允市場價值非常重要。這樣他們就能對未來的交易進行充分的建模。我們認為這將對我們未來的股權融資有所幫助。

And so when we think about timing, we're getting in the FMV at the end of this year, will then be in blackout for year-end. We'll have to work to pull together the necessary offering documentation in that same time frame, as Bruce mentioned, we'll be filing the stand sales transfer merger. So once that deemed administratively complete, that's when the clock starts ticking on that approval process. So once we have a better eye towards closing the transaction, that's when we'll look to that equity raise.

因此，當我們考慮時間表時，我們將在今年年底進行 FMV 測試，然後進入年底的靜默期。我們必須在同一時間段內整理出必要的發行文件，正如 Bruce 所提到的，我們將提交攤位銷售轉讓合併申請。一旦行政手續完成，審批流程就開始計時了。所以，一旦我們對完成交易有了更清楚的認識，我們就會考慮股權融資。

Thank you. I'm showing no further questions at this time. I'd like to turn it back to Andrew Walters for closing remarks.

謝謝。我目前沒有其他問題要問。我謹將發言權交還給安德魯沃特斯，請他作總結發言。

Thank you, operator.

謝謝接線生。

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

今天的電話會議到此結束。感謝您的參與，您現在可以斷開連接了。