H2O America (HTO) 2025 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the H2O America's fourth-quarter financial results call. (Operator Instructions) Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Jonathan Reeder, Senior Director of Treasury and Investor Relations. Please go ahead.

您好，感謝您的耐心等待。歡迎參加 H2O America 第四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。現在我謹將會議交給今天的演講嘉賓，財務和投資者關係高級總監喬納森·里德。請繼續。

Thank you, Liz. Welcome to the 2025 financial results and five-year plan update conference call for H2O America.

謝謝你，莉茲。歡迎參加 H2O America 2025 年財務表現及五年計畫更新電話會議。

My name is Jonathan Reeder, and I'm the Senior Director of Treasury and Investor Relations for H2O America. Presenting today will be Andrew Walters, Chair of the Board and Chief Executive Officer; Anne Kelly, Chief Financial Officer and Treasurer; 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.

我叫喬納森·里德，是 H2O America 的財務和投資者關係高級總監。今天出席會議的有：董事會主席兼執行長安德魯沃特斯；財務長兼財務主管安妮凱利；以及總裁兼營運長布魯斯豪克。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 the presentation, we refer to 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 H2 America disclaims any duty to update or revise such statements.

有關可能導致實際結果與簡報中的陳述不同的一些因素的說明，請參閱財務績效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，H2 America 不承擔更新或修改此類聲明的任何義務。

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 May 26, 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 may not have been calculated in accordance with generally accepted accounting principles in the United States or GAAP.

演講結束後，您將有機會提問。本次網路直播正在錄製，直播錄影將保留至 2026 年 5 月 26 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，如調整後的淨收入和調整後的稀釋每股收益，這些指標可能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 as 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。

Welcome, everyone, and thank you for joining us. I want to take a few minutes to briefly discuss some of our team's successes over the last year and where we are today as an organization before we get into what I believe is an exciting updated five-year outlook. 2025 was another strong year, both strategically and financially and builds upon prior year successes.

歡迎各位，感謝你們的參與。在深入探討我認為令人振奮的五年展望之前，我想花幾分鐘時間簡要回顧一下我們團隊過去一年取得的一些成就，以及我們目前作為一家機構的發展狀況。 2025年無論在策略上或財務上，都將是另一個強勁的年份，並建立在前幾年成功經驗的基礎上。

I am pleased to share that we delivered full-year 2025 diluted EPS of $2.92 per share and adjusted or non-GAAP diluted EPS of $2.99 per share, which was near the top end of our upwardly narrowed $2.95 to $3 per share guidance range.

我很高興地宣布，我們實現了 2025 年全年稀釋後每股收益 2.92 美元，調整後或非 GAAP 稀釋後每股收益 2.99 美元，接近我們上調至每股 2.95 美元至 3 美元的指導範圍的上限。

Our performance in 2025 reflects continued execution of our proven growth strategy, which focuses on making much needed water infrastructure investments across our national footprint of systems while constructively engaging our key local stakeholders in a consensus building process to provide timely regulatory recovery while maintaining customer affordability.

我們在 2025 年的業績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合作，以達成共識，從而在保持客戶負擔能力的同時，實現及時的監管復甦。

We will touch on these more later in the call, but some highlights during the year include: in early July, we announced the transformative deal to acquire Houston, Texas-based Quadvest for $540 million. Upon closing, Quadvest is expected to add $483.6 million of rate-making rate base plus a small complementary wholesale business.

我們將在電話會議的稍後部分更詳細地討論這些內容，但今年的一些亮點包括：7 月初，我們宣布了一項具有變革意義的交易，以 5.4 億美元收購總部位於德克薩斯州休斯頓的 Quadvest。交易完成後，Quadvest 預計將新增 4.836 億美元的定價基礎，以及小型的配套批發業務。

In the base business, we had a number of constructive regulatory and legislative developments in each of our states, including in California. We were able to secure another one-year deferral in our filing of a new cost of capital application, which provides certainty as the current return parameters and construct remain in place through the end of 2027. In Connecticut, legislation was passed and signed into law, creating the Water Quality and treatment adjustment.

在基礎業務方面，我們在各州都取得了一些建設性的監管和立法進展，包括加州。我們成功爭取到新的資本成本申請提交期限再延長一年，這保證了目前的收益參數和結構將持續到 2027 年底。在康乃狄克州，一項立法獲得通過並簽署成為法律，該立法制定了水質和處理調整方案。

The WQTA is the nation's first mechanism established to recover the capital investments needed to treat PFAS and other emerging contaminants. In Texas, legislation was passed and signed into law authorizing water utilities to adopt a future or hybrid test year in general rate cases. And in Maine, regulators approved our stipulation reached with the Office of Public Advocate to consolidate our 10 districts into 1 as well as established our first affordability rate for low-income customers in the state.

WQTA 是美國第一個為回收處理 PFAS 和其他新興污染物所需的資本投資而建立的機制。德州通過立法並簽署成為法律，授權水務公司在一般費率案件中採用未來或混合測試年。在緬因州，監管機構批准了我們與公共權益倡導辦公室達成的協議，將我們的 10 個區合併為 1 個區，並設立了該州第一個面向低收入客戶的可負擔價格。

On the CapEx front, we invested $501 million in 2025, which exceeded our upwardly revised budget of $486 million. 2025's actual spend represented a 41% increase over 2024. This record execution in 2025 bodes well as we see elevated CapEx needs for the foreseeable future across our four states as evidenced by the 31% increase in our five-year 2026 to 2030 CapEx budget to $2.7 billion.

在資本支出方面，我們2025年投資了5.01億美元，超過了我們向上修訂後的4.86億美元的預算。 2025年的實質支出比2024年增加了41%。2025 年的創紀錄執行情況預示著良好的前景，因為在可預見的未來，我們四個州的資本支出需求將會上升，這從我們 2026 年至 2030 年五年資本支出預算增加 31% 至 27 億美元中可見一斑。

And then last month, our Board increased the quarterly dividend by 4.8%. The 2026 annualized dividend is expected to be $1.76 per share compared with $1.68 per share in 2025. The $0.08 annual increase is consistent with our recent annual increase cadence and marks the 58th consecutive year of increasing the annual dividend.

然後上個月，我們的董事會將季度股息提高了 4.8%。預計 2026 年的年度股息為每股 1.76 美元，而 2025 年為每股 1.68 美元。每年增加 0.08 美元與我們近期的年度成長節奏一致，標誌著我們連續第 58 年提高年度股息。

I would be remiss if I did not take this opportunity to again thank our former Chairman and CEO, Eric Thornburg, who I'm sure is listening to this call as we speak, who retired at the end of June 2025 from the company and then from the Board at the end of last month for all of his contributions over the years.

如果我不藉此機會再次感謝我們前董事長兼執行長埃里克·索恩伯格，那將是我的失職。我相信他此刻正在收聽我們的電話，他於 2025 年 6 月底從公司退休，並於上月底從董事會退休，感謝他多年來的所有貢獻。

Eric has been a mentor to me and helped instill the foundational strategy and culture that I believe our current team is poised to take to the next level as we enhance our executional capabilities, both operationally and financially and progress towards the further growing and diversifying our business with the transformational Quadvest transaction.

Eric 一直是我的導師，他幫助我建立了基礎策略和文化，我相信，隨著我們在營運和財務方面提升執行能力，以及透過變革性的 Quadvest 交易進一步發展和多元化我們的業務，我們目前的團隊已經準備好將這些策略和文化提升到一個新的水平。

We have been active in recent years enhancing the company's capabilities by attracting highly accomplished industry leaders to our H2O America team, both at the corporate and state levels. Many have come to us from much larger, well-respected utilities, bringing with them the knowledge of these organizations' best practices. Most recent addition is Nickolas Whitley, our new Vice President of Business Development.

近年來，我們積極致力於提升公司的能力，在公司和州級層面吸引傑出的產業領導者加入我們的 H2O America 團隊。許多員工來自規模更大、備受尊敬的公用事業公司，他們帶來了這些公司最佳實踐的知識。最新加入的成員是尼可拉斯惠特利，他擔任我們的新業務發展副總裁。

Nick joined us at the end of 2025 from Northwest Natural Holdings, where he was the Managing Director of Business Development. Nick brings deep transaction expertise, strategic discipline and a proven ability to scale infrastructure platforms. His leadership and experience across complex multi-jurisdictional acquisitions will be instrumental as we continue to grow responsibly and serve more communities across the country. Nick shares our commitment to culture, service and pursuing disciplined strategic growth opportunities, and we look forward to introducing him to many of you in the future.

Nick 於 2025 年底加入我們，此前他在 Northwest Natural Holdings 擔任業務發展總經理。Nick 擁有深厚的交易專業知識、策略紀律和擴展基礎設施平台的成熟能力。他在複雜的跨司法管轄區收購方面的領導能力和經驗，對於我們繼續負責任地發展並為全國更多社區提供服務至關重要。Nick 和我們一樣，致力於企業文化、優質服務以及追求穩健的策略成長機會，我們期待在未來將他介紹給大家。

I will now turn the call over to Ann to provide details on our full-year 2025 results as well as key components of our updated 5-year plan and long-term EPS growth rate target. Then Bruce will provide updates on the Quadvest deal, approval process and connection growth as well as discuss other regulatory and legislative developments.

現在我將把電話交給安妮，讓她詳細介紹我們 2025 年全年業績，以及我們更新後的 5 年計劃的關鍵組成部分和長期每股收益增長率目標。然後，布魯斯將介紹 Quadvest 交易、審批流程和連接成長的最新情況，並討論其他監管和立法的進展。

Ann?

安？

Thank you, Andrew. Yesterday, after the market closed, we released our full-year 2025 and fourth quarter operating results. We were pleased to report full-year 2025 diluted EPS of $2.92 and adjusted diluted EPS of $2.99. This compares to full-year 2024 diluted EPS of $2.87 and adjusted diluted EPS of $2.95. And as Andrew mentioned, we're near the top end of our upwardly narrowed guidance range.

謝謝你，安德魯。昨天，市場收盤後，我們發布了 2025 年全年業績和第四季度經營業績。我們很高興地宣布，2025財年全年稀釋後每股收益為2.92美元，調整後稀釋後每股收益為2.99美元。相較之下，2024財年全年稀釋後每股收益為2.87美元，調整後稀釋後每股收益為2.95美元。正如安德魯所提到的，我們已接近先前上調後的業績指引範圍的上限。

For 2026, we are offering stand-alone guidance of $3.08 to $3.18, which reflects $483 million of capital investments as well as the issuance of $100 million to $125 million of equity to fund the stand-alone CapEx budget. This stand-alone guidance excludes the potential impacts of the pending Quadvest and Cibolo acquisitions given uncertainty regarding the timing of the deal closures and planned external capital raises.

對於 2026 年，我們提供的獨立業績指引為每股 3.08 美元至 3.18 美元，這反映了 4.83 億美元的資本投資以及發行 1 億美元至 1.25 億美元的股權，用於資助獨立的資本支出預算。鑑於交易完成時間和計劃中的外部融資存在不確定性，本獨立指南不包括待決的 Quadvest 和 Cibolo 收購案的潛在影響。

Shifting to our five-year outlook. I'm excited to share the results of our updated and rolled forward plan, and we list a few of the key highlights here. As Andrew mentioned, we plan to invest $2.7 billion or an increase of 31% over our '25 to '29 budget to renew and replace aging infrastructure across our systems, improve reliability and service quality and comply with environmental regulations.

接下來，我們展望未來五年。我很高興與大家分享我們更新和推進計劃的成果，以下列出一些關鍵亮點。正如安德魯所提到的，我們計劃投資 27 億美元，比 2025 年至 2029 年的預算增加 31%，用於更新和更換我們系統中老化的基礎設施，提高可靠性和服務質量，並遵守環境法規。

Those capital investments, along with our pending Texas acquisitions, are expected to drive a 13% rate base CAGR over the period. And as a result of our 2025 achievements and the groundwork that we have been putting in place over the last few years as well as our expectations to be able to continue to build upon this momentum into the future, we are increasing our nonlinear long-term EPS growth rate target to 6% to 8%.

這些資本投資，加上我們即將進行的德州收購，預計將推動該時期內利率基數複合年增長率達到 13%。鑑於我們 2025 年的成就，以及過去幾年我們所做的基礎工作，並期望未來能夠繼續保持這一發展勢頭，我們將非線性長期每股收益增長率目標提高到 6% 至 8%。

The 6% to 8% CAGR reflects what we believe is a long-term sustainable growth rate that extends beyond our five-year plan and is predicated on a solid yet fairly straightforward organic growth plan plus the addition of the Quadvest business in the high-growth Houston market.

6% 至 8% 的複合年增長率反映了我們認為的長期可持續增長率，該增長率超越了我們的五年計劃，並且基於穩健而相當直接的有機增長計劃，以及在高速增長的休斯頓市場增加 Quadvest 業務。

This plan is well supported by our regulatory and financial execution track record and elevated capital investment needs for decades to come. In the near term, we expect to deliver a nonlinear EPS growth rate at or above the top end of the 6% to 8% range over the 2026 to 2030 period using our actual 2025 adjusted diluted EPS of $2.99 as the new base.

該計劃得到了我們過往監管和財務執行記錄的有力支持，並且未來幾十年都需要大量的資本投資。短期內，我們預計在 2026 年至 2030 年期間，每股盈餘成長率將達到或超過 6% 至 8% 區間的上限，以 2025 年實際調整後的稀釋每股收益 2.99 美元為新的基準。

I will discuss the details of our five-year plan and guidance in more depth in a few minutes. But first, let me walk you through the key year-over-year drivers that impacted the $0.04 increase in 2025 adjusted EPS. As shown on slide 9, revenue increased $1.42 per share.

稍後我將更深入地討論我們的五年計劃和指導方針的細節。但首先，讓我帶您了解影響 2025 年調整後每股收益成長 0.04 美元的關鍵年驅動因素。如投影片 9 所示，每股收入增加了 1.42 美元。

This includes $1.20 of rate increases driven by general rate cases and infrastructure surcharge recovery mechanisms and $0.63 of higher revenues for pass-through water supply costs that are offset in our water production expenses and do not impact our net income. These positive factors were partially offset by lower consumption and the impact of our regulatory mechanisms.

這包括一般費率案件和基礎設施附加費回收機制導致的 1.20 美元費率上漲，以及轉嫁供水成本帶來的 0.63 美元收入增加，這些增加的收入在我們的水生產費用中被抵消，不會影響我們的淨收入。這些正面因素部分被消費量下降和監管機制的影響所抵消。

The revenue increase was partially offset by higher water production expense of $0.51, which reflects $0.66 of higher water supply costs and an increase from less surface water availability in California. These increases were partially mitigated by the lower usage and our regulatory mechanisms. Other operating expenses increased $0.73, driven by primarily by two items.

收入成長部分被每單位水生產成本增加 0.51 美元所抵消，這反映了每單位水供應成本增加 0.66 美元，以及加州地表水供應減少導致的成本增加。由於使用量下降以及我們的監管機制，這些成長部分得到了緩解。其他營運費用增加 0.73 美元，主要受兩項因素影響。

First was higher A&G expenses. This primarily reflects our decision to opportunistically reinvest back into our business in order to advance various strategic priorities during the second half of 2025 as well as higher insurance costs. The second item was increased customer credit losses. This was due to the fact that during the second quarter of 2024, we received funds under the California Water and Wastewater arrearages payment program that did not repeat in 2025.

首先是更高的行政和一般費用。這主要反映了我們決定把握機會，將資金重新投資於我們的業務，以推進 2025 年下半年各項策略重點，以及應對更高的保險成本。第二項是客戶信用損失增加。這是因為在 2024 年第二季度，我們根據加州水務和污水處理欠款支付計劃收到了資金，而 2025 年沒有再次收到該資金。

Beyond those two primary items were the more typical drivers of higher operating expenses such as depreciation of property taxes and increased maintenance. The remaining drivers relate to share increases due to issuances under our ATM program, a positive benefit in the prior year due to a tax method change and other, which includes higher AFUDC equity as a result of our record CapEx deployment during 2025. These drivers were generally consistent with the quarterly variances that we highlighted throughout 2025.

除了上述兩個主要因素外，還有一些較常見的導致營運費用增加的因素，例如房產稅折舊和維護費用增加。其餘驅動因素包括：由於我們的 ATM 計劃發行而導致的股份增加、由於稅收方法變更而導致的上一年的積極收益以及其他因素，其中包括由於我們在 2025 年創紀錄的資本支出部署而導致的 AFUDC 權益增加。這些驅動因素與我們在 2025 年全年重點關注的季度差異基本一致。

Expanding on taxes, our effective income tax rate in 2025 was 11% versus 9% in 2024. Our ETR increase in '25 was primarily due to a lower uncertain tax position reserve release and lower reversals of excess deferred income taxes, along with the impact of the accounting method change that I just mentioned, partially offset by higher flow-through tax benefits.

再來看稅務方面，2025 年我們的實際所得稅率為 11%，而 2024 年為 9%。2025 年我們的有效稅率 (ETR) 增加主要是由於不確定稅務事項準備金釋放減少和超額遞延所得稅衝回減少，以及我剛才提到的會計方法變更的影響，部分被更高的稅收優惠所抵消。

Shifting from 2025 results to 2026 and beyond. As Andrew mentioned, the team did an outstanding job deploying over $500 million in capital for infrastructure improvements across our service territories in 2025. This was a record amount of capital investment for our company and includes ongoing work on some of our higher profile projects, such as rolling out AMI meters in California and developing the KT water wells in Texas to shore up much needed supply in the Hill Country region.

從 2025 年的結果轉向 2026 年及以後的成果。正如安德魯所提到的，團隊出色地完成了工作，在 2025 年為我們的服務區域內的基礎設施改進投入了超過 5 億美元的資金。這是我們公司創紀錄的資本投資，其中包括一些備受矚目的項目的持續推進，例如在加利福尼亞州推廣 AMI 電錶，以及在德克薩斯州開發 KT 水井，以加強希爾鄉村地區急需的供水。

Our 2025 CapEx represented a 41% increase over 2024, and we see these elevated infrastructure needs persisting well into the future. As mentioned earlier and as shown on slide 10, we refresh and roll forward our five-year CapEx budget to the 2026 to 2030 period. We plan to invest $2.7 billion or an increase of 31% over our '25 to '29 budget. The increase in our five-year CapEx budget is driven primarily by three factors.

我們 2025 年的資本支出比 2024 年增加了 41%，我們認為這種不斷增長的基礎設施需求將在未來很長一段時間內持續存在。如前所述，並在第 10 頁投影片中顯示，我們將五年資本支出預算更新並捲動至 2026 年至 2030 年期間。我們計劃投資 27 億美元，比 2025 年至 2029 年的預算增加 31%。我們五年資本支出預算的增加主要受以下三個因素所驅動。

First, increased pipeline replacement work as we progress towards our goal of replacing 1% of our distribution pipe annually. We believe a 1% annual replacement cycle best reflects the expected useful life of the assets in our distribution system. We are not yet to this target, which means this component of our CapEx budget is expected to increase annually until we get there in addition to expected inflation. To give you a sense of the magnitude of this effort, replacing 1% of our existing distribution pipeline across our four states would amount to nearly $175 million of annual capital expenditures.

首先，隨著我們逐步實現每年更換 1% 輸配管道的目標，管道更換工作將會增加。我們認為，1% 的年度更換週期最能反映我們配電系統中資產的預期使用壽命。我們尚未達到這個目標，這意味著除了預期的通貨膨脹之外，我們資本支出預算的這一部分預計每年都會增加，直到我們達到目標為止。為了讓您了解這項工作的規模，更換我們四個州現有分銷管道的 1% 將相當於每年近 1.75 億美元的資本支出。

Second, an updated estimate of roughly $400 million to install treatment for PFAS as compared to $300 million in our prior five-year plan. The increase reflects a refinement in our initial estimates to the actual bids that we have received to complete the required remediation work. And third, including our elevated level of planned investments in Texas following the anticipated closing of our pending acquisition.

其次，PFAS 處理設施的安裝費用估計約為 4 億美元，而我們先前的五年計畫中為 3 億美元。此次上漲反映了我們對最初估價的調整，以及我們收到的完成所需修復工作的實際報價。第三，包括我們計劃在即將完成的收購之後，在德州進行更高水準的投資。

Also on this slide, and I know a lot of investors have been asking for this, we show what our expected rate base growth looks like over the five-year period. These amounts represent our estimated rate base at year-end and not necessarily what was or will be recognized in rates by our state regulators in those particular years. At year-end 2025, our estimated consolidated rate base was nearly $2.8 billion. Between the addition of Quadvest and our $2.7 billion of planned capital investments, we expect rate base to grow to $5.1 billion by year-end 2030. This represents a 13% CAGR.

此外，在這張投影片上，我知道許多投資者都要求看到，我們展示了未來五年預期利率基礎成長。這些金額代表我們年底的估計費率基數，並不一定代表我們州監管機構在特定年份已確認或將確認的費率。截至 2025 年底，我們估計綜合費率基數接近 28 億美元。隨著 Quadvest 的加入以及我們計劃進行的 27 億美元資本投資，我們預計到 2030 年底，費率基礎將成長至 51 億美元。這意味著年複合成長率達到13%。

You will note that this exceeds our EPS growth guidance due to the anticipated equity needed to fund our capital plan and delever our balance sheet as well as some regulatory lag. We are laser-focused on not only delivering the roughly 13% rate base CAGR but translating it into attractive earnings growth by minimizing regulatory lag and continually seeking ways to operate more efficiently in order to keep rates affordable while providing our customers with best-in-class service.

您會注意到，由於預計需要股權來為我們的資本計劃提供資金並降低資產負債率，以及一些監管滯後，這超過了我們的每股收益成長預期。我們不僅專注於實現約 13% 的利率基數複合年增長率，而且還通過最大限度地減少監管滯後，不斷尋求更高效的運營方式，將其轉化為有吸引力的盈利增長，從而在保持利率可負擔性的同時，為客戶提供一流的服務。

On slide 11, we provide a breakdown of our 2026 to 2030 capital budget, both by state and by category. As you can see, nearly half of the total spend is for distribution system improvement and another 15% is PFAS related. And with California's three-year forward test year rate construct as well as infrastructure surcharge mechanisms in Connecticut, Maine and Texas, plus the recently passed WQTA in Connecticut for PFAS spend, we expect timely rate recognition of roughly 80% of this five-year budget.

在第 11 張投影片中，我們按州和類別提供了 2026 年至 2030 年資本預算的細分數據。如您所見，總支出中近一半用於配電系統改進，另有 15% 與 PFAS 相關。加州的三年遠期測試年費率結構，以及康乃狄克州、緬因州和德州的基礎設施附加費機制，再加上康乃狄克州最近通過的針對 PFAS 支出的 WQTA，我們預計這五年預算的大約 80% 將及時得到費率確認。

On slide 12, we present a bridge from our 2025 actual adjusted diluted EPS of $2.99 to the $3.13 midpoint of our stand-alone 2026 guidance. I'll highlight a few of the key drivers. Starting with revenue, we expect an increase driven primarily by rate relief, including the second year step increase as part of San Jose Water's '25 to '27 general rate case, incremental infrastructure surcharge revenues in Connecticut, Maine, and Texas and the pass-through of higher purchase water costs. The higher revenues are partially offset by increased water costs.

在第 12 張投影片中，我們展示了從 2025 年實際調整後的稀釋每股收益 2.99 美元到 2026 年獨立指引中點 3.13 美元的過渡情況。我將重點介紹幾個關鍵驅動因素。從營收來看，我們預期營收成長主要得益於費率減免，包括聖荷西水務公司 2025 年至 2027 年一般費率調整案中的第二年階梯式成長、康乃狄克州、緬因州和德州新增的基礎設施附加費收入以及更高的購水成本轉嫁。收入增加的部分被水費上漲所抵銷。

Next, operating expenses are expected to be lower in 2026, which reflects the absence of the strategic investments that I mentioned earlier that we made during the second half of 2025 as well as our ongoing expense efficiency efforts, partially offset by inflationary pressures. And then in terms of headwinds, most of the items are what you would expect to see from a utility with meaningfully -- meaningful organic rate base growth and include higher depreciation expense as well as the associated cost of the debt and equity needed to finance capital investments.

其次，預計 2026 年的營運費用將會降低，這反映了我們在 2025 年下半年進行的策略性投資（我之前提到過）以及我們持續的成本效率努力的缺失，但部分被通膨壓力所抵消。至於不利因素，大多數都是公用事業公司在實現實質有機費率基礎增長後所預期的，包括更高的折舊費用以及為資本投資融資所需的債務和股權的相關成本。

Moving to slide 13. And as I mentioned earlier, we are increasing our nonlinear long-term EPS growth rate target to 6% to 8% and updating the anchor year to 2025 adjusted diluted EPS of $2.99. This compares to our prior target of 5% to 7% through 2029 with expectations to be in the top half, anchored off of 2022 diluted EPS of $2.43. Our new 6% to 8% EPS growth rate target reflects long-term sustainable organic growth rate that extends beyond 2030 and is supported by elevated CapEx investment needs.

切換到第13張投影片。正如我之前提到的，我們將非線性長期每股盈餘成長率目標上調至6%至8%，並將基準年份更新為2025年調整後稀釋每股盈餘2.99美元。相較之下，我們先前的目標為2029年之前5%至7%，並預期達到上半部分，基準年份為2022年攤薄每股收益2.43美元。我們新的6%至8%的每股盈餘成長率目標反映了2030年以後可持續的長期內生成長率，並由不斷成長的資本支出需求所支撐。

I also want to be clear that we do not factor in any potential M&A opportunities beyond Quadvest and Cibolo Valley into our growth rate target.

我還要明確一點，除了 Quadvest 和 Cibolo Valley 之外，我們沒有將任何潛在的併購機會納入我們的成長率目標。

In the near term, over the 2026 to 2030 period, we expect to deliver a nonlinear EPS growth rate at or above the top end of the 6% to 8% range, given the line of sight that we have with respect to: one, our increased five-year capital expenditure plan; two, the previously communicated accretion that we expect to realize from the pending Quadvest acquisitions beginning in '28; and three, our expectation to continue to work constructively with key stakeholders in each of our states to achieve fair and timely regulatory outcomes.

在短期內，即 2026 年至 2030 年期間，我們預計每股收益增長率將達到或超過 6% 至 8% 區間的上限，這得益於我們對以下三點的展望：一是我們增加了五年資本支出計劃；二是我們之前公佈的、預計將從 2028 年開始的 Quadvest收購中實現的收益成長；三是我們預計將繼續與我們各州的關鍵利益相關者進行建設性合作，以實現公平及時的監管結果。

As a reminder, the Quadvest acquisition is expected to be initially dilutive to our EPS prior to our ability to implement new rates, reflecting the rate-making rate base of the acquired assets. This will come from a consolidated Texas general rate case that we expect to file in early 2027. During this time period, we will have the financing costs, including share dilution, along with recognizing depreciation expense based on the higher asset values determined through the FMV process, weighing on our operating results without the associated revenues.

提醒各位，在能夠實施新費率之前，Quadvest 的收購預計會暫時稀釋我們的每股收益，這反映了被收購資產的費率基礎。這將來自我們預計將於 2027 年初提交的德州一般費率合併案。在此期間，我們將面臨融資成本（包括股份稀釋）以及根據透過公允市場價值確定的較高資產價值確認的折舊費用，這些都將對我們的經營業績造成壓力，而沒有相應的收入。

Because of this, we expect our 2026 and 2027 consolidated EPS, including Quadvest, to fall below the ranges implied by our new 6% to 8% growth rate. The actual magnitude will depend on the timing of the closing and the financing structure, but dilution relative to our stand-alone plan could be in the 10% to 20% range before becoming accretive in 2028 and beyond. We are excited about our updated five-year plan and long-term prospects and believe our team is fully capable of delivering on it.

因此，我們預期 2026 年和 2027 年的合併每股盈餘（包括 Quadvest）將低於我們新的 6% 至 8% 成長率所隱含的範圍。實際規模將取決於交易完成的時間和融資結構，但相對於我們獨立的計劃，稀釋幅度可能在 2028 年及以後開始增加收益之前達到 10% 到 20%。我們對更新後的五年計劃和長期前景感到興奮，並相信我們的團隊完全有能力實現這一目標。

Turning now to the financing and credit side of things on slide 14. Our $370 million bank lines of credit provide ample liquidity to fund our daily operations. And our A- credit rating affords us access to the capital needed to fund our longer-term investments. In 2025, we also raised $123 million of gross equity proceeds through our ATM program.

現在轉到第 14 頁，討論融資和信貸方面的問題。我們擁有 3.7 億美元的銀行信貸額度，為我們的日常營運提供了充足的流動資金。我們的 A- 信用評級使我們能夠獲得所需的資金，為我們的長期投資提供資金。2025年，我們也透過ATM計畫籌集了1.23億美元的股權收益總額。

As previously disclosed, we expect to raise $100 million to $200 million of debt across the parent and operating company levels and $350 million to $450 million of equity or equity-like products in 2026 to fund the Quadvest transaction and protect our A- credit rating. We would likely include $100 million to $125 million of equity needed to support our regular CapEx budget and the pending Cibolo Valley deal with any offering and would, therefore, not plan to use our ATM through 2026.

正如先前披露的那樣，我們預計將在 2026 年透過母公司和營運公司層級籌集 1 億至 2 億美元的債務，並透過股權或類似股權的產品籌集 3.5 億至 4.5 億美元，以資助 Quadvest 交易並保護我們的 A- 信用評級。我們可能會在任何發行中納入 1 億美元至 1.25 億美元的股權，以支持我們常規的資本支出預算和即將進行的 Cibolo Valley 交易，因此，我們不打算在 2026 年之前使用我們的 ATM 資金。

Assuming a receptive equity market, we will likely look to satisfy our 2026 equity needs during our upcoming open window prior to the Q1 2026 blackout period and follow up with the debt component of the deal financing closer to the actual closing date.

假設股票市場行情良好，我們可能會在 2026 年第一季停擺期之前的開放窗口期內滿足 2026 年的股權需求，並在交易融資接近實際交割日期時跟進債務部分。

In terms of our credit metrics, our FFO to debt ratio in 2025 was 11.2%. This remains above the S&P downgrade threshold of 11% and is consistent with our expectations. We expect to be in the 11% to 12% range through 2027, above 12% in 2028, and we will continue to delever throughout the rest of the plan through increased cash flows and the anticipated paydown of our 2029 holdco maturity.

就我們的信貸指標而言，我們 2025 年的 FFO 與負債比率為 11.2%。這仍然高於標普設定的 11% 的降級門檻值，符合我們的預期。我們預計到 2027 年，槓桿率將保持在 11% 至 12% 的範圍內，2028 年將超過 12%，並且我們將在計劃的剩餘時間內通過增加現金流和預計償還 2029 年到期的控股公司債務來繼續降低槓桿率。

And with that, I will turn the call over to Bruce to provide updates on the Quadvest and Cibolo Valley acquisitions as well as key state regulatory and legislative developments.

接下來，我將把電話交給布魯斯，讓他介紹 Quadvest 和 Cibolo Valley 收購案的最新進展，以及重要的州監管和立法動態。

Thank you, Ann. As Andrew and Ann have discussed, 2025 was a great year for H2O America. I am very proud of the progress the team has made on both the operational and regulatory sides of the business. While 2025 was great, I'm even more excited for what's in store for our company, including the positive benefits of the transformative Quadvest deal. We continue to progress through the regulatory process for our pending $540 million acquisition of Houston-based water and wastewater utility, Quadvest.

謝謝你，安。正如 Andrew 和 Ann 所討論的那樣，2025 年對 H2O America 來說是意義非凡的一年。我為團隊在業務運作和監管方面的進步感到非常自豪。雖然 2025 年很棒，但我對我們公司未來的發展更加興奮，包括具有變革意義的 Quadvest 交易帶來的正面影響。我們正在繼續推進對總部位於休士頓的水務和污水處理公司 Quadvest 的 5.4 億美元收購案的監管程序。

In late December 2025, Texas Water received the appraised fair market values from the three Public Utility Commission of Texas appointed appraisers for the regulated assets of Quadvest. In accordance with the Texas FMV statute, the purchase price of $483.6 million will serve as the rate-making rate base.

2025 年 12 月下旬，德州水務公司收到了德州公共事業委員會指定的三位評估師對 Quadvest 受監管資產的評估公平市場價值。根據德州公平市場價值法，4.836億美元的購買價格將作為定價基準。

We appreciate the hard work of all parties involved during the appraisal process and believe the FMV determination supports the transaction benefits that we laid out when announcing the deal last July. The PUCT approval process for Quadvest has started with the filing of the cell transfer merger application in January 2026.

我們感謝所有參與評估過程的各方的辛勤工作，並相信公允市場價值的確定支持了我們在去年 7 月宣布該交易時提出的交易利益。Quadvest 的 PUCT 審批流程已於 2026 年 1 月開始，當時提交了細胞轉移合併申請。

As a reminder, the STM request approval of Texas Water's acquisition of the Quadvest regulated assets and certification of the value of the rate base. Meanwhile, we continue to see robust connection growth in Quadvest system, which now has more than 54,400 active connections as of December 31, 2025. This represents a 16% increase during 2025.

再次提醒，STM 請求批准德州水務公司收購 Quadvest 受監管資產，並認證費率基數的價值。同時，我們看到 Quadvest 系統的連線數量持續強勁成長，截至 2025 年 12 月 31 日，該系統已擁有超過 54,400 個活躍連線。這意味著到 2025 年將成長 16%。

And as Quadvest 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, extending the longevity of the growth profile. Of course, future connection growth will vary based on a number of conditions, so this is no guarantee of future growth rates.

隨著 Quadvest 將其已簽約和待開發的項目轉化為活躍連接，值得注意的是，未來連接的數量不斷增加，從而延長了成長前景的持續時間。當然，未來的連結成長會受到多種因素的影響，因此這並不能保證未來的成長率。

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.

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。

We continue to anticipate a mid-2026 close for the transformative transaction and expect Quadvest to drive Texas from 8% of our consolidated customer base today to 26% by 2029. slide 17 provides a brief update on our other pending Texas deal. In late August, we announced the acquisition of Cibolo Valley wastewater treatment plant and associated collection system.

我們仍預期這項具有變革意義的交易將於 2026 年年中完成，並預計 Quadvest 將使德州在我們合併客戶群中的佔比從目前的 8% 成長到 2029 年的 26%。第 17 頁簡要介紹了我們另一項待決的德州交易的最新進展。8 月下旬，我們宣布收購 Cibolo Valley 污水處理廠及相關收集系統。

The acquisition will bring approximately 1,500 active connections and the opportunity for more than 250 additional ones that are under contract and pending construction. Like Quadvest, we are progressing through the Texas regulatory process.

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。與 Quadvest 一樣，我們也正在推進德州的監管流程。

We are using FMV, and we expect to file the STM application with the PUCT around April 2026. We anticipate Cibolo Valley to close in the fourth quarter of 2026. Between Quadvest and Cibolo Valley, we are very excited about our long-term growth potential in Texas. I'm pleased to share that our constructive engagement with regulators and other key stakeholders continues to create value for our customers and the company. Starting with California, some of the noteworthy 2025 achievements include securing a third one-year deferral of cost of capital.

我們正在採用 FMV，預計將於 2026 年 4 月左右向 PUCT 提交 STM 申請。我們預計 Cibolo Valley 將於 2026 年第四季關閉。Quadvest 和 Cibolo Valley 的發展前景讓我們對在德州的長期成長潛力感到非常興奮。我很高興地告訴大家，我們與監管機構和其他主要利害關係人的建設性互動繼續為我們的客戶和公司創造價值。以加州為例，2025 年的一些值得關注的成就包括確保資本成本第三次延長一年。

This means absent an adjustment from the water cost of capital mechanism, SJWC's authorized 10.01% ROE and 54.55% equity ratio will remain in place through 2027. I'd also like to highlight the approval of two advice letters. First was our requested $6.8 million revenue increase mid-2025 to recover investments for our ongoing AMI project.

這意味著，除非對水務資本成本機制進行調整，否則 SJWC 獲準的 10.01% 的 ROE 和 54.55% 的權益比率將維持到 2027 年。我還想特別提一下兩封推薦信的核准情況。首先，我們要求在 2025 年年中增加 680 萬美元的收入，以收回我們正在進行的 AMI 計畫的投資。

As of year-end 2025, roughly 53% of SJWC's total meters have been retrofitted or replaced with AMI-enabled meters that provide near real-time usage information and greater clarity into discrepancies between system flows and build consumption, which allows for an earlier identification of potential leaks within the distribution system. We expect to complete the AMI rollout by year-end and are encouraged by customer benefits we already are seeing.

截至 2025 年底，SJWC 約 53% 的電錶已完成改造或更換為支持 AMI 的電錶，這些電錶可提供近乎實時的使用信息，並能更清晰地顯示系統流量與建築消耗之間的差異，從而可以更早地發現配電系統中的潛在洩漏。我們預計將在年底前完成 AMI 的推廣，我們已經看到了客戶從中獲得的收益，這讓我們倍感鼓舞。

For instance, during the latter half of 2025, SJWC issued more than 46,000 leak alert notifications, which enabled customers to identify issues earlier, more effectively manage water usage and reduce customer side water loss. The second advice letter relates to the second year step rate increase as part of our SJWC's 2025 through '27 general rate case.

例如，在 2025 年下半年，SJWC 發出了超過 46,000 條漏水警報通知，使客戶能夠更早發現問題，更有效地管理用水，並減少客戶側的漏水損失。第二封建議信與我們的 SJWC 2025 年至 2027 年一般稅率案件中的第二年階梯稅率增長有關。

We were approved to increase revenue $17.2 million at the start of 2026. SJWC's next general rate case filing is expected to be made in early January 2027 and will cover the 2028 to 2030 period. In Connecticut, as was mentioned earlier, legislation was passed and signed into law creating the Water Quality and Treatment Adjustment.

我們獲准在 2026 年初增加 1,720 萬美元的收入。SJWC 的下一份一般費率案件申請預計將於 2027 年 1 月初提交，並將涵蓋 2028 年至 2030 年期間。如前所述，康乃狄克州通過立法並簽署成為法律，制定了水質和處理調整方案。

The WQTA is the nation's first mechanism established to recover the capital investment needed to treat PFAS and other emerging contaminants. The WQTA provides for an annual filing to recover the total capital invested during the period and the maximum surcharge is 7.5% per year and 15% between general rate cases. We made our initial WQTA filing in late January, requesting $0.6 million of incremental revenues, reflecting a relatively small amount of investment given we are in the early stages of constructing our PFAS remediation facilities.

WQTA 是美國第一個為回收處理 PFAS 和其他新興污染物所需的資本投資而建立的機制。WQTA 規定每年需提交一份申報表，以收回該期間投資的全部資本，最高附加費為每年 7.5%，一般稅率案件之間的最高附加費為 15%。我們在 1 月下旬提交了最初的 WQTA 申請，要求增加 60 萬美元的收入，考慮到我們正處於 PFAS 修復設施建設的早期階段，這筆投資金額相對較小。

As for our more traditional infrastructure recovery mechanism, the WICA, PURA approved our second half 2025 application as filed for a $3.1 million increase in late September. CWC submitted a new WICA filing in late January, requesting a $2.7 million increase in annualized revenues for $25.7 million invested in completed projects.

至於我們較傳統的基建恢復機制，即WICA，PURA在9月下旬批准了我們提交的2025年下半年申請，增加310萬美元。CWC 於 1 月下旬提交了一份新的 WICA 文件，要求將已完成專案投資的 2,570 萬美元的年化收入增加 270 萬美元。

If approved, the cumulative WICA surcharge as of April 1, 2026, will be 9.9%, collecting $12.1 million on an annual basis. The combination of the WICA and the WQTA mechanisms will allow for the timely recovery of a meaningful amount of our planned Connecticut investments in between general rate cases. And consistent with our roughly three-year rate case cycle in Connecticut, we expect to file a general rate case during the first half of 2026. Shifting to Texas.

如果獲得批准，截至 2026 年 4 月 1 日，WICA 的累積附加費將為 9.9%，每年徵收 1,210 萬美元。WICA 和 WQTA 機制的結合將使我們能夠在一般費率案件之間及時收回我們計劃在康乃狄克州進行的投資中相當一部分。根據康乃狄克州大約三年的費率調整週期，我們預計將在 2026 年上半年提交一份綜合費率調整申請。搬到德克薩斯州。

Two key pieces of water legislation were passed by the state legislature and signed by Governor Abbott in 2025 that provide an opportunity to reduce regulatory lag. The first authorizes water utilities to adopt a future or hybrid test year in general rate cases. Traditionally, Texas has been a historical test year jurisdiction for water utilities. The second reduces the time line for processing our infrastructure surcharge mechanism or SIC, applications from 120 days to 60 days.

2025 年，州議會通過了兩項重要的水資源立法，並由州長阿博特簽署生效，這為減少監管落後提供了機會。第一項授權供水企業在一般費率案件中採用未來或混合測試年。傳統上，德克薩斯州一直是水務公司的試點地區。第二項措施將基礎設施附加費機制（SIC）申請的處理時間從 120 天縮短至 60 天。

Texas Water supported these pieces of legislation, and we believe they are in the best interest of customers and the company. Speaking of SIC, Texas Water filed for its third SIC increase in early October requesting $5.1 million increase for completed water and wastewater projects, and we expect a decision from the PUCT in mid-2026.

德州水務公司支持這些立法，我們認為這些立法符合客戶和公司的最大利益。說到 SIC，德州水務公司在 10 月初提交了第三次 SIC 增資申請，要求為已完成的供水和污水處理項目增加 510 萬美元，我們預計德州公共事業委員會將在 2026 年年中做出決定。

Texas Water expects to file a combined company general rate case in early 2027 with new rates effective in early 2028. The timing of the case will follow the close of our pending Quadvest acquisition as well as the completion of our significant investments to bring an additional 6,000 acre feet of water annually into our existing system so that these and other additions to Texas Water's rate base can be recognized in rates.

德州水務公司預計將於 2027 年初提交合併後的公司一般費率申請，新費率將於 2028 年初生效。該案件的審理時間將等到我們完成對 Quadvest 的收購，以及我們為每年向現有系統增加 6,000 英畝英尺水量而進行的重大投資完成後，以便將這些以及其他對德克薩斯水務公司費率基礎的增加反映在費率中。

Finally, I want to briefly discuss Maine and the approval last month of a stipulation that Maine Water reached with the Office of Public Advocate and the rate unification proceeding. The stipulation enables the consolidation of Maine Water's 10 rate divisions into a single division on a revenue-neutral basis.

最後，我想簡要討論緬因州的情況，以及上個月緬因水務公司與公共權益倡導辦公室達成的協議和費率統一程序獲得批准的情況。該規定使得緬因州水務公司的 10 個費率部門能夠合併為單一的費率部門，且不會對收入造成影響。

The consolidation will set comparable rates for service across all communities that Maine Water serves and provide a more efficient regulatory structure for Maine Water to make important infrastructure investments while creating administrative efficiencies in the regulatory process, which benefits customers.

此次合併將為緬因州水務公司服務的所有社區設定統一的服務費率，並為緬因州水務公司提供更有效率的監管結構，以便其進行重要的基礎設施投資，同時提高監管流程的行政效率，從而使客戶受益。

To limit effects on customer bills, a transition rate took effect on February 1 and will adjust over time through the future rate filings until the uniform rate target is achieved. The stipulation also approves a need-based financial assistance rate program compliant with recent water affordability legislation in Maine.

為了限制對客戶帳單的影響，過渡費率於 2 月 1 日生效，並將透過未來的費率申報逐步調整，直到達到統一費率目標。該規定還批准了一項基於需求的財政援助費率計劃，該計劃符合緬因州最近發布的用水負擔能力立法。

With successful completion of the unification proceeding, Maine Water filed a notice of intent at the end of January that it plans to file a consolidated general rate case around the end of March. I believe the aforementioned regulatory and legislative accomplishments, combined with the pending acquisitions in Texas, positions our company to deliver on the five-year plan that Ann previously laid out.

隨著合併程序的成功完成，緬因州水務公司於 1 月底提交了一份意向通知，表示計劃在 3 月底左右提交一份綜合一般費率案件。我相信，上述監管和立法方面的成就，加上在德克薩斯州即將進行的收購，使我們公司能夠實現安之前製定的五年計劃。

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. I wanted to briefly touch on bill affordability for our ratepayers. We know what affordability is of -- is of paramount importance to our customers and regulators. We also know that it is a key investor concern across the utility industry given the rising levels of planned capital expenditures and the fact that 2026 is an election year in many states. Already, we have seen electric bill affordability play a prominent role in some politicians campaigns.

謝謝你，布魯斯。我想簡單談談我們用戶對帳單支付能力的承受能力。我們深知價格合理性對我們的客戶和監管機構至關重要。我們也知道，鑑於計劃資本支出水準不斷上升，以及 2026 年是許多州的選舉年，這已成為整個公用事業行業投資者關注的關鍵問題。我們已經看到，電費負擔能力在一些政治人物的競選活動中扮演了重要角色。

Affordability is a top priority of ours, and we will continue to work with our partners in our states to keep rates affordable for customers. But we do have to balance affordability with the extensive infrastructure needs throughout our service territories, all while providing safe, reliable and high-quality service.

價格實惠是我們的首要任務，我們將繼續與各州的合作夥伴共同努力，確保客戶能夠負擔得起價格。但是，我們必須在保證服務區域內基礎設施建設的可行性的同時，提供安全、可靠和高品質的服務。

A recent Environmental Protection Agency study said that water and wastewater bills are affordable if combined, they are less than 4.5% of median household income. This is up from 3% previously. As shown on slide 22, average H2O bills are 1% or less across the four states as of year-end 2025.

美國環保署最近的一項研究表明，如果水費和污水處理費加起來，是可以負擔的，它們佔家庭收入中位數的不到 4.5%。這一比例高於先前的3%。如投影片 22 所示，截至 2025 年底，這四個州的平均水費帳單漲幅為 1% 或更低。

It should be noted that that includes water and wastewater individually, so you have to divide the EPA rates by half. We believe that these statistics are beneficial for our customers, but also provide reasonable bill headroom for recovery of our planned infrastructure investments. In addition, we continue to work with -- or work to offer customer assistance programs to help with affordability for those that need it.

要注意的是，這包括水費和污水處理費，所以你必須將 EPA 費率除以二。我們相信這些統計數據對我們的客戶有利，同時也為我們計劃的基礎設施投資的回收提供了合理的帳單空間。此外，我們繼續與客戶合作，或努力提供客戶援助計劃，以幫助有需要的人減輕經濟負擔。

As Bruce mentioned, with the approval of Maine's rate unification stipulation, we are excited to be able to introduce for the first time a needs-based financial assistance rate program for eligible Maine customers. We are pleased to be able to offer this affordability tariff for our main customers who need it as we already offer similar tariffs to our customers in California and Connecticut.

正如布魯斯所提到的，隨著緬因州統一費率規定的獲得批准，我們很高興能夠首次為符合條件的緬因州客戶推出基於需求的財政援助費率計劃。我們很高興能夠為有需要的主要客戶提供這種經濟實惠的資費方案，因為我們已經為加州和康乃狄克州的客戶提供了類似的資費方案。

Further, we hope to be able to introduce this benefit to our Texas customer base as part of a future rate proceeding. And as always, we will continue to strive to run the business as efficiently as possible as we recognize that for every dollar of avoided operating expenses enables the recovery of $7 of capital investments with a neutral impact on customer bills.

此外，我們希望能夠在未來的費率調整過程中，將這項優惠引入我們在德克薩斯州的客戶群中。一如既往，我們將繼續努力盡可能有效率地經營業務，因為我們意識到，每節省一美元的營運費用，就能收回七美元的資本投資，而對客戶帳單的影響是中性的。

As we look to balance affordability with extensive investment required to replace aging infrastructure and treat emerging contaminants, all while providing high-quality water and reliable service, we will continue to work constructively with our state regulatory partners. There's been a few commissioner changes that I would like to highlight, starting with Governor Newsom's recent announcement in California. We congratulate John Reynolds on his appointment to be the new CPUC President and thank Alice Reynolds for her service.

在努力平衡價格承受能力與更換老化基礎設施和處理新出現的污染物所需的大量投資之間，同時還要提供高品質的水和可靠的服務，我們將繼續與州監管合作夥伴進行建設性合作。我想重點介紹一下最近幾項專員變動，首先是加州州長紐森的聲明。我們祝賀約翰·雷諾茲被任命為新任CPUC主席，並感謝愛麗絲·雷諾茲的服務。

We also welcome Commissioner Christine Harada to the CPUC. Then in Texas, we welcome Commissioner Morgan Johnson to the PUCT, who Governor Abbott appointed in October to fill one of the two commissioner vacancies. In closing, 2025 was another strong year for H2O America by pretty much all accounts, financial, regulatory, legislative, strategic, you name it.

我們也歡迎克里斯汀·哈拉達委員加入加州公共事業委員會。然後，在德克薩斯州，我們歡迎摩根約翰遜專員加入德克薩斯州公共事業委員會 (PUCT)。州長阿博特於 10 月任命他填補了兩個專員空缺中的一個。總之，從財務、監管、立法、策略等各方面來看，2025 年對 H2O America 來說又是強勁的一年。

And I believe our company is poised to deliver great things in 2026 and beyond. Our dedicated team remains focused on driving shareholder and customer value through disciplined infrastructure investment and executing on our financial goals, advancing the transformational Quadvest acquisition as well as Cibolo Valley, deepening our strong partnerships with local stakeholders and our unrelenting pursuit of operational excellence in identifying creative and sustainable solutions to serve generations to come while maintaining a focus on affordability.

我相信我們公司已經做好準備，在 2026 年及以後取得輝煌的成就。我們敬業的團隊將繼續致力於透過嚴謹的基礎設施投資和執行財務目標來提升股東和客戶價值，推進具有變革意義的 Quadvest 收購以及 Cibolo Valley 項目，深化與當地利益相關者的牢固合作關係，並不斷追求卓越運營，尋找創新和可持續的解決方案，為子孫後代服務，同時保持對經濟適用性的關注。

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

現在我將把電話轉回給接線生，回答大家的問題。

(Operator Instructions) Nicholas Campanella, Barclays.

（操作說明）尼古拉斯·坎帕內拉，巴克萊銀行。

Thanks for all the updates today. Maybe just a little bit more on slide 13. You have the 6% to 8% EPS CAGR now. You mentioned that it's not linear like you said. I appreciate the disclosures that we have to get through this financing and some ROE lag in '26 and '27.

感謝今天提供的所有更新資訊。或許可以在第 13 張投影片再多加一點內容。你們目前的每股盈餘複合年增長率為 6% 至 8%。你提到過，它並不像你說的那樣是線性的。我理解為了完成這筆融資，我們必須披露一些信息，並且2026年和2027年的ROE可能會有所滯後。

Just maybe just at what point do you think you're going to be really in that 8% plus level like you said on the press release? Would that come as soon as 2028 or how would you kind of frame that?

你覺得究竟要到什麼時候才能真正達到你在新聞稿中提到的8%以上的水平呢？最快會在 2028 年實現嗎？或者您會如何描述這個時間點？

Yeah, I'll take that one, Nick. We want to be respectful of the PUCT process. And you know that the outcome of the planned consolidated Texas rate case will be a key driver of our earnings in '28 and beyond, not just the magnitude of the rate increase, but also the effective date. So we do forecast accretion in 2028 versus our stand-alone plan under a number of different scenarios that we've worked.

好的，我接受這個任務，尼克。我們希望尊重PUCT流程。你知道，計劃中的德州綜合利率調整案的結果，不僅是利率上漲的幅度，還有生效日期，都將是我們 2028 年及以後收益的關鍵驅動因素。因此，根據我們研究的多種不同情景，我們預測 2028 年的增幅將與我們單獨制定的計劃有所不同。

And as indicated in our prepared remarks, we do plan to be at or above the top end of our 6% to 8% for the total period, but I don't want to get ahead of the regulatory process to say exactly when that could happen.

正如我們在準備好的發言稿中所述，我們計劃在整個期間內達到或超過 6% 至 8% 的上限，但我不想搶在監管程序之前說具體何時能夠實現。

Okay. I understand. And then maybe just, Andrew, maybe you kind of also mentioned in the slides here and then in the prepared that this outlook doesn't contemplate future M&A. Maybe just if you -- what is the time line to announce something further here? Do you want to wait until you get on the other side of the Texas rate case?

好的。我明白。然後，安德魯，也許你也在幻燈片和準備資料中提到過，這種展望並沒有考慮未來的併購。或許您只是想問一下—您打算何時公佈更多消息？你想等到德州利率案塵埃落定之後再做決定嗎？

Are you guys going to be out there remaining active across the jurisdictions? And then maybe where do you kind of see some of the best opportunities in your states or maybe even outside of your states today?

你們會繼續在各轄區保持活躍嗎？那麼，您認為目前在您所在的州，甚至在您所在的州以外，有哪些最佳機會呢？

Nick, I appreciate the question. And there's a couple of things that I would just highlight. So first of all, the velocity typically in the water space is not that regular for acquisitions. Our typical acquisitions that we do are small tuck-in acquisitions. We will continue to remain active nonstop on those tuck-in acquisitions, but I wouldn't expect that to be as groundbreaking as the Quadvest acquisition is for us.

尼克，感謝你的提問。有幾點我想特別強調一下。首先，水體中的流速通常較不規律，因此難以進行採集。我們通常進行的收購都是小型補充性收購。我們將繼續不間斷地積極進行這些補充收購，但我預期這些收購對我們來說不會像收購 Quadvest 那樣具有突破性意義。

I would say that for us, as it stands today, we're very much focused on completing the Quadvest acquisition. That's going to be our focus for the near and medium terms. And we'll see what happens in the future. There's nothing that -- we don't comment on specific transactions, but I can assure you, we're very focused on Quadvest right now.

我認為，就我們目前的情況而言，我們非常專注於完成對 Quadvest 的收購。這將是我們近期和中期內的工作重點。接下來會發生什麼，我們拭目以待。沒有什麼——我們不對具體交易發表評論，但我可以向你保證，我們現在非常專注於 Quadvest。

(Operator Instructions) Angie Storozynski, Seaport.

（操作說明）安吉·斯托羅津斯基，海港。

I have to admit that I'm still in -- all of the 13% rate base growth and then the $2.7 billion CapEx, I mean, I was bullish in my estimates, but that was far more than I had expected. I'm just wondering -- and again, you obviously show me the CapEx per subsidiary, but how did that change? So is it fair to say that the vast majority of the pickup in that longer-term CapEx came from the acquisition from Quadvest?

我必須承認我仍然看好它——13% 的利率基礎增長，以及 27 億美元的資本支出，我的意思是，我之前的估計已經很樂觀了，但這遠遠超出了我的預期。我只是想知道——而且，您顯然向我展示了每個子公司的資本支出，但這是怎樣的變化？那麼，是否可以說，長期資本支出成長的大部分都來自對 Quadvest 的收購？

No, I think it's a combination of things. You do have some additional CapEx related to the Quadvest acquisition. But as we look forward and get more granular in our project forecasting going forward, we are seeing additional projects. You're seeing increased cost as some of the bids come in. We saw the increase in the PFAS by about $100 million.

不，我認為這是多種因素共同作用的結果。您確實有一些與收購 Quadvest 相關的額外資本支出。但隨著我們展望未來，並對專案預測進行更細緻的分析，我們看到了更多的專案。隨著部分投標結果出爐，成本也隨之增加。我們看到 PFAS 的增加額約為 1 億美元。

So that's really what's driving that. I mean, Bruce, anything else you want to add?

這才是真正的驅動因素。布魯斯，你還有什麼要補充的嗎？

We just mentioned in our prepared remarks, a little bit of opportunity on the 1% main replacement, quite a bit of investment on water supply, Angie, as well. So I think it's a fairly balanced approach, but it's not just the acquisition step-up. It's quite a bit of capital beyond that as well.

我們在準備好的演講稿中提到，1% 的主管道更換帶來了一些機會，供水方面也有相當大的投資，安吉也是如此。所以我認為這是一種相當平衡的方法，但不僅僅是收購升級那麼簡單。除此之外，還需要相當多的資金。

Okay. And then on the earnings trajectory, and I guess, I understand how CAGR works from the starting and ending point, I understand that. But I'm just -- so I'm just wondering, like -- so the accretion of the acquisition starts in '28, then it accelerates in '29. But I'm asking about the step change between '29 and '30.

好的。然後是關於獲利軌跡，我想我理解複合年增長率 (CAGR) 從起點到終點是如何運作的，我明白這一點。但我只是——我只是想知道，例如——收購的累積始於 2028 年，然後在 2029 年加速。但我問的是 2029 年到 2030 年之間的巨大變化。

Is it fair to assume that there is an even bigger earnings step-up between '29 and '30. And I'm not just asking about Texas, I'm asking vis-a-vis all of the rate case timings in other jurisdictions.

是否可以合理假設 2029 年到 2030 年之間會有更大的收益成長？我問的不僅是德州的情況，而是其他地區所有費率案件的審理時間。

Maybe I'll start, Andrew.

或許我會先開始，安德魯。

Please.

請。

So Angie, when you think about our rate case cadence right now, as we mentioned in the prepared remarks, Maine has already filed an intent. Of course, Maine is our smallest jurisdiction. And Connecticut's three-year cycle has them filing again this year. So we would expect those to be implemented sometime next year. And then we have the Texas rate case that is effective in '28 as well as increased California.

所以安吉，考慮到我們目前的費率案件節奏，正如我們在準備好的發言稿中提到的，緬因州已經提交了意向書。當然，緬因州是我們最小的管轄區。康乃狄克州的三年週期意味著他們今年要再次提交申請。因此，我們預計這些措施將於明年某個時候實施。此外，還有德州的費率調整案，該調整案將於 2028 年生效，以及加州的費率上調。

Now California, of course, has step increases each year, but they do have a new rate case. So I won't -- wouldn't expect any new rate cases that would have new rates effective in '29, just any incremental step-ups from the current one. And of course, our infrastructure mechanisms such as the WIC, the WICA, the SIC and the WQTA, of course, for PFAS.

當然，加州每年都會逐步提高稅率，但他們確實有一項新的稅率提案。所以我不會——預計不會有任何新的費率案件會在 2029 年生效，只會比目前的費率略有提高。當然，還有我們的基礎設施機制，例如 WIC、WICA、SIC 和 WQTA，當然也包括 PFAS。

Understood. But -- okay. But I was more asking about '29 to '30, that step-up, if there is basically sort of this accelerating growth from -- coming mostly from Quadvest, but also other jurisdictions. I'm frankly fishing a little bit for another sort of like an equity injection that given the size of this plan, I mean, if I should just assume that there is some slowdown to the growth versus, for example, '29 simply because I need to dilute myself a bit to fund the growth.

明白了。但是——好吧。但我更想問的是 2029 年到 2030 年的那段時間，也就是所謂的“躍升期”，是否存在某種加速增長——主要來自 Quadvest，但也來自其他地區。坦白說，我有點想尋求另一種形式的股權注入，考慮到這個計劃的規模，我的意思是，如果我假設增長速度會比例如 2029 年有所放緩，僅僅是因為我需要稍微稀釋自己的股份來為增長提供資金，那又會怎樣呢？

Yeah. I mean the one thing to note is that in Connecticut and Maine, if they do a three-year cycle, which Connecticut has been, they would have actually new rates coming in in 2030. So that is one. I think the rest is just the capital plan. And then we did mention in '29 that we would have -- we have the maturity coming due of the parent company debt that we would expect to pay down.

是的。我的意思是，需要注意的一點是，康乃狄克州和緬因州如果採用三年周期（康乃狄克州一直如此），那麼實際上到 2030 年就會有新的利率出台。這是其中之一。我認為剩下的部分只是資本計劃。然後我們在 2029 年提到過，我們將有——我們將有母公司債務到期，我們預計會償還這些債務。

Alex Kania, BTIG.

Alex Kania，BTIG。

Maybe just thinking -- coming off the last question. First, just on equity issuance. It's helpful that you broke out the Quadvest-related equity versus the, I guess, ongoing equity needed to support the overall program. Is that $125 million or whatnot type of number kind of a reasonable sort of expectation on a kind of an ongoing basis as you think about funding the updated CapEx plan?

或許只是在思考──想到了上一個問題。首先，僅就股權發行而言。你將與 Quadvest 相關的股權與支持​​整個專案所需的持續股權區分開來，這很有幫助。當您考慮為更新後的資本支出計劃提供資金時，1.25億美元或其他類似的數字是否是合理的預期？

Yeah. I would say on average, that's probably about right. You may have some variances year-to-year just depending on timing of capital payments. But I would expect that just on an average basis. And of course, as our CapEx plan increases, you would expect that to increase somewhat a little bit as well.

是的。我覺得平均下來，大概差不多。由於資金支付時間的不同，每年可能會有一些差異。但我預計平均水平會是這樣。當然，隨著我們的資本支出計劃增加，您也會預期它也會略有增加。

Okay. Great. And then again, going back to the EPS long-term growth. So just as I was looking at the slide, right, I think the way that we should be reading this is that once we get to, let's say, 2030, that from whatever that number is, you've been presumably growing at the kind of at or above the 6% to 8% range through 2030. From 2030, whatever that level is, you still see line of sight where 6% to 8% can actually continue off of that 2030 as kind of a base year?

好的。偉大的。然後，我們再回到 EPS 的長期成長上來。所以，就像我剛才看幻燈片的時候一樣，我認為我們應該這樣理解：一旦到了，比如說 2030 年，無論那個數字是多少，你大概都會在 2030 年之前保持 6% 到 8% 的增長率。從 2030 年起，無論那個水準是多少，你仍然可以看到 6% 到 8% 的成長趨勢，而 2030 年可以作為基準年繼續維持這個成長水準嗎？

Yeah, that's correct.

是的，沒錯。

Okay. Maybe one last question is just on maybe Texas and the upcoming rate case as -- post Quadvest. Just how do you -- and I appreciate, Andrew, the discussion on affordability, just thinking about the rate trajectory for that jurisdiction in particular, given obviously you want a refresh of rates overall in the rate case, but also there is certainly a much higher customer growth there as well.

好的。或許最後一個問題是關於德州以及即將到來的利率案件——在 Quadvest 事件之後。那麼，您究竟該如何——我很欣賞安德魯關於可負擔性的討論，尤其是在考慮該地區的費率走勢時，因為顯然您希望在費率案件中對整體費率進行調整，但那裡的客戶增長也肯定要高得多。

But just how do you see looking through the regulatory process, the impact to kind of so-called average customer bills or whatnot?

但是，從監管流程的角度來看，您認為會對所謂的普通客戶帳單或其他方面產生什麼影響？

I'm going to ask Bruce if you wouldn't mind answering that.

我想問布魯斯，如果你不介意的話，能否回答一下這個問題。

Yeah. Thanks for the question. And again, as we had mentioned earlier, we don't want to get ahead of the PUCT process and portray any outcomes without actually getting closer to that and getting through the process. But we have a duty and obligation to make prudent investments and recover those. And we did mention earlier that it's been 13 years since we've been in.

是的。謝謝你的提問。再次強調，正如我們之前提到的，我們不想操之過急，在尚未真正接近目標並完成整個流程之前，就妄下斷言，描繪任何結果。但我們有責任和義務進行審慎的投資並收回投資。我們之前也提到過，我們已經13年沒在這裡了。

So we've made quite a bit of investment in some water supply. So we think that the increase is substantial, but we don't want to get ahead of what that is. But affordability continues to be important to us and to our customers. And so in that process, as we've done in Connecticut, Maine, and California, we'll be seeking ways to help our customers with affordability and propose a low-income tariff to help support that in other ways that will be creative in the process.

所以我們在供水方面投入了相當多的資金。所以我們認為增幅很大，但我們不想太早預測具體增幅。但價格實惠對我們和我們的客戶來說仍然非常重要。因此，在這個過程中，就像我們在康乃狄克州、緬因州和加州所做的那樣，我們將尋求幫助客戶提高負擔能力的方法，並提出低收入關稅，以其他創意的方式來支持這一目標。

That concludes today's question-and-answer session. I'd like to turn the call back to Andrew Walters for closing remarks.

今天的問答環節到此結束。我想把電話轉回給安德魯沃特斯，請他作總結發言。

Thank you again for joining us today. H2O America 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 and increased it in each of the past 58.

再次感謝您今天蒞臨。H2O America 自豪地利用我們的全國平台來支持我們獨特的本地運營，所有這些都秉持著一個共同的使命，即為四個州的 160 萬人口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，為股東創造價值，包括我們對股息的堅定承諾，我們已經連續 80 多年派發股息，並且在過去 58 年中每年都提高了股息。

Our success is built on a culture of service and partnership. We value our customers, the communities, the environment and capital providers, and I couldn't be prouder of our team whose dedication makes it all possible. I am always available for follow-up along with my partners, Ann and Bruce. We appreciate your interest in H2O America.

我們的成功建立在服務和合作的企業文化之上。我們珍惜我們的客戶、社區、環境和資金提供者，我為我們的團隊感到無比自豪，正是他們的奉獻精神才使這一切成為可能。我和我的合夥人安和布魯斯隨時可以提供後續服務。感謝您對H2O America的關注。

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了。