California Water Service Group · NYSE:CWT
California Water Service — Q1 2022 Earnings Presentation
19 slides from California Water Service's earnings presentation, Apr 28, 2022
Slide 1: First Quarter 2022 Results Presentation
First Quarter 2022 Results Presentation April 28, 2022 0
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" tr
Slide 3: Today's Participants
Today’s Participants Marty Kropelnicki Shannon Dean President & CEO Vice President, Customer Service & Chief Citizenship Officer Tom Smegal Dave Healey Vice President, CFO & Treasurer Vice President, Controller INVESTOR RELATIONS 2
Slide 4: Presentation Overview
o Our Values and Priorities o Financial Results o Financial Highlights and Earnings Bridge o California Regulatory Update o ESG Update o California Drought Update o CapEx and Supply Chain Presentation Overview o ATM Equity Plan o Business Development Status o CapEx and Rate Base Tables o In Summary
Slide 5: Investor Relations Update
INVESTOR BOARD RELATIONS UPDATE 4
Slide 6: Financial Results: First Quarter 2022
Financial Results: First Quarter 2022 (Amounts are in millions, except for EPS) Q1 2021 Q1 2022 Variance Operating Revenue $147.7 $173.0 17.1% Operating Expenses $144.8 $163.9 13.2% Net Interest Expense $9.9 $10.9 10.1% Net Income Attributable to CWT ($3.0) $1.1 --- EPS (LPS) ($0.06) $0.02 --- Capit
Slide 7: First Quarter Financial Highlights
First Quarter Financial Highlights NET INCOME SOLID FIRST QUARTER WITH CALIFORNIA INCREASED TO ESCALATION INCREASE ADDING $3.9M REVENUE $1.1M WAGES, DEPRECIATION, INTEREST UP AS EXPECTED TAX BENEFITS ADDED TO EARNINGS APPLIED STATE AID TO CUSTOMER BILLS DELINQUENT DUE TO THE PANDEMIC $68.5M CAPEX, S
Slide 8: EPS Bridge Q1 2021 to Q1 2022
EPS Bridge Q1 2021 to Q1 2022 $0.10 $0.08 $0.12 $0.06 $0.04 $0.03 $0.02 $0.02 $0.02 $0.03 $0.02 $0.04 $0.00 -$0.02 -$0.05 -$0.04 -$0.09 -$0.06 -$0.06 -$0.08 -$0.10 INVESTOR RELATIONS 7
Slide 9: California Regulatory Update
California Regulatory Update GENERAL RATE CASE CONTINUES WITH REBUTTAL TESTIMONY FILED IN APRIL. WE EXPECT TO ENGAGE IN SETTLEMENT DISCUSSIONS IN APRIL AND MAY. COST OF CAPITAL HEARINGS EXPECTED IN MAY. REBUTTAL TESTIMONY FILED IN MARCH. GRC, WITH A 2023 TEST YEAR, IS ANTICIPATED TO BE EFFECTIVE JAN
Slide 10: ESG: Bringing Strategy to Life
ESG: Bringing Strategy to Life • Updated strategic framework and corporate planning process • All-employee engagement • Short- and long-term objectives that will drive progress on o Climate Change, Energy & Emissions o Community Support o Diversity, Equality & Inclusion o Emergency Preparedness & Re
Slide 11: ESG: Executing on Strategy, 2021 Highlights
ESG: Executing on Strategy, 2021 Highlights • Published our 2nd SASB-aligned ESG Report that references GRI and TCFD • A few highlights on execution: o Climate Risk Assessment & Adaptation Framework o In-line hydro turbine system in Waikoloa, Hawaii o Tesoro Viejo Wastewater Treatment and Recycled W
Slide 12: California Drought Update
California Drought Update EXTREMELY DRY JANUARY-MARCH IN CALIFORNIA, WITH SOME RELIEF IN APRIL STATE SURFACE WATER AVAILABILITY WILL BE LOW IN 2022, CPUC HAS ALLOWED A TRACKING MECHANISM FOR DROUGHT REDUCING SUPPLY OPTIONS IN SOME REGIONS COSTS BEGINNING IN 2021 CALIFORNIA CUSTOMER USAGE DOWN 2% IN
Slide 13: Capital Spending and Supply Chain
Q1 CAPEX IN LINE WITH 2021 CONSTRUCTION IS EXPERIENCING INFLATION, SUPPLY CHAIN DISRUPTIONS, LABOR SHORTAGES, AND DELAYS IN PERMITTING GLOBAL EVENTS IMPACTING SUPPLY CHAIN: UKRAINE AND CHINESE COVID LOCKDOWNS NON-RESPONSIVE BIDDERS AND Capital Spending and CONSTRUCTION DELAYS DUE TO CONSTRUCTION LAB
Slide 14: ATM Equity Plan Renewal
We expect to renew our ATM equity program in the near term We expect the new program will allow us to raise up to $350M over three years ATM Equity Plan Renewal Proceeds will be used for general corporate purposes Company will continue to issue long-term debt from time to time The expiring ATM progr
Slide 15: 2022 Business Development Project Updates
2022 Business Development Project Updates Water Wastewater System Connections Connections Total Status Valencia Mesa (NM) 85 85 Closed February 2022 Animas Valley Water 2,000 2,000 Closed April 2022 (NM) Railyard (TX) – New 350 (up to 1,500 350 (up to 1,500 at Awaiting regulatory approval* service a
Slide 16: Capital Investment and Depreciation
Capital Investment and Depreciation (in millions) 2015-2021 TOTAL 2008-2019 Capital Investment Depreciation CapEx $400 CAGR $355 $360 $365 $350 $300 $250 3x 9.7% $229 $259 $272 $274 $299 $293 DEPRECIATION $200 $177 $150 $131 $118 $116 $135 $116 $127 $100 $99 $109 $84 $89 $77 $58 $61 $61 $64 $68.5M $
Slide 17: Estimated Regulated Rate Base of CWT
Estimated Regulated Rate Base of CWT (in billions) $3.0 $2.74 $2.49 $2.5 $2.24 $1.95 $2.0 $1.82 $1.61 $1.5 $1.26 $1.24 $1.06 $1.12 $1.0 $0.5 $0.0 2016 2017 2018 2019 2020 2021 2022 *2023 *2024 *2025 *2023-2025 Rate Base Estimates include filed proposal in 2021 California General Rate Case plus estim
Slide 18: In Summary
o Solid first quarter performance o Excited about the ESG progress we’re making o We continue to grow through acquisitions In Summary o Focus of the company is on drought, regulatory proceedings, and working through disruptions INVESTOR RELATIONS 17
Slide 19: Discussion
CALIFORNIA WATER SERVICE GROUP La i VEsTING FOR LIFE ¥
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