California Water Service Group · NYSE:CWT
California Water Service — Q1 2021 Earnings Presentation
17 slides from California Water Service's earnings presentation, Apr 29, 2021
Slide 1: First Quarter 2021 Results Presentation
First Quarter 2021 Results Presentation April 29, 2021 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 Paul Townsley President & CEO Vice President, Corporate Development and Chief Regulatory Officer Tom Smegal Dave Healey Vice President, CFO & Treasurer Vice President, Controller INVESTOR RELATIONS 2
Slide 4: Presentation Overview
Presentation Overview o Our Operating Priorities o Financial Results and EPS Bridge o Note on 2021 Tax Rates o California Regulatory Update o Continuing COVID-19 Impacts o ESG Update o Acquisition Status o Cap Ex and Rate Base Tables o In Summary INVESTOR RELATIONS 3
Slide 5: Our Operating Priorities
Our Operating Priorities Affordable, High-Quality Employees as Strong Brand & Enhanced Excellent Service Water & Best Advocates Reputation Stockholder Wastewater Value o Continuous o Safe workplace & o Environmental improvement, o Consistent sampling healthy lifestyles stewardship o Infrastructure e
Slide 6: Financial Results: First Quarter 2021
Financial Results: First Quarter 2021 (Amounts are in millions, except for EPS) Q1 2020 Q1 2021 Variance Operating Revenue $125.6 $147.7 17.7% Operating Expenses $132.5 $144.8 9.3% Net Interest Expense $9.9 $9.9 n/a Net Income (Loss) ($20.3) ($3.0) (85.1%) EPS (LPS) ($0.42) ($0.06) (85.6%) Capital I
Slide 7: Quarterly Financial Highlights
Quarterly Financial Highlights NET LOSS DECREASED BETTER RESULTS PRIMARILY DUE TO THE RATE BY INCREASES APPROVED IN THE CALIFORNIA GENERAL RATE CASE $17.3M Q1 2020 DID NOT INCLUDE CERTAIN BALANCING MECHANISMS DUE TO THE DELAYED GRC TO CORE OPERATING COST INCREASES AS EXPECTED $3.0M LOWER AFUDC EQUIT
Slide 8: EPS Bridge Q1 2020 to Q1 2021
EPS Bridge Q1 2020 to Q1 2021 $0.10 -$0.42 $0.00 -$0.10 $0.14 -$0.07 $0.02 -$0.06 $0.07 -$0.20 -$0.01 $0.12 $0.09 -$0.30 -$0.40 -$0.50 INVESTOR RELATIONS 7
Slide 9: A Note on Tax Rates for 2021
A Note on Tax Rates for 2021 Excess Deferred Income Taxes of 6.0% Effective Tax Rate estimated for 2021 $19M are being refunded to $60M Estimated mains and services investment eligible for state tax California repairs deduction in 2021 customers in $160M Eligible mains and services repairs investmen
Slide 10: Regulatory Update: California
Regulatory Update: California CALIFORNIA COST OF CAPITAL FILING WITHIN THE WEEK: REQUESTING 10.35% ROE (LAST ADOPTED 9.2%) AND SAME CAPITAL STRUCTURE COST OF DEBT DOWN FROM 5.51% IN 2018 TO 4.23% MEDIAN BILL INCREASE $0.34 PER MONTH IF ADOPTED AS PROPOSED REQUESTING TO CONTINUE COST ADJUSTMENT MECHA
Slide 11: Continuing Impacts from Covid-19 Pandemic
Beginning to see benefits of vaccinations in the states we serve. We remain vigilant over employee safety. We maintain a suspension of all collection activities in all our states. Increased customer account aging from suspension of collection activities o Bills outstanding >90 days increased to $11.
Slide 12: ESG Reporting Update
ESG REPORTING UPDATE Our first ESG report aligned with SASB and referencing GRI is available now at www.calwatergroup.com/esg INVESTOR RELATIONS 11
Slide 13: Acquisition Status Update
Acquisition Status Update System Water Wastewater Total Status Connections Connections Kapalua Water and Wastewater (HI) 500 500 1,000 Approved by Hawaii PUC March 2021/Est close Q2 2021 The Preserve at Millerton (CA) Future up to Future up to Future up to Pending Regulatory 1,400 1,400 2,800 Approv
Slide 14: Capital Investment and Depreciation
Capital Investment and Depreciation (in millions) 2015-2020 2008-2019 $350 CapEx CAGR Capital Investment Depreciation $299 $300 $285 $250 3x 9.7% DEPRECIATION $229 $259 $272 $274 $200 $177 $150 $131 $113 $111 $118 $116 $108 $108 $100 $99 $84 $89 $77 $66.8 YTD $58 $61 $61 $64 $50 $55 $40 $40 $43 $0 2
Slide 15: Estimated Regulated Rate Base of CWT
Estimated Regulated Rate Base of CWT (in millions) 2021 2022 2023-2025 Adopted Regulated Rate Base (CA) and projected (Other States) $ 1,810 $ 1,920 TBA $2,500 Remaining potential advice letters $ 54 $ 54 TBA Potential rate base including all advice letters $ 1,864 $ 1,974 TBA $2,000 *2022 Rate Base
Slide 16: In Summary
In Summary o Q1 results were in line with our expectations o We expect a busy Q2 as we begin the California Cost of Capital review, prepare for fire season and potential drought restrictions, and file our 2021 California GRC o Expecting we will continue coming out of COVID effects for the remainder
Slide 17: Discussion
CALIFORNIA WATER SERVICE GROUP La INVESTING FOR LIFE sg DISCUSSION
California Water Service Group — Q1 2021 Earnings Presentation on 6ix