American States Water Company · NYSE:AWR

American States Water — FY2023 Earnings Presentation

21 slides from American States Water's earnings presentation, Feb 22, 2024

  1. Slide 1: Financial Results Call Presentation

    Financial Results Call Presentation Fourth Quarter and Full Year 2023 February 22, 2024 NYSE: AWR

  2. Slide 2: Today’s Presenters

    Today’s Presenters Robert J. Sprowls President & CEO Eva G. Tang SVP – Finance & CFO 2

  3. Slide 3: Forward-Looking Statement

    Forward-Looking Statement Certain matters discussed during this conference call may be forward-looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. Please review a description of the company’s risks and uncer

  4. Slide 4: Non-GAAP Financial Measures

    Non-GAAP Financial Measures This conference call includes a discussion of certain measures that are not prepared in accordance with Generally Accepted Accounting Principles (GAAP) in the United States, and constitute "non-GAAP financial measures" under SEC rules. These non-GAAP financial measures ar

  5. Slide 5: Presentation Overview

    Presentation Overview 2023 Highlights 6 Q4 Diluted EPS by Segment 8 Q4 Operating Revenues by Segment 9 Q4 Expenses (Excluding Income Taxes) 10 EPS Bridge Q4 2022 to Q4 2023 11 Diluted EPS by Segment for the Year 12 Liquidity 13 Regulatory Activity 14 Adopted Average Water Rate Base 17 Contracted Ser

  6. Slide 6: 2023 Highlights

    2023 Highlights  Two final decisions were adopted by the CPUC  GSWC’s general rate case application that determined new rates for 2022-2024  GSWC’s cost of capital proceeding for 2022-2024  GSWC filed and received an approval on the trigger of the Water Cost of Capital Mechanism (“WCCM”) for 202

  7. Slide 7: 2023 Highlights (Continued)

    2023 Highlights (Continued)  ASUS was awarded two new contracts by the U.S. Government to operate water and wastewater facilities  50-year contract at Naval Air Station Patuxent River (Pax River) with an initial firm- fixed-price value estimated at $349 million; subject to annual economic price ad

  8. Slide 8: Q4 Diluted EPS by Segment

    Q4 Diluted EPS by Segment Q4 2023 Q4 2022 Variance Water $ 0.41 $ 0.28 $ 0.13 Electric 0.07 0.08 (0.01) Contracted Services 0.12 0.17 (0.05) AWR (Parent) (0.04) (0.03) (0.01) Consolidated Diluted EPS as recorded (GAAP) $ 0.55 $ 0.50 $ 0.05 Adjustment: Impact of revenues subject to refund (1) - 0.03

  9. Slide 9: Q4 Operating Revenues by Segment

    Q4 Operating Revenues by Segment (amounts in millions) Q4 2023 Q4 2022 Variance Water $87.6 $75.0 $12.6 Electric 11.1 11.0 0.1 Contracted Services 26.4 39.4 (13.0) Total Operating Revenues* $125.2 $125.4 ($0.2) * Certain amounts in the line item do not total due to rounding. 9

  10. Slide 10: Q4 Expenses (Excluding income taxes)

    Q4 Expenses (Excluding income taxes) (amounts in millions) Q4 2023 Q4 2022 Variance Water and Electric Supply Costs $26.7 $24.9 $1.8 Other Operation 10.0 10.1 (0.1) Administrative and General 22.2 21.2 1.0 Depreciation and Amortization 10.8 10.9 (0.1) Maintenance 3.2 3.3 (0.1) Property and Other Tax

  11. Slide 11: EPS Bridge Q4 2022 to Q4 2023

    EPS Bridge Q4 2022 to Q4 2023 $0.80 $0.75 $0.24** ($0.04) ($0.01) ($0.02) $0.70 $0.01 ($0.05) $0.65 ($0.01) ($0.05) $0.60 ($0.01) $0.55* $0.55 $0.50 $0.50 $0.45 Regulated Utilities Contracted AWR Services (Parent) $0.40 $0.35 $0.30 Q4 2022 EPS Increase in Higher supply Higher Higher Higher other Hig

  12. Slide 12: Diluted EPS by Segment for the Year

    Diluted EPS by Segment for the Year 2023 2022 Variance Water $ 2.77 $ 1.45 $ 1.32 Electric 0.20 0.24 (0.04) Contracted Services 0.50 0.46 0.04 AWR (Parent) (0.10) (0.04) (0.06) Consolidated Diluted EPS as recorded (GAAP) $ 3.36 $ 2.11 $ 1.25 Adjustments: Impact of retroactive rates related to the fu

  13. Slide 13: Liquidity

    Liquidity  Operating cash flows were $67.7 million for 2023, as compared to $117.8 million for 2022 largely from the delay in the water GRC and lower water consumption  GSWC has implemented: • new 2023 rate increases; • surcharges to recover all retroactive revenues accumulated since 2022 through

  14. Slide 14: Regulatory Activity

    Regulatory Activity  On June 29, 2023, CPUC adopted a final decision in GSWC's general rate case application for all water regions and its general office determining new water rates for the years 2022–2024.  Authorizes $404.8 million in capital infrastructure over the 3-year period  Increases 202

  15. Slide 15: Regulatory Activity (Continued)

    Regulatory Activity (Continued)  On June 29, 2023, the CPUC adopted a final decision on GSWC’s 2021 cost of capital application that:  adopts GSWC’s requested capital structure of 57% equity/43% debt and cost of debt of 5.1% filed in the application;  adopts a return on equity of 8.85% for GSWC a

  16. Slide 16: Regulatory Activity (Continued)

    Regulatory Activity (Continued)  On February 2, 2024, the CPUC approved a request filed jointly by GSWC and three other Class A investor-owned water utilities to defer the next cost of capital applications deadline by one year to May 1, 2025. The joint request also asked for: • current cost of capi

  17. Slide 17: GSWC Adopted Average Water Rate Base

    GSWC Adopted Average Water Rate Base (in millions) CAGR 10.3% * $1,357.5 * $1,259.5 * $1,161.5* $980.4 $916.1 $851.8 $752.2 2018 2019 2020 2021 2022 2023 2024 * Based on the final decision in the current general rate case plus includes approximately $9.4 million in advice letter projects. 17

  18. Slide 18: Contracted Services (ASUS)

    Contracted Services (ASUS)  Earnings for full year of 2023 were $0.50 per share as compared to $0.46 per share for 2022. The increase was largely due to an increase in management fee revenues resulting from resolutions of economic price adjustments and an overall increase in construction activity d

  19. Slide 19: Dividends

    Dividends  The Board of Directors approved a first quarter 2024 cash dividend of $0.43 per share  Dividend policy: CAGR of more than 7% over the long term continues to be met  Dividends paid every year since 1931  Increased dividend every Quarterly Dividend Growth* calendar year for CAGR 9.4% $0

  20. Slide 20: Questions and Answers

    e% American States ee eee Water Company Questions and Answers

  21. Slide 21: Computations and Reconciliations of Non-GAAP Financial Measures

    Computations and Reconciliations of Non-GAAP Financial Measures Below are the computations and reconciliations of diluted earnings per share from the measure of operating income by business segment to AWR’s consolidated diluted earnings per share for the three and twelve months ended December 31, 20

American States Water Company — FY2023 Earnings Presentation on 6ix