California Water Service Group · NYSE:CWT
California Water Service — Q3 2021 Earnings Presentation
19 slides from California Water Service's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Results Presentation
Third Quarter 2021 Results Presentation October 28, 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 Bridges o Earnings Notes o Regulatory Update o Drought o Continuing COVID-19 Impacts o Business Development Update 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: YTD 2021
Financial Results: YTD 2021 (Amounts are in millions, except for EPS) YTD 2020 YTD 2021 Variance Operating Revenue $605.2 $617.6 2.1% Operating Expenses $493.5 $501.3 1.6% Net Interest Expense $30.8 $31.9 3.5% Net Income $81.3 $97.5 19.9% EPS $1.66 $1.91 15.1% Capital Investments $221.3 $207.7 (6.1%
Slide 7: Financial Results: Third Quarter 2021
Financial Results: Third Quarter 2021 (Amounts are in millions, except for EPS) Q3 2020* Q3 2021 Variance Operating Revenue $304.1 $256.7 (15.6%) Operating Expenses $198.0 $185.6 (6.3%) Net Interest Expense $10.5 $11.2 7.1% Net Income $96.4 $62.5 (35.1%) EPS $1.94 $1.20 (38.0%) Capital Investments $
Slide 8: Year-to-Date Financial Highlights
Year-to-Date Financial Highlights YTD NET INCOME YEAR-TO-DATE RESULTS ALLOW DIRECT INCREASED BY COMPARISON SINCE 2020 QUARTERLY RESULTS FOR Q1 THROUGH Q3 WERE IMPACTED BY THE DELAYED $16.3M CALIFORNIA GRC ANNUAL STEP INCREASE AND OFFSET FILINGS ADDED TO $16.3M TO REVENUE $97.5M OPERATING EXPENSE INC
Slide 9: EPS Bridge YTD 2020 to YTD 2021
EPS Bridge YTD 2020 to YTD 2021 $2.00 $1.91 $1.66 $1.80 -$0.04 $0.02 $1.60 -$0.16 $0.03 $0.14 $0.26 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 INVESTOR RELATIONS 8
Slide 10: EPS Bridge Q3 2020 to Q3 2021
EPS Bridge Q3 2020 to Q3 2021 $1.94 -$0.80 $2.00 $1.80 $1.60 $1.40 $0.09 -$0.04 $0.05 -$0.03 -$0.09 $0.08 $1.20 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 *The company recorded a benefit from the delayed 2018 GRC in the third quarter of 2020, $0.80 of which would have been recorded in earlier periods
Slide 11: Earnings Notes
Earnings Notes Unbilled revenue accrual is currently As we approach year-end, keep in mind items adding $20.1M to introduced on prior calls: revenue as • Authorized rate base for all operations is $1.82B and a general compared to guide to earnings is to calculate the authorized return on the equity
Slide 12: Regulatory Update
Regulatory Update CALIFORNIA GENERAL RATE CASE FILED JULY 1: ON SCHEDULE WITH INTERVENOR TESTIMONY EXPECTED IN Q1 2022 CALIFORNIA COST OF CAPITAL FILED MAY 1: PROGRESS IS SLOW WITH INTERVENOR TESTIMONY EXPECTED IN Q4 AND A DECISION IN Q2 2022 WASHINGTON GRC INTEGRATING RAINIER VIEW ACQUISITION FILED
Slide 13: 2021 California Drought Update
2021 CALIFORNIA DROUGHT UPDATE GOVERNOR NEWSOM EXPANDED DROUGHT DECLARATION STATEWIDE ON OCTOBER 19 HEAVY RAINS IN NORTHERN CALIFORNIA LAST WEEK CAL WATER HAS MOVED TO PROVIDED SOME RELIEF BUT ONLY A WET, SNOWY WINTER STAGE 2 DROUGHT WILL END DROUGHT RISK FOR 2022 RESTRICTIONS IN 6 DISTRICTS CALIFOR
Slide 14: Continuing Impacts of Covid-19 Pandemic
All company employees have returned to the office. We continue to be vigilant for employee and customer safety; we encourage and incentivize vaccination; and we follow local masking rules and recommendations as applicable. New Mexico, Washington, and Hawaii have allowed us to restart bill collection
Slide 15: Acquisition Status for Q3 2021
Acquisition Status for Q3 2021 System Water Wastewater Total Status Connections Connections The Preserve at Millerton (CA) Future up to Future up to Future up to CPUC approved on 1,400 1,400 2,800 August 5, 2021* Animas Valley Water (NM) 2,000 2,000 NMPRC change of control filed* Keahou (HI) 1,500 E
Slide 16: Capital Investment and Depreciation
Capital Investment and Depreciation (in millions) 2015-2020 2008-2019 Capital Investment Depreciation $400 $350 CapEx CAGR $355 $360 $365 $300 $250 3x 9.7% DEPRECIATION $229 $259 $272 $274 $299 $285 $207.7 YTD $200 $177 $150 $131 $118 $116 $131 $115 $123 $100 $99 $107 $84 $89 $77 $58 $61 $61 $64 $50
Slide 17: Estimated Regulated Rate Base of CWT
Estimated Regulated Rate Base of CWT (in billions) $3 $2.74 $2.49 $3 $2.24 $1.94 $2 $1.82 $1.61 $2 $1.26 $1.24 $1.06 $1.12 $1 $1 $0 2016 2017 2018 2019 2020 2021 *2022 **2023 **2024 **2025 *2022 Rate Base estimate assumes Cal Water is eligible for all escalation rate increases included in the Califo
Slide 18: In Summary
In Summary o Q3 results were in line with our expectations, and we are excited that state aid will come to our customers who had difficulty during the pandemic. o CPUC filings are ongoing with no material developments in the quarter. o The team is working on regulatory approval and integration of mu
Slide 19: Discussion
CALIFORNIA WATER SERVICE GROUP La INVESTING FOR LIFE sg DISCUSSION
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