California Water Service Group · NYSE:CWT
California Water Service — Investor Presentation (May 2025)
38 slides from California Water Service's investor presentation, May 2025
Slide 1: Investing for Life
Investing for Life May 2025 Investor Presentation Martin Kropelnicki, Chairman, President & CEO Jim Lynch, Senior Vice President, CFO & Treasurer ©2025 California Water Service Group 1
Slide 2: Forward-Looking Statements and Other Important Information
Forward-Looking Statements and Other Important Information This presentation contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The forward-looking statements are intended to qualify under provisions of the federal se
Slide 3: Agenda
Agenda WHO WE CONSISTENT STRATEGIC HIGH-QUALITY STRONG ARE RESULTS GROWTH SERVICE VALUE ©2025 California Water Service Group 3
Slide 4: CWT is a leading water utility offering predictability of returns, long-term value, and growth
CWT is a leading water utility offering predictability of returns, long-term value, and growth potential to stockholders by investing in water and wastewater systems and providing essential, affordable services to communities in the western United States. ©2025 California Water Service Group 4
Slide 5: Largest Regulated Water Utility in the Western United States
Largest Regulated Water Utility in the Western United States 499,400 6,700 11,500 38,300 4,200 Total connections Total connections Total connections Total connections Total connections 92.3% 4.3% 0.7% 2.3% 0.4% of consolidated revenue of consolidated revenue of consolidated revenue of consolidated r
Slide 6: Financial Strength Drives Strategic Growth
Financial Strength Drives Strategic Growth $1.04B $191M $179M 2024 revenue* 2024 net income* Returned to shareholders in dividends over 3 most recent ended years A+/stable AA- Global credit rating affirmed First Mortgage Bonds by S&P Global rating *2024 revenue and net income increased due to delaye
Slide 7: Laser-Focused on—and Guided by—Our Strategic Framework
Laser-Focused on—and Guided by—Our Strategic Framework ©2025 California Water Service Group 7
Slide 8: Extensive Infrastructure with Reinvestment Opportunity
Extensive Infrastructure with Reinvestment Opportunity 7,900 1,135 681 155,000+ Miles of water main Groundwater wells Storage tanks Valves 50,000+ 2010+ 6 12 Fire hydrants Sampling stations Surface water treatment Wastewater treatment plants plants ©2025 California Water Service Group 8
Slide 9: Agenda
Agenda WHO WE CONSISTENT STRATEGIC HIGH-QUALITY STRONG ARE RESULTS GROWTH SERVICE VALUE ©2025 California Water Service Group 9
Slide 10: CWT's regulated business model, favorable regulatory environment, and innovative approach to ratemaking
CWT’s regulated business model, favorable regulatory environment, and innovative approach to ratemaking enable the company to provide predictable and consistent long-term results, regardless of market conditions and geopolitical policy. ©2025 California Water Service Group 10
Slide 11: Stable, Regulated Model with Transparent Returns
Stable, Regulated Model with Transparent Returns Earn reasonable return on Recover costs through Add non-regulated income capital invested in constructive regulatory policies (water system operations, infrastructure and efficient operations HomeServe, antenna leases) 97.7% of revenue is regulated (r
Slide 12: Regulatory Framework that Supports Long-Term Value
Regulatory Framework that Supports Long-Term Value Forward-looking test years; rates based on future budget and GRCs for multiple districts in one application every three years Statewide rates WA Construction work in progress / AFUDC included in rate base Deferred debits (like CA memo accounts) Grou
Slide 13: Progressive Regulatory Strategy Supports Customers and Stockholders
Progressive Regulatory Strategy Supports Customers and Stockholders 1 2 3 Greater percentage of revenues in fixed service charge Significantly Rate design to balance balanced with discounted first tier affordability, progressive tiered rate pricing for conservation, and design nondiscretionary water
Slide 14: Strong Start to 2025
Strong Start to 2025 Q1 2024 GAAP Q1 2025 vs. Q1 2024 Non-GAAP* (in millions, except EPS) (in millions, except EPS) $205 $204.0 $14 $0.25 $300 $13.3 $270.7 $0.22 $200 $12 $250 $0.20 $195 $10 $200 $190 $8 $0.15 $150 $1.40 $185 $1.21 $1.20 $6 $180.5 $0.10 $1.00 $180 $100 $4.1 $69.9 $0.80 $0.07 $4 Non-
Slide 15: Strong Three-Year Financial Growth
Strong Three-Year Financial Growth (in millions, except EPS data) Three-Year Revenue Three-Year Net Income Three-Year Diluted EPS $1,036.8 $190.8 $1,000.0 $200.0 $3.25 $846.4 $3.50 $850.0 $794.6 $3.00 $150.0 $2.50 GAAP $700.0 $96.0 $2.00 $1.77 $550.0 $100.0 $1.50 $400.0 $51.9 $0.91 $50.0 $1.00 $250.
Slide 16: Agenda
Agenda WHO WE CONSISTENT STRATEGIC HIGH-QUALITY STRONG ARE RESULTS GROWTH SERVICE VALUE ©2025 California Water Service Group 16
Slide 17: Infrastructure investment is the primary growth driver
Infrastructure investment is the primary growth driver, with strategic acquisitions in high-growth areas providing additional opportunity. ©2025 California Water Service Group 17
Slide 18: Infrastructure Investment Powers Long-Term Reliability and Earnings
Infrastructure Investment Powers Long-Term Reliability and Earnings Growth in capital investment outpaces depreciation (in millions) $800 Capital Investment Depreciation $750 2015-2024 TOTAL CapEx $700 $660 $655 3x $600 $500 $471 DEPRECIATION $384 $400 $328 $299 $293 $300 CapEx 2025-2027* >4x $200 $
Slide 19: Earnings Performance Driven by Double-Digit Rate Base Growth
Earnings Performance Driven by Double-Digit Rate Base Growth Rate base estimated to reach over $3.3 billion by 2027 (in billions) $4.00 $3.50 $3.35 $2.93 $3.00 $2.58 $2.50 $2.39 $2.20 $2.01 $2.00 $1.87 $1.61 $1.50 $1.00 $0.50 $0.00 2020 2021 2022 2023 2024 2025* 2026* 2027* *2025-2027 rate base esti
Slide 20: Expanding Footprint in a Priority Growth Region: Texas
Expanding Footprint in a Priority Growth Region: Texas 7 10,000+ Anticipated Customer Growth BVRT-owned regulated Total connected & committed utilities in high-growth areas customers in 2024 20,000 20,000+ 100,000+ 15,000 Additional likely customers Additional potential customers in existing service
Slide 21: Strategic Approach to Acquisitions
Strategic Approach to Acquisitions Customer Count* Accretive in the short-term or strategic 570,000 in nature 560,000 550,000 540,000 2-2.5% 530,000 520,000 510,000 47,100 Total connections added since Average growth achieved per year from 500,000 2019 new business and business development 2019 2020
Slide 22: Agenda
Agenda WHO WE CONSISTENT STRATEGIC HIGH-QUALITY STRONG ARE RESULTS GROWTH SERVICE VALUE ©2025 California Water Service Group 22
Slide 23: CWT brings life and vitality to its communities
CWT brings life and vitality to its communities by providing affordable, high-quality water and wastewater services to customers. ©2025 California Water Service Group 23
Slide 24: Keeping Water Affordable
Keeping Water Affordable Median Monthly Median Monthly Bill as % of Household Income Cal Water Bill Income Actively pursue Maintain assets Invest in conservation grants to lower strategically to keep programs that keep bills costs and water facilities operating lower (Cal Water bills are up to 2020
Slide 25: Providing Quality and Service to Customers
Providing Quality and Service to Customers Achieved 100% Well-positioned to meet new Achieving customer Providing 24/7 compliance with PFAS drinking water regulation service performance emergency all primary and ahead of compliance deadline targets more rigorous response and than those set by our pa
Slide 26: Contributing to Vibrant Communities
Contributing to Vibrant Communities $2M 2B+ Invested in conservation Gallons of recycled water delivered programs in 2024 that are per year, or 2.5% of total water expected to save 52 million supply; on track to meet goal to gallons of water per year increase to at least 5% by 2035 23.5% $1.13M Redu
Slide 27: Recognized as a Leader in the Industry
Recognized as a Leader in the Industry ©2025 California Water Service Group 27
Slide 28: Agenda
Agenda WHO WE CONSISTENT STRATEGIC HIGH-QUALITY STRONG ARE RESULTS GROWTH SERVICE VALUE ©2025 California Water Service Group 28
Slide 29: CWT has a strong track record of providing value to stockholders
CWT has a strong track record of providing value to stockholders. ©2025 California Water Service Group 29
Slide 30: 20-Year Total Return
20-Year Total Return $800 $721 S&P 500 CWT $700 $616 $575 $563 On $100 stock purchase $539 $600 on 1/1/05, with $461 $456 dividends reinvested $451 $500 $428 $420 $407 $378 $370 $358 $400 $294 $279 $265 $242 $300 $211 $211 $184 $184 $178 $162 $144 $141 $200 $131 $127 $124 $124 $123 $122 $120 $117 $1
Slide 31: 59 Years of Dividend Growth
59 Years of Dividend Growth Strong history of returning cash to shareholders $1.40 320th Consecutive Quarterly Dividend in Amount of $0.30 $1.20 $1.12 $1.24 $1.04 Announced Annual $1.00 58th Increase Expected to Yield Annual Dividend of $1.20 $1.00 $0.92 $0.80 One-Time Special $0.04 Dividend Brings
Slide 32: Takeaways
Takeaways Our regulated business model makes us a predictable, reliable investment for our stockholders, particularly as we operate in states with favorable regulatory environments. We grow by investing in our extensive water system assets and making strategic acquisitions. We provide affordable, hi
Slide 33: For More Information, Contact:
For More Information, Contact: Martin (Marty) A. Kropelnicki James (Jim) P. Lynch (408) 367-8200 (408) 367-8200 mkropelnicki@calwater.com jlynch@calwater.com ©2025 California Water Service Group 33
Slide 34: Questions?
QUESTIONS? ©2025 California Water Service Group 34
Slide 35: Appendix
APPENDIX ©2025 California Water Service Group 35
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Company’s revenue, net income, and diluted earnings per share are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and represent amounts reported on filings with the Securities and Exchange Commission. Adjusted revenue, net income, and dilut
Slide 37: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Three Months Ended March 31, (in thousands, except per share amounts) 2025 2024 Reported GAAP Operating Revenue $203,973 $270,749 Adjustments: 2023 interim rate relief related to the 2021 California GRC recorded in 2024 - ($90,266) Adjusted Operating Rev
Slide 38: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Year Ended (in thousands, except per share amounts) 2024 2023 2022 Reported GAAP Operating Revenue $1,036,806 $794,632 $846,431 Adjustments: 2023 interim rate relief related to the 2021 California GRC recorded in 2024 ($87,482) $87,482 Adjusted Operating
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