California Water Service Group · NYSE:CWT
California Water Service — Investor Presentation (March 2025)
32 slides from California Water Service's investor presentation, March 2025
Slide 1: California Water Service Group
California Water Service Group March 2025
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 secu
Slide 3: Today's Speakers
Today’s Speakers Marty Kropelnicki James Lynch Chairman & CEO Sr. Vice President, CFO & Treasurer 3
Slide 4: Who We Are
WATER SERVICE GROUP Who We Are
Slide 5: Our Company At-a-Glance
Our Company At-a-Glance Company founded Employees 70+ Gallons of drinking water delivered, annually 58 Years Gallons of waste- Population served water processed, annually 560K+ Service connections Contributed to charitable organizations 5
Slide 6: California Water Service Group: a leading publicly traded U.S. water utility
California Water Service Group: a leading publicly traded U.S. Financial Profile water utility providing high-quality water & wastewater services 2024 revenue $1.04B* 4.3% 2024 net income 2.3% $190.8M* of consolidated of consolidated revenue revenue 92.3% of consolidated $178.7M revenue 38,300 6,700
Slide 7: Our Business Model is Straightforward
Our Business Model is Straightforward Recover other Add non-regulated Earn reasonable costs through income (water return on capital reasonable system operations, invested in regulatory policies HomeServe, infrastructure and efficient antenna leases) operations 97.7% regulated revenue (return on equi
Slide 8: The Case for Investing in CWT
The Case for Investing in CWT Growth Capital Structure Return of Cash Corporate Responsibility Strong history of returning Leverage deep expertise Group authorized capital cash to shareholders Taking a science-based to grow through capital structure of 58.2% equity through dividend policy approach t
Slide 9: Recent Events
WATER SERVICE GROUP Recent Events
Slide 10: 2024 California General Rate Case
2024 California General Rate Case LUWEP Key updates since filing: • Assigned CPUC Commissioner issued Scoping Memo and Ruling in November 2024 $1.6B Application proposes Low-Use • Public participation hearings held for all service Water Equity Program that would areas, with Cal Water receiving stron
Slide 11: Cost of Capital & Other Regulatory Updates
Cost of Capital & Other Regulatory Updates Cost of Capital Other States • CPUC Authorization to postpone Cost of Capital Application to May 1, 2026; • Group has initiated a more proactive effectively maintaining Cal Water’s current capital structure through December approach in pursuing rate adjustm
Slide 12: Emergency Preparedness & Response Leadership
Emergency Preparedness & Response Leadership Dedicated Training Proactive Wildfire Mitigation Regular Community Emergency Operations Comprehensive approach including Response training across service areas, vegetation management, infrastructure including notable Hawaii Water drills (July upgrades, cr
Slide 13: The Year Ahead
The Year Ahead Continue to Stay keenly execute our Continue to focused on Lead water capital investment Evaluate strategic Provide our progress 2024 expense industry efforts to plan, which growth areas customers with California GRC and management as recover treatment includes projects including thro
Slide 14: Group Executing Plan to Meet New PFAS Standards and Continues to Pursue Cost Recovery
Group Executing Plan to Meet New PFAS Standards and Continues to Pursue Cost Recovery EPA also designated 2 EPA adopted new Group has been preparing for PFAS (PFOA & PFOS) hazardous National Primary new regulation and believes substances under Drinking Water Regulation for well positioned to meet Co
Slide 15: Strategic, Continual Growth
Strategic, Continual Growth 15
Slide 16: Responsible Infrastructure Investment
Responsible Infrastructure Investment: Critical for safe, reliable, and efficient water and wastewater service 2024 Investment Breakdown 22% Invested record Plan to invest $2.1 level of capital billion in water and investments 14% wastewater system 64% totaling infrastructure from $471 million 2025-
Slide 17: Capital Investment & Depreciation
Capital Investment & Depreciation Growth in capital investment outpaces depreciation (in millions) 2015-2024 TOTAL $800 Capital Investment Depreciation $750 CapEx $700 $600 $660 $655 3x DEPRECIATION $500 $400 $299 $293 $328 $384 $471 $300 $259 $272 $274 $229 $177 $200 CapEx 2025-2027* >4x $100 $77 $
Slide 18: Regulated Rate Base Growth
Regulated Rate Base Growth Estimated to achieve over $3.3 billion by 2027 (in billions) $4.00 $3.50 $3.35 $2.93 $3.00 $2.58 $2.39 $2.50 $2.20 $2.01 $1.87 $2.00 $1.61 $1.50 $1.24 $1.26 $1.00 $0.50 $0.00 2018 2019 2020 2021 2022 2023 2024 2025* 2026* 2027* *2025-2027 rate base estimates include amount
Slide 19: Strategic Acquisitions
Strategic Acquisitions Customer Count* 570,000 2-2.5% 560,000 550,000 47,100 540,000 Average growth achieved per year from new business and business 530,000 development activities since 2019 520,000 Total connections added since 2019 510,000 500,000 2019 2020 2021 2022 2023 2024 # Connections *exclu
Slide 20: Group & BVRT Water Resources
Group & BVRT Water Resources Strategic expansion into high-growth areas leveraging Group’s deep experience 2021 Group invested in BVRT Water Resources, a privately owned regional water & sewer utility BVRT New utility incubator for Group, investing in & growing greenfield water & sewer utilities Gro
Slide 21: BVRT Growth
BVRT Growth As of 2024, 4 of top 15 metropolitan areas for population growth in U.S. were in Texas Anticipated Customer Growth 10,000+ 20,000 Total connected & committed customers in 2024 20,000+ 15,000 12,000 Additional likely customers in 10,000 10,000 existing service areas 8,500 100,000+ 5,000 2
Slide 22: Strong Financial Performance
Strong Financial Performance 22
Slide 23: Strong Financial Performance
Strong Financial Performance Strong 2024 financial results driven primarily by March 2024 decision Cal Water received in its 2021 GRC Three-Year Revenue (in millions) Three-Year Net Income Three-Year Diluted EPS (in millions) $190.8 $200.0 $3.50 $3.25 $1,036.8 $3.00 $1,000.0 $150.0 $846.4 $2.50 $850
Slide 24: Liquidity Profile
Liquidity Profile Group maintains strong liquidity profile to execute capital plan and strategic M&A investments (in millions) $500 $450 • Expect to have adequate cash to support capital investment and growth $400 $350 • Credit facilities of $600M that can be expanded up to $300 $395.0 $800M; facili
Slide 25: Capital Allocation | Balance Sheet
Capital Allocation | Balance Sheet Continue to maintain financial discipline with strong balance sheet, while allocating capital in efficient manner Cal Water received Group maintained at- CPUC approved Group announced an authorization from the the-market stock postponement of Cal $0.08 increase in
Slide 26: Dividend Program
Dividend Program Strong history of returning cash to shareholders 320th Dividend $0.30 Consecutive Quarterly in $1.40 Amount of $1.24 $1.20 $1.12 58th $1.20 Announced Annual $1.00 $1.04 Increase Expected to Yield Annual $1.00 $0.92 Dividend of $0.80 $0.04 $1.24 One-Time Special Dividend Brings $0.60
Slide 27: Committed to Doing the Right Thing
Committed to Doing the Right Thing 27
Slide 28: Sustainability and citizenship efforts deliver long-term value
Sustainability and citizenship efforts deliver long-term value Protecting Serving our Engaging Governing with our planet customers & communities our workforce integrity We minimize our impact We invest in the long-term We foster a positive We pursue excellence by on the planet while health of our co
Slide 29: Dedicated ESG Program Designed to Drive Progress and Enhance Transparency
Dedicated ESG Program Designed to Drive Progress and Enhance Transparency Program Highlights Annual Reporting Annual framework-aligned reporting on ESG Framework-aligned annual ESG reporting provides detailed updates on our topics most significant to the business sustainability and citizenship strat
Slide 30: Awards and Ratings Reflect Strong Sustainability Performance
Awards and Ratings Reflect Strong Sustainability Performance ESG corporate QualityScore: Earned US EPA 2024 “Excellence rating: in Promoting WaterSense® Labeled Products” Governance: 1 award B / “Prime” Environment: 4 Social: 4 Earned regional Top Workplace designation for ESG rating: A 12th time in
Slide 31: How to Reach Us
How to Reach Us Martin (Marty) A. Kropelnicki (408) 367-8200 mkropelnicki@calwater.com James (Jim) P. Lynch (408) 367-8200 jlynch@calwater.com 31
Slide 32: Questions?
Questions?
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