AMERICAN STATES WATER CO Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Regulatory Updates: Received final CPUC decisions for water and electric utilities. Golden State Water’s general rate case authorized $573.1 million in capital infrastructure investment. Electric utility’s general rate case set rates retroactive to January 1, 2023.
• Financial Results: Full year 2024 reported earnings per share were $0.19 lower than prior year, but adjusted earnings were $0.32 higher. Return on equity was 14.1%, and dividend increased by 8.3% for 7 consecutive years.
• Infrastructure Investments: Invested $235.5 million in regulated utilities infrastructure in 2024. ASUS secured $56.5 million in new capital upgrade awards with projects through 2027.
• ASUS Achievements: Began work on new military contracts on the East Coast, expanding water and wastewater system management for the U.S. government.

Segment Performance

• Water Utility (Golden State Water): Fourth quarter reported earnings were $0.52 per share compared to $0.41 per share in 2023. The increase was largely due to an increase in third-year water rates, a tax benefit, but offset by higher operating and interest expenses. Revenue for the water segment increased by $5.1 million due to the third-year water rate increase and authorized rate of return on rate base.
• Electric Segment: Fourth quarter earnings were $0.13 per share compared to $0.07 per share in 2023, a $0.06 per share increase primarily due to the final CPUC decision on the electric general rate case with retroactive new rates. Revenue for the electric segment increased by $10.6 million mainly due to retroactive new electric rates.
• ASUS (Contracted Services): Fourth quarter earnings decreased $0.01 per share due to higher operating expenses, partially offset by increased management fee revenues from new military base operations. Revenue from ASUS increased $2.3 million primarily due to higher management fee revenue.

Guidance

• ASUS: Projects to contribute $0.59 to $0.63 per share in 2025.
• Capital Expenditures: Projected company-funded capital expenditures for 2025 are $170 million to $210 million.
• Equity Offering: Anticipates issuing approximately $60 million of the remaining $110 million under the at-the-market offering program in 2025.

Risks

• Regulatory Uncertainty: Changes in regulatory decisions could impact revenue and expenses, such as rejected proposed regulatory mechanisms by CPUC.
• Operating Expenses: Higher operating expenses, including labor costs and maintenance, could offset revenue increases.
• Equity Issuance Impact: Dilutive effects from equity issuance under the at-the-market program could affect consolidated earnings.

Q: Could you help me reconcile how much of the $0.06 electric GRC retroactive EPS benefit that was recorded in Q4 is solely related to 2023?

A: Bob Sprowls stated the majority is related to 2024, with Eva Tang explaining about unrecovered costs and settlement agreements affecting the split.

Q: How much of the remaining roughly $110 million of equity under the ATM program do you anticipate issuing in 2025?

A: Eva Tang responded with approximately $60 million