American States Water Company Q1 FY2025 earnings call

• Started 2025 with strong financial results; consolidated earnings per share $0.08 higher than Q1 2024, with favorable variances from CPUC rate decisions offset by operating expenses, investment losses, and equity issuance dilutive effects. - Regulated utilities on pace to invest $170 million to $210 million in infrastructure this year. - Golden State Water's general rate case: transitioned to M-WRAM and incremental cost balancing account, projected operating revenues to increase by ~$23 million in 2025 excluding advice letter projects. - Electric utility's general rate case: final decision approves settlement, allows $75.6 million in capital infrastructure investment, and approves recovery of prior wildfire mitigation costs. - ASUS: earnings consistent year-over-year, had $56.5 million in new capital upgrade projects in 2024, delays in construction due to weather but expected to catch up, projects to contribute $0.59 to $0.63 per share in 2025. - Dividends: Board approved second quarter cash dividend, with 8.8% CAGR over last five years exceeding long-term 7% goal.

For the water utility, Golden State Water reported earnings were $0.52 per share in Q1 2025 compared to $0.48 per share in Q1 2024, with a $0.04 per share increase mainly due to new 2025 water rates but offset by higher operating expenses and investment losses. Revenue for the Water segment increased by $11.7 million. The Electric segment's earnings were $0.07 per share in Q1 2025 compared to $0.05 per share in Q1 2024, a $0.02 per share increase primarily due to CPUC's electric rate decisions, with revenue increasing by $2.8 million. Earnings from ASUS were $0.13 per share in Q1 2025, consistent with Q1 2024. Losses from the parent company were $0.02 per share in Q1 2025 compared to $0.03 per share in Q1 2024, mainly due to lower interest expense.

• ASUS is projected to contribute $0.59 to $0.63 per share this year. - Golden State Water anticipates robust and sustained growth in its rate base over the next few years due to recent general rate case decisions authorizing significant capital infrastructure investment.

• Golden State Water may be subject to future volatility in revenues and earnings due to fluctuations in customer water consumption and changes in water supply source mix. - Uncertainty at the Department of Defense regarding military base privatization efforts could impact ASUS's business.

Q: Eva, I know you said you raised a little more than $25 million of equity via the ATM in Q1. Are you still expecting to raise about $60 million over the full year 2025?

A: Eva mentioned that $60 million is the target for the full year, but currently there is capacity in the credit facility and they will reassess how much to fund for the year. Over the three-year rate case cycle, they plan to do $200 million, having raised $117 million so far with $83 million to $85 million remaining.

Q: Bob, is there any update on new military base privatization efforts? Are there any bases that have come up for RFP that are progressing and we could get some sort of decision in the next couple of years or has, I guess, the Trump administration's efforts around DOGE or anything impacted the way you see that business evolving either more privatization is occurring or consolidation of bases or kind of anything like that?

A: Bob said there are no 50-year privatizations out yet in 2025. Expect Army to possibly have one or two privatizations later this year, Air Force behind Army, Navy excited with programs like Patuxent River and JBCC contract. There is uncertainty at DoD, but existing business is progressing well with nontraditional contracts like JBCC giving a leg up on competition.