California Water Service Group

Hello, and thank you for standing by. We will be starting shortly. Thank you. Thank you. Ladies and gentlemen, thank you for standing by. Hello, my name is Dustin, and I will be your conference operator today. At this time, I would like to welcome you to California Water Service Group third quarter 2025 earnest conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. So if you'd like to ask a question at that time, please press star and the number one on your telephone keypad. If you'd like to withdraw your question or your question has been answered, please press star 1 again. Thank you. I would now like to turn the conference over to James P. Lynch, Senior Vice President, CFO, and Treasurer. Please go ahead.

Thank you, Justin. Welcome, everyone, to the third quarter 2025 results call for California Water Service Group. With me today is Marty Kropelnicki, our Chairman and CEO, and Greg Milliman, our Vice President of Rates and Regulatory Affairs. Replay dial-in information for this call can be found in our quarterly results earnings release, which was issued earlier today. The call replay will be available until November 29, 2025. As a reminder, before we begin, the company has a slide deck to accompany today's earnings call. The slide deck was furnished with an 8K and is also available at the company's website at www. calwatergroup.com. Before looking at our third quarter 2025 results, I'd like to cover forward-looking statements. During our call, we may make certain forward-looking statements. Because these statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the company's current expectations. As a result, we strongly advise all current shareholders and interested parties to carefully read the company's disclosures on risks and uncertainties found in our Form 10-K, Form 10-Q, press releases, and other reports filed with the Securities and Exchange Commission. And now, I will turn the call over to Marty.

Thank you, Jim. Good morning, everyone. Thanks for joining us today. Happy fall. A few items to update you on. First and foremost, I want to start and give a quick update on our 2024 general rate case. The administrative law judge assigned to this case a few weeks ago indicated that he may need additional time to process the rate case given the size and complexity. It's a little different than the rate case we had last time. That was significantly delayed. We know this judge is actively working on the case. Additionally, the signed commissioner continues to stress the importance of getting decisions out on time, if not early. In addition, during that meeting, the judge also authorized us to file a Tier 1 advice letter on January 1st for inflationary offset if the decision is delayed. That is really different than what we've gone through before historically at Cal Water with the California Public Choice Commission. This would essentially, if they are late, allow us to put an inflationary step increase with a Tier 1 advice letter effective January 1st. Additionally, the judge also granted us a memo account, which gives us the authority to track and recover our cost revenue and costs that would normally be recovered if the rate case was affected on January 1st, 2026. So I think this is all good news. Again, we don't believe the delay is going to be significant given the commissioner's comments, both in meetings with us as well as in public forums, as well as the judge actively working on a rate case. And I give the Commission some huge kudos for being more transparent. For some of those of you that were with us in the last rate case, we didn't know nothing for a long time while the rate case was delayed. So there's good communication going on. They're putting steps in place in the event that the decision is slightly delayed. But given where we are right now, I do not believe it will be a significant delay. Greg Millman will talk about that a little bit later in the deck. Before I turn the call back over to Jim, I want to update you on a couple things, including a strong financial performance as well as our operational highlights for the first nine months of 2025. First and foremost, we continue to invest in our water infrastructure. During the quarter, we invested $135 million. That's up 14.8%. It's almost 15% Q3 of this year over Q3 of last year. And we're up 10%. year-to-date over 2024. In addition, during the quarter, Jim's team was busy. They refinanced short-term borrowings with the issuance of $370 million of long-term notes and bonds. This transaction was significantly oversubscribed. In fact, I will tell you from a bond deal, it was the most oversubscribed bond deal I've ever had the pleasure of working on in my 30 years of doing this. The nice thing about having a significantly oversubscribed deal is it helps minimize credit spreads, which lowers costs for our customers over the long run. We've continued our expansion in Texas while we wait for the commission to approve our general rate case settlement. We do have an all-party settlement in Texas that we're just waiting for final commission approval on. And we received an additional $24 million in net PFAS settlement proceeds during the quarter, which brings our year-to-date total recovery about $35 million. Again, this will be a direct offset for customer costs as we implement the new PFAS roles. In addition to that, we've made steady advancement across multiple regulatory proceedings in the service territories that we operate in. So it was a very, very, very busy third quarter. The third quarter of this year is the third year of the rate case, which is always the hardest year for us in California. And California is by far our largest operating entity. And as Jim's going to walk through, the financial performance continues to be quite good during the third year of a rate case as we wait for regulatory relief. So with Jim, I'm going to turn it over back to you.