Good day, ladies and gentlemen. Thank you for standing by. Welcome to the American States Water Company conference call discussing the company's fourth quarter and full year 2022 results. The call is being recorded. If you would like to listen to a replay of this call, it will begin this afternoon at 5:00 P.M. Eastern Time and run through Thursday, March 9, 2023 on the company's website, www.aswater.com. The slides that the company will be referring to are also available on the website. All participants are currently in a listen-only mode. Should you need assistance, you may signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity for questions. To ask a question, you may press star and one. To withdraw your questions, you may press star and two. Please also note that today's conference call will be limited to one hour. Presenting today from American States Water Company are Bob Sprowls, President and Chief Executive Officer, and Eva Tang, Senior Vice President of Finance and Chief Financial Officer. As a reminder, certain matters discussed during this conference call may be forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Please review a description of the company's risks and uncertainties in our most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission. In addition, this conference call will include a discussion of certain measures that are not prepared in accordance with generally accepted accounting principles or GAAP in the United States and constitute non-GAAP financial measures under SEC rules. These non-GAAP financial measures are derived from consolidated financial information and are not presented in our financial statements that are prepared in accordance with GAAP. For more details, please refer to the press release. At this time, I'd like to turn the conference call over to Bob Sprowls, President and Chief Executive Officer of American States Water Company. Thank you, Jamie. Welcome everyone, and thank you for joining us today. I'll begin with some brief comments on the year. Eva will then discuss some financial details, and then I'll wrap it up with some further thoughts on the quarter and the year, updates on regulatory activity, ASUS dividends, and then we'll take your questions. During a year of high inflation, rising interest rates, volatile markets, and supply chain challenges, we stayed focused on providing safe and reliable water, wastewater, and electric services to over 1 million people in nine states. To accomplish this, we spent 2022 successfully executing on our strategic plans, continuing our financial discipline, building and fortifying our infrastructure, providing excellent customer service, ensuring employee safety and well-being, and managing the water and wastewater for our country's military personnel and families. In 2022, we invested a record high $167.4 million in infrastructure at our regulated utilities and received $34.4 million in new capital upgrade awards at ASUS, nearly double the amount from 2021. These significant investments will allow us to serve our customers for generations to come. As we turn to the financial results, the largest impact on our earnings per share for the year was the delayed decision from the California Public Utilities Commission, or CPUC, on Golden State Water's general rate case. New rates are to be effective January 1, 2022. If approved as settled, would have resulted in an increase of $0.38 per share for the year. We continue to wait for a decision, and because of that, we're not able to include the effect of any new rates on 2022 financial performance. As soon as a decision is received, new rates will go into effect and still be retroactive to January 1st, 2022, which also means that the resulting increase in earnings per share is expected to be recognized in 2023's financial results. We experienced losses incurred on our investments to fund one of the company's retirement plans, which negatively impacted earnings per share by $0.10 for the year as compared to gains of $0.08 per share in 2021. Including the effects of these two items from both years, Adjusted consolidated diluted earnings for 2022 were $2.59 per share as compared to Adjusted diluted earnings of $2.47 per share for 2021, an increase of $0.12 per share. On the regulatory front, there are several critical filings pending, which I will discuss later, and we remain proud of our dividend history and growth. In 2022, we increased the annual dividend by 8.9%, our 68th consecutive year of annual dividend increases. Eva will discuss the earnings and liquidity, and I'll turn the call over to her. Thank you, Bob. Hello, everyone. Let me start with our fourth quarter financial results. Consolidated earnings as reported were $0.50 per share as compared to $0.55 per share last year in 2021, a decrease of $0.05 per share. This included gains of $1.3 million, or $0.03 per share on investment held to fund a retirement plan, as compared to gains of $2 million, or $0.04 per share in 2021. This item resulted in an unfavorable variance of $0.01 per share. In addition, due to the delay in receiving a final decision on the pending water general rate case, water revenues for 2022 were based on 2021 adopted rates. Had the new rates been approved and implemented on January 1, 2022, consistent with the settlement agreement between Golden State Water and the Public Advocates Office at the CPUC, we would have recorded additional revenues and water supply costs that would have resulted in higher earnings of $0.09 per share for the fourth quarter of 2022. Had we received the decision in the fourth quarter, we would have recorded a full year impact of $0.38 per share in Q4. Excluding the gains on investments from both periods and including the impact caused by delay in the water general rate case in the results, Adjusted consolidated earnings for the quarter were $0.56 per share as compared to Adjusted earnings of $0.51 per share for the fourth quarter of 2021, an increase of $0.05 per share or nearly 10%, despite a $0.03 per share reduction in earnings for Q4 of 2022 as a result of recording a lower debt cost in the pending cost of capital proceedings for the water segment. For our water utility subsidiary, Golden State Water Company, reported earnings for the quarter were $0.28 per share as compared to $0.36 per share in 2021, an $0.08 increase-- decrease. Both items just discussed affected earnings at the water segment. Factoring in the same effect from the two items, adjusted earnings for the fourth quarter of 2022 at the water segment were $0.34 per share, which was an increase of $0.02 per share as compared to Adjusted earnings of $0.32 per share for the same period in 2021. Included in the water segment results for the quarter was a $1.4 million reduction in revenues, or $0.03 per share to reflect our best estimate at this time of revenues subject to refund on Golden State Water's pending cost of capital application, which includes the impact of a lower cost of debt requested in this application. There were also increases in operating expenses and in interest expense, partially offset by an increase in other income. Our electric segment earnings were $0.08 per share for the fourth quarter, as compared to $0.07 per share for the same period in 2021. An increase in electric revenues and a lower effective income tax rate were partially offset by higher interest expense. Earnings from our contracted services segment increased $0.04 per share for the quarter, which Bob will discuss later during the call. Turning on the next slide. Consolidated revenue for the fourth quarter of 2022 increased by $8.8 million as compared to the same period in 2021. The increase was mostly due to an increase in revenues from our contracted services. The decrease in water revenue was due to the cost of debt adjustments expected from the cost of capital proceedings and a decrease of approximately $1 million in amounts included in CPUC-approved pension and conservation balancing accounts, both of which are offset by lower expenses and have no net earnings impact. Again, water revenue for the fourth quarter of 2022 were based on 2021 adopted rates. The increase in electric revenues was mainly due to CPUC-approved rate increases for 2022. Turning to slide nine, looking at total operating expenses other than supply costs. Consolidated expenses increased approximately $10.6 million as compared to the fourth quarter of 2021. This was primarily due to an increase in construction costs at our contracted services segment, resulting from higher construction activities and higher other operations, administrative and general, and depreciation expenses, partially offset by a decrease in maintenance costs. Interest expense, net of interest income increased by $2.2 million due to higher average interest rates during the quarter and increases in overall borrowing levels. Other income, net of other expenses, increased by $400,000, due primarily to an increase in non-service cost component for Golden State Water's benefit plan, resulting from lower actual aerial losses recognized for the fourth quarter of 2022, partially offset by a decrease in gains on investments held for a retirement plan. Slide 10 shows the EPS rates comparing the fourth quarter of 2022 with 2021 fourth quarter. This slide reflect our full year earnings per share by segment as reported and as adjusted. Fully diluted earnings for 2022 were $2.11 as compared to $2.55 for 2021, a decrease of $0.44 per share. An unfavorable variance of $0.18 per share was due to losses of $5.2 million on retirement plan investment this year, as compared to gains of $4.3 million for 2021. In addition, had the new rates in the GRC settlement been approved by the CPUC and implemented on January 1, 2022, our earnings would have increased by $0.38 per share. Excluding the gains and losses on the retirement plan investments from both years, and including the results of the new water rates from the settlement agreement for 2022, Adjusted consolidated earnings for 2022 were $2.59 per share, which were $0.12 per share higher than Adjusted earnings of $2.47 per share for 2021. Despite over $0.13 per share reduction in 2022's earnings as a result of a lower debt cost in the pending cost of capital proceeding. For more detail on the annual results, please refer to yesterday's press release and the Form 10-K. Turning to liquidity on slide 12. Net cash provided by operating activities was $117.8 million as compared to $115.6 million for 2021. In 2022, our regulated utilities received $10 million in COVID-19 relief funds from the State of California to provide assistance to customer for delinquent water and electric customer bills incurred during the COVID-19 pandemic. The increase in operating cash flow was also due to differences in timing of vendor payments between the two periods, and the timing of billing off and cash received for construction work at ASUS. These increases were partially offset by a decrease in customer cash collections resulting from decreased water consumption due to drought conditions and rationing. These under collections were being captured in the 2022 Water Revenue Adjustment Mechanism or the RAM. The delay in the water generation decision has negatively affected cash flow from operating activities. Year-to-date billed revenue have been based on 2021 adopted customer rates, while operating expenses have continued to increase. Our regulated utilities invested $167.4 million in company-funded capital projects during 2022. We expect capital expenditure of $140 million-$160 million for 2023. AWR's credit facility, with a borrowing capacity of $280 million expires in May this year. The outstanding borrowings has been classified as a current liability in the company's consolidated balance sheet as of December 31, 2022. We plan to either re-renew and extend this facility or enter into a new credit facility prior to expiration date. We believe the company's sound capital structure and A+ credit rating for American States and Golden State Water, combined with financial discipline and history and relationships with the lenders, will enable us to access the debt market with reasonable terms as well as put in place a new facility before May 2023. In January of 2023, Golden State Water issued unsecured private placement notes totaling $130 million. The proceeds were ultimately used to partially pay down AWR's credit facility and further support Golden State Water's capital program. At this time, we do not expect AWR to issue additional equity for at least the next 18-24 months to fund its current businesses. We will continue to assess the need for equity issuance, and if and when AWR decides to issue equity, we plan to raise capital over time. We will consider doing an at-the-market offering that enable AWR to control the timing and size of each sale of its common shares over several years. With that, I'll turn the call back to Bob. Thank you, Eva. I'll discuss a few key regulatory matters. As mentioned in previous earnings calls, we reached nearly a full settlement agreement with the Public Advocates Office of the CPUC on Golden State Water's 2022 through 2024 general rate case. Filed the settlement agreement with the CPUC in November 2021. If approved, this settlement agreement resolves all the issues related to the calculation of the 2022 annual revenue requirement. It authorizes Golden State Water to invest approximately $404.8 million in capital infrastructure over the three-year cycle, plus $9.4 million of capital projects that have been completed and filed as advice letter project, the revenue for which was in effect February 15th of last year. It increases Golden State Water's adopted operating revenues for 2022 by approximately $30.3 million, which includes an increase for higher adopted supply costs of $9.6 million as compared to the 2021 adopted revenues, excluding the advice letter project revenue. It allows for potential additional increases in adopted revenues for 2023 and 2024, subject to an earnings test and changes to the forecasted inflationary index value. Obviously, we're disappointed that we have not received a proposed decision for 2022 water rates, which as previously mentioned, could have added $0.38 per share to our 2022 financial results. We're now in the process of preparing our next water general rate case to be filed in July of this year for rates for the years 2025-2027. One key issue in the next application is related to the water Revenue Adjustment Mechanism, or RAM. On September 30th of last year, the Governor of California signed Senate Bill 1469. Effective January 1st, 2023, it allows Class A water utilities to request the use of the full RAM in their next general rate case. With the passage of this bill, Golden State Water will be able to request the continued use of the RAM in the general rate case we plan to file this July. Although the CPUC can still rule against the individual utilities in their request to use the full RAM, this is a significant step forward as decoupling for water utilities is now in the Public Utilities Code. In addition, Golden State Water, other water utilities in the California Water Association have appealed the August 2020 CPUC decoupling decision to the California Supreme Court, and the court has agreed to hear the case. As a result of the passage of Senate Bill 1469, the CPUC filed a motion to dismiss the petition with the court in October 2022, but was denied by the Supreme Court. Next, I'll discuss the cost of capital proceeding. Golden State Water filed a cost of capital application with the CPUC in May 2021, requesting a capital structure of 57% equity and 43% debt, a return on equity of 10.5%, an embedded cost of debt of 5.1%, and a return on rate base of 8.18%. We have recorded a reduction to water revenues, which decreased fourth quarter 2022 earnings by $0.03 per share, and the earnings for the full year of 2022 by $0.13 per share to reflect the estimated revenue impact of a lower cost of debt of 5.1%, as requested in our cost of capital application, as compared to 6.6% included in 2021 rate currently being billed to water customers. In the cost of capital application, Golden State Water has requested authorization from the CPUC to continue the Water Cost of Capital Mechanism. For the period from October 1st, 2021 through September 30th, 2022, the Moody's Aa utility bond rate increased by more than 100 basis points from the benchmark. As you know, if there is a positive or negative change of more than 100 basis points, the return on equity is adjusted by one half of the difference. We expect this to be addressed by the CPUC in the pending proposed decision. Our electric utility subsidiary filed its general rate case on August 30th of last year. In addition to new rates, there are a number of items that are requested, such as additional capital expenditures as part of the four-year rate cycle and a new capital structure. In addition, we have requested the recovery of more than $20 million in capital already spent related to the Wildfire Mitigation Plan. In the fourth quarter, the CPUC approved a decision for a general rate case memorandum account that will make new rates once approved in a CPUC final decision effective January first, 2023. Turning our attention to slide 16, we present the growth in Golden State Water's average rate base as authorized by the CPUC for 2018 through 2021. The weighted average water rate base has grown from $752.2 million in 2018 to $980.4 million in 2021. Based on the general rate case settlement agreement, the 2022 rate base amount is $1,152.3 million, which, if approved, would result in a compound annual growth rate of 11.3% since 2018. The rate base amount shown for 2021 and 2022 do not include any rate recovery for advice letter projects. Let's move on to ASUS, which contributed earnings of $0.17 per share for the fourth quarter as compared to $0.13 per share for the same period last year, an increase of $0.04 per share. The increase was largely due to an increase in construction activity during the quarter and an increase in management fee revenue resulting from resolution of various economic price adjustments, partially offset by higher overall operating expenses as compared to the same period of 2021. Earnings for the full year 2022 were $0.46 per share as compared to $0.48 per share for 2021 as the contracted services segment experienced challenges in its construction activity, resulting from longer material supply chain lead times, weather conditions and other delays during the first nine months of the year. We expect the supply chain issues will improve this year and project that ASUS will contribute $0.45-$0.49 per share for 2023. As I mentioned earlier, ASUS received new capital upgrade project awards of $34.4 million in 2022 for work that will be performed in the next few years. Completion of filings for economic price adjustments, requests for equitable adjustment, asset transfers and contract modifications awarded for new projects provide ASUS with additional revenues and dollar margin. We remain confident that we can effectively compete for new military-based contract awards in the future based on our proven track record of managing water and wastewater related services for military bases since 2004. I'd like to now turn our attention to dividends, which remain a compelling part of our investment story. Our quarterly dividend rate has grown at a compound annual growth rate of 9.3% over the last five years. These increases are consistent with our policy to achieve a compound annual growth rate in the dividend of more than 7% over the long term. Our strong dividend history is something that the company is proud of and is a continuing asset to our shareholders. This strong track record has allowed us to achieve a compound annual growth rate of 9.2% in our calendar year dividend payments to shareholders over the last 10 years for 2012 through 2022. I'd like to conclude our prepared remarks by thanking you for your interest in American States Water, I'll now turn the call over to the operator for questions. Ladies and gentlemen, at this time, we'll begin the question-and-answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the numbers to ensure the best sound quality. Once again, in order to join the question queue, you may press star and one. Our first question today comes from Angie Storozynski from Seaport. Please go ahead with your question. Thank you. So maybe first, you know, you have the $0.13 of a drag reflected in your earnings, and it's unique for you guys compared to the other two California utilities, right? Because you are reflecting the lower cost of debt from the pending cost of capital proceeding, even though there hasn't been a decision rendered or we're not sure if it's gonna be retroactive. In other words, if the decision does not require a retroactive adjustment to the cost of debt, that $0.13 is gonna return in 2023, meaning it's gonna be additive to 2023 earnings. Is that correct? That is correct. Okay. How are you doing, Angie? Very good. Again, I mean, what a mess, huh? I mean, it's just so unfortunate, you know, that we haven't had a decision in your rate case or cost of capital proceeding. Looking at your electric rate case, it also seems like it's likely to slip. It will be, you know, in a sense, a recurring headache, right? To know what the true earnings power of your business is. No? Yeah, it's, yeah, the electric rate case, given its very small size, it's likely that the commission, particularly on the electric side of the house, which is who processes that particular case, it's quite possible that that will get delayed given the size and what everything else they've got going there. Okay. Just trying to understand the 8.9% dividend increase, and, you know, and the messaging that it sends about the longer-term earnings growth potential of the company, obviously, I see the rate base growth. If you were to, you know, extrapolate from what you have settled for in your general rate case for Golden State, what would be the, you know, the rate base growth going forward? If I were to take, you know, 2022 through 2024 based on the settlement, what would be the rate base CAGR there? Yeah. you know, we've got a pretty good step up between 2021 and 2022, which is on a particular slide here. I don't know. 16. Page 16. Yeah. Yes. You know, I don't know what that percent change is, but that's a big jump there. I would say it's not as significant for 23 and 24. That's fair. Mm-hmm. That's fair. We have $404.5 million CapEx authorized over the three years. On average, year is one third of that amount. You will use the 2022 adopted rate base and, you know, plus that amount minus depreciation, of course. Yeah. The second, third year probably, much less than the increase in the first test year, as a regulated utility. We are preparing for the next rate case, which will be effective 2025. That will be, we anticipate a much higher increase in rate base on that year. Okay. 2025 onwards. Okay. Lastly, the $0.04 parent drag, you know, it's a pretty meaningful increase from previous years. Is it, and I see the drivers, right, interest expense and taxes. I mean, it's, you know, when I look forward for the next year or two, is that, you know, and, you know, given the rising interest rates, do I see the parent drag creep up further? You know, I'm growing at like $0.01 - $0.02 a year from this current level, meaning on a negative side, obviously. No, it's really a function of interest rates. If they're flat, you know, if they're flat relative to 22, you won't see it grow. Because it's really the jump in interest rates that create that drag. Mm-hmm. not necessarily the borrowing level. I want to go back to your other question, if I could. Yeah. It's something to check. I just did the math on the 22 versus 21 rate base growth, that's 17.5% growth from 21 - 22. Yeah. I understand. Yep. Okay. Okay. Very good. Just one last one. Eva, you're saying, you know, there's been a change in the wording about the equity needs. Is that also a function of rising interest rates, hence you're, you know, signaling that there could be, you know, some need for equity beyond the next 24 months? No, not so much the rising interest rate. We're still waiting for the water GRC, you know. It depends on the timing of when we receive the recovery of which. Also our CapEx continues to go up. As, you know, we prepare for our next GRC, we anticipate the capital expenditure continue to increase. Just to support the overall capital spend need for the utility. Bear Valley also spend a lot of money on their capital expenditures as well. It was really to support the capital expenditures need for the company. We'll continue to assess that. We're hoping we can last for 24 months, we'll let the market know for sure if we're ready to do that. Okay. Thank you. Thanks, Angie. Once again, if you would like to ask a question, please press star and then one. To withdraw your question, you may press star and two. Our next question comes from Jonathan Reeder from Wells Fargo. Please go ahead with your question. Hey, Bob and Eva. Just wanted to continue that last discussion on equity. Just trying to get a sense of the amount that you could need after that 18-24-month period that you mentioned. Can you talk about, you know, like, the targets that AWR has for, you know, FFO to debt to EBITDA and, you know, just the consolidated equity ratio? We definitely want to maintain the equity ratio, the CapEx ratio, aligned with the CPUC authorized rate, right, Jonathan? So if the utility have to maintain that, and this, the equity coming from parent, needs to support that. So, and for the parent, we would like to maintain our credit ratings with the rating agencies. So we'll continue to look at their benchmark to make sure we are meeting their requirements to hopefully maintain our good credit ratings at the parent level as well. Okay. Do you know what those, like, metrics are on an FFO to debt basis for your A+ and everything? Yeah, it's a bit of a debate between us and Standard and Poor's, I'll tell you that. Because they are... We're kinda looking at the 20-25 FFO to debt... Yes. for American States and Golden State. One of the issues here is whether, 'cause we have the revolver at the parent, we have to look at this 20-25. If we had the revolver at Golden State, perhaps the FFO to debt would be lower, the benchmark for. Yeah, I believe the benchmark for you until it a pure water it would be lower. Yeah. 'Cause we have other things under the American States umbrella than just Golden State. Our FFO to debt perhaps is a bit higher benchmark than what you might see for a pure water utility. Okay. Any thoughts on, like, putting a revolver, you know, having a different revolver at the utility level then too to address that or not really? I mean, we're thinking through that as we speak. Yes. With S&P we, you know, we've got the A+ rating for both parent and Golden State and with a negative outlook. You know, we're working hard to, you know, maintain our ratings there. You know, whenever you have a negative outlook, as you know, Jonathan, you're gotta work hard to try to keep your rating. We are. Okay. Okay. Makes sense. GRC, I mean, any idea what the happened with ALJ? I know, you know, they had put out the time extension saying that the proposed decision was gonna come in January. I mean, I understand things can kinda slip, but, you know, to say that with a couple weeks to go and now we're over a month after January, any idea what's going on there? Well, the sense we have is just that they've got more work to do than people to do it. You know, we're, we've been pushing and pushing and pushing and it, we, you know, it's just not, doesn't seem to be getting the ball across the goal line here. I know Jonathan and Angie both are really frustrated by this. You can imagine how frustrated we are with a all party settlement sitting in front of them, but doesn't do me any good to... I don't, you know, I don't know what issues they have there. It just seems like maybe they don't have enough people to do the work. Yeah, it just seemed kind of odd. I mean, I forget when in January it came out, you know, but for the ALJ. Like, very, very early in January. In January 12th, I think that the PUC approved the ALJ's request for a deferral. Yeah. Then there was commentary about trying to get the PD out in January. Then January came and went, then now February has come and gone. We've kind of met with everybody we think we can meet with on this issue, you know? It's just hard to put your finger on, you know? I don't know if it's if it's this particular ALJ's got too many things on his plate. That seems to be what the issue is. We, you know, we'll continue to try to push, push as much as we can. I think at this point, as long as we get a reasonable decision from the commission, you know, that we'll be fine with it. It does create this lumpiness that makes it difficult for analysts to track. We, we do understand they've got staffing issues that they're trying to deal with too. I mean, do you think it's appreciated at the top of the house of the commission? Like, I mean, I think, you know, President Reynolds, you know, when she was brought in, one of her tasks was to try to get timely decisions out there. Do you think she has an understanding of, you know, the extent of the delays and, you know, at the water side or is just, you know, is water just really taking a back seat at the commission to all of the energy policy stuff? I think she's aware that there's been delays on the water rate case. How that fits into her to-do list, you know, it is a I always defend the commission on this particular standpoint. California is a huge state. We've got five commissioners that have to basically deal with, you know, line up California with what you see on the East Coast, and how many commissions are there dealing with the issues that one commission in California is dealing with? You know, you may have, what, seven or eight state commissions. I do I have a great appreciation for the difficulties and the challenges that the commission has to deal with. I'm not happy that our case is being delayed. I don't completely understand it, but I believe that group, the PUC, works hard and, you know, they try to get things done on time, et cetera. It's just perhaps it's more things to do than time to do it. Well, you're a patient person, Bob, so hopefully, your patience is rewarded here, and we can get some proposed decisions on the two big ones out here shortly. Good luck. Appreciate you taking my call and the update today. Thank you, Jonathan. Thank you. Once again, if you would like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. No, no questions, Jamie. Ladies and gentlemen, at this time and showing no additional questions, I'd like to turn the conference call back over to Bob Sprowls for any closing remarks. Thank you, Jamie. I just wanted to thank you all again for your participation today. We look forward to speaking with you, next quarter, which will be, couple of months here, I guess. Thank you for your interest in the company. Have a good rest of your week. Thank you. Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining today's conference. You may now disconnect your line.