Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company conference call discussing the company's second quarter 2025 results. The call is being recorded. If you would like to listen to the replay of this call, it will begin this afternoon at 5:00 p.m. Eastern Time and run through August 14 on the company's website www.aswater.com. The slides that the company will be referring to are also available on our website. This call will be limited to an 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 within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees or assurances of any outcomes, financial results, levels of activity, performance or achievements, and listeners are cautioned not to place undue reliance upon them. Forward-looking statements are subject to estimates and assumptions and known and unknown risks, uncertainties and other factors. Listeners should review the description of the company's risks and uncertainties, that could affect the forward-looking statements in our most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission. Statements made on this conference call speak only as of the day of this call. And except as required by law, the company does not undertake any obligation to publicly update or revise any forward-looking statements. 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 but 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 will turn the call over to Bob Sprowls, President and Chief Executive Officer of American States Water Company.

Thank you, Betsy. Welcome, everyone, and thank you for joining us today. I'll start with a brief overview of the quarter. Eva will then go over some financial specifics, and I will finish with updates on regulatory matters, ASUS, dividends, and then we'll take your questions. We had a generally positive and productive second quarter. Earnings per share increased by $0.02 compared to the same quarter in 2024. This positive change is primarily due to final decisions from the California Public Utilities Commission received in January for the water and electric general rate cases, which allowed new water rates for 2025 to 2027 and new electric rates for 2023 to 2026. However, lower earnings from ASUS of $0.06 per share, mainly due to timing differences in construction activities, partially offset these gains. ASUS aims to catch up on construction in the second half of the year and still expects to contribute between $0.59 and $0.63 per share for the year. Additionally, we saw a $0.03 per share positive variance from investment gains that funded one of our retirement plans. The dilution from the equity issuance under American States Water's at-the-market offering program led to a $0.03 per share reduction in consolidated earnings. Year-to-date through June 30, earnings per share stood at $1.57, which is $0.10 per share higher than last year. I'm also happy to report that our Board approved a significant dividend increase of 8.3% last week. The annualized dividend rate following this increase is [indiscernible] per share. This increase demonstrates our board's confidence in the company's potential for long-term sustainable earnings growth. We believe that a growing dividend helps attract capital for investments in our infrastructure, enabling us to deliver safe and reliable services to our customers and provide value to our shareholders. American States Water has consistently paid dividends since 1931, increasing them every calendar year for 71 consecutive years, placing us in a small group of companies on the New York Stock Exchange with such a record. We continue to invest in our water and electric systems for the enduring benefit of our customers. Our regulated utilities are set to invest between $170 million and $210 million in infrastructure this year. Golden State Water Company has partnered with a developer to own and manage the water and wastewater system assets for a new planned community, which will eventually have around 1,300 customer connections, creating two revenue streams for water and wastewater services for many years. Now, I’ll turn the call over to Eva to talk about earnings and liquidity.

Thank you, Bob, and hello, everyone. Let me start with our second quarter results. Recorded consolidated earnings were $0.87 per share for the quarter compared to $0.85 per share for the second quarter of last year. For our water utility Golden State Water, reported earnings were $0.73 per share as compared to $0.67 per share last year. The $0.06 per share increase in 2025 was largely due to new 2025 water rates as a result of receiving the final decision on Golden State Water's standard rate case and higher gains generated on investments held to fund a retirement plan as compared to the same period in 2024, partially offset by higher operating expenses. Lastly, there was a decrease in earnings of $0.02 per share due to the dilutive effect from the issuance of equity under AWR's at-the-market offering program. Our Electric segment earnings were $0.03 per share for the quarter as compared to $0.01 per share for the same quarter last year, a $0.02 per share increase primarily due to receiving the final CPUC decision on the electric general rate case with new 2025 electric rates as compared to 2022 rates used to record revenue during the second quarter of 2024. Earnings from ASUS were $0.13 per share for the quarter compared to $0.19 per share in the same quarter last year, largely due to the timing of construction activity, which Bob will discuss further later in the call. Lastly, losses from our parent company were $0.01 per share for the quarter when compared to losses of $0.02 in the same quarter of 2024 due largely to a decrease in interest expense resulting from lower average interest rates, partially offset by higher borrowing levels at AWR's credit facility. Consolidated revenue for the second quarter increased by $7.7 million when compared to the same period of 2024 revenues for the water segment increased by $9.3 million, largely due to new 2025 water rates as a result of receiving a final decision in Golden State Water's general rate case with new rates effective January 1, 2025. Revenues for the Electric segment increased by $4.2 million, mainly due to new 2025 electric rates as compared to 2022 rates used to record revenue during the second quarter of last year. Revenues from ASUS decreased $5.8 million primarily due to lower construction activities during the quarter as a result of the timing when the work was performed. Turning to Slide 9. Supply costs increased by $4.7 million, mostly due to higher per unit water supply costs. Looking at total operating expenses other than supply costs, consolidated expenses increased by $3.9 million compared to 2024. This increase includes the impact of the electric general rate case decision issued in January, which authorized higher operating expenses, primarily for vegetation management and other wildfire mitigation efforts. These costs were previously excluded from customer rates and not expensed in the second quarter of last year as they were being tracked in memorandum accounts. They are now included in the adopted electric revenues. In addition, the increase was due to higher overall operating expenses, partially offset by lower ASUS construction expenses. Lastly, there was an increase in other income net of other expenses of $2.1 million, due largely to higher gains generated on investments held to fund a retirement plan during the quarter due to financial market conditions. Slide 10 shows the EPS bridge comparing reported EPS for the second quarter of 2025 against the same period for 2024. Consolidated earnings for the 6 months ended June 2025 were $1.57 per share compared to $1.47 per share for the same period last year, an increase of $0.10 per share. The increase is largely generated from higher earnings at our regulated utilities. Turning to liquidity on Slide 12. Net cash provided by operating activities was $109.6 million for the first 6 months of the year compared to $70.5 million last year, with the increase largely related to the implementation of new rates at our regulated utilities from approved general rate cases as well as the implementation of various approved surcharges or additional base rates from advice letter filings. In addition, the increase also resulted from differences in the timing of billing and cash receipts for construction work at ASUS' military bases and the timing of its vendor payments. For investing activities, our regulated utility invested $97.9 million on company-funded capital projects in the first half of the year and we project to be on target to reach $170 million to $210 million for the year. For financing activities, American States Water under its at-the-market offering program raised proceeds of $25.6 million during the first half of the year, net of issuance costs and legal costs. In May of this year, Golden State Water issued $100 million in unsecured private placement notes that matured in 2032 and 2037. In addition, earlier during the quarter, both American States Water and Golden State Water executed amendments to their credit agreements to extend their credit facility terms from June 2028 to June of 2029. As part of this amendment, American States Water also expanded its credit facility borrowing capacity from $165 million to $195 million. In early July, Standard & Poor's Global Ratings affirmed a credit rating of A stable for American States Water and A+ stable ratings for Golden State Water. These are some of the highest credit ratings in the U.S. investor-owned water utility industry. With that, I'll turn the call back to Bob.

Thank you, Eva. On the regulatory front, as a reminder, in January of this year, the CPUC issued a final decision in connection with the recent water general rate case that covers rates for 2025 through 2027 and a final decision on the electric general rate case that sets rates for 2023 through 2026. We have discussed the details of these 2 rate cases in our prior earnings releases and calls. We are gearing up to file our next electric rate case in early 2026, and we will begin preparation for our next water rate case expected to be filed in July of 2026. As you know, the final decision in the water rate case ordered Golden State Water to transition from a full decoupling mechanism and a full supply cost balancing account, which were requested again in the general rate case application to a modified rate adjustment mechanism, a Monterey-Style Water Revenue Adjustment Mechanism, or MRAM and an incremental cost balancing account for supply cost effective January 1, 2025. Without the continuation of a full revenue decoupling mechanism and a full cost balancing account for water supply, the company may be subject to future volatility in revenues and earnings as a result of fluctuations in water consumption by its customers and changes in water supply source mix. The final decision adopted the company's MRAM rate design proposal which authorizes Golden State Water to increase the revenue requirement and its fixed service charges to between 45% and 48% of the revenue requirement depending upon the ratemaking area, representing approximately 65% of the water utility's fixed cost in aggregate. It also adopted Golden State Water's recommended sales forecast and approved the company's request for the continuation of a sales reconciliation mechanism which allows the company to adjust its sales forecast throughout the general rate case cycle to address significant fluctuations in consumption. In March, Golden State Water filed an application for rehearing of the CPUC's decision in the 2025 through 2027 water general rate case asserting that the final decisions denial of the company's revenue decoupling proposal was not supported by the record. In May, the CPUC issued a decision denying the company's application for rehearing. Golden State Water, along with 4 other investor-owned water utilities in California are supporting Senate Bill 473 or SB 473, which has been authored by one of the California state senators and being sponsored by the California Water Association. SB 473 seeks to align the regulated water utilities with the regulated electric utilities, by making revenue decoupling mandatory and not at the discretion of the CPUC. The bill has been passed by the Senate and has been approved by the Assembly Committee on Utilities and Energy. It has been referred to the committee on appropriations, but no hearing date has been set. If approved by the committee on appropriations, it will go to the assembly floor for a vote. The deadline to pass out of the assembly is September 12, and the deadline for Governor Newsom to sign all proposed bills is October 12. Since Senate Bill 473 is still progressing through the legislative process, at this time, management cannot predict the final outcome of this matter. In August of 2023, Golden State Water entered into an agreement, which was subject to CPUC approval to purchase from a developer, the water and wastewater system assets in a development located in the California Central Coast region. This is a newly planned community, which will serve up to approximately 1,300 customers at full build-out, which is anticipated to occur by 2034 under the current construction schedule, barring any future delays. On December 5, 2024, the CPUC approved a final decision granting Golden State Water's certificates of public convenience and necessity that established rates for water and sewer services including the company's recovery of the purchase price through future customer rates. After receiving CPUC approval and finalizing other closing procedures, in May of this year, the parties completed the closing of the transaction, which included the initial installation and conveyance of water and wastewater system assets of $10.7 million by the developer, a non-cash transaction to Golden State Water recorded during this year's second quarter that resulted in an increase in the company's utility plant with corresponding increases in advances for and contributions in aid of construction. In the future, Golden State Water will take ownership of the incremental water and wastewater system assets in phases as they are completed and ready to accommodate new connections. Turning our attention to Slide 16, we present the growth in Golden State Water's adopted average water rate base from 2018 through 2024, which increased from $752.2 million in 2018 to $1,357.5 million in 2024. That is the compound annual growth rate of 10.3% for the 6-year period using 2018 as the base year for the calculation. Golden State Water anticipates a robust and sustained growth in its rate base over the next few years as a result of receiving its recent general rate case decision that not only authorizes it to invest $573.1 million in capital infrastructure, but in addition to that, capital investments of certain projects through advice letter filings. Upon completion, that will contribute to a further growth in the rate base in the second and third year of the rate cycle. Lastly, a few weeks ago, on July 18, Bear Valley Electric and the Public Advocates Office of the CPUC filed a joint motion with the CPUC to adopt the settlement agreement resolving all issues in Bear Valley Electric's application with the commission to construct solar energy generation and battery storage facilities. These facilities will help enable Bear Valley Electric to better control its energy and energy-related costs through self-supply from a local generation resource and also provide energy shifting capabilities and additional capacity during emergencies and peak load conditions. Among other things, the settlement agreement authorizes the construction of the facilities for a total combined cost of $28 million, plus allowance for funds used during construction. The settlement agreement is pending approval by the CPUC with a proposed decision expected later this year. If approved, the costs associated with the projects would be recoverable in customer rates at the time the projects are completed and in service. Let's continue to ASUS, which contributed earnings of $0.13 per share in the second quarter of this year as compared to $0.19 per share for 2024. The decrease was a result of a decline in construction activity due to the timing of when the work was performed and higher overall operating expenses partially offset by an increase in management fee revenues from the resolution of various economic price adjustments and lower interest expense from lower borrowing levels. Despite the lower construction activities during the quarter, we continue to project ASUS to contribute $0.59 to $0.63 per share this year, representing an increase of 7.3% at the low end of the range to 14.5% at the high end of the range. In addition, we remain confident that we can effectively compete for new military-based contract awards. I would like to turn our attention to dividends, which I touched on earlier. Last week, we announced an 8.3% increase in the third quarter dividend. This increase is 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 continued asset to our shareholders. This strong track record has allowed us to achieve an 8.5% compound annual growth rate in our quarterly dividend rate to shareholders over the last 5 years since the third quarter of 2020. I'd like to conclude our prepared remarks by thanking you for your interest in American States Water, and we'll now turn the call over to the operator for questions.

The first question today comes from Ian Rath with Bank of America.

Just a quick one in terms of sculpting our estimates for the remainder of the year. Can we see that you reiterated the ASUS guidance for the year? Just curious if you are seeing more construction activity pacing towards the third quarter? Or is that later in the year, pickup in 4Q, just so we can kind of right-size our quarterly estimates there?

We will get more clarity in both the third and fourth quarters. My expectation is that we will see more in the fourth than in the third, but that is just a guess for now. We are relying on others for permits and other processes, and it depends on how quickly we can navigate those. However, we are quite confident in the range of $0.59 to $0.63.

Okay. Great. Regarding the decoupling legislation, it appears to be progressing well through the legislature. There is certainly some vigorous debate in committee right now. Could you share your confidence level about achieving progress on that matter? Additionally, could you clarify the process or timeline for the bill as it stands to be incorporated into your rate structure?

Yes. It's quite challenging to assess the situation here in California. We believe there are strong arguments in favor of achieving full decoupling. The most significant point is that electric utilities have it—if it's beneficial for them, why shouldn't it apply to water as well? Additionally, this would enhance our ability to implement tiered rates, which would help make rates more affordable for low-income customers. We're cautiously optimistic. We've made significant progress to reach this point. However, I don't want to speculate on the outcome since I'm not a political expert; we will need to monitor the situation closely. What feedback are you receiving from other companies, Ian?

Yes, I think that's a fair assessment of the landscape, cautiously optimistic is a good term, but that's helpful for my end.

Yes. Thanks, Ian.

There are no further questions at this time. I'd like to turn the conference back over to Bob Sprowls for any closing remarks.

Thank you, Betsy. I want to express my gratitude to everyone for participating today. We look forward to speaking with all of you next quarter. Enjoy the rest of the summer. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.