Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company conference call discussing the company's third 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 November 13 on the company's website, www.aswater.com. The slides that the company will be referring to are also available on the 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 date 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. Please proceed.

Thank you, Bailey. Welcome, everyone, and thank you for joining us today. I'll begin with brief highlights of our quarter; Eva will discuss some financial details, and then I'll wrap it up with updates on regulatory activity, ASUS, dividends, and then we'll take your questions. I'm pleased to report that recorded earnings per share for the third quarter were $0.11 per share higher compared to the third quarter of last year, an increase of 11.6%. The favorable variance is attributable to the receipt of final decisions from the California Public Utilities Commission (CPUC) in January 2025 for our regulated water and electric utilities general rate cases, which authorized new water rates for 2025 to 2027 and authorized new electric rates for 2023 to 2026 and higher earnings for our contracted services business, American States Utility Services (ASUS), of $0.08 per share, due mostly to increases in construction activities during the quarter. For the year-to-date September 30, earnings were $2.63 per share, $0.21 per share higher than last year or 8.7%. We continue to invest in our water and electric utility systems for the long-term benefit of our customers. Our regulated utilities are on pace to invest a combined $180 million to $210 million in infrastructure investments this year. In addition, our water utility recently received CPUC approval to provide water services at another new planned community that will be built out over time with the first development expected to serve up to 3,800 customer connections during the next 5 years. Over the longer term, 20-plus years, it allows for the construction of 17,500 total dwelling units at full build-out. ASUS continues to enter into U.S. government awarded contract modifications for new construction projects and was awarded $28.7 million in new capital upgrade construction projects during the 9 months ended September 30 of this year. These newly awarded projects are expected to be completed through 2028. I'd also like to mention that we are pleased to be recognized on Times America's Best Midsize Companies 2025 list and are one of only two investor-owned water utilities on the list. Companies are ranked by revenue growth, employee satisfaction, and sustainability transparency. In addition, American States Water Company is the only water utility included in Barron's 100 Most Sustainable Companies for 2025. Companies were scored across 230 environmental, social, and governance performance indicators from workplace diversity to greenhouse gas emissions. We believe these recognitions reflect our strategic growth plans, commitment to our workforce and focus on our initiatives and disclosures in the sustainability areas, and these will remain priorities for the company. With that, I will turn the call over to Eva to discuss earnings and liquidity.

Thank you, Bob. Hello, everyone. Let me start with our third quarter results. Recorded consolidated earnings were $1.06 per share for the quarter as compared to $0.95 per share for the third quarter of 2024. For our water utility, Golden State Water reported earnings of $0.86 per share as compared to $0.84 per share last year. The $0.02 per share increase in 2025 was largely due to new 2025 water rates as a result of receiving a final decision in Golden State Water's general rate case proceeding. There was a higher gain generated on investments held to fund a retirement plan and lower interest expense, partially offset by higher operating expenses and a higher effective income tax rate. Lastly, there was a decrease in earnings of $0.02 per share due to the dilutive effect from the issuance of equities under AWR's market offering program. Our Electric segment earnings were $0.04 per share for the quarter as compared to $0.02 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 the new 2025 electric rates as compared to the 2022 rates used to record revenues during the third quarter of last year. Earnings from ASUS were $0.19 per share for the quarter compared to $0.11 per share for the same quarter last year. That is an increase of $0.08 per share, which Bob will discuss further later. Lastly, losses from our parent company were $0.03 per share for the quarter when compared to losses of $0.02 per share for the same quarter last year, due largely to an increase in interest expense resulting from higher borrowing levels from AWR's credit facility. Consolidated revenue for the third quarter increased by $21 million when compared to the same quarter of 2024. Revenues for the water segment increased by $8.3 million, largely as a result of receiving the final decision in Golden State Water's general rate case with new rates effective January 1, 2025. Revenues for the Electric segment increased by $4.3 million, mainly due to new 2025 electric rates as compared to 2022 rates used to record revenue during the same quarter of 2024. Revenues from ASUS increased by $8.4 million, primarily due to higher construction activity during the quarter due to timing. Supply costs increased by $4 million, mostly due to higher overall per-unit purchased water costs included in customer rates in 2025. Looking at total operating expenses other than supply costs, consolidated expenses increased by $10.3 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 were not expensed in the third quarter of last year as they were being tracked in memorandum accounts. They are now included in adopted Electric revenue. In addition, the increase was due to higher ASUS construction expenses and higher overall operating expenses. These higher expenses were partially offset by lower interest expense, net of interest income, primarily due to decreases in interest rates and overall borrowing levels partially offset by reduced interest income from a decrease in regulatory asset balances. Lastly, there was an increase in other income net of other expenses due largely to higher gains generated on investments held to fund a retirement plan during the quarter as compared to the same period in 2024 due to financial market conditions. Consolidated earnings for the 9 months ended September were $2.63 per share compared to $2.42 per share for the same period in 2024, an increase of $0.21 per share. The increase is largely generated from higher earnings at our regulated utilities. Turning to liquidity, net cash provided by operating activities was $202 million for the year-to-date September compared to $134.2 million for the same period last year, with the increase largely related to the implementation of new rates at our regulated utility funds approved to generate proceedings as well as various approved surcharges or additional base rate from advice letter filings. For investing activities, our regulated utility invested $151.8 million on company-funded capital projects in the first 9 months of this year, and we project to be on target to reach $180 million to $210 million for this year. For financing activities, American States Water under its market offering program raised proceeds of $40.2 million during the 9 months ended September 30, net of issuing costs and legal costs, leaving a remaining balance of $68 million available for issuance under the program. In July, Standard & Poor's Global Ratings affirmed a credit rating of A stable for American States Water and A+ stable rating 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 previously mentioned, 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. We have discussed the details of this rate case decision in our prior earnings releases and calls. We have begun preparation for our next water rate case expected to be filed by July 1, 2026. As a reminder, the final decision 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 known as the Monterey-Style Water Revenue Adjustment Mechanism (MRAM) and an incremental cost balancing account for supply costs 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 the 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 in the fixed services charges to between 45% and 48% of the revenue requirement depending on the rate-making area, representing approximately 65% of the water utilities' fixed costs in aggregate. It also approved Golden State Water's sales forecast and its request for the continuation of a sales reconciliation mechanism, which would allow the company to adjust its sales forecast throughout the general rate cycle to address significant fluctuations in consumption. In August 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 California's Central Coast region. This is a new planned community, which will serve up to approximately 1,300 customer connections 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 certificate of public convenience and necessity that establishes rates for water and sewer services, including the company's recovery of the purchase price through future customer rates in this new San Juan Oaks and service area. 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 the second quarter of 2025. That resulted in an increase in the company's utility plant with corresponding increases in advances 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. In addition, Golden State Water and the Public Advocates Office of the CPUC filed a joint motion with the CPUC in March to adopt a settlement agreement to authorize initial rates for water service in the new Sutter Pointe service area. Last week, the CPUC approved the settlement agreement in its entirety. The approval establishes initial water service rates for 2026 through 2028 and authorizes various balancing and memorandum accounts for this area. This new planned community in Northern California will be built out over time with the first development expected to serve up to 3,800 customer connections during the next 5 years. Over the longer term, 20-plus years allows for the construction of 17,500 total dwelling units at full build-out, as part of the overall plan approved by the respective county. Turning our attention to Slide 15. We present the growth in Golden State Water's adopted average water rate base from 2021 through 2025, which increased from $980.4 million in 2021 to $1,455.8 million in 2025. That represents a compound annual growth rate of 10.4% over the 4-year period using 2021 as the base share for the calculation. Golden State Water anticipates 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 letters upon completion that will contribute to further growth in rate base in the second and third year of this cycle. Turning our attention to Bear Valley Electric. As previously noted, in January of this year, the CPUC issued a final decision on the electric general rate case that set rates for 2023 through 2026. Like the water utility rate case, we have discussed the details of the electric rate case in our prior earnings releases and calls. We are working to file our next electric rate case in the first quarter of 2026. This past April, Bear Valley Electric also implemented new base rates to recover the revenue requirement associated with $11.6 million of capital projects approved for recovery through advice layers. In July, 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 to construct solar energy generation and battery storage facilities. The solar energy generation project will help Bear Valley Electric meet approximately 18% of its renewables portfolio standard requirement. These facilities will also 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 an allowance for funds used during construction. The settlement agreement is pending approval by the CPUC, with the proposed decision expected by the first quarter of 2026. 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 $0.19 per share in the third quarter of 2025 as compared to $0.11 per share for 2024. The increase was a result of higher construction activity due to the timing of when the work was performed. Management fee revenues resulting from the resolution of various economic price adjustments and lower interest expense from lower borrowing levels were partially offset by higher overall operating expenses. During the quarter, ASUS made substantial progress on its construction activities with year-to-date earnings of $0.45 per share as compared to $0.44 per share for the same period of 2024. We continue to project ASUS to contribute $0.59 to $0.63 per share this year, representing an increase of 7.3% to 14.5% year-over-year. ASUS was awarded $28.7 million in new capital upgrade construction projects through the year-to-date September of this year to be completed through 2028. As we look ahead to 2026, we project that ASUS will contribute $0.63 to $0.67 per share. 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. In the third quarter, we raised our dividend by 8.3% and our quarterly dividend rate has grown at a compound annual growth rate or CAGR of 8.5% over the last 5 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 unrivaled dividend history since 1931 is something that the company is proud of and will continue to be an asset to our shareholders. 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.

Our first question comes from Ian Rapp with Bank of America.

Congratulations on a strong quarter. I’d like to ask about ASUS, as it seems to have performed well and announced a solid contract. Regarding the new contract, could you share some insights on the timing and when we might see it reflected in EPS during the 2025 to 2028 timeframe? Also, looking at ASUS’s guidance for 2026, it appears to show a slight decline compared to the last three years. Is this due to contracts expiring, or what does the earnings outlook look like moving forward?

Yes, I think we've made solid progress in our earnings, moving from $0.59 to $0.63 and then to $0.67. I want to highlight the new capital upgrades, which have played a crucial role in our overall performance. Securing nearly $29 million in new capital upgrades this year is a significant achievement for us. Additionally, last year saw a considerable amount of new capital upgrades, around $55 million, which is notable in our history. These two factors give us a robust backlog for new capital upgrade work in 2026 and beyond. We are also engaged in renewal and replacement work, indicating it's been a good year overall, even though we are not adding any new bases in those figures. As you know, there is typically a transition period we need to navigate after being awarded a contract. Therefore, we anticipate that we likely won't have a new contract to address in 2026 due to that transition period and our expectations regarding government privatizations.

Okay. Got it. Yes, that makes sense. Regarding the new announcements or approvals on the growth in new customer connections, it seems there is significant activity around the new development projects. I'm curious whether we should interpret these numbers in relation to the rate base based on your Golden State rate base compared to your customer base, or if we should consider this more in terms of the capital you've requested. Any clarification on how we should approach the rate base translation would be helpful.

Yes. I guess the one difficult thing with those new customers is it is a function of people wanting to buy homes and a developer signing them up to buy homes. And so looking at the potential there, it is under this incremental acquisition approach. So as phases are done, the company will buy the infrastructure. I think the way to think about it maybe is the distribution infrastructure for these houses. And that's a pretty favorable activity for both the company and the developer because typically, the developer would have had to advance those facilities to the company to be then paid back over 4 years. So we will be acquiring new systems there. And I'm not exactly sure what to tell you about how you bake that into your rate base forecast because I do think figuring out when those customers are going to be added is a challenge.

Right. Okay. That's helpful color. And with that growth, maybe just one more if I could squeeze it in. Obviously, the big thematic these days is corporate M&A. As you look out at your growth profile, do you feel like gaining scale in California or other places would be beneficial? Or I'm really just curious to hear your thoughts on how you're thinking about M&A as investor attention kind of shifts toward it.

We were a bit surprised by the announcement of the merger between American Water and Essential Utilities, which I think you are referring to. However, we don't believe that merger will affect our company's strategic direction moving forward. We are optimistic about our company's future. The rate bases at both of our regulated utilities continue to grow strongly, and our ASUS business is also progressing well. We pointed out a 10.4% four-year CAGR on our rate base for 2022 to 2025 at Golden State Water, and Bear Valley Electric's rate base is increasing even faster. Additionally, we expect to see more customer growth from the two new developments we mentioned, San Juan Oaks and Sutter Pointe, over time. Overall, we are pleased with our growth plan. That said, if a good opportunity arises, we would consider acquiring systems in areas where the regulatory environment is favorable. Does that answer your question?

Yes, that's super helpful. And that all makes a lot of sense. I appreciate you guys walking me through, and congrats again on the quarter, and I'll echo your confidence in the growth rate. It looks promising.

Our next question comes from Angie Storozynski with Seaport.

Okay. So you added your rate base projection for 2025 on Slide 15. It is actually a little bit lower than I would have implied it from just the pace of CapEx less depreciation. I mean, Eva, is there any reason why again, just assuming that you're spending about $190 million, right, and around $30 million something of the depreciation that would have implied a slightly higher rate base for '25 versus '24, no?

Angie, we have a number of advice letters that we plan to file by the end of this year related to the rate case decision. We will be submitting approximately $76 million worth of advice letters to implement new rates effective January 1st of next year. We’re currently working on the documentation and finalizing the details to present the complete figure in the fourth quarter. We expect this to gain approval for rate implementation starting January 1st of next year. Additionally, after 2025, the actual amounts from these advice letter projects will be incorporated into the rate base.

And that $573 million, that number, does that include the advice letters? No...

It does not include the advice letters that were started to do prior to the rate case cycle. So there are $58 million, I would think, advice letters coming from the prior rate case that were allowed to be added to the rate starting next year. In total, $573 million, I believe, including $17 million of the new advice letter project, but we have another $58 million project that comes in from the prior rate case. So both of which can be added to our rate base starting next year.

Yes. I don't want to get too granular, but this implies that the $573 million figure suggests I'm spending roughly $190 million a year, assuming it's ratable. If I do the math and subtract $30 million or $35 million, it still indicates that the rate base should have increased by about $150 million compared to the $100 million growth shown between '24 and '25. So is it just deferred taxes, simply put?

Our actual spending is about that amount. I was just talking about the adopted rate base.

We are spending a little ahead of the rate cycle because we do have an earnings test in California that we have to meet. You are predisposed to try to spend early because it's a 13-month average. So that may be contributing a little bit. I don't know, Eva, what do you...

Yes, I think that will definitely contribute. We want to make sure we can finish the advice letter project so we can file this year. We've been spending the $76 million that authorized us to file.

And that wouldn't count towards the rate base? Because my point is that the rate base is lower than it would have been implied from the approved CapEx minus depreciation.

Yes, it will count as the actual rate base. It's just not currently in the revenue requirement based on the adopted rate base. We'll have a new rate next year to cover what we spent so far. Does that make sense?

Yes. Okay. And even though you have gone through the GRC for the water business, you will not show the projected rate base for '26 and '27?

We will show that next time for sure because we want to make sure we have the exact number of what we can file by the end of this year for those advice letters even though we are also right $76 million, not sure that's exactly the number that will be in the adopted rate base. So we're very conservative. We like to have a pretty certain number before announcing.

Okay. Okay. I've been asking. So I'm just repeating the question.

Yes, I can probably share with you the number for next year, but I don't have the information right now. But it's public information, so I can shoot you an email, Angie.

This concludes our question-and-answer session. I would like to turn the conference back over to Bob Sprowls for any closing remarks.

Thank you, Bailey. Just want to wrap up by thanking you all for your participation today, letting you know that we look forward to speaking with you next quarter and then wishing all of you a happy holiday season. Thank you very much.

The conference has now concluded. You may disconnect.