California Water Service(US:CWT)2024-02-29 18:49Financial Data and Key Metrics Changes - In 2023, net income attributable to California Water Service Group was $51.9 million, a decrease of $44.1 million or 45.9% compared to $96 million in 2022 [26] - Full operating revenue for 2023 decreased by $51.8 million or 6.1% to $794.6 million, primarily due to a $66.9 million decrease in WRAM and MCBA operating revenue and a $23.1 million decrease in customer usage [28] - Diluted earnings per share for 2023 was $0.91, down from $1.77 in 2022, reflecting a decrease of $0.86 or 48.4% [34] Business Line Data and Key Metrics Changes - Total operating expenses for 2023 decreased by $1.3 million to $717.5 million, with significant increases in labor costs, water production costs, and depreciation and amortization expenses [29] - Capital investment totaled approximately $384 million in 2023, with $326 million invested in the Cal Water service territory [38] Market Data and Key Metrics Changes - The rate base grew to $2.25 billion by the end of 2023, an increase of 15.4% over 2022 [66] - Operating revenue for the fourth quarter of 2023 increased by $13.6 million to $214.5 million compared to the same period last year, driven by rate increases and a decrease in deferred revenue [67] Company Strategy and Development Direction - The company is focused on balancing affordability with infrastructure needs and building resiliency against climate change [62] - Plans for 2024 include capital investments totaling $365 million, subject to the outcome of the delayed 2021 general rate case [32] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the delays in the 2021 general rate case, which has created uncertainty and impacted financial results [81] - The company anticipates a decision from the CPUC in the first half of the year, with several upcoming meetings scheduled [86] Other Important Information - The company declared a dividend of $0.08 for 2024, marking the 316th consecutive quarterly dividend and a 7.7% increase from the previous dividend [69] - The company is actively participating in the California Arrearage Payment Program, with an application accepted for $83 million to cover past due accounts [48] Q&A Session Summary Question: What is the status of the Supreme Court arguments on decoupling? - The court is expected to set a date for arguments later this year, which is a positive sign for the utilities involved [92][93] Question: When can a GRC outcome be expected? - The next CPUC meeting is on March 7, where a decision could be made, and the company remains hopeful for a resolution in the first half of the year [94] Question: How does the dividend increase relate to the differences between the PD and APD? - The company believes the fundamentals are strong, which supports the decision to raise the dividend despite the ongoing regulatory uncertainties [97][98] Question: How might the capital budget change based on the GRC outcome? - The capital budget could be affected by the GRC outcome, but the company is prepared to continue necessary investments regardless of the decision [99][100]