Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2020 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | --- | --- | --- | --- | |-----------------------------------------|---------------------------------------------------------------|---------------------------|------------------------- ...

American States Water Company (NYSE:AWR) Q1 2020 Earnings Conference Call May 5, 2020 2:00 PM ET Company Participants Bob Sprowls - President and Chief Executive Officer Eva Tang - Senior Vice President of Finance and Chief Financial Officer Conference Call Participants Durgesh Chopra - Evercore Richard Verdi - Coker & Palmer Michael Gaugler - Janney Jonathan Reeder - Wells Fargo Operator Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company conference call discussing ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2020 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | --- | --- | --- | --- | |-----------------------------------------|---------------------------------------------------------------|--------------------------------------|------------- ...

Financial Data and Key Metrics Changes - The company reported adjusted earnings per fully diluted share of $2.24 for 2019, a 30% increase over 2018 [7] - Consolidated earnings for Q4 2019 were $0.45 per share, compared to $0.37 per share for the same period in 2018 [11] - Consolidated revenues for Q4 increased by $2 million compared to the same period in 2018, with a total revenue increase of $5.3 million due to new rates approved [12] Business Line Data and Key Metrics Changes - Earnings from the water segment increased by $0.42 per share compared to 2018, primarily due to new rates approved by the CPUC [14] - Adjusted earnings from the electric segment were $0.04 per share higher than 2018, driven by new electric rates [15] - Diluted earnings from ASUS were $0.47 per share, up from $0.42 per share in 2018, attributed to operations at Fort Riley and increased maintenance fees [16] Market Data and Key Metrics Changes - The company achieved a total return of 31.2% for 2019, with 5-year and 10-year compound annual returns exceeding 20% [7] - The weighted average water rate base authorized by the CPUC grew from $717 million in 2017 to $916 million in 2020, reflecting a compound annual growth rate of 8.5% [23] Company Strategy and Development Direction - The company plans to invest $120 million to $135 million in capital projects in 2020, focusing on replacing and upgrading critical infrastructure [27] - The company is preparing its next water general rate case to be filed in July 2020 for new rates beginning in 2022 [21] - The company aims to maintain a stable capital structure with 57% equity for the foreseeable future [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of each business segment and highlighted the importance of timely capital investments [6] - The company remains committed to community engagement and has exceeded requirements for hiring small businesses [10] - Management noted that the regulatory environment in California is constructive for their operations [27] Other Important Information - The company raised its dividend by nearly 11% in 2019, marking 65 consecutive years of annual dividend increases [7][26] - The company received a binding commitment to temporarily increase its credit facility capacity to $260 million [18] Q&A Session Summary Question: What needs to transpire for ASUS to deliver earnings at the high end of the range? - Management indicated that increased construction work at military bases could help achieve the higher end of the earnings range [30] Question: In what bases is the most activity being seen? - Management noted significant activity at larger bases such as Eglin Air Force Base, Fort Riley, Fort Bragg, and Fort Bliss [32] Question: What drove the gross margin higher in 2019 at Golden State Water Company? - Management explained that the gross margin increase was due to new rates and non-WRAM customers contributing to revenue [34][41] Question: What is the status of the cost of capital extension request? - Management stated that they have not received any data requests from the PAO regarding the request [47] Question: Can you explain the rationale behind temporarily increasing the credit facility capacity? - Management clarified that the temporary increase is to bridge the gap until long-term debt issuance is approved by the CPUC [52] Question: What is the timing for acquiring the solar project? - Management indicated a six-month construction timeframe once the project receives approval [56]

| --- | --- | --- | --- | |----------------------------------------------------------------------------------------------|-------------------------------------------|-------|----------------------------| | American States Water Company Common Shares | | AWR | New York Stock Exchange | | | Securities registered pursuant to Section | 12(g) | of the Act: None | | Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule | | | 405 of the Securities Act. | American States Water ...

Financial Data and Key Metrics Changes - Earnings per share (EPS) for Q3 2019 increased by 23% year-over-year, reaching $0.76 per diluted share, with adjusted earnings (excluding retroactive impacts) at $0.69 per share, an 11% increase from the previous year [4][5][7] - Consolidated revenue rose by $10.3 million, with water segment revenue increasing by $7.6 million to $95.2 million due to new water rates [8][9] - Net cash provided by operating activities for the first nine months of 2019 was $84.3 million, down from $108.4 million in the same period of 2018, primarily due to lower water customer usage [11][12] Business Line Data and Key Metrics Changes - Water segment earnings for Q3 2019 were $0.53 per share, up $0.06 from the same period in 2018, driven by the approval of the water general rate case [8] - Electric segment earnings increased by $0.01 per share, excluding the retroactive impact of the electric rate case, due to new electric rates [8] - Contracted services segment earnings decreased to $0.12 per share from $0.13 per share year-over-year, attributed to timing differences in construction work [8] Market Data and Key Metrics Changes - Water and electric supply costs for the quarter were $31.8 million, an increase of $3.3 million from the previous year [9] - The company expects potential additional water revenue increases of approximately $9.1 million in 2020 and $12 million in 2021, subject to earnings tests and inflation forecasts [13][14] Company Strategy and Development Direction - The company plans to invest $115 million to $125 million in capital expenditures for the year, which is about 3.5 times the expected annual depreciation expense [5][12] - The company is preparing to file its next general rate case in July 2020 for new rates starting in 2022, and is also involved in the proposal process for new military base contracts [14][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of earnings and the ability to control expenses, indicating a positive outlook for future earnings growth [45][51] - The company has a long-term dividend growth target of over 7% annually, reflecting confidence in its earnings sustainability [19][52] Other Important Information - The company amended its credit facility to temporarily increase borrowing capacity from $200 million to $225 million, with plans to issue long-term debt next year [12] - The company has paid dividends to shareholders every year since 1931, increasing dividends for 65 consecutive years [19] Q&A Session Summary Question: Insights on California regulatory environment and WRAM - Management reported a smooth resolution of the water rate case with no major issues, indicating a stable regulatory environment [22] Question: Earnings power and WRAM impact - Earnings fully reflect the WRAM in revenues, with a larger WRAM balance this year due to lower consumption [24][27] Question: ASUS guidance for 2020 - Guidance for ASUS earnings in 2020 is set at $0.46 to $0.50 per share, based on new capital upgrade work and operational efficiencies [32][34] Question: Construction expense line fluctuations - Management noted that construction revenues were spread more evenly throughout the year compared to previous years, leading to some lumpiness in quarterly results [39] Question: Expected ROE for GSWC - Management did not provide specific ROE figures but indicated that expense control has been better than expected [41][45] Question: Dividend growth target clarification - The 7% dividend growth target is a long-term goal and not tied to short-term increases [53]

Financial Performance - Q3 2019 earnings per share increased by 23% compared to Q3 2018[10] - Consolidated Q3 earnings were $0.76 per share in 2019, compared to $0.62 per share in 2018[10] - Adjusted earnings increased by $0.07 per share, or 11%, after excluding the retroactive impact of the CPUC final decision on the electric general rate case[10] - Year-to-date consolidated EPS, as reported, was $1.83, compared to $1.35 in the same period of 2018[18] Segment Performance - Water segment Q3 2019 EPS was $0.53, compared to $0.47 in Q3 2018[12] - Electric segment Q3 2019 adjusted EPS was $0.03, compared to $0.02 in Q3 2018[12] - Contracted Services (ASUS) Q3 2019 EPS was $0.12, compared to $0.13 in Q3 2018[12] - Water operating revenues were $95.3 million in Q3 2019, compared to $87.7 million in Q3 2018[13] - Electric operating revenues were $12.0 million in Q3 2019, compared to $7.9 million in Q3 2018[13] - Contracted Services operating revenues were $27.2 million in Q3 2019, compared to $28.6 million in Q3 2018[13] Capital Expenditures and Liquidity - $100.3 million in GSWC-funded capital expenditures through September 2019[10] - Capital expenditures for 2019 are expected to be $115-$125 million at GSWC[10] - AWR amended its credit facility, increasing the borrowing capacity from $200 million to $225 million through June 2020[19] Regulatory and Dividends - Potential future revenue increases for water general rate case: estimated $9.1 million for 2020 and $12.0 million for 2021[21] - The board of directors declared a fourth quarter cash dividend of $0.305 per share, a 10.9% increase in July 2019[23]

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2019 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | --- | --- | --- | --- | |-----------------------------------------|---------------------------------------------------------------|---------------------------|-------------------- ...