Group 1 - Primerica, Inc. (PRI) and American States Water Company (AWR) are both classified as dividend-growth stocks, with AWR having a significantly longer history in this category [1] - AWR is recognized as a "dividend king," indicating a strong track record of increasing dividends over time, while PRI has not yet achieved this status [1] - The focus on high-quality and reliable dividend growth investments aims to provide stability and long-term wealth creation for investors [1] Group 2 - The service mentioned offers ideas for writing options to further enhance investors' income [1]

Company Overview - American States Water Company (NYSE: AWR) is a regulated utility operating in California, providing water and electricity services, as well as contracted water and wastewater services to military bases across the United States [1]. Financial Performance - The company offers a dividend yield of nearly 2.7%, which is noted as the highest among its peers [1]. Investment Strategy - The focus is on dividend growth investing with a long-term perspective, emphasizing the compounding benefits of sustainable dividend growth and capital appreciation potential [1].

Financial Data and Key Metrics Changes - Earnings per share (EPS) for Q2 2025 were $0.87, an increase from $0.85 in Q2 2024, reflecting a positive quarter overall [10] - Year-to-date EPS as of June 30 was $1.57, up $0.10 from $1.47 in the same period last year [14] - Consolidated revenues for Q2 increased by $7.7 million compared to Q2 2024 [11] Business Line Data and Key Metrics Changes - Water utility earnings increased to $0.73 per share from $0.67 per share, primarily due to new water rates effective January 1, 2025 [10] - Electric segment earnings rose to $0.03 per share from $0.01 per share, attributed to new electric rates [11] - ASUS earnings decreased to $0.13 per share from $0.19 per share, mainly due to lower construction activity [25] Market Data and Key Metrics Changes - Revenues for the water segment increased by $9.3 million due to new water rates [12] - Revenues for the electric segment rose by $4.2 million, also due to new rates [12] - Revenues from ASUS decreased by $5.8 million due to lower construction activities [12] Company Strategy and Development Direction - The company plans to invest $170 million to $210 million in infrastructure this year, reflecting a commitment to long-term growth [9] - The company is preparing to file its next electric rate case in early 2026 and a water rate case in July 2026 [18] - The company is supporting Senate Bill 473, which aims to make revenue decoupling mandatory for regulated water utilities [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the decoupling legislation, highlighting strong arguments for its necessity [30] - The company anticipates robust growth in its rate base due to recent general rate case decisions [23] - Management remains confident in ASUS's ability to compete for new military-based contract awards despite recent declines in construction activity [25] Other Important Information - The board approved an 8.3% increase in the annualized dividend rate, reflecting confidence in sustainable earnings growth [7] - The company has paid dividends every year since 1931, with a 71-year consecutive increase [8] - Standard and Poor's affirmed a stable credit rating for the company, indicating strong financial health [17] Q&A Session Summary Question: Construction activity pacing towards the third quarter - Management expects to see more construction activity in the fourth quarter than in the third, but it remains dependent on permitting processes [28] Question: Confidence level regarding decoupling legislation - Management is cautiously optimistic about the decoupling legislation, noting strong arguments for its necessity and the benefits it could bring [30]

Core Insights - American States Water Company reported a consolidated earnings per share (EPS) of $0.87 for Q2 2025, an increase of $0.02 compared to Q2 2024 [2][26] - The company announced an 8.3% increase in the annualized dividend rate, marking 71 consecutive years of annual increases [4][10] Financial Performance - Water segment earnings per share for Golden State Water were $0.73 in Q2 2025, up $0.06 from Q2 2024, driven by new water rates and higher gains on retirement plan investments [3][26] - Electric segment earnings per share increased to $0.03 in Q2 2025, a $0.02 increase compared to Q2 2024 due to new rate approvals [3][27] - Consolidated revenues increased by $7.7 million in Q2 2025 compared to Q2 2024, with water revenues rising by $9.3 million and electric revenues increasing by $4.2 million [5][29] Capital Investments and Liquidity - The company expects capital infrastructure investments between $170 million and $210 million for the year [6][24] - Operating cash flow for the first six months of 2025 was $109.6 million, a $39.1 million increase over the same period in 2024 [7][32] - The borrowing capacity was expanded from $165 million to $195 million, with maturity extended to June 2029 [6][34] Regulatory Developments - The California Public Utilities Commission (CPUC) approved new water and electric rates for 2025 to 2027 and 2023 to 2026, respectively [20][35] - A modified rate adjustment mechanism (MRAM) was adopted, replacing the full decoupling mechanism, which may introduce future revenue volatility [36][37] - Senate Bill 473, if passed, could restore mandatory revenue decoupling for California water utilities [11][39] Growth and Future Outlook - Golden State Water's rate base grew from $752.2 million in 2018 to $1.3575 billion in 2024, representing a 10.3% compound annual growth rate [8][43] - The company completed the acquisition of water and wastewater system assets for a new community, expected to have approximately 1,300 customer connections [10][42] - ASUS is projected to contribute $0.59 to $0.63 per share in 2025, with expectations of recovery in the second half of the year as construction activity normalizes [9][47]

Financial Performance - Consolidated diluted earnings per share increased by $0.02 to $0.87 in Q2 2025, compared to $0.85 in Q2 2024 [12, 13] - Year-to-date consolidated diluted earnings per share increased by $0.10 to $1.57 in 2025, compared to $1.47 in 2024 [12, 19] - Total operating revenues increased to $163 million in Q2 2025, compared to $155.3 million in Q2 2024, a $7.7 million increase [14] Segment Performance - Water segment diluted EPS increased by $0.06 to $0.73 in Q2 2025, compared to $0.67 in Q2 2024 [13] - Electric segment diluted EPS increased by $0.02 to $0.03 in Q2 2025, compared to $0.01 in Q2 2024 [13] - Contracted Services diluted EPS decreased by $0.06 to $0.13 in Q2 2025, compared to $0.19 in Q2 2024 [13, 34] Regulatory and Capital Investment - GSWC is authorized to invest $573.1 million in capital infrastructure over a three-year capital cycle [23, 28] - BVES is authorized to invest $75.6 million in capital infrastructure over a four-year rate cycle [24] - Capital expenditures for 2025 are expected to be in the range of $170-$210 million [12, 20] Dividends and Liquidity - The Board of Directors approved an 8.3% increase in the third quarter cash dividend for 2025, from $0.4655 to $0.5040 per share [12, 37] - Operating cash flows were $109.6 million year-to-date in 2025, compared to $70.5 million year-to-date in 2024 [20]

Core Insights - American States Water Company (AWR) reported second-quarter 2025 operating earnings per share (EPS) of 87 cents, missing the Zacks Consensus Estimate of 92 cents by 5.4% and up from 85 cents in the same quarter last year [1][9] AWR's Total Revenues - Total operating revenues reached $163.1 million, falling short of the Zacks Consensus Estimate of $169 million by 3.5%, but increased by 5% from $155.3 million in the prior-year period [2][9] Highlights of AWR's Q2 Release - Operating expenses were $112.1 million, an increase of 8.2% from $103.6 million in the year-ago quarter, driven by higher water purchases, administrative costs, depreciation, and maintenance expenses [3] - Operating income was $51 million, down 1.3% from $51.7 million in the corresponding period of 2024 [3] Interest and Income - Interest expenses totaled $12.1 million, a decrease of 7.6% year over year, while interest income was $1.5 million compared to $2.1 million in the previous year [4] AWR's Segmental Details - Water segment earnings were 73 cents per share, up 9% from 67 cents a year ago, attributed to new rate increases authorized by the CPUC effective January 1, 2025 [5] - Electric segment EPS was 3 cents, an increase of 2 cents from the year-ago quarter, due to revenue increases from new rates implemented in 2025 [6] - Contracted Services segment EPS was 13 cents, down from 19 cents in the year-ago quarter, while AWR (Parent) reported a loss of 1 cent per share compared to a loss of 2 cents previously [7] AWR's Financial Update - As of June 30, 2025, cash and cash equivalents were $20.2 million, down from $26.7 million as of December 31, 2024 [8] - Long-term debt increased to $789.5 million from $640.4 million as of December 31, 2024 [8] Cash Flow - Cash provided by operating activities in the first half of 2025 totaled $109.6 million, compared to $70.5 million in the same period last year [10]

Company Performance - American States Water (AWR) reported quarterly earnings of $0.87 per share, missing the Zacks Consensus Estimate of $0.92 per share, but showing an increase from $0.85 per share a year ago, resulting in an earnings surprise of -5.43% [1] - The company posted revenues of $163.07 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 3.51%, compared to year-ago revenues of $155.33 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and has topped consensus revenue estimates three times [2] Stock Performance - American States Water shares have lost about 4% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.03 on $176 million in revenues, and for the current fiscal year, it is $3.29 on $646 million in revenues [7] - The outlook for the industry can significantly impact the stock's performance, with the Utility - Water Supply industry currently in the top 41% of Zacks industries [8]

[Second Quarter 2025 Results Highlights](index=1&type=section&id=Second%20Quarter%202025%20Results%20Highlights) The company reported increased Q2 2025 diluted EPS, driven by utility segments, and announced an **8.3%** dividend increase [Consolidated Diluted Earnings Per Share](index=1&type=section&id=1.1%20Consolidated%20Diluted%20Earnings%20Per%20Share) Consolidated diluted EPS rose to **$0.87** in Q2 2025, primarily from utility segments, partially offset by contracted services | Metric | Q2 2025 | Q2 2024 | Change | | :------------------------------------ | :------ | :------ | :----- | | Consolidated Diluted EPS | $0.87 | $0.85 | +$0.02 | - Increase in diluted EPS primarily generated from higher earnings at the water and electric utility segments, partially offset by timing differences in construction activities that resulted in lower earnings at the contracted services segment[2](index=2&type=chunk) [Key Company Updates](index=1&type=section&id=1.2%20Key%20Company%20Updates) AWR increased its dividend by **8.3%** for the 71st year, secured significant capital investments, and maintained strong credit ratings - Quarterly dividend increased **8.3%** with first payment on September 3, marking the **71st consecutive year** of annual dividend increases[3](index=3&type=chunk) - AWR's regulated utilities received CPUC decisions authorizing nearly **$650 million** in capital investments, with **$170 million to $210 million** targeted for spending in 2025[3](index=3&type=chunk) - AWR's regulated water utility completed a transaction to build, own, and operate water and wastewater system assets for a new planned community of **1,300 connections**[3](index=3&type=chunk) - Standard & Poor's affirmed strong credit ratings: **'A' for AWR** (stable outlook) and **'A+' for its regulated water utility** (stable outlook)[3](index=3&type=chunk) [Second Quarter 2025 Segment Performance Details](index=2&type=section&id=Second%20Quarter%202025%20Segment%20Performance%20Details) Water and Electric segments reported increased diluted EPS from new rates, while Contracted Services saw a decrease due to reduced construction [Water Segment](index=2&type=section&id=2.1%20Water%20Segment) Water Segment diluted EPS increased by **$0.06** to **$0.73** due to new rates, partially offset by higher costs and equity dilution | Metric | Q2 2025 EPS | Q2 2024 EPS | Change | | :------------------------------------ | :---------- | :---------- | :----- | | Water Segment Diluted EPS Contribution | $0.73 | $0.67 | +$0.06 | - Water operating revenues increased by **$9.3 million** due to CPUC-authorized new rate increases effective January 1, 2025[6](index=6&type=chunk) - Water supply costs increased by **$4.2 million**, largely due to higher per-unit costs, though a favorable source mix positively impacted earnings[6](index=6&type=chunk) - Overall operating expenses (excluding supply costs) increased by **$3.1 million**, driven by labor, benefits, chemicals, treatment, maintenance, depreciation, and property taxes[6](index=6&type=chunk) - Earnings were negatively impacted by approximately **$0.02 per share** due to dilutive effects from equity issuance under AWR's ATM offering program[7](index=7&type=chunk) [Electric Segment](index=3&type=section&id=2.2%20Electric%20Segment) Electric Segment diluted EPS increased by **$0.02** due to new rates supporting rate base growth and wildfire mitigation costs | Metric | Q2 2025 EPS | Q2 2024 EPS | Change | | :------------------------------------ | :---------- | :---------- | :----- | | Electric Segment Diluted EPS Contribution | $0.03 | $0.01 | +$0.02 | - Increase in revenues from new rates implemented in 2025, supporting rate base growth and higher operating costs for wildfire mitigation plans[8](index=8&type=chunk)[9](index=9&type=chunk) [Contracted Services Segment](index=3&type=section&id=2.3%20Contracted%20Services%20Segment) Contracted Services diluted EPS decreased by **$0.06** in Q2 2025 due to reduced construction, but expects **$0.59-$0.63** per share for the full year | Metric | Q2 2025 EPS | Q2 2024 EPS | Change | | :------------------------------------ | :---------- | :---------- | :----- | | Contracted Services Diluted EPS Contribution | $0.13 | $0.19 | -$0.06 | - Decrease in construction activity and higher overall operating expenses were partially offset by increased management fee revenues and lower interest expense[10](index=10&type=chunk) - Contracted services business is still expected to contribute **$0.59 to $0.63 per share** for the full 2025 year[10](index=10&type=chunk) [AWR (Parent)](index=3&type=section&id=2.4%20AWR%20(Parent)) AWR (parent company) diluted losses decreased by **$0.01 per share** in Q2 2025, driven by lower interest expense from reduced average rates | Metric | Q2 2025 EPS | Q2 2024 EPS | Change | | :------------------------------------ | :---------- | :---------- | :----- | | AWR (Parent) Diluted EPS Contribution | -$0.01 | -$0.02 | +$0.01 | - Decrease in interest expense resulting from lower average interest rates, partially offset by higher borrowing levels[11](index=11&type=chunk) [Year-to-Date 2025 Results](index=3&type=section&id=Year-to-Date%202025%20Results) Year-to-date consolidated diluted EPS increased by **$0.10** to **$1.57**, driven by regulated utilities despite contracted services decline [Consolidated YTD Performance](index=3&type=section&id=3.1%20Consolidated%20YTD%20Performance) Consolidated diluted EPS for YTD 2025 increased by **$0.10** to **$1.57**, driven by new utility rates, offset by contracted services and equity dilution | Metric | YTD 2025 | YTD 2024 | Change | | :------------------------------------ | :------- | :------- | :----- | | Consolidated Diluted EPS | $1.57 | $1.47 | +$0.10 | | Segment | YTD 2025 EPS | YTD 2024 EPS | Change | | :-------------------- | :----------- | :----------- | :----- | | Water | $1.25 | $1.15 | +$0.10 | | Electric | $0.10 | $0.06 | +$0.04 | | Contracted services | $0.26 | $0.32 | -$0.06 | | AWR (parent) | -$0.03 | -$0.06 | +$0.03 | - YTD consolidated results were negatively impacted by approximately **$0.05 per share** due to dilutive effects from equity issuance under AWR's ATM offering program[14](index=14&type=chunk) [Company Developments](index=4&type=section&id=Company%20Developments) GSWC acquired water and wastewater assets for a new community, and AWR increased its quarterly dividend by **8.3%** for the 71st year [Asset Acquisition](index=4&type=section&id=4.1%20Asset%20Acquisition) GSWC acquired water and wastewater assets for a new California community, valued at **$10.7 million**, serving up to **1,300 customers** - GSWC completed the acquisition of water and wastewater system assets for a new planned community, serving up to approximately **1,300 customers** by 2034[16](index=16&type=chunk) - CPUC approved the transaction, establishing rates for water and sewer services and allowing recovery of the purchase price through future customer rates[16](index=16&type=chunk) - Initial installation and conveyance of assets valued at **$10.7 million** was recorded as a non-cash transaction during Q2 2025, increasing GSWC's utility plant[16](index=16&type=chunk) [Dividends](index=4&type=section&id=4.2%20Dividends) AWR's Board approved an **8.3%** increase in quarterly dividend to **$0.5040 per share**, marking the **71st consecutive year** of increases | Metric | Q3 2025 Dividend | Q2 2025 Dividend | Increase | | :------------------------------------ | :--------------- | :--------------- | :------- | | Quarterly Dividend per Share | $0.5040 | $0.4655 | 8.3% | - AWR has increased annual dividends to shareholders for **71 consecutive years**[17](index=17&type=chunk) - AWR's current policy is to achieve a CAGR in the dividend of more than **7%** over the long-term[17](index=17&type=chunk) [Additional Information](index=4&type=section&id=Additional%20Information) This section provides details on non-GAAP measures, forward-looking statements, conference call, company overview, and contact information [Non-GAAP Financial Measures](index=4&type=section&id=5.1%20Non-GAAP%20Financial%20Measures) The report includes diluted EPS by business segment as a non-GAAP measure, used internally for evaluation and supplementing GAAP disclosures - Diluted earnings per share by business segment is a non-GAAP financial measure used to evaluate operating results and segment performance[18](index=18&type=chunk)[19](index=19&type=chunk) - This non-GAAP measure supplements GAAP disclosures and should not be considered an alternative to GAAP measures[18](index=18&type=chunk) [Forward-Looking Statements](index=4&type=section&id=5.2%20Forward-Looking%20Statements) The document contains forward-looking statements subject to risks, with readers cautioned against undue reliance and no obligation for public updates - Press release contains forward-looking statements subject to estimates, assumptions, known and unknown risks, and uncertainties[20](index=20&type=chunk)[21](index=21&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the company does not undertake any obligation to publicly update or revise them, except as required by law[21](index=21&type=chunk) [Conference Call](index=5&type=section&id=5.3%20Conference%20Call) A conference call will be held on Thursday, August 7, 2025, at 2:00 p.m. ET, hosted by Robert Sprowls and Eva Tang, accessible via webcast - Conference call to discuss results on Thursday, August 7, 2025, at **2:00 p.m. Eastern Time**[22](index=22&type=chunk) - Hosted by Robert Sprowls (President & CEO) and Eva Tang (SVP & CFO), with a Q&A session, accessible via webcast at www.aswater.com[22](index=22&type=chunk) [About American States Water Company](index=5&type=section&id=5.4%20About%20American%20States%20Water%20Company) American States Water Company is a utility holding company serving over **one million people** in ten states through its water, electric, and contracted services subsidiaries - American States Water Company serves over **one million people** in ten states through its subsidiaries: Golden State Water Company, Bear Valley Electric Service, Inc., and American States Utility Services, Inc[23](index=23&type=chunk) - Golden State Water Company provides water service to approximately **265,000 customer connections** in over **80 California communities**[23](index=23&type=chunk) - Bear Valley Electric Service, Inc. distributes electricity to approximately **25,000 customer connections** in the City of Big Bear Lake and surrounding areas[23](index=23&type=chunk) - American States Utility Services, Inc. provides services for water/wastewater facilities on **twelve military bases** under 50-year contracts and one under a 15-year contract[23](index=23&type=chunk) [Contact Information](index=5&type=section&id=5.5%20Contact%20Information) Contact information for investor inquiries is provided for Eva G. Tang, SVP-Finance, CFO, Corporate Secretary and Treasurer - Contact: Eva G. Tang, Senior Vice President-Finance, Chief Financial Officer, Corporate Secretary and Treasurer, Telephone: (909) 394-3600, ext. 707[24](index=24&type=chunk) [Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents unaudited comparative balance sheets, income statements, and non-GAAP financial measure reconciliations [Comparative Condensed Balance Sheets (Unaudited)](index=6&type=section&id=6.1%20Comparative%20Condensed%20Balance%20Sheets%20(Unaudited)) Total assets increased to **$2,610,534 thousand** as of June 30, 2025, driven by Net Property, Plant and Equipment and Capitalization | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Assets | $2,610,534 | $2,500,209 | +$110,325 | | Net Property, Plant and Equipment | $2,193,581 | $2,099,625 | +$93,956 | | Capitalization | $1,762,003 | $1,560,433 | +$201,570 | | Current Liabilities | $162,075 | $285,525 | -$123,450 | [Condensed Statements of Income (Unaudited)](index=6&type=section&id=6.2%20Condensed%20Statements%20of%20Income%20(Unaudited)) Q2 2025 total operating revenues increased to **$163,066 thousand** and net income to **$33,690 thousand**, with similar YTD increases | Metric (in thousands) | Q2 2025 | Q2 2024 | Change | YTD 2025 | YTD 2024 | Change | | :-------------------- | :------ | :------ | :----- | :------- | :------- | :----- | | Total operating revenues | $163,066 | $155,328 | +$7,738 | $311,079 | $290,579 | +$20,500 | | Operating income | $50,959 | $51,748 | -$789 | $96,505 | $90,722 | +$5,783 | | Net Income | $33,690 | $31,864 | +$1,826 | $60,534 | $54,999 | +$5,535 | | Fully diluted EPS | $0.87 | $0.85 | +$0.02 | $1.57 | $1.47 | +$0.10 | | Dividends paid per Common Share | $0.4655 | $0.4300 | +$0.0355 | $0.9310 | $0.8600 | +$0.0710 | [Computation and Reconciliation of Non-GAAP Financial Measure (Unaudited)](index=7&type=section&id=6.3%20Computation%20and%20Reconciliation%20of%20Non-GAAP%20Financial%20Measure%20(Unaudited)) This section provides a detailed reconciliation of net income and diluted EPS by business segment for Q2 and YTD 2025 and 2024 | Segment (Q2) | Net Income (000s) Q2 2025 | Net Income (000s) Q2 2024 | Diluted EPS Q2 2025 | Diluted EPS Q2 2024 | | :------------------ | :------------------------ | :------------------------ | :------------------ | :------------------ | | Water | $28,140 | $25,195 | $0.73 | $0.67 | | Electric | $1,176 | $342 | $0.03 | $0.01 | | Contracted Services | $4,874 | $7,251 | $0.13 | $0.19 | | AWR (Parent) | $(500) | $(924) | $(0.01) | $(0.02) | | **Consolidated (GAAP)** | **$33,690** | **$31,864** | **$0.87** | **$0.85** | | Segment (YTD) | Net Income (000s) YTD 2025 | Net Income (000s) YTD 2024 | Diluted EPS YTD 2025 | Diluted EPS YTD 2024 | | :------------------ | :------------------------- | :------------------------- | :------------------- | :------------------- | | Water | $48,046 | $42,989 | $1.25 | $1.15 | | Electric | $3,802 | $2,084 | $0.10 | $0.06 | | Contracted Services | $9,998 | $12,025 | $0.26 | $0.32 | | AWR (Parent) | $(1,312) | $(2,099) | $(0.03) | $(0.06) | | **Consolidated (GAAP)** | **$60,534** | **$54,999** | **$1.57** | **$1.47** |

Part I Financial Information [Item 1: Financial Statements](index=7&type=section&id=Item%201%3A%20Financial%20Statements) The report presents unaudited consolidated financial statements for AWR and its subsidiary GSWC for the quarter ended June 30, 2025 [American States Water Company Financial Statements](index=8&type=section&id=American%20States%20Water%20Company%20Financial%20Statements) This section details the consolidated balance sheets, income statements, and cash flow statements for AWR for periods ended June 30, 2025 AWR Consolidated Income Statement Highlights (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $163,066 | $155,328 | $311,079 | $290,579 | | **Operating Income** | $50,959 | $51,748 | $96,505 | $90,722 | | **Net Income** | $33,690 | $31,864 | $60,534 | $54,999 | | **Fully Diluted EPS** | $0.87 | $0.85 | $1.57 | $1.47 | AWR Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $2,610,534 | $2,500,209 | | Net Property, Plant & Equipment | $2,193,581 | $2,099,625 | | **Total Liabilities** | $1,638,015 | $1,580,158 | | Long-term Debt | $789,484 | $640,382 | | **Total Common Shareholders' Equity** | $972,519 | $920,051 | AWR Consolidated Cash Flow Highlights - YTD (in thousands) | Cash Flow Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $109,636 | $70,515 | | **Net Cash from Investing Activities** | ($118,334) | ($108,897) | | **Net Cash from Financing Activities** | $2,284 | $27,892 | | **Net Change in Cash** | ($6,414) | ($10,490) | [Golden State Water Company Financial Statements](index=14&type=section&id=Golden%20State%20Water%20Company%20Financial%20Statements) This section details the balance sheets, income statements, and cash flow statements for GSWC for periods ended June 30, 2025 GSWC Income Statement Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $119,697 | $110,424 | $221,700 | $200,689 | | **Operating Income** | $42,557 | $40,565 | $77,353 | $69,732 | | **Net Income** | $28,140 | $25,195 | $48,046 | $42,989 | GSWC Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $2,230,570 | $2,131,981 | | Net Utility Plant | $1,994,354 | $1,911,369 | | **Total Liabilities** | $1,342,734 | $1,326,148 | | Long-term Debt | $704,879 | $605,547 | | **Total Common Shareholder's Equity** | $887,836 | $805,833 | [Notes to Consolidated Financial Statements](index=20&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section explains accounting policies and details key financial items like acquisitions, financing, and legal settlements - In May 2025, GSWC completed the acquisition of a new water and wastewater system, recording an initial non-cash transaction of **$10.7 million** in utility plant assets[53](index=53&type=chunk) - AWR's At-The-Market (ATM) offering program raised net proceeds of **$25.8 million** in the first six months of 2025, with approximately **$82.9 million** remaining available for sale under the program as of June 30, 2025[60](index=60&type=chunk) - In May 2025, GSWC issued **$100.0 million** in new long-term debt and received a **$50.0 million** equity contribution from AWR to pay down its revolving credit facility[59](index=59&type=chunk)[62](index=62&type=chunk) - GSWC will receive approximately **$19 million** (net of fees) from a 3M Company class action settlement related to PFAS contamination, with an initial **$12.5 million** recognized as a receivable in Q2 2025[84](index=84&type=chunk)[85](index=85&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202%3A%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operational results, regulatory impacts, and capital resources [Overview and Regulatory Matters](index=38&type=section&id=Overview%20and%20Regulatory%20Matters) This section covers key performance factors and significant regulatory decisions impacting water and electric rates - GSWC's 2025-2027 General Rate Case (GRC) decision authorizes approximately **$573.1 million** in capital infrastructure investment over three years[136](index=136&type=chunk) - The GRC decision transitioned GSWC to a modified Monterey-style WRAM (M-WRAM), which will subject earnings to volatility from fluctuations in customer consumption and water supply costs[137](index=137&type=chunk)[139](index=139&type=chunk) - BVES's 2023-2026 GRC decision authorized approximately **$52.5 million** in capital infrastructure in base rates and an additional **$23.1 million** to be recovered through advice letters[141](index=141&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes financial performance by business segment for the three and six months ended June 30, 2025 Diluted EPS by Segment - Q2 | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Water | $0.73 | $0.67 | $0.06 | | Electric | $0.03 | $0.01 | $0.02 | | Contracted services | $0.13 | $0.19 | ($0.06) | | AWR (parent) | ($0.01) | ($0.02) | $0.01 | | **Consolidated** | **$0.87** | **$0.85** | **$0.02** | Diluted EPS by Segment - YTD | Segment | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Water | $1.25 | $1.15 | $0.10 | | Electric | $0.10 | $0.06 | $0.04 | | Contracted services | $0.26 | $0.32 | ($0.06) | | AWR (parent) | ($0.03) | ($0.06) | $0.03 | | **Consolidated** | **$1.57** | **$1.47** | **$0.10** | - Water segment earnings increased due to new CPUC-authorized rates and a favorable water supply mix[149](index=149&type=chunk) - Electric segment earnings increased due to new rates from its GRC decision supporting rate base growth and higher wildfire mitigation costs[150](index=150&type=chunk)[151](index=151&type=chunk) - Contracted services earnings decreased due to the timing of construction activities, though the full-year 2025 EPS contribution is still expected to be between **$0.59 and $0.63**[152](index=152&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's capital-intensive funding through internal cash flows and external financing activities - AWR's At-The-Market (ATM) offering program has raised a total of **$115.3 million** through June 30, 2025, with **$82.9 million** remaining available for sale[233](index=233&type=chunk) - On July 29, 2025, AWR's Board approved an **8.3% increase** in the quarterly dividend to $0.5040 per share, targeting a long-term dividend CAGR of more than 7%[241](index=241&type=chunk)[299](index=299&type=chunk) - For 2025, company-funded capital expenditures for the regulated utilities are projected to be between **$170 million and $210 million**[247](index=247&type=chunk) - Net cash from operating activities increased to **$109.6 million** for YTD 2025 from $70.5 million in YTD 2024, due to the timing of cash receipts and postponed tax payments[245](index=245&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risks since the 2024 Annual Report - The company confirms no material changes to its market risk disclosures regarding interest rates and commodity prices from its 2024 Form 10-K[288](index=288&type=chunk) [Item 4: Controls and Procedures](index=66&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were adequate and effective as of the end of the fiscal quarter[289](index=289&type=chunk) - No changes occurred during the quarter ended June 30, 2025, that materially affected the company's internal control over financial reporting[291](index=291&type=chunk) Part II Other Information [Item 1: Legal Proceedings](index=68&type=section&id=Item%201%3A%20Legal%20Proceedings) This section details developments in legal matters, primarily focusing on PFAS contamination lawsuit settlements - GSWC will receive approximately **$19 million** (net of fees) from a PFAS class action settlement with 3M Company, with an initial **$12.5 million** funded in Q2 2025[293](index=293&type=chunk) - GSWC and an ASUS subsidiary are plaintiffs in approved class action settlements with Dupont, Tyco Fire Products, and BASF Corp related to PFAS, but settlement amounts are not yet determined[294](index=294&type=chunk) [Item 1A: Risk Factors](index=68&type=section&id=Item%201A%3A%20Risk%20Factors) The company reports no significant changes to risk factors from its 2024 Annual Report - There have been no significant changes to the risk factors disclosed in the 2024 Form 10-K[296](index=296&type=chunk) [Item 2: Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=68&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section details AWR's common share repurchases during Q2 2025 for employee and dividend plans AWR Common Share Repurchases - Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 5,946 | $79.41 | | May 2025 | 6,858 | $77.98 | | June 2025 | 3,655 | $78.66 | | **Total** | **16,459** | **$78.65** | [Item 5: Other Information](index=69&type=section&id=Item%205%3A%20Other%20Information) This section discloses other corporate actions, including a dividend increase and director trading plan updates - On July 29, 2025, AWR's Board of Directors approved an **8.3% increase** in the third quarter dividend to $0.5040 per share, payable on September 3, 2025[299](index=299&type=chunk)

Core Viewpoint - American States Water Company (AWR) is benefiting from strategic investments in infrastructure and a growing customer base, but its heavy reliance on California for earnings poses challenges [1][5]. Group 1: Positive Factors - AWR's subsidiary, American States Utility Services (ASUS), has successfully begun operating water and wastewater systems at two new military bases, enhancing revenue stability through long-term defense contracts [2]. - ASUS is projected to contribute between 59-63 cents per share to AWR's total earnings for the full year 2025, indicating strong future earnings potential [3]. - The company has approved rate cases for regulated utilities, which will facilitate revenue and earnings growth, with capital expenditures expected to reach $573.1 million from 2025 to 2027 [4]. Group 2: Challenges - AWR's financial performance is significantly tied to California, particularly Southern California, making it vulnerable to various risks including political conditions, water supply issues, and natural disasters [5]. - There is an ongoing risk of groundwater contamination, which may lead to additional costs for AWR in the future [6]. Group 3: Stock Performance - Over the past six months, AWR's stock has increased by 1.7%, while the industry has seen a growth of 13.7% [7]. Group 4: Comparisons with Peers - Other companies in the sector, such as American Water Works (AWK), Essential Utilities (WTRG), and CenterPoint Energy (CNP), have better rankings and growth rates, with AWK showing a long-term earnings growth rate of 7.4% [9][10].