American States Water pany(AWR) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Results Highlights The company reported increased Q2 2025 diluted EPS, driven by utility segments, and announced an 8.3% dividend increase Consolidated Diluted Earnings Per Share 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] Key Company Updates 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] - 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] - 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] - Standard & Poor's affirmed strong credit ratings: 'A' for AWR (stable outlook) and 'A+' for its regulated water utility (stable outlook)[3] Second Quarter 2025 Segment Performance Details Water and Electric segments reported increased diluted EPS from new rates, while Contracted Services saw a decrease due to reduced construction Water Segment 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] - Water supply costs increased by $4.2 million, largely due to higher per-unit costs, though a favorable source mix positively impacted earnings[6] - Overall operating expenses (excluding supply costs) increased by $3.1 million, driven by labor, benefits, chemicals, treatment, maintenance, depreciation, and property taxes[6] - Earnings were negatively impacted by approximately $0.02 per share due to dilutive effects from equity issuance under AWR's ATM offering program[7] Electric Segment 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][9] Contracted Services Segment 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] - Contracted services business is still expected to contribute $0.59 to $0.63 per share for the full 2025 year[10] AWR (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] Year-to-Date 2025 Results Year-to-date consolidated diluted EPS increased by $0.10 to $1.57, driven by regulated utilities despite contracted services decline Consolidated YTD Performance 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] Company Developments 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 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] - CPUC approved the transaction, establishing rates for water and sewer services and allowing recovery of the purchase price through future customer rates[16] - 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] Dividends 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] - AWR's current policy is to achieve a CAGR in the dividend of more than 7% over the long-term[17] Additional Information This section provides details on non-GAAP measures, forward-looking statements, conference call, company overview, and contact information Non-GAAP Financial Measures 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][19] - This non-GAAP measure supplements GAAP disclosures and should not be considered an alternative to GAAP measures[18] Forward-Looking Statements 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][21] - 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] Conference Call 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] - 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 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] - Golden State Water Company provides water service to approximately 265,000 customer connections in over 80 California communities[23] - Bear Valley Electric Service, Inc. distributes electricity to approximately 25,000 customer connections in the City of Big Bear Lake and surrounding areas[23] - 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] Contact Information 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] Consolidated Financial Statements (Unaudited) This section presents unaudited comparative balance sheets, income statements, and non-GAAP financial measure reconciliations Comparative Condensed Balance Sheets (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) 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) 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 |