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

Part I Financial Information Item 1: Financial Statements 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 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 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 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] - 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] - 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][62] - 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][85] Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operational results, regulatory impacts, and capital resources Overview and Regulatory Matters 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] - 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][139] - 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] Results of Operations 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] - Electric segment earnings increased due to new rates from its GRC decision supporting rate base growth and higher wildfire mitigation costs[150][151] - 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] Liquidity and Capital Resources 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] - 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][299] - For 2025, company-funded capital expenditures for the regulated utilities are projected to be between $170 million and $210 million[247] - 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] Item 3: Quantitative and Qualitative Disclosures About Market Risk 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] Item 4: Controls and Procedures 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] - No changes occurred during the quarter ended June 30, 2025, that materially affected the company's internal control over financial reporting[291] Part II Other Information Item 1: Legal Proceedings 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] - 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] Item 1A: Risk Factors 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] Item 2: Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 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 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]