CALIFORNIA WATER SERVICE GROUP

Previous wording

This quarterly report, including all documents incorporated by reference, contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (the PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for “safe harbor” treatment established by the PSLRA. Forward-looking statements in this quarterly report are based on currently available information, expectations, estimates, assumptions and projections, and our management’s beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like “will,” “would,” “expects,” “intends,” “plans,” “believes,” “may,” “could,” “estimates,” “assumes,” “anticipates,” “projects,” “progress,” “predicts,” “hopes,” “targets,” “forecasts,” “should,” “seeks,” “indicates,” or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this quarterly report include, but are not limited to, statements describing our intention, indication or expectation regarding our financial performance, dividends or targeted payout ratio, our expectations, anticipations or beliefs regarding governmental, legislative, judicial, administrative or regulatory timelines, regulatory compliance, decisions, approvals, authorizations, requirements or other actions, including plans and proposals pursuant to and timing of the California Water Service Company (Cal Water)’s general rate case (GRC) filed on July 8, 2024 (2024 GRC), rate amounts, cost recovery or refunds, certain per- and polyfluoralkyl substances (PFAS) regulations, and associated impacts, such as our expected or estimated revenue, our intentions regarding recovery billing, our expectations regarding regulatory asset and operating revenue recognition, sources of funding or capital requirements, estimates of, or expectations regarding, capital expenditures, funding needs or other capital requirements, obligations, contingencies or commitments, our expectations regarding water sources, our beliefs regarding adequacy of water supplies, estimates and assumptions relating to our significant accounting policies, such as deferred revenue or assets or refund of advances, our expectations or assumptions regarding employee benefit plans and stock-based compensation and estimated contributions to our pension plans and other postretirement benefit plans, our estimated annual effective tax rate and expectations regarding tax benefits, our intentions regarding use of net proceeds from any future equity or debt issuances or borrowings, our expectations, intentions or anticipations regarding our sources of funding, capital structure, including authorized return on equity, cost of debt and rate of return, o…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This quarterly report, including all documents incorporated by reference, contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (the PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for “safe harbor” treatment established by the PSLRA. Forward-looking statements in this quarterly report are based on currently available information, expectations, estimates, assumptions and projections, and our management’s beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like “will,” “would,” “expects,” “intends,” “plans,” “believes,” “may,” “could,” “estimates,” “assumes,” “anticipates,” “projects,” “progress,” “predicts,” “hopes,” “targets,” “forecasts,” “should,” “seeks,” “indicates,” or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this quarterly report include, but are not limited to, statements describing our intention, indication or expectation regarding our financial performance, dividends or targeted payout ratio, our expectations, anticipations or beliefs regarding governmental, legislative, judicial, administrative or regulatory timelines, regulatory compliance, decisions, approvals, authorizations, requirements or other actions, including plans and proposals pursuant to and timing of the California Water Service Company (Cal Water)’s general rate case (GRC) filed on July 8, 2024 (2024 CA GRC), rate amounts, cost recovery or refunds, certain per- and polyfluoroalkyl substances (PFAS) regulations, and associated impacts, such as our expected or estimated revenue, our intentions regarding recovery billing, our expectations regarding regulatory asset and operating revenue recognition, sources of funding or capital requirements, estimates of, or expectations regarding, capital expenditures, funding needs or other capital requirements, obligations, contingencies or commitments, our expectations regarding water sources, our beliefs regarding adequacy of water supplies, estimates and assumptions relating to our significant accounting policies, such as deferred revenue or assets or refund of advances, our expectations or assumptions regarding employee benefit plans and stock-based compensation and estimated contributions to our pension plans and other postretirement benefit plans, our estimated annual effective tax rate and expectations regarding tax benefits, our intentions regarding use of net proceeds from any future equity or debt issuances or borrowings, our expectations, intentions or anticipations regarding our sources of funding, capital structure, including authorized return on equity, cost of debt and rate of retur…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

•the outcome and timeliness of regulatory commissions’ actions concerning rate relief and other matters, including with respect to the 2024 GRC;

Current wording

•the outcome and timeliness of regulatory commissions’ actions concerning rate relief and other matters, including with respect to the 2024 CA GRC;

Previous wording

•changes in state regulatory commissions’ policies and procedures, such as the California Public Utilities Commission (CPUC)’s decision in 2020 to preclude companies from proposing full decoupling (which impacted our 2021 GRC);

Current wording

•changes in state regulatory commissions’ policies and procedures, such as the California Public Utilities Commission (CPUC)’s decision in 2020 to preclude companies from proposing full decoupling (which impacted Cal Water’s 2021 GRC (2021 CA GRC));

Previous wording

•changes in environmental compliance and water quality requirements, such as the United States Environmental Protection Agency’s (EPA) finalization of a National Primary Drinking Water Regulation establishing legally enforceable maximum contaminant levels (MCL) for six PFAS in drinking water in 2024;

Current wording

•changes in environmental compliance and water quality requirements, such as the United States Environmental Protection Agency’s (EPA) finalization of a National Primary Drinking Water Regulation establishing legally enforceable maximum contaminant levels (MCL) for PFAS in drinking water in 2024 as well as legal challenges to such MCLs;

Previous wording

•the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown or a recession, changes in tariff policy and uncertainty regarding tariffs and other retaliatory trade measures, the interest rate environment, changes in monetary policy, adverse capital markets activity or macroeconomic conditions as a result of geopolitical conflicts, and the prospect of a shutdown of the U.S. federal government;

Current wording

•the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown or a recession, changes in tariff policy and uncertainty regarding tariffs and other retaliatory trade measures, the interest rate environment, changes in monetary policy, adverse capital markets activity or macroeconomic conditions as a result of geopolitical conflicts;

Previous wording

For the three months ended March 31, 2025, there were no material changes in the methodology for computing critical accounting estimates, no additional accounting estimates met the standards for critical accounting policies, and there were no material changes to the important assumptions underlying the critical accounting estimates.

Current wording

For the six months ended June 30, 2025, there were no material changes in the methodology for computing critical accounting estimates, no additional accounting estimates met the standards for critical accounting policies, and there were no material changes to the important assumptions underlying the critical accounting estimates.

Previous wording

Net income attributable to California Water Service Group for the three months ended March 31, 2025 was $13.3 million or $0.22 earnings per diluted common share, compared to net income of $69.9 million or $1.21 earnings per diluted common share for the three months ended March 31, 2024. The $56.6 million decrease in net income was primarily due to a decrease in operating revenue of $66.7 million primarily as a result of the cumulative adjustment in first three months of 2024 for the impacts of the 2021 GRC delayed approval, partially offset by rate increases and an increase in customer usage. Additionally, total operating expenses decreased $11.3 million. The total operating expense decrease was primarily due to a decrease in income tax expense of $14.5 million, which was partially offset by an increase in depreciation and amortization expenses of $3.1 million.

Current wording

Net income attributable to California Water Service Group for the six months ended June 30, 2025 was $55.5 million or $0.93 earnings per diluted common share, compared to net income of $110.5 million or $1.90 earnings per diluted common share for the six months ended June 30, 2024. The $55.0 million decrease in net income was primarily due to a decrease in operating revenue of $46.1 million primarily as a result of the cumulative adjustment in the first six months of 2024 for the impacts of the 2021 CA GRC delayed approval, partially offset by rate increases and an increase in customer usage. Additionally, total operating expenses increased $5.8 million. The total operating expense increase was primarily due to increases in other operations expense of $8.0 million, water production costs of $6.7 million, and depreciation and amortization expenses of $6.2 million. The increases were partially offset by a decrease in income tax expense of $16.3 million primarily due to lower pre-tax income.

Previous wording

For the three months ended March 31, 2025, operating revenue decreased $66.7 million, or 24.7%, to $204.0 million as compared to $270.7 million for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, operating revenue increased $20.7 million, or 8.5%, to $265.0 million as compared to $244.3 million for the three months ended June 30, 2024.

Previous wording

The net change due to rate changes, usage, and other for the three months ended March 31, 2025 was primarily due to rate increases of $21.4 million, recognition of Palos Verdes Pipeline Memorandum Account related revenue of $3.8 million (see “Palos Verdes Peninsula Water Reliability Project” in Regulatory Matters below for more details), an increase in customer usage of $1.6 million, and an increase in accrued and unbilled revenue of $3.5 million due to increases in rates and unbilled days. This was partially offset by $2.4 million of other 2023 revenue recorded in the first three months of 2024 as a result of the resolution of the 2021 GRC that did not recur in the first quarter of 2025.

Current wording

The net change due to rate changes, usage, and other for the three months ended June 30, 2025 was primarily due to rate increases of $23.9 million and an increase in customer usage of $7.0 million. For the six months ended June 30, 2025, the net change was due to rate changes, usage, and other was primarily driven by rate increases of $45.5 million, an increase in customer usage of $8.7 million, the recognition of Palos Verdes Pipeline Memorandum Account related revenue of $3.8 million (see “Palos Verdes Peninsula Water Reliability Project” in Regulatory Matters below for more details), and an increase in accrued and unbilled revenue of $1.3 million due to an increase in rates. This was partially offset by $2.4 million of other 2023 revenue recorded in the first six months of 2024 as a result of the resolution of the 2021 CA GRC that did not recur in the first six months of 2025.

Previous wording

Due to the delay in the resolution of the 2021 GRC, the CPUC authorized Cal Water to track in an IRMA the variances between actual customer billings and those that would have been billed assuming the 2021 GRC had been effective January 1, 2023. Such variances were recorded as regulatory balancing account revenue. The 2021 GRC was approved in March of 2024 and final rates for the 2021 GRC were implemented on May 31, 2024; as a result, Cal Water recorded IRMA revenue of $80.7 million in March of 2024 of which $70.3 million was attributable to 2023.

Current wording

Due to the delay in the resolution of the 2021 CA GRC, the CPUC authorized Cal Water to track in an IRMA the variances between actual customer billings and those that would have been billed assuming the 2021 CA GRC had been effective January 1, 2023. Such variances were recorded as regulatory balancing account revenue. The 2021 CA GRC was approved in March of 2024 and final rates for the 2021 CA GRC were implemented on May 31, 2024. As a result, Cal Water recorded IRMA revenue of $7.9 million for the three months ended June 30, 2024. For the six months ended June 30, 2024, Cal Water recorded IRMA revenue of $88.6 million of which $67.6 million is attributable to 2023, including $17.3 million and $28.4 million that was attributable to the three and six months ended June 30, 2023.

Previous wording

MWRAM revenue is the variance between actual metered sales billed through the tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a uniform rate had been in effect. In March of 2024, Cal Water received approval of the 2021 GRC which authorized the use of the MWRAM effective January 1, 2023. For the three months ended March 31, 2025 and 2024 Cal Water recorded MWRAM revenue of $14.8 million and $31.1 million, respectively. Of the $31.1 million recorded MWRAM revenue for the three months ended March 31, 2024, $17.6 million was attributable to 2023.

Current wording

MWRAM revenue is the variance between actual metered sales billed through the tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a uniform rate had been in effect. In March of 2024, Cal Water received approval of the 2021 CA GRC which authorized the use of the MWRAM effective January 1, 2023. For the three months ended June 30, 2025 and 2024, Cal Water recorded MWRAM revenue of $6.7 million and $8.2 million, respectively. For the six months ended June 30, 2025 and 2024, Cal Water recorded MWRAM revenue of $21.5 million and $39.3 million, respectively. Of the $39.3 million recorded MWRAM revenue for the six months ended June 30, 2024, $17.4 million is attributable to 2023, including $7.4 million and $18.0 million that was attributable to the three and six months ended June 30, 2023.

Previous wording

Deferred revenue consists of amounts that are expected to be collected from customers beyond 24 months following the end of the accounting period in which the sales transaction occurred. Deferred revenue for the three months ended March 31, 2025 decreased and revenue increased by $1.8 million due to a change in the amount expected to be collected beyond 24 months.

Current wording

Deferred revenue consists of amounts that are expected to be collected from customers beyond 24 months following the end of the accounting period in which the sales transaction occurred. Deferred revenue for the six months ended June 30, 2025 decreased and revenue increased by $1.7 million due to a change in the amount expected to be collected beyond 24 months.

Previous wording

For the three months ended March 31, 2025, total operating expenses decreased $11.3 million, or 5.8%, to $181.6 million, as compared to $192.9 million for the three months ended March 31, 2024. The decrease was primarily due to lower income tax expense partially offset by an increase in depreciation and amortization expense.

Current wording

For the three months ended June 30, 2025, total operating expenses increased $17.0 million, or 8.7%, to $213.1 million, as compared to $196.1 million for the three months ended June 30, 2024. The increase was primarily due to increases in water production costs, other operations expense, and depreciation and amortization expense, partially offset by lower income tax expense.

Previous wording

Water production costs decreased $1.2 million, or 1.9%, for the three months ended March 31, 2025 as compared to the same period in the prior year primarily due to a decrease in Incremental Cost Balancing Accounts (ICBA) expense of $9.3 million. For the three months ended March 31, 2024, Cal Water recorded $7.0 million of ICBA expense attributable to 2023. The decrease was partially offset by an $8.1 million increase in water production costs primarily due to an increase in customer usage and wholesale rates.

Current wording

Water production costs increased $6.7 million, or 4.7%, for the six months ended June 30, 2025 as compared to the same period in the prior year primarily due to an increase in wholesale rates and higher customer usage, partially offset by a decrease of $6.5 million related to the recording of Incremental Cost Balancing Accounts (ICBA) expense in the first six months of 2024 attributable to fiscal year 2023 due to the delayed decision in our 2021 CA GRC. The $6.5 million attributable to fiscal year 2023 included $1.7 million and $2.9 million, respectively, attributable to water production costs for the three and six months ended June 30, 2023.

Previous wording

Other operations expenses increased $1.9 million, or 7.1%, for the three months ended March 31, 2025 as compared to the same period in 2024. The increase was primarily due to the recognition of $0.9 million of costs associated with recognized deferred revenue, an increase of $0.5 million in miscellaneous office expenses, a $0.3 million increase in bad debt expense, a $0.3 million increase in labor expense, and a $0.3 million increase in water treatment fees. These increases were partially offset by a $0.7 million reduction in conservation program expenses. Other than costs associated with deferred revenue, these increases were primarily due to inflation.

Current wording

Other operations expenses increased $8.0 million, or 15.2%, for the six months ended June 30, 2025 as compared to the same period in 2024. The increase was primarily due to a $4.2 million increase in bad debt expense, a $1.3 million increase in labor expense, a $0.6 million increase in miscellaneous office expenses, and a $0.6 million increase in software expense. These increases were partially offset by a $0.6 million reduction in conservation program expenses. The increase in bad debt expense was primarily due to lower bad debt expense in 2024 as a result of applying arrearage funds to eligible, previously written-off accounts.

Previous wording

Depreciation and amortization expense increased $3.1 million for the three months ended March 31, 2025, as compared to the same period in 2024. The increase was primarily due to utility plant placed in service in 2024.

Current wording

Depreciation and amortization expense increased $3.1 million and $6.2 million for the three and six months ended June 30, 2025, as compared to the same periods in 2024. These increases were primarily due to utility plant placed in service in 2024.

Previous wording

Income tax expense decreased $14.5 million for the three months ended March 31, 2025, as compared to the same period in 2024. The decrease in income tax expense was primarily due to a decrease in pre-tax operating income for the three months ended March 31, 2025, compared to the same period in 2024.

Current wording

Income tax expense decreased $1.8 million and $16.3 million for the three and six months ended June 30, 2025, as compared to the same periods in 2024. The decreases in income tax expenses were primarily due to decreases in pre-tax operating income for the three and six months ended June 30, 2025, compared to the same periods in 2024.

Previous wording

On July 8, 2024, Cal Water submitted Infrastructure Improvement Plans (the Plans) for its California districts for the period of 2025 to 2027 in its 2024 GRC application with the CPUC. The application also proposes a Low-Use Water Equity Program, that would, if approved as filed, decouple revenue from water sales, to assist low-water-using, lower-income customers.

Current wording

On July 8, 2024, Cal Water submitted Infrastructure Improvement Plans (the Plans) for its California districts for the period of 2025 to 2027 in its 2024 CA GRC application with the CPUC. The application also proposes a Low-Use Water Equity Program, that would, if approved as filed, decouple revenue from water sales, to assist low-water-using, lower-income customers.

Previous wording

The required, triennial filing begins an approximately 18-month review process by the CPUC, which will analyze the Plans, operating budget proposals, and the Low-Use Water Equity Program to establish water rates for 2026 to 2028 that reflect the cost of providing safe, reliable water service. Associated rates set by the CPUC would become effective no sooner than January 2026. Cal Water has concluded an initial pre-hearing conference and an administrative law judge and Commissioner have been assigned to the case. The Commissioner issued the Scoping Memo and Ruling in November 2024 identifying the issues to be addressed and setting the schedule for the proceeding. At the start of 2025, public participation hearings were conducted and Cal Water received California Public Advocate’s testimony responding to the 2024 GRC application. Cal Water submitted rebuttal testimony in late March 2025. The Assigned Commissioner also issued an Amended Scoping Memo and Ruling on March 13, 2025 granting in part Cal Water’s request to modify the ex-parte rules, and denying Cal Water’s request to modify the issues within the scope of the proceeding. Settlement discussions took place during April 2025, and hearings before the Administrative Law Judge are expected to occur in May 2025.

Current wording

The required, triennial filing begins an approximately 18-month review process by the CPUC, which will analyze the Plans, operating budget proposals, and the Low-Use Water Equity Program to establish water rates for 2026 to 2028 that reflect the cost of providing safe, reliable water service. Associated rates set by the CPUC would become effective no sooner than January 2026. Cal Water has concluded an initial pre-hearing conference and an Administrative Law Judge (ALJ) and Commissioner have been assigned to the case. The Commissioner issued the Scoping Memo and Ruling in November 2024 identifying the issues to be addressed and setting the schedule for the proceeding. At the start of 2025, public participation hearings were conducted and Cal Water received California Public Advocate’s testimony responding to the 2024 CA GRC application. Cal Water submitted rebuttal testimony in late March 2025. The Assigned Commissioner also issued an Amended Scoping Memo and Ruling on March 13, 2025 granting in part Cal Water’s request to modify the ex-parte rules, and denying Cal Water’s request to modify the issues within the scope of the proceeding. Settlement discussions took place during April 2025, and hearings before the ALJ occurred in May 2025. After the hearings, the ALJ issued a ruling requesting additional information that parties to the proceeding responded to in June 2025. Briefs were filed on July 7, 2025 and reply briefs were filed on July 28, 2025. A final law and motion hearing is scheduled for August 5, 2025 at which point the case is expected to be submitted to the ALJ to draft a proposed decision.

Previous wording

•Infrastructure replacements to help ensure reliable delivery of water service.

Current wording

•Infrastructure replacements to help provide reliable delivery of water service.

Previous wording

•Equipment such as generators to help withstand power outages and shutoffs, and solar installation projects to help reduce Cal Water’s dependency on the electric power grid and lessen our environmental footprint.

Current wording

•Equipment such as generators to help withstand power outages and shutoffs, and solar installation projects to help reduce Cal Water’s dependency on the electric power grid and lessen the Company’s environmental footprint.

Previous wording

As a part of the decision on the 2021 GRC, Cal Water was authorized to request annual escalation rate increases for 2025 for those districts that passed the CPUC’s earnings test. In November of 2024, Cal Water requested 2025 escalation rate increases for 18 of its regulated districts. The increase in annual adopted gross revenue associated with the November 2024 filing was $27.2 million. The new rates were approved and subsequently implemented on January 1, 2025.

Current wording

As a part of the decision on the 2021 CA GRC, Cal Water was authorized to request annual escalation rate increases for 2025 for those districts that passed the CPUC’s earnings test. In November of 2024, Cal Water requested 2025 escalation rate increases for 18 of its regulated districts. The increase in annual adopted gross revenue associated with the November 2024 filing was $27.2 million. The new rates were implemented on January 1, 2025.

Previous wording

For construction projects authorized in the 2021 GRC as advice letter projects, Cal Water is allowed to request rate base offsets to increase revenues after the project goes into service. In October of 2024, Cal Water submitted a $5.7 million rate base offset advice letter to recover $0.9 million of annual revenue increases in 9 of its regulated districts. The new rates were approved and subsequently implemented on January 1, 2025.

Current wording

For construction projects authorized in the 2021 CA GRC as advice letter projects, Cal Water is allowed to request rate base offsets to increase revenues after the project goes into service. In October of 2024, Cal Water submitted a $5.7 million rate base offset advice letter to recover $0.9 million of annual revenue increases in 9 of its regulated districts. The new rates were implemented on January 1, 2025.

Previous wording

On March 14, 2025, Washington Water filed a rate case with the Washington State Utility and Transportation Commission to increase revenues in the Stroh’s water system by $0.2 million, implemented into rates over two years. The first implementation of new rates, if approved, is expected to be effective May 23, 2025.

Current wording

On March 22, 2025, the Washington Utilities and Transportation Commission approved a tariff update for the Stroh’s water system to increase revenues by $0.2 million. The general rate increase was approved on May 22, 2025, implemented into rates over two years. The first implementation of new rates was effective May 23, 2025, and the second implementation of new rates is effective May 23, 2026.

Previous wording

During the first quarter of 2025, a settlement was reached in the 2024 Ka’anapali GRC between Hawaii Water and the Hawaii Division of Consumer Advocacy. The settlement calls for total test year revenue requirement of $7.5 million, representing an increase over the $6.4 million previously approved, on rate base of $13.4 million. The settlement agreement was filed with the Hawaii Public Utilities Commission and was approved on April 7, 2025. The rate change is expected to be effective in May 2025.

Current wording

During the first quarter of 2025, a settlement was reached in the 2024 Ka’anapali GRC between Hawaii Water and the Hawaii Division of Consumer Advocacy. The settlement calls for total test year revenue requirement of $7.5 million, representing an increase over the $6.4 million previously approved, on rate base of $13.4 million. The settlement agreement was filed with the Hawaii Public Utilities Commission and was approved on April 7, 2025. The updated rate tariff was effective on April 18, 2025.

Previous wording

During the three months ended March 31, 2025, we generated cash flow from operations of $38.4 million compared to $26.5 million for the same period in 2024. Cash generated by operations varies during the year due to customer billings, and timing of collections and contributions to our benefit plans.

Current wording

During the six months ended June 30, 2025, we generated cash flow from operations of $87.4 million compared to $120.9 million for the same period in 2024. The decrease in the first six months of 2025 as compared to the same period in 2024 is primarily due to the receipt of $83.0 million from California’s Extended Water and Wastewater Arrearages Payment Program in 2024. This was partially offset by an increase in cash collections in the first six months of 2025 as compared to 2024 due to an increase in customer rates and the recovery of MWRAM and IRMA receivables that were recorded in 2024 due to the resolution of the 2021 CA GRC. Cash generated by operations varies during the year due to customer billings, and timing of collections and contributions to our benefit plans.

Previous wording

During the three months ended March 31, 2025, we made cash contributions of $2.3 million to our employee pension plan and did not make any cash contribution to our other postretirement benefit plans. During the three months ended March 31, 2024, we did not make any cash contributions to our employee pension plan or to our other postretirement benefit plans. The 2025 estimated cash contribution to the employee pension plan is expected to be approximately $5.2 million and no cash contributions are expected to be made for the other postretirement benefits plans.

Current wording

During the six months ended June 30, 2025, we made cash contributions of $3.3 million to our employee pension plan and did not make any cash contribution to our other postretirement benefit plans. During the six months ended June 30, 2024, we made cash contributions of $0.2 million to our employee pension plan and did not make any cash contribution to our other postretirement benefit plans. The 2025 estimated cash contribution to the employee pension plan is expected to be approximately $5.2 million and no cash contributions are expected to be made for the other postretirement benefits plans.

Previous wording

During the three months ended March 31, 2025 and 2024, we used $110.1 million and $109.8 million, respectively, of cash for Company-funded and developer-funded utility capital expenditures. Cash used in investing activities fluctuates each year largely due to the availability of construction resources and our ability to obtain construction permits in a timely manner. For 2025, our utility capital expenditures are estimated to be between $450.0 million and $550.0 million based on the 2024 GRC in California and expected capital needs in the other subsidiaries.

Current wording

During the six months ended June 30, 2025 and 2024, we used $229.5 million and $214.4 million, respectively, of cash for Company-funded and developer-funded utility capital expenditures. Cash used in investing activities fluctuates each year largely due to the availability of construction resources and our ability to obtain construction permits in a timely manner. For 2025, our utility capital expenditures are estimated to be between $450.0 million and $550.0 million based on the 2024 CA GRC and expected capital needs in the other subsidiaries.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $65.9 million compared to $86.6 million for the same period in 2024. For the three months ended March 31, 2025 and 2024, we paid dividends of $20.2 million and $16.2 million, respectively. For the three months ended March 31, 2025 and 2024, we issued $0.7 million and $0.8 million, respectively, of Company common stock through our employee stock purchase plan.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 was $142.4 million compared to $91.1 million for the same period in 2024. For the six months ended June 30, 2025 and 2024, we paid dividends of $38.1 million and $32.3 million, respectively. For the six months ended June 30, 2025, we issued $1.3 million of Company common stock through our employee stock purchase plan. For the six months ended June 30, 2024, we issued $52.0 million of Company common stock through our at-the-market equity program and $1.4 million through our employee stock purchase plan. For the six months ended June 30, 2025, we also received $10.6 million in initial PFAS settlement proceeds.

Previous wording

For each of the three months ended March 31, 2025 and 2024, we borrowed $170.0 million, on our unsecured revolving credit facilities. We made repayments on our unsecured revolving credit facilities of $90.0 million and $70.0 million during the three months ended March 31, 2025 and 2024, respectively.

Current wording

For the six months ended June 30, 2025 and 2024, we borrowed $410.0 million and $295.0 million, respectively, on our unsecured revolving credit facilities. We made repayments on our unsecured revolving credit facilities of $255.0 million and $230.0 million during the six months ended June 30, 2025 and 2024, respectively.

Previous wording

The net IRMA, MWRAM, Water Revenue Adjustment Mechanism and Modified Cost Balancing Account receivable balances were $121.7 million and $57.9 million as of March 31, 2025 and 2024, respectively. The receivable balances were primarily financed by Cal Water using short-term financing arrangements to meet operational cash requirements. Interest on the receivable balances, which represents the interest recoverable from customers, is limited to the then-current 90-day commercial paper rates, which typically are significantly lower than Cal Water’s short-term financing rates.

Current wording

The net IRMA, MWRAM, Water Revenue Adjustment Mechanism and Modified Cost Balancing Account receivable balances were $118.4 million and $134.2 million as of June 30, 2025 and 2024, respectively. The receivable balances were primarily financed by Cal Water using short-term financing arrangements to meet operational cash requirements. Interest on the receivable balances, which represents the interest recoverable from customers, is limited to the then-current 90-day commercial paper rates, which typically are significantly lower than Cal Water’s short-term financing rates.

Previous wording

As of March 31, 2025 and December 31, 2024, short-term borrowings of $285.0 million and $205.0 million, respectively, were outstanding on the Company and Cal Water facilities.

Current wording

As of June 30, 2025 and December 31, 2024, short-term borrowings of $360.0 million and $205.0 million, respectively, were outstanding on the Company and Cal Water facilities.

Previous wording

During the three months ended March 31, 2025, our quarterly common stock dividend payment was $0.34 per share, which includes a one-time special dividend in the amount of $0.04 per share, compared to $0.28 per share for the three months ended March 31, 2024. For the full year 2024, the payout ratio was 34.3% of net income. On a long-term basis, our goal is to achieve a dividend payout ratio of 60% of net income.

Current wording

During the six months ended June 30, 2025, our quarterly common stock dividend payments were $0.64 per share, which includes a one-time special dividend in the amount of $0.04 per share, compared to $0.56 per share for the six months ended June 30, 2024. For the full year 2024, the payout ratio was 34.3% of net income. On a long-term basis, our goal is to achieve a dividend payout ratio of 60% of net income.

Previous wording

At the April 30, 2025 meeting, the Company’s Board of Directors declared the second quarter dividend of $0.30 per share payable on May 23, 2025, to stockholders of record on May 12, 2025. This was our 321st consecutive quarterly dividend.

Current wording

At the July 30, 2025 meeting, the Company’s Board of Directors declared the third quarter dividend of $0.30 per share payable on August 22, 2025, to stockholders of record on August 11, 2025. This was our 322nd consecutive quarterly dividend.

Previous wording

In future periods, management anticipates funding our utility plant needs through a balance of long-term debt and equity.

Current wording

We intend to fund our utility plant needs in future periods through a relatively balanced approach between long-term debt and equity.

Previous wording

We intend to fund our utility plant needs in future periods through a relatively balanced approach between long-term debt and equity. The Company and Cal Water have a syndicated unsecured revolving line of credit of $200.0 million and $400.0 million, respectively, for short-term borrowings. As of March 31, 2025, the Company’s and Cal Water’s availability on these unsecured revolving lines of credit was $150.0 million and $165.0 million, respectively.

Current wording

The Company and Cal Water have a syndicated unsecured revolving line of credit of $200.0 million and $400.0 million, respectively, for short-term borrowings. As of June 30, 2025, the Company’s and Cal Water’s availability on these unsecured revolving lines of credit was $135.0 million and $105.0 million, respectively.

Previous wording

Book value per common share was $27.35 at March 31, 2025 compared to $27.49 at December 31, 2024. There were approximately 1,680 stockholders of record for our common stock as of February 10, 2025.

Current wording

Book value per common share was $27.77 at June 30, 2025 compared to $27.49 at December 31, 2024. There were approximately 1,673 stockholders of record for our common stock as of May 12, 2025.

Previous wording

During the three months ended March 31, 2025, utility plant expenditures totaled $110.1 million, including Company-funded projects of $104.8 million and developer-funded projects of $5.3 million. For 2025, we estimate utility capital expenditures to be between $450.0 million and $550.0 million based on the 2024 GRC in California and expected capital needs in the other subsidiaries.

Current wording

During the six months ended June 30, 2025, utility plant expenditures totaled $229.5 million, including Company-funded projects of $216.7 million and developer-funded projects of $12.8 million. For 2025, we estimate utility capital expenditures to be between $450.0 million and $550.0 million based on the 2024 CA GRC and expected capital needs in the other subsidiaries.

Previous wording

As of March 31, 2025, construction work in progress was $378.4 million. Construction work in progress includes projects that are under construction but not yet complete and placed in service.

Current wording

As of June 30, 2025, construction work in progress was $432.0 million. Construction work in progress includes projects that are under construction but not yet complete and placed in service.

Previous wording

Historically, approximately half of our annual water supply is pumped from wells. State groundwater management agencies operate differently in each state. Some of our wells extract ground water from water basins under state ordinances. These are adjudicated groundwater basins, in which a court has settled the dispute between landowners, or other parties over how much annual groundwater can be extracted by each party. All of our adjudicated groundwater basins are located in the State of California. Our average annual groundwater extraction from adjudicated groundwater basins approximates 7.8 billion gallons or 14.9% of our total average annual (2023 to 2024) water supply pumped from wells. Historically, we have extracted less than 100% of our annual adjudicated groundwater rights and have the right to carry forward up to 20% of the unused amount to the next annual period. All of our remaining wells extract ground water from managed or unmanaged water basins. There are no set limits for the ground water extracted from these water basins. Our average annual groundwater extraction from managed groundwater basins approximates 29.6 billion gallons or 56.4% of our total average annual (2023 to 2024) water supply pumped from wells. Many managed groundwater basins we extract water from have groundwater recharge facilities for which we financially support the recharge activities by paying well pump taxes. For the three months ended March 31, 2025 and 2024, our well pump taxes were $5.7 million and $4.8 million, respectively. In 2014, the State of California enacted the Sustainable Groundwater Management Act of 2014 (SGMA). The law and its implementing regulations required most basins to create a sustainability agency by 2017, develop a sustainability plan by the end of 2022, and show progress toward sustainability by 2027. We expect that after the SGMA provisions are fully implemented, all the Company’s California groundwater will be produced from sustainably managed and/or adjudicated basins.

Current wording

Historically, approximately half of our annual water supply is pumped from wells. State groundwater management agencies operate differently in each state. Some of our wells extract ground water from water basins under state ordinances. These are adjudicated groundwater basins, in which a court has settled the dispute between landowners, or other parties over how much annual groundwater can be extracted by each party. All of our adjudicated groundwater basins are located in the State of California. Our average annual groundwater extraction from adjudicated groundwater basins approximates 7.8 billion gallons or 14.9% of our total average annual (2023 to 2024) water supply pumped from wells. Historically, we have extracted less than 100% of our annual adjudicated groundwater rights and have the right to carry forward up to 20% of the unused amount to the next annual period. All of our remaining wells extract ground water from managed or unmanaged water basins. There are no set limits for the ground water extracted from these water basins. Our average annual groundwater extraction from managed groundwater basins approximates 29.6 billion gallons or 56.4% of our total average annual (2023 to 2024) water supply pumped from wells. Many managed groundwater basins we extract water from have groundwater recharge facilities for which we financially support the recharge activities by paying well pump taxes. For the six months ended June 30, 2025 and 2024, our well pump taxes were $12.1 million and $10.2 million, respectively. In 2014, the State of California enacted the Sustainable Groundwater Management Act of 2014 (SGMA). The law and its implementing regulations required most basins to create a sustainability agency by 2017, develop a sustainability plan by the end of 2022, and show progress toward sustainability by 2027. We expect that after the SGMA provisions are fully implemented, all the Company’s California groundwater will be produced from sustainably managed and/or adjudicated basins.