AMERICAN STATES WATER CO
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
AWR$89.98+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001628280-24-045760
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001056903-25-000008
Item 2. : Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 273 previous paragraphs and 179 current paragraphs.
78 unchanged; 55 reworded; 46 added; 117 removed; 23 previous and 0 current paragraphs rearranged.
Tables are not compared: 28 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (46)
Current report
The U.S. government has recently announced a comprehensive set of tariffs. The U.S. government has paused the implementation of certain of these tariffs, and the timing and scope of such tariffs is currently uncertain. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. The impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemption for certain goods, among other uncertainties.
Current report
The final decision also addressed GSWC’s request for various regulatory mechanisms that were litigated during the proceeding. Among other things, the final decision rejected GSWC’s request for the continuation of a full sales and revenue decoupling mechanism such as the WRAM and a full cost balancing account for water supply such as the MCBA, and instead orders GSWC to transition to a modified rate adjustment mechanism (a Monterey-style WRAM or “M-WRAM”) and an incremental cost balancing account (“ICBA”) for supply costs. The final decision also adopted GSWC’s M-WRAM rate design proposal, authorizing GSWC to increase the revenue requirement in its fixed service charges to between 45-48% of the revenue requirement depending on the ratemaking area representing approximately 65% of GSWC’s fixed costs in aggregate. The M-WRAM tracks the difference between the revenue based on actual metered sales through a tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a blended tier standard quantity rate had been in effect. The ICBA for supply costs tracks differences between the authorized per-unit prices of water production costs and actual per-unit prices of water production costs. The M-WRAM and ICBA were effective January 1, 2025. GSWC will not be able to recognize under-collections of revenue caused by fluctuations in consumption or changes in water supply cost mix beginning in 2025. However, the final decision did approve GSWC’s request for the continuation of a sales reconciliation mechanism, which would allow GSWC to adjust its sales forecast throughout the general rate case cycle to address significant fluctuations in consumption.
Current report
On March 5, 2025, GSWC filed an application for rehearing of the CPUC’s decision in the 2025-2027 general rate case, asserting that the final decision’s denial of GSWC’s revenue decoupling proposal was not supported by the record. At this time, management cannot predict the outcome of this matter.
Current report
The new 2025 rates and the implementation of the new M-WRAM and ICBA regulatory mechanisms approved in the final decision have been reflected in GSWC’s earnings for the three months ended March 31, 2025 that resulted in an increase in recorded revenues of $11.7 million largely from the new rates and an increase in recorded water supply costs of $4.0 million, which combined is an increase of $7.7 million, compared to the same period in 2024. GSWC’s earnings during the first quarter of 2025 were favorably impacted by an actual water supply source mix that included less purchased water than what was authorized in the general rate case and included in the revenue requirement. Generally, the variable cost of producing water from wells is less than the cost of water purchased from wholesale suppliers. GSWC obtains its water supplies from a variety of sources, which vary among its water systems and will fluctuate depending on the available source. Furthermore, the demand for water varies by season. For instance, water consumption tends to be higher during the third quarter of each year when weather in California is hotter and dryer. During cooler periods, such as the first quarter, GSWC’s customers generally use less water, and as a result, GSWC’s pumped water sources are capable of meeting a greater portion of customer demand. Therefore, the favorable water supply source mix experienced during the first quarter may or may not continue during the remainder of the 2025 year, and without a full cost balancing account for water supply, GSWC’s earnings will be subject to future volatility as a result of favorable and unfavorable changes in the water supply source mix compared to the adopted mix incorporated in the revenue requirement.
Current report
GSWC Cost of Capital (“COC”) Proceeding:
Current report
The new electric rates were implemented on March 1, 2025. BVES was also authorized by the CPUC to establish a general rate case memorandum account that made the new rates retroactive to January 1, 2023. Due to the delay in finalizing the electric general rate case, billed electric revenues for the years 2023 and 2024, were based on 2022 adopted rates. The general rate case memorandum account tracks the revenue differences between the 2022 adopted rates and the 2023 and 2024 new rates authorized by the CPUC for future recovery. As of March 31, 2025, the aggregate cumulative under-collection in retroactive revenues related to the full year of 2023 and 2024 amounted to $10.0 million. On April 1, 2025, BVES implemented surcharges to recover the retroactive amounts accumulated related to the new rates, as well as recovery of incremental operating costs incurred prior to 2023 in connection with BVES’s wildfire mitigation plans that were being tracked in memorandum accounts prior to the new rate cycle.
Current report
The final decision will also provide for an increase in adopted operating revenues of $2.2 million for 2025 and $3.3 million in 2026. The rate increases for 2024 - 2026 are not subject to an earnings test. Furthermore, the previously mentioned advice letter projects of at least $23.1 million are expected to generate additional annual operating revenues of approximately $3 million when the respective projects are completed, placed in service, and filed for recovery in customer rates. These projects also accrue AFUDC during construction that will further increase the revenue requirement. In the settlement agreement, the parties agreed to remove portions of the requested capital budgets from rates until they were completed and placed in service. For all of the advice letter projects, BVES will be allowed to accrue AFUDC during the construction period at the adopted rate of return, which will be added to the cost of the assets and recovered in customer rates when the assets are placed in service. On April 1, 2025, BVES implemented new base rates to recover the revenue requirement associated with $11.6 million of capital projects approved for recovery through advice letters.
Current report
Contracted Services Segment:
Current report
Summary of First Quarter Results by Segment
Current report
Note: Certain amounts in the table above may not foot or crossfoot due to rounding.
Current report
Note: Certain amounts in the table above may not foot or crossfoot due to rounding.
Current report
Water Segment:
Current report
•An increase in water operating revenues of $11.7 million largely as a result of the CPUC-approved new rate increases effective January 1, 2025 in connection with the recently approved general rate case. Billed water consumption for the first quarter of 2025 approximated consumption levels adopted in the new 2025 rates and, therefore, GSWC’s transition from a full revenue decoupling mechanism to the M-WRAM did not have a material impact to revenues recorded during the first quarter. GSWC’s revenues and earnings will be subject to future volatility as a result of significant fluctuations in customer consumption compared to adopted levels.
Current report
•An increase in water supply costs of $4.0 million, which consist of purchased water, purchased power for pumping, groundwater production assessments and changes in the water supply cost balancing accounts. The increase in water supply costs compared to the same period in 2024 is primarily related to an increase in customer water usage and higher overall water per-unit water supply costs. As a result of transitioning from a full cost balancing account for water supply to the ICBA, GSWC’s earnings during the first quarter of 2025 were favorably impacted by an actual water supply source mix that included less purchased water than what was authorized in the general rate case and included in the revenue requirement. During the first quarter, GSWC’s pumped water sources, which cost less than purchased water, were capable of meeting a greater portion of customer demand when compared to a higher purchased water mix being recovered in the new adopted rates. GSWC’s earnings will be subject to future volatility as a result of favorable and unfavorable changes in the water supply source mix compared to the adopted mix incorporated in the revenue requirement.
Current report
•An overall decrease in other income (net of other expense) of $2.7 million due largely to losses totaling $0.6 million generated on investments held to fund one of the company’s retirement plans during the three months ended March 31, 2025, as compared to gains on investments of $2.1 million recorded during the same period in 2024 due to financial market conditions.
Current report
Electric Segment:
Current report
Diluted earnings from the electric utility segment increased $0.02 per share for the first quarter of 2025 as compared to the same period in 2024 largely resulting from an increase in revenues from third-year electric rate increases implemented in 2025 as a result of receiving a final decision from the CPUC in connection with BVES’s general rate case proceeding that set new rates for 2023 - 2026 (retroactive to January 1, 2023), as compared to 2022 rates used to record revenue during the same period of 2024. The new rates resulted in an increase in electric revenues that supports, among other things, the growth in rate base and higher operating costs related to BVES’s wildfire mitigation plans that were previously not included in customer rates and not expensed during the first quarter of 2024 because they were being tracked in memorandum accounts. Therefore, the increase in revenues was partially offset by overall increases in operating expenses due, in large part, to higher expenses recorded in connection with BVES’s vegetation management and other wildfire mitigation plans, as well as an increase in outside services related to various regulatory filings.
Current report
Contracted Services Segment:
Current report
For the three months ended March 31, 2025, revenues from water operations increased by $11.7 million to $102.0 million as compared to the same period in 2024. The increase in water revenues during the first quarter of 2025 is primarily a result of the CPUC-approved new 2025 rate increases effective January 1, 2025 in connection with the recently approved general rate case, as well as an increase in water consumption compared to the same period in 2024. Billed water consumption for thefirst quarter of 2025 washigher by 12.0% as compared to the same period in 2024 due to lower amounts of seasonal precipitation as compared tofirst quarter of 2024. Billed water consumption for the first quarter of 2025 approximated consumption levels adopted in the new 2025 rates and, therefore, GSWC’s transition from a full revenue decoupling mechanism to the M-WRAM did not have a material impact to revenues recorded during the first quarter. GSWC’s revenues and earnings will be subject to future volatility as a result of significant fluctuations in customer consumption compared to adopted levels.
Current report
Electric revenues for the three months ended March 31, 2025 increased by $2.8 million to $15.0 million largely resulting from an increase in revenues from third-year electric rate increases implemented in 2025, as compared to 2022 rates used to record revenue during the same period of 2024. A final decision from the CPUC issued in January 2025 in connection with BVES’s general rate case proceeding set new rates for 2023 - 2026 (retroactive to January 1, 2023).
Current report
Contracted Services
Current report
The sum of the water and electric supply-cost balancing accounts are shown on AWR’s Consolidated Statements of Income and totaled $(1.7) million and $(0.6) million for the three months ended March 31, 2025 and 2024, respectively.
Current report
** not meaningful
Current report
The sum of the water and electric supply-cost balancing accounts are shown on AWR’s Consolidated Statements of Income and totaled $(1.7) million and $(0.6) million for the three months ended March 31, 2025 and 2024, respectively.
Current report
The increase in other operation expenses at the electric segment was primarily due to higher outside-services costs and an increase in bad debt expense. The increase at the contracted services segment was due primarily to the new operations at Joint Base Cape Cod and Naval Air Station Patuxent River.
Current report
Administrative and general expenses increased at the electric segment due primarily to higher outside-services costs incurred related to BVES’s wildfire mitigation plans and various other regulatory filings. Higher expenses of $0.3 million related to the wildfire mitigation plans are reflected and recovered in the new customer rates implemented in 2025. As previously mentioned, costs to support BVES’s wildfire mitigation plan were not included in customer rates and not expensed during the first quarter of 2024 because they were being tracked in memorandum accounts prior to receiving the approved general rate case decision in January 2025.
Current report
Administrative and general expenses increased at the contracted services segment mainly due to higher labor costs and employee-related benefits from the new operations at Joint Base Cape Cod and Naval Air Station Patuxent River, partially offset by lower overall costs of legal and other outside services.
Current report
Overall depreciation and amortization expense is consistent at the electric segment due to additions to utility plant and other fixed assets that was largely offset by an overall lower composite depreciation rate supported by the latest depreciation study adopted in the final decision in the electric general rate case. The lower adopted depreciation expense levels from the updated study is also reflected in the new revenue requirements, resulting in no significant impact to earnings.
Current report
At the electric segment, higher vegetation management costs contributed to the majority of the increase compared to the same period in 2024. Higher expenses of $0.7 million related to vegetation management costs are reflected and recovered in the new customer rates implemented in 2025. As discussed, vegetation management costs were not previously included in customer rates and not expensed during the first quarter of 2024 because they were being tracked in memorandum accounts prior to receiving the approved general rate case decision in January 2025.
Current report
not meaningful
Current report
GSWC expects to issue long-term debt and/or equity during the second quarter of 2025 to facilitate the pay-off of its credit facility. On January 22, 2024, GSWC had filed a new financing application with the CPUC that requests authorization for the issuance and sale of additional long-term debt and equity securities of up to $750.0 million. A final decision was adopted at the March 13, 2025 voting meeting approving GSWC’s requests in its application. Therefore, GSWC has $750.0 million available that provides for long-term financing and which is expected to be used over the next 5 to 6 years to pay down outstanding borrowings under its credit facility and support its water operations.
Current report
On February 12, 2025, BVES completed the issuance of $50.0 million in unsecured private-placement notes with a coupon rate of 6.12% maturing on February 12, 2030. BVES used the proceeds from the notes to pay down all amounts under its revolving credit facility outstanding at the time of issuing the notes.
Current report
Contracted Services
Current report
Water Segment:
Current report
Rates that GSWC is authorized to charge are determined by the CPUC in general rate cases. In January 2025, the CPUC issued a final decision in GSWC’s latest general rate case proceeding that will set new rates for the years 2025 - 2027. Accordingly, new water rates for 2025 have been implemented and reflected in GSWC results for the three months ended March 31, 2025.
Current report
Cost of Capital Proceeding:
Current report
San Juan Oaks Acquisition:
Current report
In August 2023, GSWC entered into an agreement, which was subject to CPUC approval, to purchase from a developer the water and wastewater system assets located in California’s Central Coast region. This is a new planned community, which will serve up to approximately 1,300 customers at full build out, which under the current construction schedule is 2034 barring any future delays. On December 5, 2024, the CPUC approved a final decision granting GSWC’s Certificates of Public Convenience and Necessity that will establish rates for water and sewer services, including GSWC’s recovery of the purchase price through future customer rates. After receiving CPUC approval and completing other closing procedures on May 1, 2025, GSWC will begin acquiring the water and wastewater system assets in tranches as the community is built over time pursuant to the agreement.
Current report
Sutter Pointe General Rate Case:
Current report
On March 7, 2025, GSWC and Cal Advocates filed a joint motion with the CPUC to adopt a settlement agreement to authorize initial rates for water service in GSWC’s new Sutter Pointe ratemaking area.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (117)
Previous report
Included in the following analysis is a discussion of Registrant’s operations in terms of earnings per share by business segment and AWR (parent), which equals each business segment’s earnings divided by AWR’s weighted average number of diluted Common Shares. The impact of retroactive rates related to the full year of 2022 recorded during the nine months ended September 30, 2023 resulting from the final decision in the water general rate case approved in June 2023, and the impact from the reversal of revenues subject to refund due to a change in estimates recorded during the nine months ended September 30, 2023 following the receipt of a final cost of capital decision in June 2023 have been excluded in this analysis when communicating AWR’s consolidated and water segment results for the nine months ended September 30, 2024 and 2023 to help facilitate comparisons of Registrant’s performance from period to period.
Previous report
On August 14, 2023, GSWC filed a general rate case application for all its water regions and the general office. This general rate case will determine new water rates for the years 2025 – 2027. On July 12, 2024, GSWC and the Public Advocates Office (“Cal Advocates”) of the CPUC filed a joint motion to adopt a settlement agreement between GSWC and Cal Advocates in connection with the water utility general rate case. The CPUC is scheduled to issue a proposed decision in the water general rate case by the end of 2024, with new rates to become effective January 1, 2025.
Previous report
Excluding revenues for all of the advice letter capital projects discussed above, under the terms of the settlement agreement (i) GSWC’s adopted operating revenues less water supply costs for 2025 are projected to increase by approximately $23 million as compared to the 2024 adopted operating revenues less water supply costs, and (ii) there are potential additional revenue increases of approximately $20 million for each of the years 2026 and 2027 based on inflation factors used at the time of the application filing in August 2023. The increases in 2026 and 2027 are subject to the results of an earnings test and changes to the forecasted inflationary index values. Actual increases for 2026 and 2027 will be determined when the CPUC approves the filings to implement the new rate increases, using inflationary index values applicable at that time.
Previous report
The two remaining unresolved 2025 revenue requirement issues relate to the sales forecast and supply mix. In addition, four items related to GSWC’s request for certain regulatory mechanisms will be litigated and they include (i) a full sales and revenue decoupling mechanism, and a full cost balancing account for water supply, (ii) a sales reconciliation mechanism, (iii) a supply mix adjustment mechanism, and (iv) a request to modify the existing per- and polyfluoroalkyl substances (“PFAS”) memorandum account to track carrying costs on capital investments needed to comply with the new PFAS maximum contaminant levels (monitoring and reporting required effective 2027) established by the Environmental Protection Agency. With regards to all of these unresolved issues, GSWC and Cal Advocates filed briefs with the CPUC in July 2024. An oral argument has been scheduled with the administrative law judge in December to discuss litigated items. When the administrative law judge in the proceeding issues a proposed decision, it will address the unresolved issues along with the settlement agreement filed by GSWC and Cal Advocates.
Previous report
As noted above, GSWC is litigating its request for the continued use of a full sales and revenue decoupling mechanism, and a full cost balancing account for water supply. In August 2020, the CPUC had issued a decision that mandated the discontinuation of the existing full revenue decoupling mechanism known as the Water Revenue Adjustment Mechanism (“WRAM”) used by investor owned water utilities since 2008 that, in conjunction with tiered rates, incentivizes water conservation, and also ordered the discontinued use of the Modified Cost Balancing Account (“MCBA”). Under the CPUC’s order, the WRAM and MCBA would be discontinued after 2024. In response to the CPUC’s order, GSWC, three other investor-owned water utilities and the California Water Association each separately filed a petition in 2021 with the California Supreme Court (the “Court”) to review the CPUC’s decision-making processes that resulted in discontinuing the use of the WRAM and MCBA.
Previous report
In September 2022, the governor of California signed Senate Bill (“SB”) 1469, which allowed Class A water utilities, including GSWC, to continue requesting the use of a revenue decoupling mechanism in their next general rate case. On July 8, 2024, the Court issued a ruling that set aside the previously issued order by the CPUC and vacated the portions of the CPUC’s August 2020 decision related to the discontinued use of the WRAM and MCBA used by water utilities and its accompanying findings and conclusions. However, GSWC’s request to continue using the WRAM and MCBA is still subject to CPUC approval in the pending general rate case proceeding. If the water general rate case is delayed beyond December 31, 2024, GSWC will continue to bill its customers based on the existing adopted 2024 rates until the new 2025 rates are approved. However, GSWC may not be able to recognize under-collections of revenue in 2025 caused by fluctuations in consumption until the CPUC issues a final decision on GSWC’s request for the continuation of the WRAM and MCBA. In lieu of the existing full revenue decoupling mechanism such as the WRAM, the CPUC may authorize a modified rate adjustment mechanism that would allow for partial recognition of any potential under-collections. There can be no assurance as to the timing of the final decision or whether the CPUC will authorize a WRAM, MCBA or alternative modified rate adjustment mechanism.
Previous report
Water General Rate Case for 2022–2024 and Changes in Rates for 2023 and 2024
Previous report
In June 2023, the CPUC adopted a final decision in GSWC’s general rate case application for all its water regions and its general office that determined new water rates for the years 2022–2024 retroactive to January 1, 2022. The impact of retroactive rates for the full year of 2022 as well as the 2023 estimated second-year rate increases have been reflected in the results of operations for the nine months ended September 30, 2023.
Previous report
The third-year rate increases for 2024, which were effective January 1, 2024, have been reflected in the nine months ended September 30, 2024 results. There was an increase in recorded water operating revenues of $17.3 million largely as a result of the third-year rate increases for 2024 that reflects, among other things, a higher revenue requirement for increases in recorded supply costs of $2.5 million, which combined is an increase of $0.29 per share, and excludes the impact of (i) retroactive rates for the full year of 2022 resulting from the final general rate case decision, and (ii) reversing the revenues subject to refund liability previously recorded in 2022 resulting from the final cost of capital decision, with both decisions received and recorded in 2023. Actual water supply costs are tracked against adopted costs in the revenue requirement, and passed through to customers on a dollar-for-dollar basis by way of the CPUC-approved water supply cost balancing accounts. The increase in water supply costs results in a corresponding increase in water operating revenues and has no net impact on the water segment’s profitability. Due to the delay in finalizing the prior water general rate case, water revenues billed to customers for the year ended December 31, 2022 and for the period from January 1, 2023 to July 30, 2023 were based on 2021 adopted rates and new 2023 rate increases went into effect on July 31, 2023. In October 2023, surcharges were implemented to recover all retroactive rate differences accumulated in memorandum accounts for the full year of 2022 and for 2023 through July 30, 2023 over 36 months. As of September 30, 2024, there is an aggregate remaining cumulative balance of $41.7 million in CPUC-approved general rate case memorandum accounts that have been recognized as regulatory assets.
Previous report
Cost of Capital (“COC”) Proceedings:
Previous report
2021 COC Application
Previous report
On June 29, 2023, the CPUC adopted a final decision in the cost of capital proceeding that, among other things, allowed for the continuation of the Water Cost of Capital Mechanism (“WCCM”) through December 31, 2024. The WCCM adjusts the return on equity and rate of return on rate base between the three-year cost of capital proceedings only if there is a positive or negative change of more than 100 basis points in the average of the Moody’s Aa utility bond rate as measured over the period October 1 through September 30. If there is a positive or negative change of more than 100 basis points, the return on equity is adjusted by one half of the difference. Based on the final decision, all adjustments to rates were effective July 31, 2023. Accordingly, GSWC billed its water customers and recognized revenues for the period from January 1 through July 30, 2023 based on the previously authorized return on equity of 8.9%. After receiving the final cost of capital decision, GSWC filed an advice letter to establish the WCCM and related adjustment for 2023, which increased GSWC’s 8.85% adopted return on equity in the decision to 9.36% effective July 31, 2023. For the period from October 1, 2022 through September 30, 2023, the Moody’s Aa utility bond rate increased by 139.7 basis points from the benchmark, which again triggered a WCCM adjustment and increased GSWC’s 9.36% adopted return on equity to 10.06% effective January 1, 2024.
Previous report
2024 COC Application
Previous report
Excluding the additional revenues from the advice letter capital projects discussed above, under the terms of the settlement agreement (i) BVES’s adopted operating revenues less electric supply costs for 2023 are projected to increase by approximately $5.1 million as compared to the 2022 adopted and recorded operating revenues less electric supply costs to cover, among other things, the higher incremental operating costs as settled in the revenue requirement related to BVES’s wildfire mitigation plans that were previously not included in customer rates and not expensed because they were being tracked in memorandum accounts, and (ii) it provides increases in the adopted operating revenues of $2.2 million for each of the years 2024 and 2025, and by $3.3 million in 2026. The rate increases for 2024 - 2026 are not subject to an earnings test. The previously mentioned advice letter projects of $23.1 million plus AFUDC are expected to generate additional annual operating revenues of approximately $3 million when the respective projects are completed, placed in service, and filed for recovery in customer rates.
Previous report
Due to the delay in finalizing the electric general rate case, electric revenues billed to customers for 2023 and through September 30, 2024 have been based on 2022 adopted rates, and will remain in effect until finalization of the pending general rate case proceeding. BVES has been authorized by the CPUC to establish a general rate case memorandum account that will make the new rates retroactive to January 1, 2023 and, therefore, when a final decision is issued by the CPUC, cumulative adjustments will be recorded at that time to reflect the full impact of retroactive rates. The CPUC has extended the statutory deadline of this proceeding to January 31, 2025. Therefore, a decision in the electric general rate case is scheduled to be issued by the first quarter of 2025. No assurance can be given that a decision will be received at such time.
Previous report
In August and September of 2023, ASUS was awarded new contracts with the U.S. government to serve two military bases for which operations began in April 2024. After completion of the transition periods, ASUS began operating the water and wastewater utility systems at Naval Air Station Patuxent River in Maryland under a 50-year privatization contract with the U.S. government and at Joint Base Cape Cod in Massachusetts under a 15-year contract with the U.S. government. The initial value of its contract at Naval Air Station Patuxent River was estimated at approximately $349 million over a 50-year period subject to an inventory adjustment and annual economic price adjustments. In July 2024, the contract value was increased to $378 million after an inventory adjustment. Under its contract at Joint Base Cape Cod, ASUS performs work through the annual issuance of task orders by the U.S. government over a 15-year period up to a maximum value to ASUS of$75.0 million subject to adjustments as task orders are issued. In April 2024, the U.S. government awarded a task order to ASUS valued at$4.1 million for the first year of operation, maintenance, and renewal and replacement services of the water and wastewater systems at Joint Base Cape Cod.
Previous report
ASUS continues to enter into U.S. government-awarded contract modifications and agreements with third-party prime contractors for new construction projects at the military bases it currently serves. During the nine months ended September 30, 2024, ASUS has been awarded approximately $54.0 million in new construction projects, which are expected to be completed during 2024 through 2027. This is a significant increase of new construction projects awarded when compared to $25.2 million awarded for the full year of 2023. Earnings and cash flows from modifications to the original 50-year contracts with the U.S. government and agreements with third-party prime contractors for additional construction projects may or may not continue in future periods.
Previous report
Summary of Third Quarter Results by Segment
Previous report
•An increase in water operating revenues of approximately $7.8 million was largely a result of the third-year rate increases approved by the CPUC that went into effect on January 1, 2024, and an overall increase in the authorized rate of return on rate base in 2024 compared to the same period in 2023 due to triggering the WCCM, which increased the return on equity from 9.36% to 10.06% effective January 1, 2024.
Previous report
•An increase in water supply costs of $1.4 million, which consist of purchased water, purchased power for pumping, groundwater production assessments and changes in the water supply cost balancing accounts. The increase in water supply costs is primarily related to an increase in customer water usage, wholesale water prices and water production costs. Actual water supply costs are tracked against adopted costs in the revenue requirement, and passed through to customers on a dollar-for-dollar basis by way of the CPUC-approved water supply cost balancing accounts. The increase in water supply costs results in a corresponding increase in water operating revenues and has no material impact on the water segment’s profitability.
Previous report
•An overall increase in operating expenses of $2.8 million (excluding supply costs) due primarily to increases in (i) overall labor costs and other employee-related benefits, (ii) operation-related costs resulting from higher conservation spending, (iii) administrative and general expenses resulting largely from higher outside-services costs including related to the pending general rate case application and other regulatory filings, and higher insurance-related costs, and (iv) depreciation and amortization expenses as well as property taxes, both of which are impacted by the increasing capital expenditures and are reflected and recovered in customer rates. These increases were partially offset by a decrease in maintenance expenses due to timing.
Previous report
•An increase in interest expense (net of interest income) of $1.6 million resulting primarily from an overall increase in interest rates, as well as an increase in total borrowing levels to support, among other things, the capital expenditure program at GSWC, and a decrease in interest income earned on regulatory assets bearing interest at the current 90-day commercial paper rate due to a decrease in the level of regulatory assets recorded.
Previous report
•Changes in certain flowed-through income taxes and permanent items included in GSWC’s income tax expense for the three months ended September 30, 2024 as compared to the same period in 2023 that favorably impacted the water segment’s earnings. As a regulated utility, GSWC treats certain temporary differences as being flowed-through in computing its income tax expense consistent with the income tax method used in its CPUC-jurisdiction rate making. Changes in the magnitude of flowed-through items either increase or decrease tax expense, thereby affecting diluted earnings per share.
Previous report
Diluted earnings from the electric utility segment decreased $0.02 per share for the third quarter of 2024 as compared to the same period in 2023 primarily due to an increase in interest expense (net of interest income) resulting from an overall increase in interest rates, as well as an increase in total borrowing levels to support, among other things, the capital expenditure program at BVES, and a decrease in interest income earned on regulatory assets.
Previous report
On August 30, 2022, BVES filed a general rate case application with the CPUC to determine new electric rates for the years 2023 through 2026, which is still pending finalization. On November 1, 2024, BVES, Cal Advocates, and the other intervenor in the proceeding filed a joint motion to adopt a settlement agreement between all parties resolving all issues in connection with the pending general rate case. When a decision is issued in the electric general rate case, new rates are expected to be retroactive to January 1, 2023 and cumulative adjustments will be recorded at that time.
Previous report
Diluted earnings from the contracted services segment were consistent for the quarter when compared to 2023 with a decrease of $0.01 per share shown in the table above primarily due to the effects of rounding. The contracted services segment is expected to contribute $0.54 to $0.57 per share for the full 2024 year.
Previous report
Summary of Year-to-Date Results by Segment
Previous report
All adjustments to 2023’s recorded diluted earnings per share relate to the water segment. The water segment’s adjusted earnings for 2023 exclude both the impact of the final decision in the water general rate case that included retroactive rates related to the full year of 2022, and the impact of reversing previously recorded estimated 2022 revenues subject to refund as a result of the final cost of capital decision issued in June 2023 that made all adjustments to rates prospective. Both adjustments are shown separately in the table above.
Previous report
For the nine months ended September 30, 2024, AWR’s recorded consolidated diluted earnings were $2.42 per share, as compared to $2.82 per share recorded for the same period in 2023, a decrease of $0.40 per share. Included in the results for the nine months ended September 30, 2023 were (i) the impact from the final decision in the water general rate case recorded in 2023 that included retroactive new rates related to the full year of 2022 of $0.38 per share, and (ii) the impact of the final cost of capital decision that resulted in the reversal of estimated water revenues subject to refund previously recorded in 2022 of $6.4 million, or $0.13 per share. Excluding these items from the nine months ended September 30, 2023, adjusted consolidated diluted earnings were $2.31 per share, compared to adjusted and recorded consolidated earnings of $2.42 per share during the same period in 2024, an adjusted increase of $0.11 per share, largely generated from the water utility segment.
Previous report
For the nine months ended September 30, 2024, recorded diluted earnings from the water utility segment were $1.99 per share, as compared to $2.36 per share for the same period in 2023, a decrease of $0.37 per share, which includes (i) the impact from the final decision in the water general rate case recorded in 2023 that included retroactive new rates related to the full 2022 year of $0.38 per share, and (ii) the impact of the final cost of capital decision that resulted in the reversal during the nine months ended September 30, 2023 of estimated revenues subject to refund recorded in 2022 of $6.4 million, or $0.13 per share.
Previous report
Excluding the impact of both items discussed above from the nine months ended September 30, 2023, adjusted diluted water earnings were $1.85 per share, as compared to adjusted and recorded diluted earnings of $1.99 per share for the nine months ended September 30, 2024, an adjusted increase at the water segment of $0.14 per share due, in part, to a net favorable variance of $0.06 per share from gains totaling $5.1 million, or $0.10 per share, generated on investments held to fund one of the Company’s retirement plans during the nine months ended September 30, 2024, as compared to gains on investments of $2.1 million, or $0.04 per share, recorded during the same period in 2023 due to financial market conditions. The discussion below presents the other major variances in earnings for the two periods and which resulted in a net overall increase in earnings at the water segment of $0.08 per share for the nine months ended September 30, 2024.
Previous report
•Excluding the revenue impact related to 2022 resulting from the decisions in both the general rate case and cost of capital proceedings recorded during the nine months ended September 30, 2023 as previously discussed, there was an increase in water operating revenues of approximately $17.3 million as a result of the third-year rate increases that went into effect on January 1, 2024.
Previous report
•An increase in water supply costs of $2.5 million, which consists of purchased water, purchased power for pumping, groundwater production assessments and changes in the water supply cost balancing accounts. The increase in water supply costs is primarily related to an increase in customer water usage, wholesale water prices and water production costs. Actual water supply costs are tracked against adopted costs in the revenue requirement, and passed through to customers on a dollar-for-dollar basis by way of the CPUC-approved water supply cost balancing accounts. The increase in water supply costs results in a corresponding increase in water operating revenues and has no material impact on the water segment’s profitability.
Previous report
•An overall increase in interest expenses (net of interest income) of $4.8 million resulting primarily from an increase in interest rates, as well as an overall increase in total borrowing levels to support, among other things, the capital expenditure programs at GSWC, partially offset by higher interest income earned on regulatory assets bearing interest at the current 90-day commercial paper rate, which increased compared to 2023’s rates, as well as an increase in the level of regulatory assets recorded.
Previous report
•Excluding the impact from the investments held to fund one of the Company’s retirement plans as previously discussed, an overall decrease in other expenses (net of other income) of $0.8 million due primarily to a decrease in the non-service cost components related to GSWC’s benefit plans resulting from changes in actuarial assumptions including expected returns on plan assets. However, as a result of GSWC’s two-way pension balancing accounts authorized by the CPUC, changes in total net periodic benefits costs related to the pension plan have no material impact to earnings.
Previous report
•Changes in certain flowed-through income taxes and permanent items included in GSWC’s income tax expense for the nine months ended September 30, 2024 as compared to the same period in 2023 that favorably impacted the water segment’s earnings. As a regulated utility, GSWC treats certain temporary differences as being flowed-through in computing its income tax expense consistent with the income tax method used in its CPUC-jurisdiction rate making. Changes in the magnitude of flowed-through items either increase or decrease tax expense, thereby affecting diluted earnings per share.
Previous report
Diluted earnings from the electric utility segment decreased $0.07 per share for the nine months ended September 30, 2024 as compared to the same period in 2023, largely resulting from not having new rates while awaiting the processing of the pending electric general rate case that will set new rates for 2023 – 2026, while also experiencing continued increases in overall operating expenses and interest costs. On November 1, 2024, BVES, Cal Advocates, and the other intervenor in the proceeding filed a joint motion to adopt a settlement agreement between all parties resolving all issues in connection with the pending general rate case. If the CPUC approves the settlement agreement, when a decision is issued in the electric general rate case, new rates are expected to be retroactive to January 1, 2023 and cumulative adjustments will be recorded at that time.
Previous report
AWR (Parent):
Previous report
For the three months ended September 30, 2024, revenues from water operations increased by $7.8 million to $124.0 million as compared to the same period in 2023. The increase in water revenues during the third quarter of 2024 is primarily a result of third-year rate increases that went into effect on January 1, 2024, and an increase in the authorized rate of return on rate base in 2024.
Previous report
Billed water consumption for the third quarter of 2024 was higher by approximately 8.6% as compared to the same period in 2023 due primarily to the summer heat wave in California and higher overall temperatures in thethird quarter of 2024 as compared to thethird quarter of 2023. Currently, changes in consumption generally do not have a significant impact on recorded revenues due to the CPUC-approved WRAM that is in place in all but one small rate making area. GSWC records the difference between what it bills its water customers and what is authorized by the CPUC in the WRAM accounts as regulatory assets or liabilities.
Showing the first 40 of 117 passages. Open the source sections for the rest.
Reworded paragraphs (55)
Previous wording
All of the measures discussed above are derived from consolidated financial information of Registrant, but are not presented in our financial statements that are prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). These items constitute “non-GAAP financial measures” under Securities and Exchange Commission rules, which supplement our GAAP disclosures but should not be considered as an alternative to the respective GAAP measures. Furthermore, the non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other registrants.
Current wording
Included in the following analysis is a discussion of Registrant’s operations in terms of earnings per share by business segment and AWR (parent), which equals each business segment’s earnings divided by AWR’s weighted average number of diluted Common Shares. All of the measures discussed are derived from consolidated financial information of Registrant, but are not presented in our financial statements that are prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). These items constitute “non-GAAP financial measures” under Securities and Exchange Commission rules, which supplement our GAAP disclosures but should not be considered as an alternative to the respective GAAP measures. Furthermore, the non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other registrants.
Previous wording
AWR uses earnings per share by business segment as an important measure in evaluating its operating results and believes it provides investors with clarity surrounding the performance of its segments. AWR reviews this measurement regularly and compares it to historical periods and to its operating budget. A reconciliation to AWR’s consolidated diluted earnings per share prepared in accordance with GAAP is included in the discussion under the section titled“Summary of Third Quarter Results by Segment”and“Summary of Year-to-Date Results by Segment.”
Current wording
AWR uses earnings per share by business segment as an important measure in evaluating its operating results and believes it provides investors with clarity surrounding the performance of its segments. AWR reviews this measurement regularly and compares it to historical periods and to its operating budget. A reconciliation to AWR’s consolidated diluted earnings per share prepared in accordance with GAAP is included in the discussion under the section titled“Summary of First Quarter Results by Segment.”
Previous wording
GSWC’s revenues, operating income and cash flows are earned primarily through delivering potable water to homes and businesses in California. BVES’s revenues, operating income and cash flows are primarily earned through delivering electricity in the Big Bear area of San Bernardino County, California. Rates charged to GSWC and BVES customers are authorized by the CPUC. These rates are intended to allow recovery of operating costs and a reasonable rate of return on invested capital. GSWC and BVES plan to continue seeking recovery of its operating and supply costs, and receive reasonable returns on invested capital. Capital expenditures in future years at GSWC and BVES are expected to remain at substantially higher levels than depreciation expense. When necessary, GSWC and BVES may obtain funds from external sources in the capital markets and through bank borrowings.
Current wording
GSWC’s revenues, operating income and cash flows are earned primarily through delivering potable water to homes and businesses in California. BVES’s revenues, operating income and cash flows are primarily earned through delivering electricity in the Big Bear area of San Bernardino County, California. Rates charged to GSWC and BVES customers are authorized by the CPUC. These rates are intended to allow recovery of operating costs and a reasonable rate of return on invested capital. GSWC and BVES plan to continue seeking recovery of their operating and supply costs, and receive reasonable returns on invested capital. Capital expenditures in future years at GSWC and BVES are expected to remain at substantially higher levels than depreciation expense. When necessary, GSWC and BVES may obtain funds from external sources in the capital markets and through bank borrowings.
Previous wording
The proposed settlement agreement, if approved by the CPUC, resolves most of the issues related to the calculation of the 2025 annual revenue requirement in the general rate case application leaving only two unresolved issues. Among other things, the settlement authorizes GSWC to invest approximately $573.1 million in capital infrastructure over the three-year capital cycle. The $573.1 million of infrastructure investment, as proposed in the settlement agreement, includes $17.7 million of advice letter capital investments to be filed for revenue recovery during the second and third year attrition increases when those projects are completed. In addition, the settlement agreement approves $58.2 million of advice letter capital investments that began construction in 2023 that we expect to file for revenue recovery during the second and third year attrition increases when those projects are completed. For all of the advice letter projects, GSWC will be allowed to accrue interest during construction at the adopted cost of debt and recover the full rate of return, including all applicable components of the revenue requirement after the assets are placed in service up until the assets are placed in customer rates.
Current wording
On January 30, 2025, the CPUC issued a final decision in GSWC’s general rate case application for all its water regions and the general office, which determines new water rates for the years 2025 - 2027. Among other things, the approved settlement authorizes GSWC to invest approximately $573.1 million in capital infrastructure over the three-year capital cycle. The $573.1 million of infrastructure investment includes $17.7 million of advice letter capital investments to be filed for revenue recovery during the second and third year attrition increases when those projects are completed. In addition, the approved settlement agreement includes $58.2 million of advice letter capital investments that began construction in 2023 that we expect to file for revenue recovery during the second and third year attrition increases when those projects are completed. For all of the advice letter projects, GSWC will be allowed to accrue interest during construction at the adopted cost of debt and recover the full rate of return, including all applicable components of the revenue requirement after the assets are placed in service up until the assets are placed in customer rates. Excluding revenues for all of the advice letter capital projects discussed above, under the terms of the settlement agreement GSWC’s adopted operating revenues less water supply costs for 2025 are projected to increase by approximately $23 million as compared to the 2024 adopted operating revenues less water supply costs.
Previous wording
Investor-owned water utilities serving California are required to file their cost of capital applications on a triennial basis. GSWC’s next cost of capital application was scheduled to be filed on May 1, 2024 effective for the years 2025 - 2027. However, GSWC, along with three other Class A investor-owned water utilities in California, filed a joint request with the CPUC to defer the filing deadline of the next cost of capital applications by one year, which was approved on February 2, 2024. The joint request asked that the utilities keep the cost of capital currently authorized for 2024 in effect through 2025, and file new cost of capital applications by May 1, 2025 to set the cost of debt, return on equity and capital structure starting January 1, 2026. GSWC’s current authorized rate of return on rate base is 7.93% effective January 1, 2024, which will continue in effect through December 31, 2025. Additionally, GSWC’s WCCM will remain active through the one year deferral period.
Current wording
Investor-owned water utilities serving California are required to file their cost of capital applications on a triennial basis. After receiving an extension in February 2024, GSWC’s next cost of capital application was scheduled to be filed on May 1, 2025 effective for the years 2026 - 2028. On January 14, 2025, the CPUC approved a request to defer the cost of capital application by another year. In December 2024, GSWC, along with three other investor-owned California water utilities, requested a further extension of the date by which each of them must file their cost of capital applications. The CPUC’s approval postponed this filing date by one year until May 1, 2026, with a corresponding effective date of January 1, 2027. The CPUC also approved the joint parties’ request to leave the current WCCM in place through the one-year deferral period. GSWC’s current authorized rate of return on rate base is 7.93%, based on its weighted cost of capital, which will continue in effect through December 31, 2026. The 7.93% return on rate base includes a return on equity of 10.06%, an embedded cost of debt of 5.1%, and a capital structure with 57% equity and 43% debt.
Previous wording
On August 30, 2022, BVES filed a general rate case application with the CPUC to determine new electric rates for the years 2023 through 2026. On November 1, 2024, BVES, Cal Advocates, and the other intervenor in the proceeding filed a joint motion to adopt a settlement agreement between the parties resolving all issues in connection with the pending general rate case. Among other things, the settlement agreement, if approved by the CPUC, (i) settles and adopts the revenue requirements for each of the four years 2023 through 2026, (ii) authorizes BVES to invest approximately $52.5 million in capital infrastructure included in base rates over the four-year rate cycle and an additional $23.1 million (plus an allowance for funds used during construction, or “AFUDC”) to be filed for revenue recovery through advice letters when the projects are completed, all of which are dedicated to improving system safety and reliability; (iii) adopts a cost of capital that increases BVES’s adopted return on equity from 9.6% to 10.0%, lowers the cost of debt from 6.6% to 5.51%, and maintains the capital structure of 57% equity and 43% debt, and (iv) approves for recovery the requested capital expenditures and other incremental operating costs already incurred in connection with BVES’s wildfire mitigation plans that are currently not included in customer rates.
Current wording
On January 16, 2025, the CPUC adopted a final decision in BVES’s general rate case proceeding that set the new electric rates retroactive to January 1, 2023 and approves the settlement agreement reached between BVES, Cal Advocates and another intervenor in its entirety. Among other things, the settlement agreement, (i) settles and adopts the revenue requirements for each of the four years 2023 through 2026, (ii) authorizes BVES to invest approximately $52.5 million in capital infrastructure included in base rates over the four-year rate cycle and at least an additional $23.1 million (plus an allowance for funds used during construction, or “AFUDC”) to be filed for revenue recovery through advice letters when the projects are completed; (iii) adopts a cost of capital that increases BVES’s adopted return on equity from 9.6% to 10.0%, lowers the cost of debt from 6.6% to 5.51%, and maintains the capital structure of 57% equity and 43% debt, and (iv) approves for recovery the requested capital expenditures and other incremental operating costs already incurred in connection with BVES’s wildfire mitigation plans that were previously not included in customer rates.
Previous wording
The table below sets forth the third quarter diluted earnings per share by business segment and for the parent company:
Current wording
The table below sets forth the first quarter diluted earnings per share by business segment and for the parent company:
Previous wording
For the three months ended September 30, 2024, AWR’s recorded consolidated diluted earnings were $0.95 per share, as compared to $0.85 per share for the same period in 2023, an increase of $0.10 per share, generated from higher earnings at the water utility segment, which contributed an increase of $0.12 per share that included a net favorable variance of $0.06 per share from gains generated on investments held to fund one of the company’s retirement plans during the third quarter of 2024 as compared to losses recorded during the same period in 2023 due to financial market conditions.
Current wording
For the three months ended March 31, 2025, AWR’s recorded consolidated diluted earnings were $0.70 per share, as compared to $0.62 per share for the same period in 2024, an increase of $0.08 per share, primarily generated from higher earnings at the water and electric utility segments. Included in AWR’s consolidated results during the first quarter of 2025 were losses of $0.6 million, or $0.01 per share, generated on investments held to fund one of the Company’s retirement plans as compared to gains of $2.1 million, or $0.04 per share, recorded during the same period in 2024, a net unfavorable variance of $0.05 per share due to financial market conditions. In addition, AWR’s consolidated diluted earnings for the first quarter of 2025 were negatively impacted by approximately $0.02 per share due to the dilutive effects from the issuance of equity under AWR’s at-the-market (“ATM”) offering program.
Previous wording
The following is a computation and reconciliation of diluted earnings per share from the measure of operating income by business segment as disclosed in Note 10 to the Unaudited Consolidated Financial Statements to AWR’s consolidated fully diluted earnings per common share (as recorded), for the three months ended September 30, 2024 and 2023:
Current wording
The following is a computation and reconciliation of diluted earnings per share from the measure of net income (loss) by business segment and for the parent company as disclosed in Note 10 to the Unaudited Consolidated Financial Statements to AWR’s consolidated fully diluted earnings per common share (as recorded), for the three months ended March 31, 2025 and 2024:
Previous wording
For the three months ended September 30, 2024, recorded diluted earnings from the water utility segment were $0.84 per share, as compared to $0.72 per share for the same period in 2023, an increase of $0.12 per share due, in part, to a net favorable variance of $0.06 per share from gains totaling $2.1 million, or $0.04 per share, generated on investments held to fund one of the company’s retirement plans during the three months ended September 30, 2024, as compared to losses on investments of $1.0 million, or $0.02 per share, recorded during the same period in 2023 due to financial market conditions. The discussion below presents the other major variances in earnings for the two periods and which resulted in a net overall increase in earnings at the water segment of $0.06 per share for the third quarter of 2024.
Current wording
For the three months ended March 31, 2025, recorded diluted earnings from the water utility segment were $0.52 per share, as compared to $0.48 per share for the same period in 2024, an increase of $0.04 per share. The discussion below presents the major variances in earnings for the two periods, which resulted in a net overall increase in earnings at the water segment of $0.04 per share for the first quarter of 2025.
Previous wording
•An overall increase in operating expenses of $6.5 million (excluding supply costs) mainly due to increases in (i) overall labor costs and other employee-related benefits, (ii) administrative and general expenses resulting largely from higher outside-services costs including related to the pending general rate case application and other regulatory filings, and an increase in insurance-related costs, and (iii) depreciation and amortization expenses as well as property taxes, both of which are impacted by the increasing capital expenditures and are reflected and recovered in customer rates. These increases were partially offset by decreases in the timing of other operation-related and maintenance expenses.
Current wording
•An overall increase in operating expenses of $2.1 million (excluding supply costs) due primarily to increases in (i) overall labor costs and other employee-related benefits, (ii) administrative and general expenses resulting largely from higher regulatory costs related to various regulatory filings, and an increase in insurance-related costs, (iii) maintenance expense, (iv) depreciation and amortization expenses, which is impacted by the increasing capital expenditures and are reflected and recovered in customer rates, and (v) property and other non-income taxes.
Previous wording
•A decrease in earnings of approximately $0.02 per share due to the dilutive effects from the issuance of equity under AWR’s ATM offering program. Under the program, AWR may offer and sell its Common Shares, with an aggregate gross offering price of up to $200 million, from time to time at its sole discretion. Through September 30, 2024, AWR has sold 791,097 Common Shares through this ATM offering program.
Current wording
•A decrease in earnings of approximately $0.02 per share due to the dilutive effects from the issuance of equity under AWR’s ATM offering program beginning in February 2024. Under the ATM offering program, AWR may offer and sell its Common Shares, with an aggregate gross offering price of up to $200 million, from time to time at its sole discretion. Through March 31, 2025, AWR has sold 1,479,767 Common Shares through this ATM offering program.
Previous wording
Diluted earnings from the contracted services segment increased $0.06 per share for the nine months ended September 30, 2024 as compared to the same period in 2023, largely due to an increase in management fee revenue resulting from the resolution of various economic price adjustments and the commencement of operations at the new bases, partially offset by higher overall operating expenses (excluding construction expenses) and interest costs as compared to the same period of 2023. The contracted services segment is expected to contribute $0.54 to $0.57 per share for the full 2024 year.
Current wording
Diluted earnings from the contracted services segment were consistent for the quarter when compared to the same period in 2024. The increase in management fee revenues resulting from the commencement of operations in April 2024 at the new bases (Naval Air Station Patuxent River and Joint Base Cape Cod) and the resolution of various economic price adjustments at the legacy bases, was offset by a decrease in construction activity and higher overall operating expenses (excluding construction expenses). During the first quarter of 2025, construction activities were negatively impacted by unfavorable weather conditions, which were less impactful to construction activities during the same period in 2024. The contracted services segment is expected to contribute $0.59 to $0.63 per share for the full 2025 year.
Previous wording
For the nine months ended September 30, 2024, the diluted loss from AWR (parent) increased by $0.01 per share compared to the same period in 2023 due primarily to an increase in interest expense resulting from higher short-term interest rates and higher borrowings made under AWR’s revolving credit facility.
Current wording
For the three months ended March 31, 2025, diluted losses from AWR (parent) decreased by $0.01 per share when compared to the same period in 2024 due largely to a decrease in interest expense resulting from lower average interest rates and lower borrowing levels under AWR’s credit facility.
Previous wording
The following discussion and analysis for the three and nine months ended September 30, 2024 and 2023 provides information on AWR’s consolidated operations and, where necessary, includes specific references to AWR’s individual segments and subsidiaries: GSWC, BVES, and ASUS and its subsidiaries.
Current wording
The following discussion and analysis for the three months ended March 31, 2025 and 2024 provide information on AWR’s consolidated operations and assets and, where necessary, includes specific references to AWR’s individual segments and subsidiaries: GSWC, BVES and ASUS and its subsidiaries.
Previous wording
Electric usage for the nine months ended September 30, 2024 was higher by 0.6% compared to the same period in 2023. Due to the CPUC-approved Base Revenue Requirement Adjustment Mechanism, which adjusts certain revenues to adopted levels authorized by the CPUC, changes in usage do not have a significant impact on earnings.
Current wording
Electric usage for thefirst quarter of 2025 was 0.7% higher than the same period in 2024. Due to the CPUC-approved Base Revenue Requirement Adjustment Mechanism, which adjusts certain revenues to adopted levels authorized by the CPUC, changes in usage do not have a significant impact on earnings.
Previous wording
Revenues from contracted services are composed of construction revenues (including renewal and replacements) and management fees for operating and maintaining water and/or wastewater systems at various military bases. For the three months ended September 30, 2024, revenues from contracted services increased by $2.2 million to $28.7 million as compared to $26.5 million for the same period in 2023. The increase was largely resulting from an increase in management fees from economic price adjustments and revenues at the new bases.
Current wording
Revenues from contracted services are composed of construction revenues (including renewal and replacements) and management fees for operating and maintaining water and/or wastewater systems at various military bases. For the three months ended March 31, 2025, revenues from contracted services decreased by $1.8 million to $31.0 million as compared to $32.8 million for the same period in 2024. There was a decrease in construction activities largely due to timing and weather delays, partially offset by an increase in management fees from economic price adjustments and the new operations at Joint Base Cape Cod and Naval Air Station Patuxent River.
Previous wording
Total supply costs at the regulated utilities comprise the largest portion of total consolidated operating expenses. Supply costs accounted for approximately 35.7% and 36.6% of total operating expenses for the three months ended September 30, 2024 and 2023, respectively.
Current wording
Total supply costs at the regulated utilities comprise the largest portion of total consolidated operating expenses. Supply costs accounted for approximately 28.8% and 26.1% of total operating expenses for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Two of the principal factors affecting water supply costs are the amount of water produced and the source of the water. Generally, the variable cost of producing water from wells is less than the cost of water purchased from wholesale suppliers. The overall actual percentages of purchased water for the three months ended September 30, 2024 and 2023 were approximately 43% and 44%, respectively.
Current wording
Two of the principal factors affecting water supply costs are the amount of water produced and the source of the water. Generally, the variable cost of producing water from wells is less than the cost of water purchased from wholesale suppliers. The overall actual percentages of purchased water for the three months ended March 31, 2025 and 2024 were 39.6% and 40.5%, respectively.
Previous wording
Under the current CPUC-approved MCBA, GSWC tracks adopted and actual expense levels for purchased water, power purchased for pumping and pump taxes and records the variances (which include the effects of changes in both rate and volume) between adopted and actual purchased water, purchased power and pump tax expenses to the MCBA. GSWC recovers from, or refunds to, customers the amount of such variances. GSWC tracks these variances individually for each water ratemaking area.
Current wording
Since its implementation in 2008, the previously CPUC-approved MCBA, GSWC was able to track adopted and actual expense levels for purchased water, power purchased for pumping and pump taxes. GSWC recorded the variances (which include the effects of changes in both rate and volume) between adopted and actual purchased water, purchased power and pump tax expenses as a regulatory asset or liability. GSWC recovered from, or refunded to, customers the amount of such variances. Without the MCBA mechanism in place beginning in 2025, there may be volatility to Registrant’s earnings as a result of changes in water supply source mix. The MCBA has been replaced with an incremental supply cost balancing account that will not include the impact from changes in water supply source mix compared to the adopted mix incorporated in the revenue requirement, but allows GSWC to track differences between the authorized per-unit prices of water production costs and actual per-unit prices of water production costs.
Previous wording
Purchased water costs for the third quarter of 2024 increased to $24.1 million as compared to $23.2 million for the same period in 2023 primarily due to an increase in wholesale water costs, partially offset by a reduction in purchased water due to wells coming back on-line. There was an overall increase in well production costs compared to the same period in 2023 due to an increase in customer water usage, which increases power purchased for pumping and groundwater production assessments. The increases to water production costs were also a result of increases in electricity provider rates and increases in pump tax rates.
Current wording
Purchased water costs for the first quarter of 2025 increased to $16.3 million as compared to $13.8 million for the same period in 2024 primarily due to an increase in wholesale water costs. There was also an overall increase in well production costs compared to the same period in 2024 due to an increase in customer water usage, which increases power purchased for pumping and groundwater production assessments, and higher overall per-unit water supply costs. The increases to water production costs were also a result of increases in electricity provider rates and increases in pump tax rates.
Previous wording
For the nine months ended September 30, 2024, the cost of power purchased for resale to BVES’s electric customers decreased to $8.3 million as compared to $9.8 million during the same period in 2023 primarily due to lower overall average prices per megawatt-hour. The change in the electric supply cost balancing account during the nine months ended September 30, 2024 compared to the same period in 2023 was due to decreases in energy prices.
Current wording
For the three months ended March 31, 2025, the cost of power purchased for resale to BVES’s electric customers increased by $1.7 million to $6.1 million as compared to $4.3 million during the same period in 2024 due to higher overall average prices per megawatt-hour that include all fixed costs. The change in the electric supply cost balancing account in 2025 when compared to 2024 is also due to increases in energy prices.
Previous wording
Administrative and general expenses increased at the water segment due primarily to an increase in outside-services costs largely related to the pending general rate case application and other regulatory filings, labor costs and insurance-related costs. The increase at the electric segment primarily was due to higher outside-services costs. The increase at the contracted services segment was mainly due to commencing operations at the new bases, an increase in labor costs, employee-related benefits and insurance-related costs.
Current wording
Administrative and general expenses increased at the water segment due primarily to an increase in outside-services costs largely related to the various regulatory filings, labor costs and employee-related benefits, and insurance costs.
Previous wording
The overall increase to depreciation and amortization expense is largely attributed to additions to utility plant and other fixed assets at both regulated utilities.
Current wording
Depreciation and amortization expense increased at the water and contracted services segments due largely to capital additions to utility plant and other fixed assets.
Previous wording
Overall maintenance expense decreased at the water segment due to lower planned and unplanned maintenance costs as compared to the same period in 2023 some due to timing differences.
Current wording
Overall maintenance expense increased at the water and contracted services segments due to higher planned and unplanned maintenance costs as compared to the same period in 2024 due to timing differences.
Previous wording
Property and other taxes increased at the electric segment due to higher property taxes resulting from capital additions and related higher assessed values.
Current wording
Property and other taxes increased at the water segment due largely to an increase in franchise fees from higher revenues and property taxes from capital additions. The increase at the electric segment was due to higher property taxes resulting from capital additions and related higher assessed values.
Previous wording
For the nine months ended September 30, 2024, construction expenses for contracted services were $43.6 million, a decrease of $2.9 million compared to the same period in 2023 primarily due to a decrease in construction activity resulting from timing differences of when such work was performed in 2024 as compared to the same period of 2023.
Current wording
For the three months ended March 31, 2025, construction expenses for contracted services were $12.9 million, a decrease of $2.8 million compared to the same period in 2024, primarily resulting from a decrease in construction activity as compared to the same period of 2024 due to timing and weather delays.
Previous wording
AWR’s borrowings consist of bank notes under revolving credit facilities, while GSWC and BVES borrowings consist of revolving credit facilities and long-term debt issuances. Interest expenses at the regulated utilities increased as compared to the same period in 2023 resulting primarily from an increase in total borrowing levels to support, among other things, the capital expenditures programs at the regulated utilities, as well as an overall increase in average interest rates, while AWR’s borrowing levels decreased when compared to 2023. The combined average interest rates at the regulated utilities were 5.22% and 5.10% for the three months ended September 30, 2024 and 2023, respectively.
Current wording
AWR’s borrowings consist of revolving credit facilities, while GSWC and BVES borrowings consist of revolving credit facilities and long-term debt issuances. Interest expenses at the regulated utilities decreased as compared to the same period in 2024 resulting primarily from a decrease in interest rates, partially offset by an increase in total borrowing levels to support, among other things, the capital expenditures programs at the regulated utilities. In addition, the decrease in the water segment’s interest expense was also attributed to the CPUC-approved capital memorandum account that allows GSWC to defer the cost of debt related to certain advice letter projects into a memorandum account, which only occurred in 2025. Lastly, there was an overall decrease in average interest rates, which also contributed to the decreases of interest expense at the contracted services segment and AWR parent when compared to the same period in 2024. The overall combined average interest rates were 5.14% and 5.45% for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
For the three months ended September 30, 2024, overall interest income decreased at the regulated utilities as compared to the same period in 2023 due primarily to a decrease in interest income earned on regulatory assets. Regulatory asset balances will decrease due to implementing authorized surcharges.
Current wording
For the three months ended March 31, 2025, interest income decreased at the water segment when compared to the same period in 2024 due primarily to a decrease in interest income earned on regulatory assets. Regulatory asset balances will decrease as surcharges are approved. There was an increase in interest income in the electric segment due primarily to higher levels of regulatory asset balances.
Previous wording
For the three months ended September 30, 2024, other income (net of other expense) increased largely because of gains of $2.1 million recorded on investments held to fund one of the Company’s retirement plans in 2024, compared to losses of $1.0 million recorded in 2023.
Current wording
For the three months ended March 31, 2025, other expense (net of other income) increased largely because of losses of $0.6 million recorded on investments held to fund one of the Company’s retirement plans in 2025, compared to gains of $2.1 million recorded in 2024. The increase in other income for the electric segment is due primarily to AFUDC earned on certain CPUC-approved advice letter projects.
Previous wording
Consolidated income tax expense for the three months ended September 30, 2024 increased by $0.5 million primarily due to an increase in consolidated pretax income as compared to the same period in 2023. AWR’s ETR was 21.9% and 23.2% for the three months ended September 30, 2024 and 2023, respectively. GSWC’s ETR was 22.6% and 24.9% for the three months ended September 30, 2024 and 2023, respectively, which fluctuated due to changes in certain flowed-through income taxes and permanent items.
Current wording
Consolidated income tax expense for the three months ended March 31, 2025 increased by $1.1 million primarily due to an increase in consolidated pretax income as compared to the same period in 2024. AWR’s ETR was 24.0% and 24.2% for the three months ended March 31, 2025 and 2024, respectively. GSWC’s ETR was 24.7% for each of the periods ended March 31, 2025 and 2024, respectively.
Previous wording
AWR funds its operating expenses and pays dividends on its outstanding Common Shares primarily through dividends from its wholly owned subsidiaries. The ability of GSWC and BVES to pay dividends to AWR is restricted by California law. Under these restrictions, approximately $763.4 million was available for GSWC to pay dividends to AWR on September 30, 2024. Approximately $97.0 million was available for BVES to pay dividends to AWR as of September 30, 2024. ASUS’s ability to pay dividends to AWR is dependent upon state laws in which each ASUS subsidiary operates, as well as ASUS’s ability to pay dividends under California law.
Current wording
AWR funds its operating expenses and pays dividends on its outstanding Common Shares primarily through dividends from its wholly owned subsidiaries. The ability of GSWC and BVES to pay dividends to AWR is restricted by California law. Under these restrictions, approximately $827.4 million was available for GSWC to pay dividends to AWR on March 31, 2025. Approximately $104.7 million was available for BVES to pay dividends to AWR as of March 31, 2025. ASUS’s ability to pay dividends to AWR is dependent upon state laws in which each ASUS subsidiary operates, as well as ASUS’s ability to pay dividends under California law.
Previous wording
On February 27, 2024, AWR entered into an Equity Distribution Agreement with third-party sales agents, under which AWR may offer and sell Common Shares, from time to time at its sole discretion, through an ATM offering program having an aggregate gross offering price of up to $200 million over a three-year period and pursuant to AWR’s effective shelf registration statement on Form S-3. AWR intends to use the net proceeds from these sales, after deducting commissions on such sales and offering expenses, for general corporate purposes, including, but not limited to, repayment of debt and making equity contributions to its subsidiaries. During the first nine months of 2024, AWR sold 791,097 Common Shares through this ATM offering program and raised proceeds of $60.0 million, net of $0.9 million in commissions paid under the terms of the Equity Distribution Agreement. The net proceeds raised during the first nine months of 2024 were used to pay down outstanding borrowings under AWR’s credit facility and to make equity contributions to a subsidiary. As of September 30, 2024, approximately $139.1 million remained available for sale under the ATM offering program.
Current wording
On February 27, 2024, AWR entered into an Equity Distribution Agreement with third-party sales agents, under which AWR may offer and sell Common Shares, from time to time at its sole discretion, through an ATM offering program having an aggregate gross offering price of up to $200 million over a three-year period and pursuant to AWR’s effective shelf registration statement on Form S-3. AWR intends to use the net proceeds from these sales, after deducting commissions on such sales and offering expenses, for general corporate purposes, including, but not limited to, repayment of debt and making equity contributions to its subsidiaries. During the three months ended March 31, 2025, AWR sold 334,548 Common Shares through this ATM offering program and raised net proceeds of $25.7 million, bringing the total raised through March 31, 2025 to $115.3 million, net of $1.8 million of commissions paid under the terms of the Equity Distribution Agreement. As of March 31, 2025, approximately $82.9 million remained available for sale under the ATM offering program.
Previous wording
In June 2023, AWR and GSWC each entered into credit agreements with a term of five years provided by a syndicate of banks and financial institutions. Both credit agreements will mature in June 2028. The credit agreements currently provide AWR and GSWC unsecured revolving credit facilities with borrowing capacities of $165.0 million and $200.0 million, respectively. Under the terms of the credit agreements, the borrowing capacities for AWR and GSWC may currently be expanded up to an additional $60.0 million and $75.0 million, respectively, subject to the lenders’ approval. AWR’s credit facility primarily provides support to AWR (parent) and ASUS, while GSWC’s credit agreement provides support to its water operations and capital expenditures. AWR’s and GSWC’s outstanding borrowings under its credit facilities were $120.0 million and $140.0 million, respectively, as of September 30, 2024. The CPUC requires GSWC to completely pay off all borrowings under its revolving credit facility within a 24-month period after which GSWC may again borrow under its facility. GSWC’s pay-off period for its credit facility ends in June 2025. Accordingly, GSWC’s outstanding borrowings under its credit facility as of September 30, 2024 have been classified as current liabilities in both AWR’s Consolidated Balance Sheet and GSWC’s Balance Sheet. GSWC expects to issue long-term debt and/or equity to facilitate the pay-off of its credit facility.
Current wording
In June 2023, AWR and GSWC each entered into credit agreements with a term of five years provided by a syndicate of banks and financial institutions. Both credit agreements will mature in June 2028. As of March 31, 2025, the credit agreements provided AWR and GSWC unsecured revolving credit facilities with borrowing capacities of $165.0 million and $200.0 million, respectively. Under the terms of the credit agreements, as of March 31, 2025, the borrowing capacities for AWR and GSWC may be expanded up to an additional $60.0 million and $75.0 million, respectively, subject to the lenders’ approval. On May 6, 2025, AWR and GSWC both executed amendments to their credit agreements to extend their credit facility terms from June 2028 to June 2029. In addition, as part of its amendment, AWR expanded its credit facility borrowing capacity to $195.0 million through an existing bank from the original syndicate group and the addition of a new bank to the existing syndicate group participating in AWR’s credit facility. AWR’s credit facility primarily provides support to AWR (parent) and ASUS, while GSWC’s credit agreement provides support to its water operations and capital expenditures. AWR’s and GSWC’s outstanding borrowings under its credit facilities were $106.0 million and $143.0 million, respectively, as of March 31, 2025. The CPUC requires GSWC to completely pay off all borrowings under its revolving credit facility within a 24-month period after which GSWC may again borrow under its facility. GSWC’s pay-off period for its credit facility ends in June 2025. Accordingly, GSWC’s outstanding borrowings under its credit facility as of March 31, 2025 have been classified as current liabilities in both AWR’s Consolidated Balance Sheet and GSWC’s Balance Sheet.
Previous wording
BVES has a separate revolving credit facility without a parent guaranty that supports its electric operations and capital expenditures with a current borrowing capacity of $65.0 million that matures on July 1, 2026. Currently, the credit agreement provides BVES an option to increase the borrowing capacity of the facility by an additional $10.0 million, subject to lender approval. The CPUC requires BVES to completely pay off all borrowings under its revolving credit facility within a 24-month period after which BVES may again borrow under this facility. BVES’s next pay-off period was set to end in August 2024. In May 2024, the CPUC approved BVES’s request to extend its 24-month pay-off period past the August deadline while it awaited a final decision from the CPUC on its financing application that enables BVES to issue the necessary long-term financing to pay off its borrowings under the credit facility. The CPUC granted BVES an extension to its original August 2024 deadline to nine months from the date a final decision in the financing application is issued by the CPUC. On August 1, 2024, the CPUC issued a final decision in BVES’s financing application, which among other things, approves BVES’s request to issue up to $120 million of new debt and equity securities. As a result, BVES will have until May 1. 2025 to secure long-term financing to pay off the remaining balance of its revolving credit arrangement. Furthermore, in September 2024, BVES issued eleven Common Shares to AWR for total proceeds of $22.0 million. BVES used the proceeds from the stock issuance to pay down outstanding borrowings under its revolving credit facility and to fund its operations and capital expenditures. Accordingly, the $37.0 million outstanding under BVES’s credit facility has been classified as a current liability in AWR’s Consolidated Balance Sheet as of September 30, 2024.
Current wording
BVES has a separate revolving credit facility without a parent guaranty that supports its electric operations and capital expenditures with a current borrowing capacity of $65.0 million that matures on July 1, 2026. Currently, the credit agreement provides BVES an option to increase the borrowing capacity of the facility by an additional $10.0 million. BVES’s revolving credit facility is considered a short-term debt arrangement by the CPUC. Therefore, pursuant to the CPUC’s requirements, borrowings under this credit facility are required to be fully paid off within a 24-month period, after which, BVES may borrow under the credit facility again. BVES’s extended pay-off period as approved by the CPUC was set to end on May 1, 2025. On August 1, 2024, the CPUC issued a final decision in BVES’s financing application, which among other things, approved BVES’s request to issue up to $120 million of new debt and equity securities. On February 12, 2025, BVES completed the issuance of $50.0 million in unsecured private-placement notes with a coupon rate of 6.12% maturing on February 12, 2030. BVES used the proceeds from the notes to pay down all amounts under its revolving credit facility outstanding at the time of issuing the notes satisfying the CPUC’s requirement. As of March 31, 2025, there are no outstanding borrowings under BVES’s credit facility. BVES has $88 million remaining available under its latest CPUC-approved financing application that provides for long-term financing and which is expected to be used over the next 2 to 5 years to pay down future borrowings under its credit facility and support its electric operations.
Previous wording
Our primary sources of liquidity to fund operations continue to be from the recovery of costs charged to customers at our regulated utilities and the collection of payments from the U.S government. We believe that capital investment costs associated with our capital programs at our regulated utilities will continue to be recovered through water and electric rates charged to customers, as well as funds from credit facilities from our regulated utilities. In addition, AWR’s credit facility will continue to be used to support ASUS’s operations and AWR (parent). The long-term capital-intensive nature of our regulated utilities have required us to continually seek future financing opportunities beyond the short-term. Future long-term financing at GSWC and BVES is expected to consist of both long-term debt and equity issuances in order to manage to the CPUC-authorized capital structure. Under the current financing applications authorized by the CPUC, GSWC and BVES have $40.0 million and $160.0 million, respectively, remaining and available under each utility’s authorized applications that provides for long-term financing and which are expected to be used over the next 3-6 months to pay down portions of the outstanding borrowings under the respective credit facilities.
Current wording
Our primary sources of liquidity to fund operations continue to be from the recovery of costs charged to customers at our regulated utilities and the collection of payments from the U.S government. We believe that capital investment costs associated with our capital programs at our regulated utilities will continue to be recovered through water and electric rates charged to customers, as well as funds from credit facilities from our regulated utilities. In addition, AWR’s credit facility will continue to be used to support ASUS’s operations and AWR (parent). The long-term capital-intensive nature of our regulated utilities have required us to continually seek future financing opportunities beyond the short-term. Future long-term financing at GSWC and BVES is expected to consist of both long-term debt and equity issuances in order to manage to the CPUC-authorized capital structure. Under the current financing applications authorized by the CPUC, GSWC and BVES have $750.0 million and $88.0 million, respectively, remaining and available under each utility’s authorized applications that provide for long-term financing and which are expected to be used over the next 2-6 years to pay down outstanding borrowings under the respective credit facilities and support its operations.
Previous wording
AWR’s ability to pay cash dividends on its Common Shares outstanding depends primarily upon cash flows from its subsidiaries. AWR intends to continue paying quarterly cash dividends on or about March 1, June 1, September 1 and December 1, subject to earnings and financial conditions, regulatory requirements and such other factors as the Board of Directors may deem relevant. On October 29, 2024, AWR’s Board of Directors approved a fourth quarter dividend of $0.4655 per share on AWR’s Common Shares. Dividends on the Common Shares will be paid on December 2, 2024 to shareholders of record at the close of business on November 15, 2024. Registrant has paid Common Share dividends every year since 1931 and has increased the dividends received by shareholders each calendar year for 70 consecutive years, which places it in an exclusive group of companies on the New York Stock Exchange that have achieved that result. AWR’s quarterly dividend rate has grown at a compound annual growth rate (“CAGR”) of 8.8% over the last five years and is on pace to achieve a 10-year CAGR of 8.0% in its calendar year dividend payments. AWR’s current policy is to achieve a CAGR in the dividend of more than 7% over the long-term.
Current wording
AWR’s ability to pay cash dividends on its Common Shares depends primarily upon cash flows from its subsidiaries. AWR intends to continue paying quarterly cash dividends on or about March 1, June 1, September 1 and December 1, subject to earnings and financial conditions, regulatory requirements and such other factors as the Board of Directors may deem relevant. On May 5, 2025, AWR’s Board of Directors approved a second quarter dividend of $0.4655 per share on AWR’s Common Shares. Dividends on the Common Shares will be paid on June 3, 2025 to shareholders of record at the close of business on May 19, 2025. Registrant has paid Common Share dividends every year since 1931 and has increased the dividends received by shareholders each calendar year for 70 consecutive years, which places it in an exclusive group of companies on the New York Stock Exchange that have achieved that result. AWR’s quarterly dividend rate has grown at a compound annual growth rate (“CAGR”) of 8.8% over the last five years through 2024 and it has achieved a 10-year CAGR of 8.0% in its calendar year dividend payments through 2024. AWR’s current policy is to achieve a CAGR in the dividend of more than 7% over the long-term.
Previous wording
Cash flows from operating activities have generally provided sufficient cash to fund operating requirements, including a portion of capital expenditures at GSWC and BVES, and construction expenses at ASUS, and to pay dividends. AWR’s future cash flows from operating activities are expected to be affected by a number of factors, including, among other things, utility regulation; delays in receiving approvals of general rate cases, changes in tax law; maintenance expenses; inflation; compliance with environmental, health and safety standards; production costs; customer growth; per-customer usage of water and electricity; weather and seasonality; conservation efforts; compliance with local governmental requirements, including mandatory restrictions on water use; the lingering effects of the COVID-19 pandemic on its customers’ ability to pay utility bills; and required cash contributions to pension and post-retirement plans. Future cash flows from contracted services subsidiaries will depend on new business activities, existing operations, the construction of new and/or replacement infrastructure at military bases, timely economic price and equitable adjustment of prices, and timely collection of payments from the U.S. government and other prime contractors operating at the military bases, and any adjustments arising out of an audit or investigation by federal governmental agencies. For further information regarding the risks faced by Registrant, see Item 1A, Risk Factors, in our annual report on Form 10-K for the period ended December 31, 2023.
Current wording
Cash flows from operating activities have generally provided sufficient cash to fund operating requirements, including a portion of capital expenditures at GSWC and BVES, and construction expenses at ASUS, and to pay dividends. AWR’s future cash flows from operating activities are expected to be affected by a number of factors, including, among other things, utility regulation; delays in receiving approvals of general rate cases, changes in tax law; maintenance expenses; inflation; newly imposed tariffs; compliance with environmental, health and safety standards; production costs; customer growth; per-customer usage of water and electricity; weather and seasonality; conservation efforts; compliance with local governmental requirements, including mandatory restrictions on water use; the customers’ ability to pay utility bills; and required cash contributions to pension and post-retirement plans. Future cash flows from contracted services subsidiaries will depend on new business activities, existing operations, the construction of new and/or replacement infrastructure at military bases, timely economic price and equitable adjustment of prices, and timely collection of payments from the U.S. government and other prime contractors operating at the military bases, and any adjustments arising out of an audit or investigation by federal governmental agencies. For further information regarding the risks faced by Registrant, see Item 1A, Risk Factors, in our annual report on Form 10-K for the period ended December 31, 2024.
Previous wording
In addition, the increase in cash flows from operating activities resulted from differences at ASUS in the timing of vendor payments and the receipt of cash for construction work at military bases. The billings (and cash receipts) for this construction work generally occur at completion of the work or in accordance with a billing schedule contractually agreed to with the U.S. government and/or other prime contractors. Thus, cash flow from construction-related activities may fluctuate from period to period with such fluctuations representing timing differences of when the work is being performed and when the cash is received for payment of the work.
Current wording
Cash flows from operating activities are primarily generated by net income, adjusted for non-cash expenses such as depreciation and amortization, and deferred income taxes. Cash generated by operations varies during the year. Net cash provided by operating activities of AWR was $45.1 million for the three months ended March 31, 2025 as compared to $45.8 million for the same period in 2024. The decrease in operating cash flows was largely due to the timing of cash receipts and disbursements related to working capital items. In particular, the decrease in cash flows from operating activities resulted from differences at ASUS in the timing of vendor payments and the receipt of cash for construction work at military bases. The billings (and cash receipts) for this construction work generally occur at completion of the work or in accordance with a billing schedule contractually agreed to with the U.S. government and/or other prime contractors. Thus, cash flow from construction-related activities may fluctuate from period to period with such fluctuations representing timing differences of when the work is being performed and when the cash is received for payment of the work. These decreases were partially offset by (i) new rates implemented at the regulated utilities approved in the recent general rate case proceedings, (ii) the implementation, in May 2024, of the WRAM/MCBA surcharges related to the recovery of all pre-2024 balances with the majority to be recovered over 18 months, (ii) an increase in billed water consumption of 12.0%, and (iii) the timing of income tax payments between the two periods.
Previous wording
Net cash used in investing activities was $172.9 million for the nine months ended September 30, 2024 as compared to $135.2 million for the same period in 2023, which is mostly related to capital expenditures at the regulated utilities. GSWC and BVES invest capital to provide essential services to their regulated customer bases, while working with the CPUC to have the opportunity to earn a fair rate of return on investment. AWR’s infrastructure investment plan consists of both infrastructure renewal programs (to replace infrastructure, including those to mitigate wildfire risk) and major capital investment projects (to construct new water treatment, supply and delivery facilities and electric facilities). The regulated utilities may also be required from time to time to relocate existing infrastructure in order to accommodate local infrastructure improvement projects. Projected capital expenditures and other investments are subject to periodic review and revision.
Current wording
Net cash used in investing activities was $67.4 million for the three months ended March 31, 2025 as compared to $47.4 million for the same period in 2024, which is mostly related to capital expenditures at the regulated utilities. GSWC and BVES invest capital to provide essential services to their regulated customer bases, while working with the CPUC to have the opportunity to earn a fair rate of return on investment. AWR’s infrastructure investment plan consists of both infrastructure renewal programs (to replace infrastructure, including those to mitigate wildfire risk) and major capital investment projects (to construct new water treatment, supply and delivery facilities and electric facilities). The regulated utilities may also be required from time to time to relocate existing infrastructure in order to accommodate local infrastructure improvement projects. Projected capital expenditures and other investments are subject to periodic review and revision.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
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Previous report — wording carried elsewhere
•A decrease in earnings of approximately $0.01 per share due to the dilutive effects from the issuance of equity under AWR’s at-the-market (“ATM”) offering program. Under the ATM offering program, AWR may offer and sell its Common Shares, with an aggregate gross offering price of up to $200 million, from time to time at its sole discretion. Through September 30, 2024, AWR has sold 791,097 Common Shares through this ATM offering program.
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, diluted losses from AWR (parent) were consistent when compared to the same period in 2023.
Previous report — wording carried elsewhere
The table below sets forth the year-to-date diluted earnings per share by business segment and for the parent company:
Previous report — wording carried elsewhere
The following is a computation and reconciliation of diluted earnings per share from the measure of operating income by business segment as disclosed in Note 10 to the Unaudited Consolidated Financial Statements, to AWR’s consolidated fully diluted earnings per common share, for the nine months ended September 30, 2024 and 2023:
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, the cost of power purchased for resale to BVES’s electric customers increased by $0.1 million to $2.5 million as compared to $2.4 million during the same period in 2023 due to higher overall average prices per megawatt-hour that include all fixed costs.
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, construction expenses for contracted services were $11.8 million, an increase of $0.1 million compared to the same period in 2023 primarily due to an increase in construction activity as compared to the same period of 2023.
Previous report — wording carried elsewhere
Consolidated Results of Operations — Nine Months Ended September 30, 2024 and 2023 (amounts in thousands, except per share amounts):
Previous report — wording carried elsewhere
GSWC and BVES rely upon approvals by the CPUC of rate increases to recover operating expenses and to provide for a return on invested and borrowed capital used to fund utility plant. ASUS relies on economic price and equitable adjustments by the U.S. government in order to recover operating expenses and provide a profit margin for ASUS. Current operating revenues and earnings can be negatively impacted if ASUS’s subsidiaries do not receive adequate rate relief or adjustments in a timely manner. ASUS’s earnings are also impacted by the level of additional construction projects at its subsidiaries, which may or may not continue at current levels in future periods.
Previous report — wording carried elsewhere
Total supply costs at the regulated utilities comprise the largest portion of total consolidated operating expenses. Supply costs accounted for approximately 31.2% and 34.1% of total operating expenses for the nine months ended September 30, 2024 and 2023, respectively.
Previous report — wording carried elsewhere
Two of the principal factors affecting water supply costs are the amount of water produced and the source of the water. Generally, the variable cost of producing water from wells is less than the cost of water purchased from wholesale suppliers.
Previous report — wording carried elsewhere
Under the current CPUC-approved MCBA, GSWC tracks adopted and actual expense levels for purchased water, power purchased for pumping and pump taxes and records the variances (which include the effects of changes in both rate and volume) between adopted and actual purchased water, purchased power and pump tax expenses to the MCBA. GSWC recovers from, or refunds to, customers the amount of such variances. GSWC tracks these variances individually for each water ratemaking area.
Previous report — wording carried elsewhere
Supply costs for the water segment consist of purchased water, purchased power for pumping, groundwater production assessments and changes in the water supply cost balancing accounts. For the nine months ended September 30, 2024 and 2023, water supply costs consisted of the following amounts (in thousands):
Previous report — wording carried elsewhere
Supply costs for the electric segment consist primarily of purchased power for resale, the cost of natural gas used by BVES’s generating unit, the cost of renewable energy credits and changes in the electric supply cost balancing account. For the nine months ended September 30, 2024 and 2023, electric supply costs consisted of the following amounts (in thousands):
Previous report — wording carried elsewhere
The primary components of other operation expenses include payroll costs, materials and supplies, chemicals and water treatment costs and outside-services costs of operating the regulated water systems, including the costs associated with water transmission and distribution, pumping, water quality, meter reading, billing, and operations of district offices and the electric system. Registrant’s contracted services operations incur many of the same types of expenses. For the nine months ended September 30, 2024 and 2023, other operation expenses by business segment consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
Administrative and general expenses include payroll costs related to administrative and general functions, all employee-related benefits, insurance expenses, outside legal and consulting fees, regulatory-utility-commission expenses, expenses associated with being a public company and general corporate expenses charged to expense accounts. For the nine months ended September 30, 2024 and 2023, administrative and general expenses by business segment, including AWR (parent), consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, depreciation and amortization by business segment consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, maintenance expense by business segment consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, property and other taxes by business segment consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, interest expense by business segment, including AWR (parent), consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, interest income by business segment, including AWR (parent), consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, other income and (expenses), net by business segment, including AWR (parent), consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024 and 2023, income tax expense by business segment, including AWR (parent), consisted of the following (dollar amounts in thousands):
Previous report — wording carried elsewhere
These increases in operating cash flows discussed above were partially offset by differences in the timing of income tax payments between the two periods. The timing of cash receipts and disbursements related to other working capital items also affected the change in net cash provided by operating activities.