AMERICAN STATES WATER CO

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 Second Quarter 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 Third Quarter Results by Segment.”

Previous wording

The U.S. government announced a comprehensive set of tariffs in the second quarter. Since then, the U.S. government has paused implementation for some of these tariffs. Although certain tariffs have gone into effect, the timing and scope of other tariffs is still 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 unknowns.

Current wording

The U.S. government announced a comprehensive set of tariffs in the second quarter. Following the pause of certain of these tariffs, the majority of the previously announced tariffs have been implemented. The U.S. government has indicated that they could impose additional tariffs on particular countries and to impose global tariffs on certain goods. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. Management is actively engaged with vendors and business partners to reduce financial risks of tariffs; however, the impact of such tariffs is subject to uncertainties regarding the timing of their implementation, whether the U.S. government ultimately imposes additional tariffs, the magnitude of such tariffs and possible exemption for certain goods, among other unknowns.

Previous wording

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 six months ended June 30, 2025 that resulted in an increase in recorded revenues of $21.0 million largely from the new rates and an increase in recorded water supply costs of $8.2 million, which combined is an increase of $12.8 million, compared to the same period in 2024. GSWC’s earnings during the six months 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 six months, 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 six months 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 wording

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 nine months ended September 30, 2025 that resulted in an increase in recorded revenues of $29.3 million largely from the new rates and an increase in recorded water supply costs of $11.7 million, which combined is an increase of $17.6 million, compared to the same period in 2024. GSWC’s earnings during the three and nine months ended September 30, 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 six months, 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. The overall favorable water supply source mix experienced during the first nine months 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.

Previous wording

GSWC Cost of Capital (“COC”) Proceeding:

Current wording

Water Cost of Capital (“COC”) Proceeding:

Previous 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.

Current wording

On January 16, 2025, the CPUC adopted a final decision in BVES’s general rate case proceeding that set 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 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 June 30, 2025, the aggregate cumulative under-collection in retroactive revenues related to the full year of 2023 and 2024 amounted to $9.6 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 wording

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 September 30, 2025, the aggregate cumulative under-collection in retroactive revenues related to the full year of 2023 and 2024 amounted to $8.9 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.

Previous wording

The final decision provides 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. Thus far, 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 wording

The final decision provides 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.

Previous wording

ASUS’s revenues, operating income and cash flows are earned by providing water and/or wastewater services, including operation and maintenance services and construction of facilities for the water and/or wastewater systems at various military installations, pursuant to an initial 50-year, firm-fixed-price contract, additional firm-fixed-price contracts, task order agreements and subcontracts with third party prime contractors on military bases. Currently, ASUS has one subsidiary that has entered into a task order agreement with the U.S. government that has a term of 15 years. The contract prices for each of the contracts and recurring task order agreements are subject to annual economic price adjustments. Additional revenues generated by contract operations are primarily dependent on annual economic price adjustments, and new construction activities under contract modifications with the U.S. government or agreements with other third-party prime contractors. ASUS’s subsidiaries expect to continue to enter into U.S. government-awarded contract modifications and agreements with third-party prime contractors for new construction projects at the military bases served.

Current wording

ASUS’s revenues, operating income and cash flows are earned by providing water and/or wastewater services, including operation and maintenance services and construction of facilities for the water and/or wastewater systems at various military installations, pursuant to an initial 50-year, firm-fixed-price contract, additional firm-fixed-price contracts, task order agreements and subcontracts with third party prime contractors on military bases. Currently, ASUS has one subsidiary that has entered into a task order agreement with the U.S. government that has a term of 15 years. The contract prices for each of the contracts and recurring task order agreements are subject to annual economic price adjustments. Additional revenues generated by contract operations are primarily dependent on annual economic price adjustments, and new construction activities under contract modifications with the U.S. government or agreements with other third-party prime contractors. During the nine months ended September 30, 2025, ASUS was awarded approximately $28.7 million in new construction projects, which are expected to be completed beginning in 2025 through 2028. ASUS’s subsidiaries expect to continue to enter into U.S. government-awarded contract modifications and agreements with third-party prime contractors for new construction projects at the military bases served.

Previous wording

The table below sets forth the second quarter diluted earnings per share by business segment and for the parent company:

Current wording

The table below sets forth the third quarter diluted earnings per share by business segment and for the parent company:

Previous wording

For the three months ended June 30, 2025, AWR’s recorded consolidated diluted earnings were $0.87 per share, as compared to $0.85 per share for the same period in 2024, an increase of $0.02 per share, primarily generated from higher earnings at the water and electric utility segments, partially offset by timing differences in construction activities that resulted in lower earnings at the contracted services segment. Included in AWR’s consolidated results during the second quarter of 2025 were gains of $2.7 million, or $0.05 per share, generated on investments held to fund one of the Company’s retirement plans as compared to gains of $1.0 million, or $0.02 per share, recorded during the same period in 2024, a net favorable variance of $0.03 per share due to financial market conditions. In addition, AWR’s consolidated diluted earnings for the second quarter of 2025 were negatively impacted by approximately $0.03 per share due to the continued dilutive effects from the issuance of equity under AWR’s at-the-market (“ATM”) offering program.

Current wording

For the three months ended September 30, 2025, AWR’s recorded consolidated diluted earnings were $1.06 per share, as compared to $0.95 per share for the same period in 2024, an increase of $0.11 per share, primarily generated from higher construction activities that resulted in higher earnings at the contracted services segment, and higher earnings at the water and electric utility segments resulting from the implementation of new customer rates. AWR’s consolidated diluted earnings for the third quarter of 2025 were negatively impacted by approximately $0.03 per share due to the continued dilutive effects from the issuance of equity under AWR’s at-the-market (“ATM”) offering program.

Previous wording

For the three months ended June 30, 2025, recorded diluted earnings from the water utility segment were $0.73 per share, as compared to $0.67 per share for the same period in 2024, an increase of $0.06 per share. The discussion below presents the major variances in earnings for the two periods.

Current wording

For the three months ended September 30, 2025, recorded diluted earnings from the water utility segment were $0.86 per share, as compared to $0.84 per share for the same period in 2024, an increase of $0.02 per share. The discussion below presents the major variances in earnings for the two periods.

Previous wording

•An increase in water operating revenues of $9.3 million largely as a result of the CPUC-authorized new rate increases effective January 1, 2025. GSWC transitioned from a full revenue decoupling mechanism to the M-WRAM effective January 1, 2025. As a result, GSWC’s revenues and earnings may be subject to future volatility as a result of significant fluctuations in customer consumption compared to adopted levels.

Current wording

•An increase in water operating revenues of $8.3 million was largely as a result of the CPUC-authorized new rate increases effective January 1, 2025. GSWC transitioned from a full revenue decoupling mechanism to the M-WRAM effective January 1, 2025. As a result, GSWC’s revenues and earnings may be subject to future volatility from significant fluctuations in customer consumption compared to adopted levels.

Previous wording

•An increase in water supply costs of $4.2 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 largely due to an increase in the overall 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 second 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 second 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. However, the favorable water supply source mix experienced during the second 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 wording

•An increase in water supply costs of $3.5 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 largely due to an increase in the overall per-unit purchased water costs covered in customer rates. As a result of transitioning from a full cost balancing account for water supply to the ICBA, GSWC’s earnings will be subject to future volatility from favorable and unfavorable changes in the water supply source mix compared to the adopted mix incorporated in the revenue requirement.

Previous wording

•An overall increase in operating expenses of $3.1 million (excluding supply costs) due primarily to increases in (i) overall labor costs and other employee-related benefits, (ii) other operation-related costs largely from an increase in chemicals and water treatment costs, (iii) maintenance expense, (iv) depreciation and amortization expenses, which is impacted by increases in capital additions placed in service and are reflected and recovered in customer rates, and (v) property and other non-income taxes; partially offset by a decrease in other administrative and general expenses largely from lower outside service costs, which resulted from higher outside service costs incurred in 2024 related to the processing of the pending general rate case application at that time.

Current wording

•An overall increase in operating expenses of $2.2 million (excluding supply costs) due primarily to increases in (i) overall labor costs, (ii) maintenance expense, (iii) depreciation and amortization expenses, which is impacted by increases in capital additions placed in service and are reflected and recovered in customer rates, and (iv) property and other non-income taxes; partially offset by a decrease in administrative and general expenses (excluding labor) primarily due to lower outside services costs, insurance reserves, and other employee-related benefits as compared to the same period in 2024.

Previous wording

•An overall decrease in interest income (net of interest expense) of $0.4 million resulting largely from a decrease in interest income earned on regulatory assets due to decreasing regulatory balances as GSWC recovers the amounts through surcharges, partially offset from an overall decrease in interest expense resulting from lower interest rates and the impact of capitalizing debt costs related to certain advice letter projects approved by the CPUC in the latest general rate case effective January 1, 2025.

Current wording

•An overall decrease in interest expense (net of interest income) of $0.3 million resulting largely from an overall decrease in average borrowing levels and interest rates as well as the impact of capitalizing debt costs related to certain advice letter projects approved by the CPUC in the latest general rate case effective January 1, 2025; partially offset by a decrease in interest income earned on regulatory assets due to decreasing regulatory balances as GSWC recovers the amounts through surcharges.

Previous wording

•An overall increase in other income (net of other expense) of $1.7 million due largely to gains totaling $2.7 million generated on investments held to fund one of the company’s retirement plans during the three months ended June 30, 2025, as compared to gains on investments of $1.0 million recorded during the same period in 2024 due to financial market conditions.

Current wording

•An overall increase in other income (net of other expense) of $0.5 million due largely to gains totaling $2.5 million generated on investments held to fund one of the company’s retirement plans during the three months ended September 30, 2025, as compared to gains on investments of $2.1 million recorded during the same period in 2024 due to financial market conditions.

Previous wording

•Changes in certain flowed-through income taxes and permanent items included in GSWC’s income tax expense for the three months ended June 30, 2025 as compared to the same period in 2024 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.

Current wording

•Changes in certain flowed-through income taxes and permanent items included in GSWC’s income tax expense for the three months ended September 30, 2025 as compared to the same period in 2024 unfavorably 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 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 June 30, 2025, AWR has sold 1,479,767 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, with $68 million currently remaining available for sale. Through September 30, 2025, AWR has sold 1,680,979 Common Shares through this ATM offering program.

Previous wording

Diluted earnings from the electric utility segment increased $0.02 per share for the second quarter of 2025 as compared to the same period in 2024 largely resulting from an increase in revenues from new rates 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.

Current wording

Diluted earnings from the electric utility segment increased $0.02 per share for the third quarter of 2025 as compared to the same period in 2024 largely resulting from an increase in revenues from new rates 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 revenues during the same period of 2024.

Previous wording

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 second 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 activities, as well as an increase in outside services related to various regulatory filings.

Current wording

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 third 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 activities, as well as an increase in outside services related to various regulatory filings, partially offset by a decrease in interest expense (net of interest income).

Previous wording

Diluted earnings from the contracted services segment decreased $0.06 per share for the second quarter of 2025 when compared to the same period in 2024. The effects of a decrease in construction activity and higher overall operating expenses (excluding construction expenses) were partially offset by (i) an increase in management fee revenues resulting from the resolution of various economic price adjustments, and (ii) lower interest expense from lower borrowing levels. During the second quarter of 2025, construction activities were negatively impacted by timing of when the work is performed. However, the contracted services segment is still expected to contribute $0.59 to $0.63 per share for the full 2025 year.

Current wording

Diluted earnings from the contracted services segment increased $0.08 per share for the third quarter of 2025 when compared to the same period in 2024 largely resulting from an increase in (i) construction activities, from timing of when work is performed, (ii) management fee revenues resulting from the resolution of various economic price adjustments, and (iii) lower interest expense from lower borrowing levels, partially offset by higher overall operating expenses (excluding construction expenses). The contracted services segment is expected to contribute $0.59 to $0.63 per share for the full 2025 year.

Previous wording

For the three months ended June 30, 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, partially offset by higher borrowing levels under AWR’s credit facility.

Current wording

For the three months ended September 30, 2025, diluted losses from AWR (parent) increased by $0.01 per share when compared to the same period in 2024 due largely to an increase in interest expense resulting from higher borrowing levels under AWR’s credit facility, partially offset by lower average interest rates.

Previous wording

For the six months ended June 30, 2025, AWR’s recorded consolidated diluted earnings were $1.57 per share, as compared to $1.47 per share recorded for the same period in 2024, an increase of $0.10 per share, primarily generated from higher earnings at the water and electric utility segments, partially offset by timing differences in construction activities that resulted in lower earnings at the contracted services segment. Included in AWR’s consolidated results for the six months ended June 30, 2025 were gains of $2.2 million, or $0.04 per share, generated on investments held to fund one of the Company’s retirement plans as compared to gains of $3.0 million, or $0.06 per share, recorded during the same period in 2024, a net unfavorable variance of $0.02 per share due to financial market conditions. In addition, AWR’s consolidated diluted earnings for the six months ended June 30, 2025 were negatively impacted by approximately $0.05 per share due to the continued dilutive effects from the issuance of equity under AWR’s ATM offering program.

Current wording

For the nine months ended September 30, 2025, AWR’s recorded consolidated diluted earnings were $2.63 per share, as compared to $2.42 per share recorded for the same period in 2024, an increase of $0.21 per share, primarily generated from higher earnings at the water and electric utility segments resulting largely from the implementation of new customer rates. AWR’s consolidated diluted earnings for the nine months ended September 30, 2025 were negatively impacted by approximately $0.08 per share due to the continued dilutive effects from the issuance of equity under AWR’s 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 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, for the six months ended June 30, 2025 and 2024:

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, for the nine months ended September 30, 2025 and 2024:

Previous wording

For the six months ended June 30, 2025, recorded diluted earnings from the water utility segment were $1.25 per share, as compared to $1.15 per share for the same period in 2024, an increase of $0.10 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 $0.10 per share for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2025, recorded diluted earnings from the water utility segment were $2.11 per share, as compared to $1.99 per share for the same period in 2024, an increase of $0.12 per share. The discussion below presents the major variances in earnings for the two periods.

Previous wording

•An increase in water operating revenues of approximately $21.0 million largely as a result of the CPUC-authorized new rate increases effective January 1, 2025 in connection with the approved general rate case. GSWC transitioned from a full revenue decoupling mechanism to the M-WRAM effective January 1, 2025. As a result, GSWC’s revenues and earnings may be subject to future volatility as a result of significant fluctuations in customer consumption compared to adopted levels.

Current wording

•An increase in water operating revenues of approximately $29.3 million largely as a result of the CPUC-authorized new rate increases effective January 1, 2025 in connection with the approved general rate case. GSWC transitioned from a full revenue decoupling mechanism to the M-WRAM effective January 1, 2025. As a result, GSWC’s revenues and earnings may be subject to future volatility from significant fluctuations in customer consumption compared to adopted levels.

Previous wording

•An increase in water supply costs of $8.2 million primarily related to an increase in customer water usage and higher overall 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 six months ended June 30, 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 six months ended June 30, 2025, 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 wording

•An increase in water supply costs of $11.7 million primarily related to higher overall per-unit purchased water costs covered in rates. As a result of transitioning from a full cost balancing account for water supply to the ICBA, GSWC’s earnings during the nine months ended September 30, 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 nine months ended September 30, 2025, 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.

Previous wording

•An overall increase in operating expenses of $5.2 million (excluding supply costs) mainly due to increases in (i) overall labor costs and other employee-related benefits, (ii) other operation-related costs largely from an increase in chemicals and water treatment costs, (iii) maintenance expense, (iv) administrative and general expenses resulting largely from higher insurance-related costs, (v) depreciation and amortization expenses, which are impacted by increasing capital additions placed in service and are reflected and recovered in customer rates, and (vi) property and other non-income taxes.

Current wording

•An overall increase in operating expenses of $7.4 million (excluding supply costs) mainly due to increases in (i) overall labor costs, (ii) maintenance expense, (iii) depreciation and amortization expenses, which are impacted by increasing capital additions placed in service and are reflected and recovered in customer rates, and (iv) property and other non-income taxes; partially offset by a decrease in administrative and general expenses (excluding labor) primarily due to lower outside services costs including those related to regulatory filings as compared to the same period in 2024.

Previous wording

•An overall decrease in other income (net of other expenses) of $0.9 million due primarily to gains of $2.2 million generated on investments held to fund one of the Company’s retirement plans as compared to gains of $3.0 million recorded during the same period in 2024, due to financial market conditions.

Current wording

•An overall decrease in other income (net of other expenses) of $0.4 million due primarily to gains of $4.6 million generated on investments held to fund one of the Company’s retirement plans as compared to gains of $5.1 million recorded during the same period in 2024, due to financial market conditions.

Previous wording

•A decrease in earnings of approximately $0.04 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 June 30, 2025, AWR has sold 1,479,767 Common Shares through this ATM offering program.

Current wording

•A decrease in earnings of approximately $0.06 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, with $68 million currently remaining available for sale. Through September 30, 2025, AWR has sold 1,680,979 Common Shares through this ATM offering program.

Previous wording

Diluted earnings from the electric utility segment increased $0.04 per share for the six months ended June 30, 2025 as compared to the same period in 2024, largely resulting from an increase in revenues from the new rates 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.

Current wording

Diluted earnings from the electric utility segment increased $0.07 per share for the nine months ended September 30, 2025 as compared to the same period in 2024, largely resulting from an increase in revenues from the new rates 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 revenues during the same period of 2024.

Previous wording

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 six months 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 activities, as well as an increase in outside services related to various regulatory filings.

Current wording

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 nine months 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 activities, as well as an increase in outside services related to various regulatory filings, partially offset by a decrease in interest expense (net of interest income).

Previous wording

Diluted earnings from the contracted services segment decreased $0.06 per share for the six months ended June 30, 2025 as compared to the same period in 2024, largely due to a decrease in construction activity and higher overall operating expenses (excluding construction expenses), partially offset by (i) an increase in management fee revenue 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, and (ii) lower interest expense from lower borrowing levels. During the six months ended June 30, 2025, construction activities were negatively impacted by unfavorable weather conditions and timing, which were less impactful to construction activities during the same period of 2024. Furthermore, there was a decrease in earnings of approximately $0.01 per share due to the dilutive effects from the issuance of equity under AWR’s ATM offering program previously discussed. However, the contracted services segment is still expected to contribute $0.59 to $0.63 per share for the full 2025 year.

Current wording

Diluted earnings from the contracted services segment increased $0.01 per share for the nine months ended September 30, 2025 as compared to the same period in 2024, largely due to (i) an increase in management fee revenue 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, and (ii) lower interest expense from lower borrowing levels; partially offset by higher overall operating expenses (excluding construction expenses) and a decrease in construction activity. Furthermore, there was a decrease in earnings of approximately $0.01 per share due to the dilutive effects from the issuance of equity under AWR’s ATM offering program. During the nine months ended September 30, 2025, construction activities were negatively impacted by unfavorable weather conditions and timing, which were less impactful to construction activities during the same period of 2024. The majority of these issues have been resolved as of September 30, 2025 and the contracted services segment is still expected to contribute $0.59 to $0.63 per share for the full 2025 year.

Previous wording

For the six months ended June 30, 2025, the diluted loss from AWR (parent) decreased by $0.03 per share compared to the same period in 2024 due primarily to a decrease in interest expense resulting from lower average interest rates and lower borrowings made under AWR’s revolving credit facility, compared to the same period in 2024.

Current wording

For the nine months ended September 30, 2025, the diluted loss from AWR (parent) decreased by $0.01 per share compared to the same period in 2024 due, in part, to a decrease in overall interest expense from borrowings made under AWR’s revolving credit facility, compared to the same period in 2024.

Previous wording

The following discussion and analysis for the three and six months ended June 30, 2025 and 2024 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 and nine months ended September 30, 2025 and 2024 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.

Previous wording

For the three months ended June 30, 2025, revenues from water operations increased by $9.3 million to $119.7 million as compared to the same period in 2024. The increase in water revenues during the second 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 thesecond quarter of 2025 washigher by 8.5% as compared to the same period in 2024 due to lower amounts of seasonal precipitation as compared tosecond quarter of 2024. Without having a full revenue decoupling mechanism, 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 wording

For the three months ended September 30, 2025, revenues from water operations increased by $8.3 million to $132.3 million as compared to the same period in 2024. The increase in water revenues during the third 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. There was also an increase in CPUC-approved surcharges billed in 2025 compared to the same period in 2024 to recover previously incurred costs. These surcharges are largely offset by corresponding increases in operating expenses, resulting in no impact to earnings. Billed water consumption for thethird quarter of 2025 wasconsistent as compared to the same period in 2024. Without having a full revenue decoupling mechanism, GSWC’s revenues and earnings will be subject to future volatility as a result of significant fluctuations in customer consumption compared to adopted levels.

Previous wording

Electric revenues for the three months ended June 30, 2025 increased by $4.2 million to $12.9 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 wording

Electric revenues for the three months ended September 30, 2025 increased by $4.3 million to $13.3 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 revenues 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).

Previous wording

Electric usage for thesecond quarter of 2025 was 2.6% lower 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.

Current wording

Electric usage for thethird quarter of 2025 was 3.1% lower 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 June 30, 2025, revenues from contracted services decreased by $5.8 million to $30.4 million as compared to $36.2 million for the same period in 2024. There was a decrease in construction activities largely due to timing, partially offset by an increase in management fees from economic price adjustments.

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 September 30, 2025, revenues from contracted services increased by $8.4 million to $37.1 million as compared to $28.7 million for the same period in 2024. The increase was primarily due to an increase in construction activities largely due to timing and an increase in management fees from economic price adjustments.

Previous wording

Total supply costs at the regulated utilities comprise the largest portion of total consolidated operating expenses. Supply costs accounted for approximately 32.9% and 31.1% of total operating expenses for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Total supply costs at the regulated utilities comprise the largest portion of total consolidated operating expenses. Supply costs accounted for 34.8% and 35.7% of total operating expenses for the three months ended September 30, 2025 and 2024, respectively.