CALIFORNIA WATER SERVICE GROUP

The following sections include a discussion of results for fiscal 2025 compared to fiscal 2024 as well as certain 2023 results. The comparative results for fiscal 2024 with fiscal 2023 generally have not been included in this Form 10-K, but may be found in “Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

Net Income Attributable to California Water Service Group

In 2025 and 2024, net income attributable to California Water Service Group was $128.2 million and $190.8 million, respectively. Earnings per diluted common share decreased $1.10 from $3.25 to $2.15, or 33.8%, in 2025.

The $62.6 million decrease in net income was primarily due to a decrease in operating revenue of $36.7 million primarily as a result of a decrease in customer usage of $12.7 million and the cumulative adjustment for the impacts of the 2021 CA GRC, retroactive to January 1, 2023, that was recorded in 2024, partially offset by an increase in rates of $69.6 million. Total operating expenses also increased by $18.0 million. The total operating expense increase was primarily due to an increase in water production costs of $11.5 million, an increase in administrative and general expenses of $2.1 million, an increase in other operations expenses of $11.6 million, an increase in depreciation and amortization expenses of $12.5 million, and an increase in property and other taxes of $3.7 million. These increases were partially offset by a decrease in income tax expense of $24.7 million. Additionally, net interest expense increased by $9.1 million due to higher average outstanding borrowings, partially offset by lower interest rates.

The net income benefit of the 2021 CA GRC from 2023 interim rate relief was approximately $64.0 million, or $1.09 earnings per diluted common share, that is included in 2024 results.