CALIFORNIA WATER SERVICE GROUP

Previous wording

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

Excerpt shortened here; the source contains the full paragraph.

Current wording

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

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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

Current wording

•changes in state regulatory commissions’ policies and procedures;

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•the adequacy of our efforts to mitigate physical and cyber security risks and threats;

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•physical and cyber security risks and threats and the adequacy of our efforts to mitigate such risks and threats;

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•labor relations matters as we negotiate with the unions;

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•labor relations matters as we negotiate with unions;

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•our ability to complete, in a timely manner or at all, successfully integrate, and achieve anticipated benefits from announced acquisitions;

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•our ability to complete, in a timely manner or at all, successfully integrate, and achieve anticipated benefits from announced acquisitions, including the Nexus and BVRT acquisitions;

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•risks associated with expanding our business and operations geographically;

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•risks associated with expanding our business and operations, including into other geographic areas;

Previous wording

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

Current wording

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

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•the impact of weather and timing of meter reads on our accrued unbilled revenue;

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•the impact of weather and timing of meter reads on our accrued and unbilled revenue;

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•the impact of evolving legal and regulatory requirements, including emerging environmental, social and governance requirements;

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•the impact of evolving legal and regulatory requirements, including sustainability requirements;

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•the impact of the evolving U.S. political environment that has led to, in some cases, legal challenges and uncertainty around the funding, functioning and policy priorities of U.S. federal regulatory agencies and the status of current and future regulations; and

Current wording

•the impact of the evolving U.S. political environment and changes effected, proposed or threatened by the U.S. federal government that has led to, in some cases, legal challenges and uncertainty around the funding, functioning and policy priorities of U.S. federal regulatory agencies and the status of current and future regulations; and

Previous wording

We maintain our accounting records in accordance with GAAP and as directed by the Commissions to which our operations are subject. The process of preparing financial statements in accordance with GAAP requires the use of estimates on the part of management. The estimates used by management are based on historic experience and an understanding of current facts and circumstances. Management believes that the following accounting policies are critical because they involve a higher degree of complexity and judgment, and can have a material impact on our results of operations, financial condition, and cash flows of the business. These policies and their key characteristics are discussed in detail in the 2024 Annual Report on Form 10-K. They include:

Current wording

We maintain our accounting records in accordance with accounting principles generally accepted in the United States of America and as directed by the Commissions to which our operations are subject. The process of preparing financial statements requires the use of estimates on the part of management. The estimates used by management are based on historic experience and an understanding of current facts and circumstances. Management believes that the following accounting policies are critical because they involve a higher degree of complexity and judgment, and can have a material impact on our results of operations, financial condition, and cash flows of the business. These policies and their key characteristics are discussed in detail in the 2025 Annual Report on Form 10-K. They include:

Previous wording

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

Current wording

For the three months ended March 31, 2026, there were no material changes in the methodology for computing critical accounting estimates, no additional accounting estimates met the standards for critical accounting policies, and there were no material changes to the important assumptions underlying the critical accounting estimates.

Previous wording

Net income attributable to California Water Service Group for the three months ended September 30, 2025 was $61.2 million or $1.03 earnings per diluted common share, compared to net income of $60.7 million or $1.03 earnings per diluted common share for the three months ended September 30, 2024. The $0.5 million increase in net income was primarily the result of an increase in operating revenue of $11.6 million primarily due to rate increases. This was partially offset by an increase in total operating expenses of $7.8 million and a $3.5 million increase in net interest expense. The total operating expenses increase was primarily due to an increase in water production costs of $7.6 million and an increase in depreciation and amortization expenses of $3.1 million. The increases were partially offset by a decrease in operating income tax expense of $4.8 million primarily due to a decrease in the effective tax rate.

Current wording

Net income attributable to California Water Service Group for the three months ended March 31, 2026 was $4.0 million or $0.07 earnings per diluted common share, compared to net income of $13.3 million or $0.22 earnings per diluted common share for the three months ended March 31, 2025. The $9.3 million decrease in net income was primarily due to an increase in total operating expenses of $14.8 million. The total operating expense increase was primarily due to increases in water production costs of $8.3 million, depreciation and amortization expenses of $4.0 million, and other operations expense of $2.4 million. The increase in expenses was partially offset by an increase in operating revenue of $10.6 million primarily due to rate increases partially offset by a decrease in customer usage. Additionally, net other income decreased by $2.1 million and net interest expense increased $2.9 million.

Previous wording

For the three months ended September 30, 2025, operating revenue increased $11.6 million, or 3.9%, to $311.2 million as compared to $299.6 million for the three months ended September 30, 2024.

Current wording

For the three months ended March 31, 2026, operating revenue increased $10.6 million, or 5.2%, to $214.6 million as compared to $204.0 million for the three months ended March 31, 2025.

Previous wording

The net change due to rate changes, usage, and other for the three months ended September 30, 2025 was primarily due to rate increases of $12.7 million and an increase in accrued and unbilled revenue of $2.0 million. This was partially offset by a decrease in customer usage of $8.1 million. For the nine months ended September 30, 2025, the net change due to rate changes, usage, and other was primarily driven by rate increases of $57.5 million, the recognition of Palos Verdes Pipeline Memorandum Account related revenue of $3.8 million (see “Palos Verdes Peninsula Water Reliability Project” in Regulatory Matters below for more details), an increase in accrued and unbilled revenue of $3.2 million and an increase in customer usage of $2.0 million. This was partially offset by $2.4 million of other 2023 revenue recorded in the first nine months of 2024 as a result of the resolution of the 2021 CA GRC that did not recur in the first nine months of 2025.

Current wording

The net change due to rate changes, MWRAM, and other for the three months ended March 31, 2026 was primarily due to rate increases of $9.2 million and an increase in accrued and unbilled revenue of $4.9 million.

Previous wording

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

Current wording

Deferred revenue consists of amounts that are expected to be collected from customers beyond 24 months following the end of the accounting period in which the sales transaction occurred. Deferred revenue for the three months ended March 31, 2026 increased and revenue decreased due to a change in the amount expected to be collected beyond 24 months.

Previous wording

For the three months ended September 30, 2025, total operating expenses increased $7.8 million, or 3.4%, to $240.6 million, as compared to $232.8 million for the three months ended September 30, 2024. The increase was primarily due to increases in water production costs, and depreciation and amortization expense, partially offset by lower income tax expense.

Current wording

For the three months ended March 31, 2026, total operating expenses increased $14.8 million, or 8.1%, to $196.4 million, as compared to $181.6 million for the three months ended March 31, 2025. The increase was primarily due to increases in water production costs, other operations expense, and depreciation and amortization expense.

Previous wording

Water production costs increased $7.6 million, or 8.0%, for the three months ended September 30, 2025 as compared to the same period in 2024 primarily due to an increase in wholesale rates.

Current wording

Water production costs increased $8.3 million, or 13.2%, for the three months ended March 31, 2026 as compared to the same period in 2025 primarily due to an increase in wholesale rates.

Previous wording

Other operations expenses increased $7.8 million for the nine months ended September 30, 2025 as compared to the same period in 2024. The increase was primarily due to a $2.9 million increase in bad debt expense, a $2.2 million increase in labor expense, a $1.2 million increase in miscellaneous office expenses, and a $1.2 million increase in software expense. These increases were partially offset by a $2.1 million reduction in conservation program expenses. The increase in bad debt expense was primarily due to lower bad debt expense in 2024 as a result of applying arrearage funds to eligible, previously written-off accounts.

Current wording

Other operations expenses increased $2.4 million for the three months ended March 31, 2026 as compared to the same period in 2025. The increase was primarily due to a $0.7 million increase in software expenses, a $0.6 million increase in conservation program expenses, a $0.5 million increase in water treatment expenses, a $0.4 million increase related to obsolete inventory, and a $0.4 million increase in labor expense. These increases were partially offset by a $0.6 million decrease in bad debt expense.

Previous wording

Property and other taxes expense increased $2.3 million for the nine months ended September 30, 2025 as compared to the same period in 2024, primarily due to utility plant placed in service in 2024.

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Depreciation and amortization expense increased $4.0 million for the three months ended March 31, 2026, as compared to the same period in 2025. The increase was primarily due to utility plant placed in service in 2025.

Previous wording

Net interest expense increased $3.5 million and $6.6 million for the three and nine months ended September 30, 2025, as compared to the same periods in 2024. These increases were primarily due to higher average outstanding borrowings partially offset by lower interest rates.

Current wording

Net interest expense increased $2.9 million for the three months ended March 31, 2026, as compared to the same period in 2025. The increase was primarily due to higher average outstanding borrowings partially offset by lower interest rates.

Previous wording

In June of 2025, Cal Water filed a motion requesting authority to increase rates by inflation on January 1, 2026 (interim rates) and for the establishment of an IRMA in the event the CPUC does not issue a final decision for the 2024 GRC in time for new rates to be implemented on January 1, 2026. In October of 2025, the ALJ granted Cal Water’s motion for interim rates and the establishment of the IRMA. Cal Water expects to file an advice letter implementing interim rates and the IRMA as of January 1, 2026 in the fourth quarter of 2025 if a final decision for the 2024 GRC is not received before the end of the year. The IRMA will track the difference between interim rates and the rates that will eventually be approved pursuant to the CPUC’s decision concerning Cal Water’s 2024 GRC.

Current wording

In June of 2025, Cal Water filed a motion requesting authority to increase rates by inflation on January 1, 2026 (interim rates) and for the establishment of an IRMA in the event the CPUC did not issue a final decision for the 2024 CA GRC in time for new rates to be implemented on January 1, 2026. In October of 2025, the ALJ granted Cal Water’s motion for interim rates and the establishment of the IRMA. In November of 2025, Cal Water filed an advice letter implementing a three percent increase in interim rates and the IRMA as of January 1, 2026. The IRMA tracks the difference between interim rates and the rates that will ultimately be approved pursuant to the CPUC’s final decision on the 2024 CA GRC.

Previous wording

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

Current wording

For construction projects authorized in the 2021 CA GRC as advice letter projects, Cal Water is allowed to request rate base offsets to increase revenues after the project goes into service. In November of 2025, Cal Water submitted a $12.3 million rate base offset advice letter to recover $1.5 million of annual revenue increases for 6 of its regulated districts. The new rates were implemented on January 1, 2026.

Previous wording

In May of 2025, Cal Water submitted a $11.4 million rate base offset advice letter to recover $1.6 million of annual revenue increases for all of its regulated districts (excluding Grand Oaks). The new rates were implemented on July 1, 2025.

Current wording

In March of 2026, Cal Water submitted an $8.9 million rate base offset advice letter to recover $1.5 million of annual revenue increases for 2 of its regulated districts. The new rates are expected to be implemented on July 1, 2026.

Previous wording

Expense offsets are dollar-for-dollar increases in revenue to match increased expenses, and therefore do not affect net operating income. In October of 2024, Cal Water submitted an advice letter to request offsets for increases in purchased water costs and pump taxes in 8 of its regulated districts totaling $17.1 million. The new rates were implemented on January 1, 2025.

Current wording

Expense offsets are dollar-for-dollar increases in revenue to match increased expenses, and therefore do not affect net operating income. In November of 2025, Cal Water submitted an advice letter to request expense offsets for increases in purchased water, pump tax, and purchased power costs in 18 of its regulated districts totaling $15.7 million. The new rates were implemented on January 1, 2026.

Previous wording

Washington Water Service – 2025 East Pierce and Legacy Systems General Rate Case

Current wording

Washington Water Service Company (Washington Water) – 2025 East Pierce and Legacy Water Systems General Rate Case

Previous wording

On September 25, 2025, Washington Water filed a tariff update for the East Pierce and Legacy water systems to increase revenues by $4.9 million with the UTC. The general rate increase, which includes recovery of expenses, capital expenditures and PFAS-related expenses incurred in 2023 and 2024 is expected to be implemented in December of 2025.

Current wording

On September 25, 2025, Washington Water filed a tariff update with the Washington Utilities and Transportation Commission for the East Pierce and Legacy water systems to increase revenues by $4.9 million. The general rate increase, which includes recovery of expenses, capital expenditures and PFAS-related expenses incurred in 2023 and 2024, is expected to be implemented in the second half of 2026.

Previous wording

In June 2024, BVRT filed a general rate case for 5 utilities with the Public Utility Commission of Texas (PUCT). Consumer advocates reviewed and filed their reports in April and May of 2025, and BVRT filed a rebuttal in June of 2025. A comprehensive settlement was reached and is pending PUCT approval. The initial phase of the new rates was implemented on July 25, 2025.

Current wording

In June of 2024, BVRT filed a general rate case for 5 utilities with the Public Utility Commission of Texas (PUCT). Consumer advocates reviewed and filed their reports in April and May of 2025, and BVRT filed a rebuttal in June of 2025. A comprehensive settlement was reached and the initial phase of the new rates was implemented on July 25, 2025. The final PUCT approval of the settlement agreement is pending.

Previous wording

During the nine months ended September 30, 2025, we generated cash flow from operations of $254.7 million compared to $222.8 million for the same period in 2024. The increase in the first nine months of 2025 as compared to the same period in 2024 was primarily due to an increase in cash collections in the first nine months of 2025 as compared to 2024 due to an increase in customer rates and the recovery of MWRAM and IRMA receivables that were recorded in 2024 due to the resolution of the 2021 CA GRC. This was partially offset by the receipt of $83.0 million from California’s Extended Water and Wastewater Arrearages Payment Program in 2024. Cash generated by operations varies during the year due to customer billings, and timing of collections and contributions to our benefit plans.

Current wording

During the three months ended March 31, 2026, we generated cash flow from operations of $49.4 million compared to $38.4 million for the same period in 2025. The increase in the first three months of 2026 as compared to the same period in 2025 was primarily due to an increase in cash collections in the first three months of 2026 as compared to 2025 due to an increase in customer rates. Cash generated by operations varies during the year due to customer billings, and timing of collections and contributions to our benefit plans.

Previous wording

During the nine months ended September 30, 2025, we made cash contributions of $4.3 million to our employee pension plan and did not make any cash contribution to our other postretirement benefit plans. During the nine months ended September 30, 2024, we made cash contributions of $0.4 million to our employee pension plan and did not make any cash contribution to our other postretirement benefit plans. The 2025 estimated cash contribution to the employee pension plan is expected to be approximately $5.2 million and no cash contributions are expected to be made for the other postretirement benefits plans.

Current wording

During the three months ended March 31, 2026, we made cash contributions of $1.2 million to our employee pension plan and did not make any cash contribution to our other postretirement benefit plans. During the three months ended March 31, 2025, we made cash contributions of $2.3 million to our employee pension plan and did not make any cash contribution to our other postretirement benefit plans. The 2026 estimated cash contribution to the employee pension plan is expected to be approximately $2.7 million and no cash contributions are expected to be made for the other postretirement benefits plans.

Previous wording

During the nine months ended September 30, 2025 and 2024, we used $364.7 million and $332.2 million, respectively, of cash for Company-funded and developer-funded utility capital expenditures. Cash used in investing activities fluctuates each year largely due to the availability of construction resources and our ability to obtain construction permits in a timely manner. For 2025, our utility capital expenditures are estimated to be between $450.0 million and $550.0 million based on the 2024 CA GRC and expected capital needs in the other subsidiaries.

Current wording

During the three months ended March 31, 2026 and 2025, we used $129.5 million and $110.1 million, respectively, of cash for Company-funded and developer-funded utility capital expenditures. Cash used in investing activities fluctuates each year largely due to the availability of construction resources and our ability to obtain construction permits in a timely manner. For 2026, our utility capital expenditures are estimated to be between $580.0 million and $640.0 million based on the 2024 CA GRC and normal capital needs in the other subsidiaries.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $139.1 million compared to $132.3 million for the same period in 2024. For the nine months ended September 30, 2025 and 2024, we paid dividends of $56.0 million and $48.8 million, respectively. For the nine months ended September 30, 2025, we issued $1.9 million of Company common stock through our employee stock purchase plan. For the nine months ended September 30, 2024, we issued $86.5 million of Company common stock through our at-the-market equity program and $1.9 million through our employee stock purchase plan. For the nine months ended September 30, 2025, we also received $34.8 million after fees and expenses in PFAS settlement proceeds.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $86.4 million compared to $65.9 million for the same period in 2025. For the three months ended March 31, 2026 and 2025, we paid dividends of $20.0 million and $20.2 million, respectively. For the three months ended March 31, 2026, we issued $6.1 million of Company common stock through our at-the-market equity program and $0.8 million of Company common stock through our employee stock purchase plan. For the three months ended March 31, 2025, we issued $0.7 million through our employee stock purchase plan. We also made a $7.0 million payment to BVRT as required by the membership interest purchase agreement (see Acquisitions below) in the first quarter of 2026.

Previous wording

For the nine months ended September 30, 2025 and 2024, we borrowed $420.0 million and $370.0 million, respectively, on our unsecured revolving credit facilities. We made repayments on our unsecured revolving credit facilities of $280.0 million and $290.0 million during the nine months ended September 30, 2025 and 2024, respectively.

Current wording

For the three months ended March 31, 2026 and 2025, we borrowed $160.0 million and $170.0 million, respectively, on our unsecured revolving credit facilities. We made repayments on our unsecured revolving credit facilities of $60.0 million and $90.0 million during the three months ended March 31, 2026 and 2025, respectively.

Previous wording

The net IRMA, MWRAM, Water Revenue Adjustment Mechanism and Modified Cost Balancing Account receivable balances were $98.0 million and $116.7 million as of September 30, 2025 and 2024, respectively. The receivable balances were primarily financed by Cal Water using short-term financing arrangements to meet operational cash requirements. Interest on the receivable balances, which represents the interest recoverable from customers, is limited to the then-current 90-day commercial paper rates, which typically are significantly lower than Cal Water’s short-term financing rates.

Current wording

The combined total net IRMA, MWRAM, Water Revenue Adjustment Mechanism and Modified Cost Balancing Account receivable balance was $104.5 million and $121.7 million as of March 31, 2026 and 2025, respectively. The receivable balances were primarily financed by Cal Water using short-term financing arrangements to meet operational cash requirements. Interest on the receivable balances, which represents the interest recoverable from customers, is limited to the then-current 90-day commercial paper rates, which typically are significantly lower than Cal Water’s short-term financing rates.

Previous wording

Short-term liquidity is provided by the Company’s unsecured revolving credit facility (the Company facility) and the Cal Water unsecured revolving credit facility (the Cal Water facility) and internally generated funds. Long-term financing is accomplished through the use of both debt and equity. The Company and subsidiaries that it designates may borrow up to $200.0 million under the Company facility. Cal Water may borrow up to $400.0 million under the Cal Water facility; however, all of Cal Water’s borrowings under the Cal Water facility must be repaid within 24 months as authorized by the

Current wording

Short-term liquidity is provided by the Company’s unsecured revolving credit facility (the Company facility) and the Cal Water unsecured revolving credit facility (the Cal Water facility) and internally generated funds. Long-term financing is accomplished through the use of both debt and equity. The Company and subsidiaries that it designates may borrow up to $200.0 million under the Company facility. Cal Water may borrow up to $400.0 million under the Cal Water facility; however, all of Cal Water’s borrowings under the Cal Water facility must be repaid within 24 months as authorized by the CPUC. The proceeds from the Company and Cal Water facilities may be used for working capital or other business purposes.

Previous wording

As of September 30, 2025 and December 31, 2024, short-term borrowings of $345.0 million and $205.0 million, respectively, were outstanding on the Company and Cal Water facilities.

Current wording

As of March 31, 2026 and December 31, 2025, short-term borrowings of $230.0 million and $130.0 million, respectively, were outstanding on the Company and Cal Water facilities.

Previous wording

Given our ability to access our lines of credit on a daily basis, cash balances are managed to levels required for daily cash needs and excess cash is invested in short-term or cash equivalent instruments. Minimal operating levels of unrestricted cash are maintained for Washington Water, New Mexico Water, Hawaii Water and Texas Water.

Current wording

Given our ability to access the Company and Cal Water credit facilities on a daily basis, cash balances are managed to levels required for daily cash needs and excess cash is invested in short-term or cash equivalent instruments.

Previous wording

On April 17, 2009, Cal Water (Issuer) issued $100.0 million aggregate principal amount of 5.5% First Mortgage Bonds due 2040, all of which are fully and unconditionally guaranteed by the Company (Guarantor). Certain subsidiaries of the Company do not guarantee the security and are referred to as Non-guarantors. The Guarantor fully, absolutely, irrevocably and unconditionally guarantees the due and punctual payment when due, whether at stated maturity, by acceleration, by notice of prepayment or otherwise, of the principal of, premium, if any, and interest on the bonds. The bonds rank equally among Cal Water’s other First Mortgage Bonds.

Current wording

On April 17, 2009, Cal Water (Issuer) issued $100.0 million aggregate principal amount of 5.5% first mortgage bonds due 2040 (the Bonds), all of which are fully and unconditionally guaranteed by the Company (Guarantor). Certain subsidiaries of the Company do not guarantee the security and are referred to as Non-guarantors. The Guarantor fully, absolutely, irrevocably and unconditionally guarantees the due and punctual payment when due, whether at stated maturity, by acceleration, by notice of prepayment or otherwise, of the principal of, premium, if any, and interest on the Bonds. The Bonds rank equally among Cal Water’s other first mortgage bonds.

Previous wording

During the nine months ended September 30, 2025, our quarterly common stock dividend payments were $0.94 per share, which includes a one-time special dividend in the amount of $0.04 per share, compared to $0.84 per share for the nine months ended September 30, 2024. For the full year 2024, the payout ratio was 34.3% of net income. On a long-term basis, our goal is to achieve a dividend payout ratio of 60% of net income.

Current wording

During the three months ended March 31, 2026, our quarterly common stock dividend payment was $0.335 per share compared to $0.34 per share, which includes a one-time special dividend of $0.04 per share, for the three months ended March 31, 2025. For the full year 2025, the payout ratio was 57.6% of net income. On a long-term basis, our goal is to achieve a dividend payout ratio of approximately 60% of net income.

Previous wording

At the October 29, 2025 meeting, the Company’s Board of Directors declared the third quarter dividend of $0.30 per share payable on November 21, 2025, to stockholders of record on November 10, 2025. This was our 323rd consecutive quarterly dividend.

Current wording

At the April 29, 2026 meeting, the Company’s Board of Directors declared the second quarter dividend of $0.335 per share payable on May 22, 2026, to stockholders of record on May 11, 2026. This was our 325th consecutive quarterly dividend.