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 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.

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, the anticipated closing and timing of acquisition of Nexus Water Group’s (Nexus) Nevada and Oregon systems, 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 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 …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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

Current wording

•the outcome and timeliness of regulatory commissions’ actions concerning rate relief and other matters;

Previous wording

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

Current wording

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

Previous wording

•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;

Current wording

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

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, 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;

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, including ongoing conflicts in the Middle East, and the prospect of shutdowns of the U.S. federal government;

Previous 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.

Current wording

For the six months ended June 30, 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 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.

Current wording

Net income attributable to California Water Service Group for the six months ended June 30, 2026 was $60.5 million or $1.01 earnings per diluted common share, compared to net income of $55.5 million or $0.93 earnings per diluted common share for the six months ended June 30, 2025. The $5.0 million increase in net income was due to an increase in operating revenue of $54.3 million primarily as a result of the cumulative adjustment for the impacts of the 2024 CA GRC, retroactive to January 1, 2026 and rate increases. The operating revenue increase was partially offset by an increase in operating expenses of $39.3 million. The operating expense increase was primarily due to increases in water production costs of $14.7 million, administrative and general expense of $2.4 million, other operations expense of $15.8 million, and income tax expense of $6.0 million. These operating expense increases were partially offset by a decrease in depreciation and amortization expenses of $2.5 million. Additionally, net other income decreased by $3.5 million and net interest expense increased by $6.1 million.

Previous 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.

Current wording

For the three months ended June 30, 2026, operating revenue increased $43.6 million, or 16.5%, to $308.6 million as compared to $265.0 million for the three months ended June 30, 2025.

Previous 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.

Current wording

The net change due to rate changes, M-WRAM, and other for the three months ended June 30, 2026 was primarily due to rate increases of $11.6 million. For the six months ended June 30, 2026, the net change due to rate changes, M-WRAM, and other was primarily due to rate increases of $23.3 million and an increase in accrued and unbilled revenue of $3.9 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 months ended March 31, 2026 increased and revenue decreased 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 and six months ended June 30, 2026 decreased due to changes in the amount expected to be collected beyond 24 months as new surcharges have been implemented to collect previously deferred balances.

Previous 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.

Current wording

For the three months ended June 30, 2026, total operating expenses increased $24.6 million, or 11.5%, to $237.7 million, as compared to $213.1 million for the three months ended June 30, 2025.

Previous 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.

Current wording

Water production costs increased $6.3 million, or 7.4%, for the three months ended June 30, 2026 as compared to the same period in 2025 primarily due to an increase in wholesale rates.

Previous 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.

Current wording

Administrative and general expenses increased $2.4 million for the six months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to a $3.5 million increase in consulting services and a $1.3 million increase in other general corporate expenses. These increases were partially offset by a $2.6 million decrease in employee related costs.

Previous wording

Net other income decreased $2.1 million for the three months ended March 31, 2026, as compared to the same period in 2025. The decrease was primarily due to an increase of $1.3 million in acquisition-related expenses and a $0.7 million reduction associated with our non-qualified benefit plan investments.

Current wording

Net other income decreased $1.5 million for the three months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily due to a $2.3 million reduction in other components of net periodic benefit credit and an increase of $1.4 million in acquisition-related expenses. These decreases in net other income were partially offset by a $1.5 million gain associated with our non-qualified benefit plan investments and a $0.6 million gain associated with our Company-owned life insurance.

Previous 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.

Current wording

Net interest expense increased $3.2 million and $6.1 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The increases were primarily due to higher average outstanding borrowings partially offset by lower interest rates.

Previous wording

On April 29, 2026, the ALJ issued a revised PD in response to the requested changes, which authorizes rate increases that add $90.5 million of revenue in 2026, or an increase of 10.9%. It also authorizes revenue increases of $43.2 million, or 4.7%, in 2027, and $48.9 million, or 5.1%, in 2028. The revised PD authorizes key revenue stabilization mechanisms, including continuation of the MWRAM, a higher percentage of revenue collected in fixed charges, and a new Sales Reconciliation Mechanism. In addition, it includes provisions that allow for recovery of certain costs through balancing accounts and other regulatory mechanisms designed to mitigate volatility in customer usage and uncertain costs.

Current wording

The decision also authorizes key revenue stabilization mechanisms, including continuation of the M-WRAM, a higher percentage of revenue collected in fixed charges, and a new annual Sales Reconciliation Mechanism. In addition, it includes provisions that allow for recovery of certain costs through balancing accounts and other regulatory mechanisms designed to mitigate volatility in customer usage and uncertain costs.

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 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.

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 CPUC 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 for most districts, and creation of the IRMA, as of January 1, 2026. The IRMA tracks the difference between interim rates and the final rates that were 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 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.

Current wording

For construction projects authorized in the 2021 and 2024 CA GRCs as advice letter projects, Cal Water was allowed to request rate base offsets to increase revenues after the project goes into service.

Previous 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.

Current wording

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. The new rates were implemented on January 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 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.

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 most of its regulated Class A districts totaling $15.7 million. The new rates were implemented on January 1, 2026.

Previous 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.

Current wording

On September 25, 2025, Washington Water filed a tariff update with the Washington Utilities and Transportation Commission (UTC) for the East Pierce and Legacy water systems to increase revenues by $4.9 million. The general rate increase includes recovery of expenses and capital expenditures. A settlement with UTC staff and the Washington Public Counsel was reached and filed before the UTC in May of 2026. A final decision is expected to be implemented in the second half of 2026.

Previous wording

In December of 2023, Camino Real Utility filed a new water Certificate of Convenience and Necessity (CCN) application with the PUCT to establish a water service area that initially covers 229.1 acres in Caldwell County. On December 30, 2025, a Notice of Approval was received from the PUCT establishing the CCN and initial water tariff rates.

Current wording

In February of 2022, Camino Real Utility filed a new wastewater Certificate of Convenience and Necessity and Sale, Transfer, or Merger application with the PUCT to transfer an existing sewer service area and establish a new sewer service area that initially covers 6,216 acres in Caldwell and Travis Counties. PUCT has set a year-end 2026 schedule to complete the application.

Previous wording

On March 6, 2026, a change of control application was filed with the PUCT to acquire the remaining membership interests of BVRT. The ALJ granted PUCT staff an extension to review until May 6, 2026.

Current wording

On March 6, 2026, a change of control application was filed with the PUCT to acquire the remaining membership interests of BVRT. On July 2, 2026, the ALJ deemed the application administratively complete and established a procedural schedule for continued processing of the application.

Previous 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.

Current wording

During the six months ended June 30, 2026, we generated cash flow from operations of $113.0 million compared to $87.4 million for the same period in 2025. The increase in the first six months of 2026 as compared to the same period in 2025 was primarily due to an increase in cash collections in the first six 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 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.

Current wording

During the six months ended June 30, 2026 and 2025, we made cash contributions of $1.7 million and $3.3 million, respectively, to our employee pension plan. No cash contributions were made to our other postretirement benefit plans during the six months ended June 30, 2026 and 2025. 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 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.

Current wording

During the six months ended June 30, 2026 and 2025, we used $276.4 million and $229.5 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 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.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2026 was $155.2 million compared to $142.4 million for the same period in 2025. For the six months ended June 30, 2026 and 2025, we paid dividends of $40.0 million and $38.1 million, respectively. For the six months ended June 30, 2026, we issued $94.1 million of Company common stock through our at-the-market equity program and $1.4 million of Company common stock through our employee stock purchase plan. For the six months ended June 30, 2025, we issued $1.3 million through our employee stock purchase plan. We received $18.5 million and $10.6 million of PFAS settlement proceeds for the six months ended June 30, 2026 and 2025, respectively. 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 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.

Current wording

For the six months ended June 30, 2026 and 2025, we borrowed $555.0 million and $410.0 million, respectively, on our unsecured revolving credit facilities. We made repayments on our unsecured revolving credit facilities of $480.0 million and $255.0 million during the six months ended June 30, 2026 and 2025, respectively.

Previous 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.

Current wording

The combined total net IRMA, M-WRAM, Water Revenue Adjustment Mechanism and Modified Cost Balancing Account receivable balance was $110.2 million and $118.4 million as of June 30, 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

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.

Current wording

As of June 30, 2026 and December 31, 2025, short-term borrowings of $205.0 million and $130.0 million, respectively, were outstanding on the unsecured revolving credit facilities.

Previous 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.

Current wording

During the six months ended June 30, 2026, our quarterly common stock dividend payments were $0.67 per share compared to $0.64 per share, which includes a one-time special dividend of $0.04 per share, for the six months ended June 30, 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 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.

Current wording

At the July 29, 2026 meeting, the Company’s Board of Directors declared the third quarter dividend of $0.335 per share payable on August 21, 2026, to stockholders of record on August 10, 2026. This was our 326th consecutive quarterly dividend.

Previous wording

We utilize the Company and Cal Water facilities for our short-term financing needs. As of March 31, 2026, the availability on the Company and Cal Water credit facilities was $180.0 million and $190.0 million, respectively.

Current wording

We utilize the Company and Cal Water facilities for our short-term financing needs. As of June 30, 2026, the availability on the Company and Cal Water credit facilities was $200.0 million and $195.0 million, respectively.

Previous wording

Book value per common share was $28.08 at March 31, 2026 compared to $28.33 at December 31, 2025. There were approximately 1,705 stockholders of record for our common stock as of February 9, 2026.

Current wording

Book value per common share was $29.23 at June 30, 2026 compared to $28.33 at December 31, 2025. There were approximately 1,692 stockholders of record for our common stock as of May 11, 2026.

Previous wording

During the three months ended March 31, 2026, utility plant expenditures totaled $129.5 million, including Company-funded projects of $114.0 million and developer-funded projects of $15.5 million. For 2026, we estimate utility capital expenditures to be between $580.0 million and $640.0 million based on the 2024 CA GRC and normal capital needs in the other subsidiaries. The range includes an estimated PFAS compliance cost of $79.2 million for 2026.

Current wording

During the six months ended June 30, 2026, utility plant expenditures totaled $276.4 million, including Company-funded projects of $242.8 million and developer-funded projects of $33.6 million. For 2026, we estimate utility capital expenditures to be between $580.0 million and $640.0 million based on the 2024 CA GRC and normal capital needs in the other subsidiaries. The range includes an estimated PFAS compliance cost of $79.2 million for 2026.

Previous wording

As of March 31, 2026, construction work in progress was $368.5 million. Construction work in progress includes projects that are under construction but not yet complete and placed in service.

Current wording

As of June 30, 2026, construction work in progress was $435.5 million. Construction work in progress includes projects that are under construction but not yet complete and placed in service.

Previous wording

In November of 2025, we entered into an agreement to purchase the remaining membership interests of BVRT for $45.0 million. As required by the membership interest purchase agreement, we made an initial payment of $7.0 million in the first quarter of 2026. An additional payment of $3.8 million is due in the third quarter of 2026, with the remainder due upon closing of the acquisition. Acquisition of the remaining membership interests is subject to satisfaction of customary closing conditions in addition to PUCT and our Board of Director’s approval. We expect to fund the purchase with cash from operations.

Current wording

In November of 2025, we entered into an agreement to purchase the remaining membership interests of BVRT for $45.0 million. As required by the membership interest purchase agreement, we made an initial payment of $7.0 million in the first quarter of 2026. An additional payment of $3.8 million was made in July of 2026, with the remainder due upon closing of the acquisition. Acquisition of the remaining membership interests is subject to satisfaction of customary closing conditions in addition to PUCT and our Board of Director’s approval. We expect to fund the purchase with cash from operations.

Previous wording

Our source of supply varies among our operating subsidiaries and districts. Certain subsidiaries and districts obtain all of their supply from wells; some purchase all of their supply from wholesale suppliers; and others obtain supply from a combination of wells and wholesale suppliers. A small portion of supply comes from surface sources and is processed through Company-owned water treatment plants. To the best of management’s knowledge, we are meeting water quality, environmental, and other regulatory standards for all Company-owned systems.

Current wording

Our source of supply varies among our service areas. Certain service areas obtain all of their supply from wells; some purchase all of their supply from wholesale suppliers; and others obtain supply from a combination of wells and wholesale suppliers. A small portion of supply comes from surface sources and is processed through Company-owned water treatment plants. To the best of management’s knowledge, we are meeting water quality, environmental, and other regulatory standards for all Company-owned systems.

Previous wording

Historically, approximately half of our annual water supply is pumped from wells. State groundwater management agencies operate differently in each state. Some of our wells extract ground water from adjudicated groundwater basins, in which a court has settled the dispute between landowners, or other parties over how much annual groundwater can be extracted by each party. All of our adjudicated groundwater basins are located in the State of California. Our average annual groundwater extraction from adjudicated groundwater basins approximates 8.2 billion gallons or 15.0% of our total average annual (2024 to 2025) water supply pumped from wells. Historically, we have extracted less than 100% of our annual adjudicated groundwater rights and have the right to carry forward up to 20% of the unused amount to the next annual period. All of our remaining wells extract groundwater from locally managed or unmanaged water basins or aquifers. There are currently no set limits for the ground water extracted from these water basins or aquifers. Our average annual groundwater extraction from managed groundwater basins approximates 30.9 billion gallons or 56.2% of our total average annual (2024 to 2025) water supply pumped from wells. Many managed groundwater basins from which we extract water have groundwater recharge facilities that we financially support by paying well pump taxes. For the three months ended March 31, 2026 and 2025, our well pump taxes were $8.0 million and $5.7 million, respectively. In 2014, the State of California enacted the Sustainable Groundwater Management Act of 2014 (SGMA). The law and its implementing regulations required most basins to create a sustainability agency by 2017, develop a sustainability plan by the end of 2022, and show progress toward sustainability by 2027. We expect that after the SGMA provisions are fully implemented, all the Company’s California groundwater will be produced from sustainably managed and/or adjudicated basins.

Current wording

Historically, approximately half of our annual water supply is pumped from wells. State groundwater management agencies operate differently in each state. Some of our wells extract ground water from adjudicated groundwater basins, in which a court has settled the dispute between landowners, or other parties over how much annual groundwater can be extracted by each party. All of our adjudicated groundwater basins are located in the State of California. Our average annual groundwater extraction from adjudicated groundwater basins approximates 8.2 billion gallons or 15.0% of our total average annual (2024 to 2025) water supply pumped from wells. Historically, we have extracted less than 100% of our annual adjudicated groundwater rights and have the right to carry forward up to 20% of the unused amount to the next annual period. All of our remaining wells extract groundwater from locally managed or unmanaged water basins or aquifers. There are currently no set limits for the ground water extracted from these water basins or aquifers. Our average annual groundwater extraction from managed groundwater basins approximates 30.9 billion gallons or 56.2% of our total average annual (2024 to 2025) water supply pumped from wells. Many managed groundwater basins from which we extract water have groundwater recharge facilities that we financially support by paying well pump taxes. For the six months ended June 30, 2026 and 2025, our well pump taxes were $15.0 million and $12.1 million, respectively. In 2014, the State of California enacted the Sustainable Groundwater Management Act of 2014 (SGMA). The law and its implementing regulations required most basins to create a sustainability agency by 2017, develop a sustainability plan by the end of 2022, and show progress toward sustainability by 2027. We expect that after the SGMA provisions are fully implemented, all the Company’s California groundwater will be produced from sustainably managed and/or adjudicated basins.

Previous wording

California’s normal weather pattern yields little precipitation between mid-spring and mid-fall. The Washington Water service areas receive precipitation in all seasons, with the heaviest amounts during the winter. New Mexico Water’s rainfall is heaviest in the summer monsoon season. Hawaii Water receives precipitation throughout the year, with the largest amounts in the winter months. Typically, water usage in all service areas is highest during the warm and dry summers and declines in the cool winter months. Rain and snow during the winter months in California replenish underground water aquifers and fill reservoirs, providing the water supply for subsequent delivery to customers. As of April 16, 2026, statewide precipitation was 99% of long-term averages and statewide reservoir storage was above long-term averages during the 2025 to 2026 water year (per the California Department of Water Resources). Management believes that supply pumped from underground aquifers and purchased from wholesale suppliers will be adequate to meet customer demand during 2026 and thereafter. Our customers in West Maui are experiencing drought conditions, and we are working with local partners to encourage additional conservation. Water rationing in West Maui may be required in future periods, if declared by the state or local jurisdictions. Long-term water supply plans are developed for each of our districts to help assure an adequate water supply under various operating and supply conditions. Some districts have unique challenges in meeting water quality standards, but management believes that supplies will meet current standards using currently available treatment processes or by installing the best available technologies.

Current wording

California’s normal weather pattern yields little precipitation between mid-spring and mid-fall. The Washington Water service areas receive precipitation in all seasons, with the heaviest amounts during the winter. New Mexico Water’s rainfall is heaviest in the summer monsoon season. Hawaii Water receives precipitation throughout the year, with the largest amounts in the winter months. Typically, water usage in all service areas is highest during the warm and dry summers and declines in the cool winter months. Rain and snow during the winter months in California replenish underground water aquifers and fill reservoirs, providing the water supply for subsequent delivery to customers. As of July 20, 2026, statewide precipitation was 97% of long-term averages and statewide reservoir storage was above long-term averages during the 2025 to 2026 water year (per the California Department of Water Resources). Management believes that supply pumped from underground aquifers and purchased from wholesale suppliers will be adequate to meet customer demand during 2026 and thereafter. However, water rationing may be required in future periods, dependent on local conditions or if declared by the state or local jurisdictions. Long-term water supply plans are developed for each of our service areas to help assure an adequate water supply under various operating and supply conditions. Some service areas have unique challenges in meeting water quality standards, but management believes that supplies will meet current standards using currently available treatment processes or by installing the best available technologies.