H2O AMERICA
For the period ended Oct 23, 2026. Filed Oct 26, 2026.
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Oct 23, 2026 · Filed Oct 26, 2026
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Contents
EX-99.1 · Forward-Looking Statements
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the federal securities laws relating to future events and future results of H2O America and its subsidiaries that are based on current expectations, estimates, forecasts, and projections about H2O America and its subsidiaries and the industries in which H2O America and its subsidiaries operate and the beliefs and assumptions of the management of H2O America. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “estimates,” “anticipates,” “intends,” “seeks,” “plans,” “projects,” “may,” “should,” “will,” “approximately,” “strategy,” or the negative of those words or other comparable terminology. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.
The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the following factors: (1) the risks associated with the Quadvest and Cibolo Valley transactions, including, the risk of the proposed Cibolo Valley transaction not closing on the anticipated timeline, or at all, and the ability to successfully integrate Quadvest’s and Cibolo Valley's operations and realize the projected financial and other benefits of the proposed transactions; (2) the effect of water, utility, environmental and other governmental policies and regulations, including regulatory actions concerning rates, authorized return on equity, authorized capital structures, capital expenditures, PFAS and other decisions; (3) changes in demand for water and other services; (4) unanticipated weather conditions and changes in seasonality including those affecting water supply and customer usage; (5) the effect of the impact of climate change; (6) unexpected costs, charges or expenses; (7) our ability to successfully evaluate investments in new business and growth initiatives; (8) contamination of our water supplies and damage or failure of our water equipment and infrastructure; (9) the risk of work stoppages, strikes and other labor-related actions; (10) catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, epidemic, or similar occurrences; (11) changes in general economic, political, legislative, business and financial market conditions; (12) the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, changes in interest rates, compliance with regulatory requirements, compliance with the terms and conditions of our outstanding indebtedness and general market and economic conditions; and (13) legislative and general market and economic developments. The risks, uncertainties and other factors may cause the actual results, performance or achievements of H2O America to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Results for a quarter are not indicative of results for a full year due to seasonality and other factors. In addition, actual results, performance or achievements are subject to other risks and uncertainties that relate more broadly to our overall business, including those more fully described in our filings with the SEC, including our most recent reports on Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements are not guarantees of future performance, and speak only as of the date made, and H2O America undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
H2O America Contacts:
Ann P. Kelly
Chief Financial Officer and Treasurer
408.385.4752
Ann.Kelly@H2O-America.com
Jonathan Reeder
Senior Director of Treasury and Investor Relations
475.414.1034
Jonathan.Reeder@H2O-America.com
1 Adjusted net income and adjusted diluted EPS are non-GAAP financial measures as defined below. See the tables below for reconciliations to the most comparable GAAP measures. Information reconciling adjusted diluted EPS guidance to the comparable GAAP financial measure is unavailable to the company without unreasonable effort, as discussed below.
2 Includes both utility plant additions and capitalizable costs associated with cloud-computing arrangements.
Condensed Consolidated Statements of Income
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Operating revenue | $250,229 | 240,550 | 643,996 | 606,404 |
| Operating expense: | ||||
| Production expenses: | ||||
| Purchased water | 50,360 | 38,163 | 116,953 | 101,537 |
| Power | 4,351 | 8,175 | 12,474 | 15,509 |
| Groundwater extraction charges | 36,020 | 39,608 | 87,848 | 84,253 |
| Other production expenses | 12,575 | 12,374 | 37,936 | 36,857 |
| Total production expenses | 103,306 | 98,320 | 255,211 | 238,156 |
| Administrative and general | 35,441 | 31,306 | 98,874 | 87,861 |
| Maintenance | 8,347 | 8,016 | 24,178 | 22,985 |
| Property taxes and other non-income taxes | 10,168 | 9,516 | 28,146 | 27,217 |
| Depreciation and amortization | 32,478 | 28,765 | 96,918 | 85,797 |
| Total operating expense | 189,740 | 175,923 | 503,327 | 462,016 |
| Operating income | 60,489 | 64,627 | 140,669 | 144,388 |
| Other (expense) income: | ||||
| Interest on long-term debt and other interest expense | (18,161) | (17,898) | (54,951) | (54,292) |
| Pension non-service credit | 1,975 | 1,587 | 5,906 | 4,810 |
| Other, net | 3,943 | 2,607 | 9,595 | 5,384 |
| Income before income taxes | 48,246 | 50,923 | 101,219 | 100,290 |
| Provision for income taxes | 5,202 | 5,791 | 12,573 | 13,932 |
| Net income | 43,044 | 45,132 | 88,646 | 86,358 |
| Comprehensive income | $43,044 | 45,132 | 88,646 | 86,358 |
| Earnings per share | ||||
| —Basic | $1.03 | 1.27 | 2.18 | 2.49 |
| —Diluted | $0.99 | 1.27 | 2.13 | 2.48 |
| Dividends per share | $0.44 | 0.42 | 1.32 | 1.26 |
| Weighted average shares outstanding | ||||
| —Basic | 41,959,732 | 35,543,224 | 40,594,395 | 34,706,183 |
| —Diluted | 43,478,365 | 35,643,826 | 41,644,367 | 34,797,374 |
Condensed Consolidated Balance Sheets
| September 30,2026 | December 31,2025 | |
|---|---|---|
| Assets | ||
| Utility plant: | ||
| Land | $44,563 | 44,600 |
| Depreciable plant and equipment | 4,963,174 | 4,688,644 |
| Construction work in progress | 347,660 | 269,272 |
| Intangible assets | 51,683 | 51,683 |
| Total utility plant | 5,407,080 | 5,054,199 |
| Less: accumulated depreciation and amortization | 1,190,907 | 1,120,232 |
| Net utility plant | 4,216,173 | 3,933,967 |
| Nonutility properties | 2,239 | 1,683 |
| Less: accumulated depreciation | 106 | 103 |
| Net nonutility properties | 2,133 | 1,580 |
| Current assets: | ||
| Cash and cash equivalents | 572,957 | 20,686 |
| Accounts receivable: | ||
| Customers, net of allowances for credit losses of $980 and $722 on September 30, 2026 and December 31, 2025, respectively | 87,869 | 62,471 |
| Income tax | — | 2,720 |
| Other | 7,741 | 7,710 |
| Accrued unbilled revenue | 71,833 | 68,971 |
| Prepaid expenses | 15,977 | 11,634 |
| Current portion of regulatory assets | 14,621 | 8,315 |
| Other current assets | 7,138 | 8,086 |
| Total current assets | 778,136 | 190,593 |
| Other assets: | ||
| Regulatory assets, less current portion | 254,732 | 246,547 |
| Investments | 20,373 | 19,711 |
| Postretirement benefit plans | 84,887 | 80,967 |
| Goodwill | 640,311 | 640,311 |
| Other | 55,379 | 35,890 |
| Total other assets | 1,055,682 | 1,023,426 |
| Total assets | $6,052,124 | 5,149,566 |
Condensed Consolidated Balance Sheets
| September 30,2026 | December 31,2025 | |
|---|---|---|
| Capitalization and liabilities | ||
| Capitalization: | ||
| Stockholders’ equity: | ||
| Common stock, $0.001 par value; authorized 70,000,000 shares; 48,318,991 issued and outstanding shares on September 30, 2026 and 36,118,242 on December 31, 2025 | $48 | 36 |
| Additional paid-in capital | 1,582,745 | 958,188 |
| Retained earnings | 616,956 | 581,080 |
| Accumulated other comprehensive income | 1,467 | 1,467 |
| Total stockholders’ equity | 2,201,216 | 1,540,771 |
| Long-term debt, less current portion | 1,881,391 | 1,866,819 |
| Total capitalization | 4,082,607 | 3,407,590 |
| Current liabilities: | ||
| Lines of credit | 200,275 | 86,834 |
| Current portion of long-term debt | 7,882 | 23,504 |
| Accrued groundwater extraction charges, purchased water and power | 44,660 | 29,321 |
| Accounts payable | 87,913 | 75,427 |
| Accrued interest | 23,331 | 18,241 |
| Accrued payroll | 14,632 | 19,109 |
| Current portion of regulatory liabilities | — | — |
| Other current liabilities | 31,654 | 20,942 |
| Total current liabilities | 410,347 | 273,378 |
| Deferred income taxes | 332,866 | 307,893 |
| Advances for construction | 209,161 | 201,413 |
| Contributions in aid of construction | 354,547 | 342,697 |
| Postretirement benefit plans | 47,391 | 45,878 |
| Regulatory liabilities, less current portion | 583,599 | 546,797 |
| Other noncurrent liabilities | 31,606 | 23,920 |
| Total capitalization and liabilities | $6,052,124 | 5,149,566 |
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
| Three months ended September 30, | Nine months ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Reported GAAP Net Income | $43,044 | 45,132 | 88,646 | 86,358 |
| Adjustments: | ||||
| (Gain)/loss on sale of real estate investments1 | (1,152) | (273) | (1,324) | (273) |
| Expense for merger, acquisition and integration activities1 | 3,774 | 700 | 10,185 | 3,048 |
| Non-recurring tax adjustment due to merger, acquisition and integration related activities2 | 264 | — | 264 | — |
| Tax effect of above adjustments3 | (733) | (109) | (2,479) | (766) |
| Adjusted Net Income (non-GAAP) | $45,197 | 45,450 | $95,292 | 88,367 |
| Reported GAAP Diluted Earnings Per Share | $0.99 | 1.27 | $2.13 | $2.48 |
| Adjustments: | ||||
| (Gain)/loss on sale of real estate investments, net of tax | (0.02) | (0.01) | (0.02) | (0.01) |
| Expense for merger, acquisition and integration activities, net of tax | 0.06 | 0.01 | 0.18 | 0.06 |
| Non-recurring tax adjustment due to merger, acquisition and integration related activities | 0.01 | — | 0.01 | — |
| Adjusted Diluted Earnings Per Share (non-GAAP) | $1.04 | 1.27 | 2.30 | 2.53 |
1 Included in the "Administrative and general" and “Other, net” lines on the consolidated statements of comprehensive income
2 Included in the “provision for income taxes” line on the condensed consolidated statements of comprehensive income
3 The tax effect on all adjustments is calculated at the applicable statutory rate.
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