American States Water Company — Second Quarter 2026 Earnings Summary

Financial Performance

• Consolidated diluted earnings per share (EPS) increased 25.3% to $1.09 for the quarter ended June 30, 2026, compared to $0.87 in the same period in 2025.
• Consolidated basic EPS was $1.10 for the quarter ended June 30, 2026, compared to $0.87 in 2025.
• Year-to-date (YTD) consolidated diluted EPS increased 18.5% to $1.86 for the six months ended June 30, 2026, compared to $1.57 in 2025.
• Total operating revenues for the quarter ended June 30, 2026, were $181.29 million, up from $163.07 million in 2025.
• Total operating revenues for the six months ended June 30, 2026, were $350.48 million, up from $311.08 million in 2025.
• Net income for the quarter ended June 30, 2026, was $43.27 million, compared to $33.69 million in 2025.
• Net income for the six months ended June 30, 2026, was $73.22 million, compared to $60.53 million in 2025.
• Diluted earnings per share contribution from the Water segment was $0.91 for Q2 2026, up from $0.73 in 2025 (24.7% increase).
• Diluted earnings per share contribution from the Electric segment was $0.04 for Q2 2026, up from $0.03 in 2025.
• Diluted earnings per share contribution from the Contracted services segment was $0.16 for Q2 2026, up from $0.13 in 2025.
• Diluted earnings per share contribution from the AWR (parent) was $(0.01) for both Q2 2026 and Q2 2025.
• YTD diluted earnings per share contribution from the Water segment was $1.47 for 2026, up from $1.25 in 2025.
• YTD diluted earnings per share contribution from the Electric segment was $0.12 for 2026, up from $0.10 in 2025.
• YTD diluted earnings per share contribution from the Contracted services segment was $0.31 for 2026, up from $0.26 in 2025.
• YTD diluted earnings per share contribution from the AWR (parent) was $(0.03) for both 2026 and 2025.
• The increase in Q2 2026 EPS was negatively impacted by approximately $0.02 per share due to dilution from the ATM offering program.
• The increase in YTD 2026 EPS was negatively impacted by approximately $0.04 per share due to dilution from the ATM offering program.
• Water operating revenues increased $11.4 million in Q2 2026 compared to 2025.
• Water supply costs increased $0.7 million in Q2 2026 compared to 2025.
• Operating expenses (excluding supply costs) increased $0.2 million in Q2 2026 compared to 2025.
• Interest expense (net of interest income) increased $0.9 million in Q2 2026 compared to 2025.
• Other income (net of other expense) increased $2.0 million in Q2 2026 compared to 2025, driven by $4.3 million in investment gains compared to $2.7 million in 2025.
• Total operating expenses for the quarter ended June 30, 2026, were $117.32 million, compared to $112.11 million in 2025.
• Total operating expenses for the six months ended June 30, 2026, were $235.14 million, compared to $214.57 million in 2025.
• Operating income for the quarter ended June 30, 2026, was $63.97 million, compared to $50.96 million in 2025.
• Operating income for the six months ended June 30, 2026, was $115.34 million, compared to $96.51 million in 2025.
• Income before income tax expense for the quarter ended June 30, 2026, was $57.75 million, compared to $43.93 million in 2025.
• Income before income tax expense for the six months ended June 30, 2026, was $97.57 million, compared to $79.23 million in 2025.
• Income tax expense for the quarter ended June 30, 2026, was $14.48 million, compared to $10.24 million in 2025.
• Income tax expense for the six months ended June 30, 2026, was $24.35 million, compared to $18.70 million in 2025.
• Total assets were $2.77 billion as of June 30, 2026, compared to $2.72 billion as of December 31, 2025.
• Total capitalization was $1.84 billion as of June 30, 2026, compared to $1.83 billion as of December 31, 2025.

Guidance and Future Outlook

• AWR's regulated utilities are on target to invest $185 to $220 million in 2026.
• The contracted services business is expected to contribute $0.63 to $0.67 per share for the full year 2026.
• AWR has no plans to issue additional equity through at least the end of 2029 to support current operations.
• Future earnings volatility for the water utility segment is expected due to consumption fluctuations and water supply mix changes resulting from a modified revenue decoupling mechanism and incremental water supply cost balancing account effective January 1, 2025.
• It is uncertain whether the second quarter's trend of higher customer demand and favorable water supply source mix will continue throughout the remainder of 2026.

Business Segments and Product Lines

• Water Segment: Earnings growth was driven by CPUC-approved rate increases effective January 1, 2026, which boosted 2026 full-year adopted operating revenues less water supply costs by $32.0 million over 2025 adopted amounts, including $11.0 million for capital projects approved through advice letter filings. Earnings also benefited from a 4% increase in water consumption and a lower reliance on purchased water.
• Electric Segment: Earnings growth was driven by CPUC-authorized fourth-year rate increases in 2026 and additional revenues approved to recover the cost plus an allowance for funds used during construction of certain advice letter capital projects.
• Contracted Services Segment: Earnings growth was driven by an increase in construction activities, an increase in management fee revenues from the resolution of various economic price adjustments, and a decrease in interest expense due to lower average borrowing levels and interest rates.
• The company serves over one million people in ten states.
• Golden State Water Company provides water service to approximately 265,200 customer connections in more than 80 communities in Northern, Coastal, and Southern California.
• Bear Valley Electric Service, Inc. distributes electricity to approximately 24,900 customer connections in the City of Big Bear Lake and surrounding areas in San Bernardino County, California.
• American States Utility Services, Inc. provides operations, maintenance, and construction management services for water distribution, wastewater collection, and treatment facilities located on twelve military bases throughout the country under 50-year privatization contracts with the U.S. government in 8 states and one military base under a 15-year contract in an additional state.

Market and Competitive Landscape

• In July, Standard & Poor's affirmed the company's strong credit ratings of "A" for AWR with a stable outlook, and "A+" for its regulated water utility with a stable outlook.
• Water consumption changes depend on factors like climate change, conservation, and weather conditions, including El Niño or La Niña events.
• Water supply mix changes can occur due to unforeseen changes in groundwater quality and operating conditions of groundwater basins and associated pumping facilities.

Risks and Challenges

• Future earnings volatility for the water utility segment faces risks from consumption fluctuations and water supply mix changes.
• Consumption changes depend on climate change, conservation, and weather conditions.
• Water supply mix changes can occur due to unforeseen changes in groundwater quality and operating conditions.
• Changes in the magnitude of flowed-through items in income tax expense can unfavorably impact the water segment's earnings.
• Forward-looking statements are subject to estimates, assumptions, known and unknown risks, uncertainties, and other factors described in the company's SEC filings.

Management Commentary and Tone

• Management highlighted that earnings growth was primarily generated from higher earnings at the water utility segment resulting from new customer rate increases approved by the CPUC.
• Management noted that the contracted services segment benefited from increased construction activities.
• The company has increased annual dividends to shareholders for 72 consecutive years.
• AWR has grown its quarterly dividend rate at a compound annual growth rate (CAGR) of 8.4% over the last five years since the third quarter of 2021.
• AWR is on pace to achieve a 10-year CAGR of 8.7% in its calendar year dividend payments through 2026.
• AWR's current policy is to achieve a CAGR in the dividend of more than 7% over the long-term.

Other Key Points

• On June 12, 2026, AWR successfully completed its at-the-market (ATM) offering program, reaching the maximum aggregate offering capacity of $200 million in gross proceeds raised, resulting in the total sale of 2,575,947 Common Shares.
• No further sales of Common Shares will be made under the ATM offering program.
• The Board of Directors approved an 8.2% increase in the third quarter dividend to $0.5455 per share, up from $0.5040 per share.
• The increased dividend will be paid on September 2, 2026, to shareholders of record on August 17, 2026.
• AWR has paid common dividends every year since 1931.
• Robert Sprowls (President and CEO) and Eva Tang (Senior Vice President and CFO) hosted a conference call on August 6, 2026, to discuss the results.