10q10k10q10k.net

What changed in AMERICAN STATES WATER CO's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of AMERICAN STATES WATER CO's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+480 added−507 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in AMERICAN STATES WATER CO's 2025 10-K

480 paragraphs added · 507 removed · 349 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

101 edited+24 added−13 removed226 unchanged
Biggest changeAlthough we do not believe that our systems are at a materially greater risk of cybersecurity attacks when compared to other similar organizations, our information technology systems remain at risk to damage or interruption from the following among other types of cybersecurity risks: • Supply Chain Attacks; • Malicious Software; • Credential Loss or Theft; • Supervisory Control and Data Acquisition System Takeover; • Equipment Theft; • Ransomware; • Actions of Employees (Intentional or Accidental); • Phishing Attacks; 24 Table of Contents • Identity-Based Attacks; and • Denial-of-Service Attacks.
Biggest changeAlthough we do not believe that our systems are at a materially greater risk of cybersecurity attacks when compared to other similar organizations, our information technology systems remain at risk to damage or interruption from the following among other types of cybersecurity risks: • Supply Chain Attacks; • Malicious Software; • Credential Loss or Theft; • Supervisory Control and Data Acquisition System Takeover; • Equipment Theft; • Ransomware; • Actions of Employees (Intentional or Accidental); • Phishing Attacks; • Identity-Based Attacks; and • Denial-of-Service Attacks. • Artificial Intelligence enabled Attacks We believe a breach of customer personally identifiable information is one of the most significant financial risks to us as the costs incurred could exceed the amount of our cybersecurity insurance coverage and these costs may increase if we fail to comply with federal and state privacy regulations such as the California Consumer Privacy Act (“CCPA”), a state statute that became effective January 1, 2020, which enhances the privacy rights and consumer protections for California residents.
The subsidiaries of ASUS are subject to similar requirements in connection with their water and 8 Table of Contents wastewater operations on military bases. GSWC is also responsible for clean-up and remediation at a plant site that contained an underground storage tank.
The subsidiaries of ASUS are subject to similar requirements in connection with their water and wastewater operations on military bases. GSWC is also responsible for clean-up and remediation at a plant site that contained 8 Table of Contents an underground storage tank.
These contracts may be terminated or services suspended at any time for convenience of the government. We are subject to penalties for failure to conform or comply with U.S. government regulations and the terms of our contracts, and may be suspended or debarred for such failure to comply.
These contracts may be terminated or services suspended at any time for convenience of the U.S. government. We are subject to penalties for failure to conform or comply with U.S. government regulations and the terms of our contracts, and may be suspended or debarred for such failure to comply.
Our regulated utilities' ongoing financial results depend on their ability to recover costs from its customers, including costs such as water or electricity purchased for its customers, through rates charged and billed to its customers as approved by the CPUC.
Our regulated utilities’ ongoing financial results depend on their ability to recover costs from their customers, including costs such as water or electricity purchased for its customers, through rates charged and billed to its customers as approved by the CPUC.
Regulations and laws affect almost all aspects of our businesses and changes to such regulations are continuous and ongoing. There can be no assurance that laws, regulations and policies of regulatory agencies will not be changed in ways that will not materially impact our results of operations, financial position or cash flows.
Regulations and laws affect almost all aspects of our businesses and changes to such regulations are continuous and ongoing. There can be no assurance that laws, regulations and policies of regulatory agencies will not be changed in ways that will materially impact our results of operations, financial position or cash flows.
Our liquidity, earnings and operations may be materially adversely affected by wildfires.
Our liquidity, earnings and operations may be materially and adversely affected by wildfires.
In addition, wildfires may result in reduced demand if structures are destroyed or unusable following a wildfire and may adversely affect our ability to provide water or electric service in our service areas due to public safety power shutdowns or any of our water or electric utility infrastructure is damaged by a wildfire.
In addition, wildfires may result in reduced demand if structures are destroyed or unusable following a wildfire and may adversely affect our ability to provide water or electric service in our service areas due to public safety power shutdowns or if any of our water or electric utility infrastructure is damaged by a wildfire.
Additionally, the CPUC has delegated to its staff the authority to issue citations, which carry a fine of $50,000 per-violation per day, to electric utilities subject to its jurisdiction for violations of safety rules found in statutes, regulations, and the General Orders of the CPUC.
Additionally, the CPUC has delegated to its staff the authority to issue citations, which carry a fine of $50,000 per-violation per day, to electric utilities subject to its jurisdiction for violations of safety rules found in statutes, regulations, and the General Orders, rules and regulations, of the CPUC.
In addition to purchased power contracts, we purchase additional energy from the spot market to meet peak demand and following the expiration of purchased power contracts if there are delays in obtaining CPUC authorization of new purchase power contracts. We may sell surplus power to the spot market during times of reduced energy demand.
In addition to purchased power contracts, we purchase additional energy from the spot market to meet peak demand and following the expiration of purchased power contracts if there are delays in obtaining CPUC authorization of new purchased power contracts. We may sell surplus power to the spot market during times of reduced energy demand.
We may have responsibility for water quality at the military bases we serve While it is the responsibility of the U.S. government to provide the source of water supply to meet ASUS’s subsidiaries water distribution system requirements under their contracts with the U.S. government, ASUS’s subsidiaries, as the water system permit holders for most of the bases they serve, are responsible for ensuring the continued compliance of the provided source of supply with all federal, state and local regulations.
We may have responsibility for water quality at the military bases we serve While it is the responsibility of the U.S. government to provide the source of water supply to meet ASUS’s subsidiaries water distribution system requirements under their contracts with the U.S. government, ASUS’s subsidiaries, as the water system permit holders for most of the bases they serve, are responsible for ensuring the continued compliance of the provided source of supply with all federal, state and local regulations, including water quality regulations.
As mandated by legislation enacted in California, BVES is required to submit wildfire mitigation plans to the CPUC and the Office of Energy Infrastructure Safety (“OEIS”) for approvals. California requires electric utilities to prepare plans on constructing, maintaining, and operating their electrical lines and equipment to minimize the risk of catastrophic wildfire.
Also, as mandated by legislation enacted in California, BVES is required to submit wildfire mitigation plans to the CPUC and the Office of Energy Infrastructure Safety (“OEIS”) for approvals. California requires electric utilities to prepare plans on constructing, maintaining, and operating their electrical lines and equipment to minimize the risk of catastrophic wildfire.
However, without the continuation of a full revenue decoupling mechanism such as the WRAM and a full cost balancing account for water supply such as the MCBA, Registrant may be subject to future volatility in revenues and earnings as a result of fluctuations in water consumption by our customers and changes in water supply cost mix.
However, without the continuation of a full revenue decoupling mechanism such as the WRAM and a full supply cost decoupling balancing account such as the MCBA, Registrant may be subject to future volatility in revenues and earnings as a result of fluctuations in water consumption by our customers and changes in water supply cost mix.
GSWC expects to incur additional capital costs and operating costs to maintain and improve the quality of water delivered to its customers in light of anticipated stress on water resources associated with watershed and aquifer pollution, drought impacts, as well as to meet future water quality standards and consumer expectations.
However, GSWC expects to incur additional capital costs and operating costs to maintain and improve the quality of water delivered to its customers in light of anticipated stress on water resources associated with watershed and aquifer pollution, drought impacts, as well as to meet future water quality standards and consumer expectations.
We are also subject to other business risks typical of our business, including: • Cybersecurity incidents or information and operational technology outages, including incidents and outages caused by third party solutions that support operational and business processes, could disrupt and adversely impact our operations and critical technology systems, resulting in an increase of costs, liabilities to third parties and damage to our reputation; • Physical security risks of our infrastructure, critical assets, and data critical to our business, employees, customers and vendors could also disrupt our operations and critical systems, resulting in reputational damage and adversely impact our financial performance; • Failure to attract, train, develop and transition key employees with the necessary skills to replace employees who are retiring or otherwise terminate employment or to fill new positions needed to respond to the increase in public utility and environmental regulations; 12 Table of Contents • Failure to make accurate estimates about financing and accounting matters, and in filing requests for rate increases with the CPUC or requests for price adjustments with the U.S. government or in bids on military base contracts or obtain new task orders from the U.S. government; • Our ability to finance significant capital expenditures required by our businesses, which could be adversely impacted by general economic and market conditions, delays in receiving decisions from the CPUC on our general rate cases or delays in receiving payment from the U.S. government; • Volatility in economic conditions such as changes to inflation, short-term interest rate volatility, and other market conditions may adversely impact our financial performance; • Changes in accounting, public utility, environmental and tax laws and regulations impacting our business; • Our inability to comply with debt covenants in our debt agreements; and • Final determination of our income tax liability by the federal and applicable state governments.
We are also subject to other business risks typical of our business, including: • Cybersecurity incidents or information and operational technology outages, including incidents and outages caused by third party solutions that support operational and business processes, could disrupt and adversely impact our operations and critical technology systems, resulting in an increase of costs, liabilities to third parties and damage to our reputation; • Physical security risks of our infrastructure, critical assets, and data critical to our business, employees, customers and vendors could also disrupt our operations and critical systems, resulting in reputational damage and adversely impact our financial performance; • Failure to attract, train, develop and transition key employees with the necessary skills to replace employees who are retiring or otherwise terminate employment or to fill new positions needed to respond to the increase in public utility and environmental regulations and overall needs of our operations and continued capital investments; 12 Table of Contents • Failure to make accurate estimates about financing and accounting matters, and in filing requests for rate increases with the CPUC or requests for price adjustments with the U.S. government or in bids on military base contracts or obtain new task orders from the U.S. government; • Our ability to finance significant capital expenditures required by our businesses, which could be adversely impacted by general economic and market conditions, delays in receiving decisions from the CPUC on our general rate cases or delays in receiving payment from the U.S. government; • Volatility in economic conditions such as changes to inflation, short-term interest rate volatility, tariffs, and other market conditions may adversely impact our financial performance; • Changes in accounting, public utility, environmental and tax laws and regulations impacting our business; • Our inability to comply with debt covenants in our debt agreements; and • Final determination of our income tax liability by the federal and applicable state governments.
Climate Change Climate change has resulted in increased frequency and duration of droughts, potential degradation of water quality, and changes in demand for services. More frequent and extended California drought conditions may cause increased stress on surface water supplies and groundwater basins, as well as allocations of water from the State Water Project and the Colorado River.
Climate Change Climate change has resulted in increased frequency and duration of droughts, volatility in rainfall, potential degradation of water quality, and changes in demand for services. More frequent and extended California drought conditions may cause increased stress on surface water supplies and groundwater basins, as well as allocations of water from the State Water Project and the Colorado River.
The CPUC had adopted regulatory mechanisms that GSWC had implemented since 2008, and which helped mitigate fluctuations in revenues due to changes in water consumption by our customers in California. The Water Revenue Adjustment Mechanism (“WRAM”) and the Modified Cost Balancing Account (“MCBA”) remained in effect through December 31, 2024.
The CPUC had adopted regulatory mechanisms that GSWC had implemented since 2008, and which helped mitigate fluctuations in revenues due to changes in water consumption by our customers in California. The Water Revenue Adjustment Mechanism (“WRAM”) and the Modified Cost Balancing Account (“MCBA”) were in effect through December 31, 2024.
We make certain estimates and judgments in preparing our financial statements regarding, among others: • timing of recovering M-WRAM, WRAM, ICBA, MCBA and BRRAM regulatory assets; • regulatory recovery of deferred items; 25 Table of Contents • amounts to set aside for uncollectible accounts receivable, inventory obsolescence and uninsured losses; • our legal exposure and the appropriate accrual for claims, including general liability and workers’ compensation claims; • future costs and assumptions for pensions and other post-retirement benefits; and • possible tax uncertainties.
We make certain estimates and judgments in preparing our financial statements regarding, among others: • timing of recovering M-WRAM, WRAM, ICBA, MCBA and BRRAM regulatory assets; • regulatory recovery of deferred items; • amounts to set aside for uncollectible accounts receivable, inventory obsolescence and uninsured losses; • our legal exposure and the appropriate accrual for claims, including general liability and workers’ compensation claims; • future costs and assumptions for pensions and other post-retirement benefits; and • possible tax uncertainties.
NEM customers can receive a bill credit if their annual renewable energy production exceeds their on-site use. Approximately 5% of the energy consumed by BVES customers is now generated by customer-owned renewable sources (solar). BVES is required to comply with the CPUC’s greenhouse gas emission performance standards.
NEM customers can receive a bill credit if their annual renewable energy production exceeds their on-site use. Approximately 7% of the energy consumed by BVES customers is now generated by customer-owned renewable sources (solar). BVES is required to comply with the CPUC’s greenhouse gas emission performance standards.
Both GSWC’s and BVES’s operations exhibit seasonal trends. Although both have diversified customer bases, residential and commercial customers account for the majority of water and electric sales and revenues. Revenues derived from commercial and residential customers accounted for approximately 90% of total water and electric revenues for the years ended December 31, 2024, 2023 and 2022.
Both GSWC’s and BVES’s operations exhibit seasonal trends. Although both have diversified customer bases, residential and commercial customers account for the majority of water and electric sales and revenues. Revenues derived from commercial and residential customers accounted for approximately 90% of total water and electric revenues for the years ended December 31, 2025, 2024 and 2023.
On August 27, 2020, the CPUC issued a final decision in the first phase of the CPUC’s Order Instituting Rulemaking evaluating the low income ratepayer assistance and affordability objectives contained in the CPUC’s 2010 Water Action Plan, addressing the continued use of the WRAM and the MCBA by California water utilities.
In August 2020, the CPUC issued a final decision in the first phase of the CPUC’s Order Instituting Rulemaking evaluating the low income ratepayer assistance and affordability objectives contained in the CPUC’s 2010 Water Action Plan, addressing the continued use of the WRAM and the MCBA by California water utilities.
As a result of receiving a final decision in GSWC’s recent general rate case application that will set new rates for the years 2025 - 2027, GSWC was denied both regulatory mechanisms and instead received authorization to transition to a modified rate adjustment mechanism (a Monterey-style WRAM or “M-WRAM”) and an incremental cost balancing account for supply costs effective January 1, 2025.
As a result of receiving a final decision in GSWC’s latest general rate case application that set new rates for the years 2025 - 2027, GSWC was denied both regulatory mechanisms and instead received authorization to transition to a modified rate adjustment mechanism (a Monterey-style WRAM or “M-WRAM”) and an incremental cost balancing account for supply costs effective January 1, 2025.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” under the heading “ Overview .” However, without a full supply cost balancing account, Registrant’s earnings may be subject to future volatility as a result of changes in water supply cost mix.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” under the heading “ Overview .” Without a full decoupling supply cost balancing account, Registrant’s earnings may be subject to future volatility as a result of changes in water supply cost mix.
Under these standards, BVES must file an annual attestation with the CPUC stating that BVES has no new ownership investment in generation facilities exceeding the emission performance standards and no long-term commitments for generation exceeding the standards. In February 2025, BVES filed an attestation that BVES complied with the standards for 2024.
Under these standards, BVES must file an annual attestation with the CPUC stating that BVES has no new ownership investment in generation facilities exceeding the emission performance standards and no long-term commitments for generation exceeding the standards. In February 2026, BVES filed an attestation that BVES complied with the standards for 2025.
BVES is actively seeking both short- and long-term renewable energy contracts and is developing a utility-owned solar facility to fulfill its resource portfolio requirements for the compliance period from 2025 to 2027. In 2024, BVES’s renewable power represented 44% of total retail sales. Renewable energy procurement requirements continue to escalate, reaching 50% by 2026 and 100% carbon free by 2045.
BVES is actively seeking both short- and long-term renewable energy contracts and is developing a utility-owned solar facility to fulfill its resource portfolio requirements for the compliance period from 2025 to 2027. In 2025, BVES’s renewable power represented 47% of total retail sales. Renewable energy procurement requirements continue to escalate, reaching 50% by 2026 and 100% carbon free by 2045.
The CPUC has adopted regulatory mechanisms for our electric business, which helps mitigate fluctuations in the revenues of our electric business due to changes in the amount of electricity used by BVES’s customers. Environmental Regulations AWR’s subsidiaries are subject to extensive environmental regulations.
The CPUC has adopted regulatory mechanisms for our electric business, which help mitigate fluctuations in the revenues of our electric business due to changes in the amount of electricity used by BVES’s customers. Environmental Regulations AWR’s subsidiaries are subject to extensive environmental regulations.
While we maintain insurance policies to help reduce our financial exposure, a significant seismic event in southern California, where our regulated water and electric operations are concentrated, wildfires or other natural disasters in any of the areas that we serve could adversely impact our ability to deliver water and electricity or provide wastewater service, and adversely affect our costs of operations.
While we maintain insurance policies to help reduce our financial exposure, a significant seismic event in southern California, where our regulated water and electric operations are concentrated, wildfires or other 17 Table of Contents natural disasters in any of the areas that we serve could adversely impact our ability to deliver water and electricity or provide wastewater service, and adversely affect our costs of operations.
We may experience a decline in per-customer water usage due to factors such as: • conservation efforts to reduce costs; • drought conditions resulting in additional water conservation; • the use of more efficient household fixtures and appliances by customers to save water; • voluntary or mandatory changes in landscaping and irrigation patterns; • recycling of water by our customers; and • mandated water-use restrictions.
We may experience a decline in per-customer water usage due to factors such as: • conservation efforts to reduce costs; • drought conditions resulting in additional water conservation; • the use of more efficient household fixtures and appliances by customers to save water; • voluntary or mandatory changes in landscaping and irrigation patterns; • recycling of water by our customers; • mandated water-use restrictions; and • excessive rainfall events.
We have implemented tiered rates and other practices, as appropriate, in order to encourage water conservation. We have also implemented programs to assist customers in complying with water usage reductions. Over the long term, we are acting to secure additional supplies, which may include supplies from desalination and increased use of reclaimed water, where appropriate and feasible.
We have implemented tiered rates and other practices, as appropriate, in order to encourage water conservation. We have also implemented programs to assist customers in complying with water usage reductions. Over the long term, we are acting to secure additional supplies, which may include supplies from desalination, increased use of reclaimed water, and direct potable re-use where appropriate and feasible.
We recognize additional revenue for such work as, and 21 Table of Contents to the extent that, our economic price adjustments and/or requests for equitable adjustments are approved. Delays in obtaining approval of economic price adjustments and/or equitable adjustments can negatively impact our results of operations and cash flows. Certain payments under these contracts are subject to appropriations by Congress.
We recognize additional revenue for such work as, and to the extent that, our economic price adjustments and/or requests for equitable adjustments are approved. Delays in obtaining approval of economic price adjustments and/or equitable adjustments can negatively impact our results of operations and cash flows. Certain payments under these contracts are subject to appropriations by Congress.
If we are unable to obtain funds from a subsidiary in a timely manner, we may be unable to meet our financial obligations, make additional investments or pay dividends. The final determination of our income tax liability may be materially different from our income tax provision Significant judgment is required in determining our provision for income taxes.
If we are unable to obtain funds from a subsidiary in a timely manner, we may be unable to meet our financial obligations, make additional investments or pay dividends. 27 Table of Contents The final determination of our income tax liability may be materially different from our income tax provision Significant judgment is required in determining our provision for income taxes.
The failure of any of these subcontractors to perform services for us in accordance with the terms of our contracts with the U.S. government could result in the termination of our contract to provide water and/or wastewater 22 Table of Contents services at the affected base(s), and/or a loss of revenues, or increases in costs, to correct a subcontractor’s performance failures.
The failure of any of these subcontractors to perform services for us in accordance with the terms of our contracts with the U.S. government could result in the termination of our contract to provide water and/or wastewater services at the affected base(s), and/or a loss of revenues, or increases in costs, to correct a subcontractor’s performance failures.
Further, changes in demographics, such as increases in life expectancy assumptions may also increase the funding requirements of our obligations related to our pension and other post-retirement benefit plans. Market conditions also affect the values of the assets that are held in trusts to satisfy significant future obligations under our pension and other post-retirement benefit plans.
Further, changes in demographics, such as increases in life expectancy assumptions may also increase the funding requirements of our obligations related to our pension and other post-retirement benefit plans. 26 Table of Contents Market conditions also affect the values of the assets that are held in trusts to satisfy significant future obligations under our pension and other post-retirement benefit plans.
Our information and operational technology systems and operations could be damaged or interrupted by weather, natural disasters, telecommunications failures, cyberattacks or acts of war or terrorism or similar events or disruptions. Outages caused by third party information and operational technology solutions are often beyond our ability to control.
Our information and operational technology systems and operations could be damaged or interrupted by weather, natural disasters, telecommunications failures, cyberattacks or acts of war or terrorism or similar events or 24 Table of Contents disruptions. Outages caused by third party information and operational technology solutions are often beyond our ability to control.
We may recover costs from certain third parties that may be responsible, or potentially responsible, for groundwater contamination. However, we often experience delays in obtaining recovery of these costs and incur additional costs associated with seeking recovery from responsible or potentially responsible parties, which may adversely impact our liquidity.
We may recover costs from certain third parties that may be responsible, or potentially responsible, for groundwater contamination. However, we often experience delays in obtaining recovery of these costs and 18 Table of Contents incur additional costs associated with seeking recovery from responsible or potentially responsible parties, which may adversely impact our liquidity.
In addition, power supplies may also become more constrained and more expensive due to regulation of power plants using fossil fuels. BVES’s compliance with its wildfire mitigation plans have resulted in an increase in capital expenditures for wildfire mitigation 9 Table of Contents projects.
In addition, power supplies may also become more constrained and more expensive due to regulation of power plants using fossil fuels. BVES’s compliance with its wildfire mitigation plans have resulted in an increase in capital expenditures for wildfire mitigation projects.
The next RPS compliance period is years 2025-2027. In the event that the third parties fail to perform in accordance with the terms of the agreement, we may not be able to obtain sufficient resources to meet the renewable procurement requirements.
The next RPS compliance period is years 2025-2027. In the event that the third parties fail to perform in accordance with the terms of the agreement, we may not be able to obtain sufficient resources to 21 Table of Contents meet the renewable procurement requirements.
With respect to GSWC and BVES, the CPUC has historically allowed utilities to establish a catastrophic emergency memorandum account (“CEMA”) to potentially recover 17 Table of Contents incremental costs not covered in rates caused by catastrophic emergency events. With respect to ASUS’s subsidiaries, costs associated with responding to natural disasters have been recoverable through requests for equitable adjustment.
With respect to GSWC and BVES, the CPUC has historically allowed utilities to establish a catastrophic emergency memorandum account (“CEMA”) to potentially recover incremental costs not covered in rates caused by catastrophic emergency events. With respect to ASUS’s subsidiaries, costs associated with responding to natural disasters have been recoverable through requests for equitable adjustment.
Water shortages at GSWC may: • adversely affect our supply mix, for instance, by causing increased reliance upon more expensive water sources; • adversely affect our operating costs, for instance, by increasing the cost of producing water from more highly contaminated aquifers or requiring us to transport water over longer distances, truck water to water systems or adopt other emergency measures to enable us to continue to provide water service to our customers; • result in an increase in our capital expenditures over the long term, for example, by requiring future construction of pipelines to connect to alternative sources of supply, new wells to replace those that are no longer in service or are otherwise inadequate to meet the needs of our customers, and other facilities to conserve or reclaim water; • adversely affect the volume of water sold as a result of such factors as mandatory or voluntary conservation efforts by customers, changes in customer conservation patterns, recycling of water by customers and imposition of new regulations impacting such things as landscaping and irrigation patterns; • adversely affect aesthetic water quality if we are unable to flush our water systems as frequently due to water shortages or drought restrictions; and • result in customer dissatisfaction and harm to our reputation if water service is reduced, interrupted or otherwise adversely affected as a result of drought, water contamination or other causes.
Water shortages at GSWC may: • adversely affect our supply mix, for instance, by causing increased reliance upon more expensive water sources; • adversely affect our operating costs, for instance, by increasing the cost of producing water from more highly contaminated aquifers or requiring us to transport water over longer distances, truck water to water systems or adopt other emergency measures to enable us to continue to provide water service to our customers; • result in an increase in our capital expenditures over the long term, for example, by requiring future construction of pipelines to connect to alternative sources of supply, new wells to replace those that are no longer in service or are otherwise inadequate to meet the needs of our customers, and other facilities to conserve or reclaim water; • adversely affect the volume of water sold as a result of such factors as mandatory or voluntary conservation efforts by customers, changes in customer conservation patterns, recycling of water by customers and imposition of new regulations impacting such things as landscaping and irrigation patterns; • adversely affect aesthetic water quality if we are unable to flush our water systems as frequently due to water shortages or drought restrictions; and • result in customer dissatisfaction and harm to our reputation if water service is reduced, interrupted or otherwise adversely affected as a result of drought, water contamination or other causes. 19 Table of Contents Our liquidity may be adversely affected by changes in water supply costs We obtain our water supplies for GSWC from a variety of sources, which vary among our water systems.
At the same time, there is increasing opposition from consumer groups to rate increases that may be necessary to compensate GSWC and BVES for the increased costs of regulation by local governments.
At the same time, there is increasing opposition from consumer groups to rate increases that may be necessary to compensate GSWC and BVES for the increased costs of regulation by local 15 Table of Contents governments.
Factors that could cause fluctuations in the trading price of our Common Shares include: changes in interest rates; regulatory developments, decisions and delays of decisions; general economic conditions and trends; price and volume fluctuations in the overall stock market; actual or anticipated changes or fluctuations in our results of operations; actual or anticipated changes in the expectations of investors or securities analysts; 26 Table of Contents actual or anticipated developments in other utilities’ businesses or the general competitive landscape; litigation involving us or our industry; major catastrophic events, or sales of large blocks of our stock.
Factors that could cause fluctuations in the trading price of our Common Shares include: changes in interest rates; regulatory developments, decisions and delays of decisions; general economic conditions and trends; price and volume fluctuations in the overall stock market; actual or anticipated changes or fluctuations in our results of operations; actual or anticipated changes in the expectations of investors or securities analysts; actual or anticipated developments in other utilities’ businesses or the general competitive landscape; litigation involving us or our industry; major catastrophic events; sales of large blocks of our stock and the other risks described herein.
GSWC is regulated by the California Public Utilities Commission (“CPUC”). BVES is a public electric utility that distributes electricity in several San Bernardino County mountain communities in California and is also regulated by the CPUC. Additional information regarding public utility regulation is discussed in Item 7.
BVES is a public electric utility that distributes electricity in several San Bernardino County mountain communities in California and is also regulated by the CPUC. Additional information regarding public utility regulation is discussed in Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of Operation” under the section titled “ Overview .” Delays in obtaining approval of general rate cases could adversely impact our liquidity We have been experiencing increasing delays in obtaining CPUC approval of our general rate cases.
“Management’s Discussion and Analysis of Financial Condition and Results of Operation” under the section titled “ Overview .” Delays in obtaining approval of general rate cases could adversely impact our liquidity We have experienced delays in obtaining CPUC approval of our general rate cases.
AWR generally guarantees performance of all of the contracts of ASUS’s subsidiaries. 7 Table of Contents Pursuant to the terms of the 50-year contracts with the U.S. government, the subsidiaries of ASUS operate the following water and wastewater systems: Subsidiary Military Base (1) Type of System Location FBWS Fort Bliss Water and Wastewater Texas and New Mexico ODUS Fort Gregg-Adams Wastewater Virginia ODUS Joint-Base Langley Eustis and Joint Expeditionary Base Little Creek-Fort Story Water and Wastewater Virginia TUS Joint Base Andrews Water and Wastewater Maryland PSUS Fort Jackson Water and Wastewater South Carolina ONUS Fort Liberty, Pope Army Airfield and Camp Mackall Water and Wastewater North Carolina ECUS Eglin Air Force Base Water and Wastewater Florida FRUS Fort Riley Water and Wastewater Collection and Treatment Kansas PRUS Naval Air Station Patuxent River Water and Wastewater Maryland BSUS Joint Base Cape Cod* Water and Wastewater Collection and Treatment Massachusetts (1) Names of military bases are as of December 31, 2024. *BSUS is the only subsidiary that has entered into a task order agreement serving Joint Base Cape Cod that has a term of 15 years.
AWR generally guarantees performance of all of the contracts of ASUS’s subsidiaries. 7 Table of Contents Pursuant to the terms of the 50-year contracts with the U.S. government, the subsidiaries of ASUS operate the following water and wastewater systems: Subsidiary Military Base Type of System Location FBWS Fort Bliss Water and Wastewater Texas and New Mexico ODUS Fort Lee Wastewater Virginia ODUS Joint-Base Langley Eustis and Joint Expeditionary Base Little Creek-Fort Story Water and Wastewater Virginia TUS Joint Base Andrews Water and Wastewater Maryland PSUS Fort Jackson Water and Wastewater South Carolina ONUS Fort Bragg, Pope Army Airfield and Camp Mackall Water and Wastewater North Carolina ECUS Eglin Air Force Base Water and Wastewater Florida FRUS Fort Riley Water and Wastewater Collection and Treatment Kansas PRUS Naval Air Station Patuxent River Water and Wastewater Maryland BSUS Joint Base Cape Cod* Water and Wastewater Collection and Treatment Massachusetts *BSUS is the only subsidiary that has entered into a task order agreement serving Joint Base Cape Cod that has a term of 15 years.
ASUS actively competes for business with other investor-owned utilities, other third-party providers of water and/or wastewater services, and governmental entities primarily on the basis of quality of service and price. AWR Workforce AWR and its subsidiaries had a total of 846 employees as of December 31, 2024. GSWC had 517 employees as of December 31, 2024.
ASUS actively competes for business with other investor-owned utilities, other third-party providers of water and/or wastewater services, and governmental entities primarily on the basis of quality of service and price. AWR Workforce AWR and its subsidiaries had a total of 900 employees as of December 31, 2025. GSWC had 537 employees as of December 31, 2025.
The final decision in the recent water general rate case rejected GSWC’s request for the continued use of a full sales and revenue decoupling mechanism such as the WRAM and orders GSWC to transition to a modified rate adjustment mechanism, M-WRAM, which tracks the difference between the revenue based on actual metered sales through a tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a blended tier standard quantity rate had been in effect.
The final decision, issued January 30, 2025, in the water general rate case rejected GSWC’s request for the continued use of a full sales and revenue decoupling mechanism such as the WRAM and orders GSWC to transition to a modified rate adjustment 20 Table of Contents mechanism, M-WRAM, which tracks the difference between the revenue based on actual metered sales through a tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a blended tier standard single quantity rate had been in effect.
These types of changes may result in permanent decreases in demand even if our water supplies are sufficient to meet higher levels of demand after a drought ends.
These types of changes may result in short term as well as permanent decreases in demand even if our water supplies are sufficient to meet higher levels of demand after a drought ends.
The final decision also approved GSWC’s request for the continuation of a sales reconciliation mechanism, which would allow GSWC to adjust its sales forecast throughout the general rate case cycle to address significant fluctuations in consumption.
The final CPUC decision did approve GSWC’s request for the continuation of a sales reconciliation mechanism, which would allow GSWC to adjust its sales forecast throughout the general rate case cycle to address significant fluctuations in consumption.
The final decision also approved GSWC’s request for the continuation of a sales reconciliation mechanism, which would allow GSWC to adjust its sales forecast throughout the general rate case cycle to address significant fluctuations in consumption.
The final CPUC decision did approve GSWC’s request for the continuation of a sales reconciliation mechanism, which would allow GSWC to adjust its sales forecast throughout the general rate case cycle to address significant fluctuations in consumption.
ASUS expects to perform $9.0 million construction activities related to environmental control facilities in 2025. In addition, various other capital expenditures at the regulated utilities and construction projects at ASUS are incurred for purposes other than environmental control facilities but may also have some environmental benefits.
ASUS expects to perform $18.8 million construction activities related to environmental control facilities in 2026. In addition, various other capital expenditures at the regulated utilities and construction projects at ASUS are incurred for purposes other than environmental control facilities but may also have some environmental benefits.
To the extent that our 23 Table of Contents construction activities are impeded by these events, we will experience a delay in recognizing revenues from these construction projects.
To the extent that our construction activities are impeded by these events, we will experience a delay in recognizing revenues from these construction projects.
Other Business Risks We may be subject to financial losses, penalties and other liabilities if we fail to operate and maintain safe work sites, equipment and facilities, including losses, damages, penalties and other liabilities arising from wildfires, other natural disasters and cybersecurity and terrorist activities.
Other Business Risks We may be subject to financial losses, penalties and other liabilities if we fail to operate and maintain safe work sites, equipment and facilities, or experience losses, damages, penalties and other liabilities arising from natural disasters such as wildfires, other natural disasters and cybersecurity incidents or terrorist activities.
We strive to have all aspects of employment, including the decision to hire, promote, discipline, or discharge, be based on merit, competence, performance, and business needs.
This begins with the recruitment process. We strive to have all aspects of employment, including the decision to hire, promote, discipline, or discharge, be based on merit, competence, performance, and business needs.
We maintain health and safety standards to protect our employees, customers, vendors and the public. Although we aim to comply with such health and safety standards, it is unlikely that we will be able to avoid all accidents or other events resulting in damage to property or the public.
Although we aim to comply with such health and safety standards, it is unlikely that we will be able to avoid all accidents or other events resulting in damage to property or the public.
AWR makes its periodic reports, Form 10-Q and Form 10-K, and current reports, Form 8-K, and amendments to those reports, available free of charge through its website, www.aswater.com, as soon as those reports are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). Such reports are also available on the SEC’s website at www.sec.gov.
AWR makes its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports, available free of charge through its website, www.aswater.com, as soon as those reports are electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).
The State of California and the CPUC have established renewable energy procurement targets. BVES has entered into a CPUC-approved eleven-year contract for renewable energy credits. With this contract, BVES anticipates meeting most of California’s renewable energy statutes addressing this compliance requirement through 2036.
The report will become available publicly in the third quarter of 2026. The State of California and the CPUC have established renewable energy procurement targets. BVES has entered into a CPUC-approved eleven-year contract for renewable energy credits. With this contract, BVES anticipates meeting most of California’s renewable energy statutes addressing this compliance requirement through 2036.
We anticipate that the costs of capital improvements necessary to implement this program will increase substantially. BVES is also required to implement a public safety power shut-off program during high wildfire threat conditions. The CPUC may assess penalties if BVES shuts-down power to its customers and the CPUC determines that the shutdown was not reasonably necessary in the circumstances.
BVES is also required to implement a public safety power shut-off program during high wildfire threat conditions. The CPUC may assess penalties if BVES shuts-down power to its customers and the CPUC determines that the shutdown was not reasonably necessary in the circumstances.
Since 2008, we have implemented the CPUC-approved WRAM at GSWC, which has the effect of stabilizing revenues at the adopted level thereby reducing the potential adverse earnings impact of our customers’ conservation efforts.
From 2008 until 2024, we implemented the CPUC-approved WRAM at GSWC, which had the effect of stabilizing revenues at the adopted level thereby reducing the potential adverse earnings impact of our customers’ conservation efforts.
BVES had 46 employees, of which 17 employees are covered by a collective bargaining agreement with the International Brotherhood of Electrical Workers, which expires in December 2025.
BVES had 48 employees, of which 18 employees are covered by a collective bargaining agreement with the International Brotherhood of Electrical Workers, which expires in December 2026.
Moreover, if a security breach affects our systems or results in the unauthorized release of sensitive data, our reputation could be materially damaged. We may not discover any security breach and loss of information for a significant period of time after the security breach. We could also be exposed to a risk of loss or litigation and possible liability.
Moreover, if a security breach affects our systems or results in the unauthorized release of 25 Table of Contents sensitive data, our reputation could be materially damaged. We may not discover any security breach and loss of information for a significant period of time after the security breach.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the section titled “ Regulatory Matters . ” AWR’s regulated utilities served 264,557 water customers and 24,857 electric customers at December 31, 2024, or a total of 289,414 customers, compared with 264,093 water customers and 24,777 electric customers at December 31, 2023, or a total of 288,870 customers.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the section titled “ Regulatory Matters . ” AWR’s regulated utilities served 265,142 water customers and 24,915 electric customers at December 31, 2025, or a total of 290,057 customers, compared with 264,557 water customers and 24,857 electric customers at December 31, 2024, or a total of 289,414 customers.
However, such issues, if ultimately resolved unfavorably to us, could, in the aggregate, have a material adverse effect on our results of operations and financial condition. 18 Table of Contents Water Supply Risks The adequacy of our water supplies depends upon weather and a variety of other uncontrollable factors The adequacy of our water supplies varies from year to year depending upon a variety of factors, including: • rainfall, basin replenishment, flood control, snowpack levels in California and the West, reservoir levels and availability of reservoir storage; • availability of Colorado River water and imported water from the State Water Project; • the amount of usable water stored in reservoirs and groundwater basins; • the amount of water used by our customers and others; • water quality and changes to water quality regulations; • legal limitations on production, diversion, storage, conveyance and use; and • climate change.
Water Supply Risks The adequacy of our water supplies depends upon weather and a variety of other uncontrollable factors The adequacy of our water supplies varies from year to year depending upon a variety of factors, including: • rainfall, groundwater basin replenishment, flood control, snowpack levels in California and the West, reservoir levels and availability of reservoir storage; • availability of Colorado River water and imported water from the State Water Project; • the amount of usable water stored in reservoirs and groundwater basins; • the amount of water used by our customers and others; • water quality and changes to water quality regulations; • legal limitations on production, diversion, storage, conveyance and use; and • climate change.
While BVES’s power-plant emissions are below the reporting threshold, as a “Covered Entity,” BVES has an obligation to file a report with the California Air Resources Board in June of each year under the Greenhouse Gas Mandatory Reporting Regulation. The report will become available publicly in the third quarter of 2025.
California has established a cap-and-trade program applicable to greenhouse gas emissions. While BVES’s power-plant emissions are below the reporting threshold, as a “Covered Entity,” BVES has an obligation to file a report with the California Air Resources Board in June of each year under the Greenhouse Gas Mandatory Reporting Regulation.
Ongoing development of our talent across the organization to meet critical business needs is a continual focus, and includes (i) building a culture such that high-potential talent is identified and further developed, (ii) creating career paths that not only move up a specialized ladder, but across the organization, and (iii) offering opportunities for employees to accept new challenges through stretch assignments. 10 Table of Contents Attracting Diverse Qualified Candidates We understand that strength comes from having a diverse employee population.
Ongoing development of our talent across the organization to meet critical business needs is a continual focus, and includes (i) building a culture such that high-potential talent is identified and further developed, (ii) creating career paths that not only move up a specialized ladder, but across the organization, and (iii) offering opportunities for employees to accept new challenges through stretch assignments. 10 Table of Contents Attracting Qualified Candidates We strive to hire from our local communities and to have a workforce that is representative, at all job levels, of the communities we serve and from which we recruit.
Pursuant to U.S. government regulations regarding cybersecurity of government contractors, we might be subject to fines, penalties or other actions, including debarment, with respect to current contracts or with respect to future contract opportunities.
We could also be exposed to a risk of loss or litigation and possible liability. Pursuant to U.S. government regulations regarding cybersecurity of government contractors, we might be subject to fines, penalties or other actions, including debarment, with respect to current contracts or with respect to future contract opportunities.
EPA announced several final regulations that include established maximum contaminant levels (“MCLs”) for six perfluoroalkyl substances (“PFAS”) compounds in drinking water, designation of PFOA and PFOS as CERCLA hazardous substances, and Lead and Copper Rule Improvements, as further described in Item 7, “ Environmental Matters .” Such regulations are expected to increase GSWC’s capital investments and operations and maintenance expenses over the next decade.
EPA announced several final regulations that include established maximum contaminant levels (“MCLs”) for six perfluoroalkyl substances (“PFAS”) compounds in drinking water, designation of PFOA and PFOS as CERCLA hazardous substances, Lead and Copper Rule Improvements and California State Division of Drinking Water adopted a MCL of 10 parts per billion for Hexavalent Chromium, as further described, along with additional information regarding other changes to water quality regulations, in Item 7, “ Environmental Matters .” Such regulations are expected to increase GSWC’s capital investments and operations and maintenance expenses over the next decade.
Severe wildfires can pose a material risk for BVES in the event of the occurrence of a wildfire. There is no assurance that losses incurred through a wildfire event will not exceed the coverage limits of BVES’s insurance coverage. Any losses not fully insured by BVES’s insurance coverage may not be approved by the CPUC for future cost recovery.
Severe wildfires can pose a material risk for BVES in the event of the occurrence of a wildfire. There is no assurance that losses incurred through a wildfire event will not exceed the coverage limits of BVES’s insurance coverage.
In addition, infrastructure maintenance expenses are affected by labor and material costs, inflationary changes impacting such costs, supply chain disruptions and more stringent environmental regulations. Our electrical systems have also required upgrades due to aging and new wildfire safety and other compliance requirements. While we spend significant amounts on maintenance each year, these costs can increase substantially and unexpectedly.
In addition, infrastructure maintenance expenses are affected by labor and material costs, inflationary or tariff changes impacting such costs, supply chain disruptions and more stringent environmental regulations. Our electrical systems have also required upgrades due to aging and new wildfire safety and other compliance requirements.
California drought conditions in recent years and historically and changes in weather patterns have caused an increased stress on surface water supplies and groundwater basins.
Although there have been improvements in drought conditions over this past year, California drought conditions in recent years and changes in weather patterns have caused an increased stress on surface water supplies and groundwater basins.
These trends may adversely affect our ability to recover in rates the costs of providing water and electric services and to efficiently manage capital expenditures and operating and maintenance expenses within CPUC-authorized levels. 15 Table of Contents We have also experienced instances of increased costs and delays in obtaining permits that we need in order to install, maintain, repair, and replace some of our aging water and electric utility infrastructure and upgrades needed to comply with changes in laws and regulations or otherwise necessary to harden our infrastructure as a result of drought, wildfires and increases in the frequency and duration of more extreme weather events due to climate change.
We have also experienced instances of increased costs and delays in obtaining permits that we need in order to install, maintain, repair, and replace some of our aging water and electric utility infrastructure and upgrades needed to comply with changes in laws and regulations or otherwise necessary to harden our infrastructure as a result of drought, wildfires and increases in the frequency and duration of more extreme weather events due to climate change.
Furthermore, potential future legislative efforts to ban gas powered power plants as a response to climate change may require us to replace our current 8.4 MW natural gas-powered generator before its useful life is completed. 13 Table of Contents Risks Associated with Regulated Public Utility and Contracted Services Operations Our businesses are heavily regulated and, as a result, decisions by regulatory agencies or the U.S. government can significantly affect our businesses GSWC’s and BVES’s revenues depend substantially on the rates and fees they charge their customers and their ability to recover costs on a timely basis as authorized by the CPUC, including the ability to recover the costs of purchased water, groundwater assessments, electricity, natural gas, chemicals, water treatment, security at water facilities and preventative maintenance and emergency repairs.
Risks Associated with Regulated Public Utility and Contracted Services Operations Our businesses are heavily regulated and, as a result, decisions by regulatory agencies or the U.S. government can significantly affect our businesses GSWC’s and BVES’s revenues depend substantially on the rates and fees they charge their customers and their ability to recover costs on a timely basis as authorized by the CPUC, including the ability to recover the costs of purchased water, groundwater assessments, electricity, natural gas, chemicals, water treatment, security at water facilities and preventative maintenance and emergency repairs.
We may experience delays in receiving payments for services rendered in military bases due to delays in Congressional appropriation bills or other factors affecting the available funds to pay contractors.
We may experience delays in receiving payments for services rendered in military bases due to delays in Congressional appropriation bills, extended government shutdowns, or other factors affecting the available funds to pay contractors. During 2025, the U.S. government experienced the longest government shutdown in its history.
The regulated utilities spent approximately $27.4 million in 2024 and expect to spend approximately $15.9 million in 2025 for capital expenditures on environmental control facilities. During 2024, ASUS performed $12.1 million of construction activities (for the benefit of the U.S. government) related to environmental control facilities.
The regulated utilities spent approximately $19.3 million in 2025 and expect to spend approximately $20.6 million in 2026 for capital expenditures on environmental control facilities. During 2025, ASUS performed $13.5 million of construction activities (for the benefit of the U.S. government) related to environmental control facilities.
Furthermore, in September 2022, the governor of California signed Senate Bill (“SB”) 1469, which allowed Class A water utilities, including GSWC, to continue requesting the use of a revenue decoupling mechanism in their next general rate case.
As a result of this decision, these mechanisms implemented by GSWC in 2008 would be discontinued for years after 2024. Furthermore, in September 2022, the governor of California signed Senate Bill (“SB”) 1469, which allowed Class A water utilities, including GSWC, to continue requesting the use of a revenue decoupling mechanism in their next general rate case.
Within the segments, AWR has three principal business units, water and electric service utility operations conducted through its regulated utilities GSWC and BVES, respectively, and contracted services conducted through ASUS and its subsidiaries. GSWC is a public water utility engaged in the purchase, production, distribution and sale of water in 10 counties in the state of California.
Within the segments, AWR has three principal business units, water and electric service utility operations conducted through its regulated utilities GSWC and BVES, respectively, and contracted services conducted through ASUS and its subsidiaries.
AWR also makes available free of charge its code of business conduct and ethics, its corporate governance guidelines, its policy for the recoupment of performance-based compensation, its insider trading policy and the charters of its Nominating and Governance Committee, Compensation Committee and Audit and Finance Committee through its website or by calling (877) 463-6297.
Such reports are also available on the SEC’s website at www.sec.gov. AWR also makes available free of charge its code of conduct, its guidelines on significant governance issues, its recoupment policy, its insider trading policy and the charters of its Nominating and Governance Committee, Compensation Committee and Audit and Finance Committee through its website or by calling (877) 463-6297.
In addition, due to the volatility of the supply chain and demand for PFAS or other treatment components, both the capital investments and operations and maintenance expenses are likely to further increase. Additional information regarding changes to water quality regulations is provided in Item 7.
In addition, due to the volatility of the supply chain and demand for PFAS or other treatment components, both the capital investments and operations and maintenance expenses are likely to further increase. In May 2025, U.S.
The recovery of costs incurred to implement the plan and its update are not approved by the CPUC at the time of its approval of the plan but will only be 20 Table of Contents approved by the CPUC in a subsequent general rate case.
The recovery of costs incurred to implement the plan are not approved by the CPUC at the time of its approval of the plan but will only be approved by the CPUC in a subsequent general rate case. We anticipate that the costs of capital improvements necessary to implement this program will increase substantially.
We anticipate that the costs of capital improvements necessary to sustain this program will continue to increase. BVES is also required to implement a public safety power shut-off program during high wildfire threat conditions. Shut-offs can reduce BVES’s liquidity and decrease customer satisfaction. Abnormal weather patterns created by climate change can also impact electricity demand at BVES.
BVES is also required to implement a public safety power shut-off program during high wildfire threat conditions. Shut-offs can reduce BVES’s liquidity and decrease customer satisfaction. Abnormal weather patterns created by climate change can also impact electricity demand at BVES. The demand for electricity at our electric segment is greatly affected by winter snow levels.
Our liquidity, earnings and operations may be adversely affected if we are unable to recover the costs of paying claims for damages caused by the non-negligent operation and maintenance of our property from customers or through insurance. 16 Table of Contents We may be subject to financial losses, penalties and other liabilities if we fail to maintain safe work sites, equipment or facilities Our safety record is critical to our reputation.
Our liquidity, earnings and operations may be adversely affected if we are unable to recover the costs of paying claims for damages caused by the non-negligent operation and maintenance of our property from customers or through insurance.
We may be adversely affected by disputes with the U.S. government regarding our performance of contracted services on military bases Entering into contracts with the U.S. government subjects us to a number of operational and compliance risks over our performance of contracted services on military bases.
If these estimates prove inaccurate or circumstances change, cost overruns could have a material adverse effect on our contracted business operations and results of operations. 22 Table of Contents We may be adversely affected by disputes with the U.S. government regarding our performance of contracted services on military bases Entering into contracts with the U.S. government subjects us to a number of operational and compliance risks over our performance of contracted services on military bases.

… 58 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

203 edited+99 added−141 removed100 unchanged
Biggest changeInterest Income For the years ended December 31, 2024 and 2023, interest income by business segment, including AWR (parent), consisted of the following amounts (in thousands): Year Ended Year Ended $ % 12/31/2024 12/31/2023 CHANGE CHANGE Water Services $ 6,018 $ 5,557 $ 461 8.3 % Electric Services 976 1,060 (84) -7.9 % Contracted Services 782 806 (24) -3.0 % AWR (parent) 98 (7) 105 * Total interest income $ 7,874 $ 7,416 $ 458 6.2 % * not meaningful The increase in interest income at the water segment was due primarily to higher interest income earned on regulatory assets bearing interest at the current 90-day commercial paper rates, which have increased compared to rates in 2023, as well as an overall higher average net regulatory assets balance recorded during 2024 compared to 2023. 48 Table of Contents Other Income and (Expense), net For the years ended December 31, 2024 and 2023, other income and (expense) by business segment, including AWR (parent), consisted of the following amounts (in thousands): Year Ended Year Ended $ % 12/31/2024 12/31/2023 CHANGE CHANGE Water Services $ 6,326 $ 4,946 $ 1,380 27.9 % Electric Services 968 36 932 * Contracted Services (82) (125) 43 -34.4 % AWR (parent) 254 269 (15) -5.6 % Total interest income $ 7,466 $ 5,126 $ 2,340 45.6 % * not meaningful For the year ended December 31, 2024, other income (net of other expense) increased primarily due to a change in the non-service cost components related to the Company’s defined-benefit pension plan and other retirement benefits resulting from changes in actuarial assumptions including expected returns on plan assets.
Biggest changeThe increase at the electric segment was due to higher levels of regulatory asset balances earning interest income. 47 Table of Contents Other Income and (Expense), net For the years ended December 31, 2025 and 2024, other income and (expense) by business segment, including AWR (parent), consisted of the following amounts (in thousands): Year Ended Year Ended $ % 12/31/2025 12/31/2024 CHANGE CHANGE Water Services $ 6,634 $ 6,326 $ 308 4.9 % Electric Services 519 968 (449) -46.4 % Contracted Services (18) (82) 64 -78.0 % AWR (parent) 514 254 260 102.4 % Total other income and (expenses), net $ 7,649 $ 7,466 $ 183 2.5 % For the year ended December 31, 2025, other income (net of other expense) increased due primarily to gains of $5.5 million generated on investments held to fund one of the Company’s retirement plans as compared to gains of $5.3 million recorded in 2024, due to financial market conditions.
California State Division of Drinking Water adopted an MCL of 10 parts per billion for Hexavalent Chromium, which went into effect on October 1, 2024. Depending on the size of the water system, water systems will have two to four years from the effective date to come into compliance with the MCL.
Hexavalent Chromium California State Division of Drinking Water adopted an MCL of 10 parts per billion for Hexavalent Chromium, which went into effect on October 1, 2024. Depending on the size of the water system, water systems will have two to four years from the effective date to come into compliance with the MCL.
GSWC also receives advances and contributions from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances for construction are generally refundable at a rate of 2.5% in equal annual installments over 40 years. Utility plant funded by advances and contributions is excluded from rate base.
In addition, GSWC also receives advances and contributions from customers, home builders and real estate developers to fund construction necessary to extend service to new areas. Advances for construction are generally refundable at a rate of 2.5% in equal annual installments over 40 years. Utility plant funded by advances and contributions is excluded from rate base.
Any reductions in the value of plan assets will result in increased future expense, a decrease in the overfunded position, and increase the required future contributions. 51 Table of Contents The CPUC has authorized GSWC and BVES to each maintain a two-way balancing account to track differences between their forecasted annual pension expenses adopted in rates and the actual annual expense to be recorded in accordance with the accounting guidance for pension costs.
Any reductions in the value of plan assets will result in increased future expense, a decrease in the overfunded position, and increase the required future contributions. 50 Table of Contents The CPUC has authorized GSWC and BVES to each maintain a two-way balancing account to track differences between their forecasted annual pension expenses adopted in rates and the actual annual expense to be recorded in accordance with the accounting guidance for pension costs.
As a result of the accounting guidance and CPUC-adopted recovery periods, Registrant must estimate if any WRAM and BRRAM revenues will be collected beyond the 24-month period. This can affect the timing of when such revenues are recognized. ASUS’s firm-fixed-price contracts with the U.S. government are considered service concession arrangements under ASC 853 Service Concession Arrangements .
As a result of the accounting guidance and CPUC-adopted recovery periods, Registrant must estimate if any WRAM and BRRBA revenues will be collected beyond the 24-month period. This can affect the timing of when such revenues are recognized. ASUS’s firm-fixed-price contracts with the U.S. government are considered service concession arrangements under ASC 853 Service Concession Arrangements .
Registrant believes that it will be able to refinance debt instruments at their maturity through public issuance or private placement of debt or equity. Annual payments to service debt are generally made from cash flows from operations. The following table reflects Registrant’s contractual obligations and commitments to make future payments pursuant to contracts as of December 31, 2024.
Registrant believes that it will be able to refinance debt instruments at their maturity through public issuance or private placement of debt or equity. Annual payments to service debt are generally made from cash flows from operations. The following table reflects Registrant’s contractual obligations and commitments to make future payments pursuant to contracts as of December 31, 2025.
A 25-basis point decrease in the long-term return on pension-plan-asset assumption would have increased 2024 pension cost by approximatel y $0.5 million. In addition, changes in the fair value of plan assets will impact future pension cost and the Plan’s funded status. Changes in market conditions can affect the value of plan assets held to fund future long-term pension benefits.
A 25-basis point decrease in the long-term return on pension-plan-asset assumption would have increased 2025 pension cost by approximatel y $0.5 million. In addition, changes in the fair value of plan assets will impact future pension cost and the Plan’s funded status. Changes in market conditions can affect the value of plan assets held to fund future long-term pension benefits.
Employees hired or rehired after December 31, 2010 are eligible to participate in a defined contribution plan instead of the pension plan. 52 Table of Contents Liquidity and Capital Resources AWR AWR’s regulated business is capital intensive and requires considerable capital resources. A portion of these capital resources is provided by internally generated cash flows from operations.
Employees hired or rehired after December 31, 2010 are eligible to participate in a defined contribution plan instead of the pension plan. 51 Table of Contents Liquidity and Capital Resources AWR AWR’s regulated business is capital intensive and requires considerable capital resources. A portion of these capital resources is provided by internally generated cash flows from operations.
Under the terms of the credit agreements, the borrowing capacities for AWR and GSWC may be expanded up to an additional $60.0 million and $75.0 million, respectively, subject to the lenders’ approval. AWR’s credit facility primarily provides support to AWR (parent) and ASUS, while GSWC’s credit agreement provides support to its water operations and capital expenditures.
Under the terms of the credit agreements, the borrowing capacities for AWR and GSWC may be expanded up to an additional $30.0 million and $75.0 million, respectively, subject to the lenders’ approval. AWR’s credit facility primarily provides support to AWR (parent) and ASUS, while GSWC’s credit agreement provides support to its water operations and capital expenditures.
Furthermore, in March 2024, as a result of the Extended Arrearage Program, GSWC received $3.5 million in COVID-19 relief funds from the State of California to provide assistance to customers for delinquent water customer bills incurred during the pandemic. There were no similar relief funds received during 2023.
Furthermore, in March 2024, as a result of the Extended Arrearage Program, GSWC received $3.5 million in COVID-19 relief funds from the State of California to provide assistance to customers for delinquent water customer bills incurred during the pandemic. There were no similar relief funds received during 2025.
AWR has paid common dividends every year since 1931, and has increased the dividends received by shareholders each calendar year for 70 consecutive years, which places it in an exclusive group of companies on the New York Stock Exchange that have achieved that result.
AWR has paid common dividends every year since 1931, and has increased the dividends received by shareholders each calendar year for 71 consecutive years, which places it in an exclusive group of companies on the New York Stock Exchange that have achieved that result.
Information comparing the liquidity and capital resources for fiscal years 2023 and 2022 can be found under Item 7, Management’s Discussion and Analysis under the heading “ Liquidity and Capital Resources ” in AWR’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC.
Information comparing the liquidity and capital resources for fiscal years 2024 and 2023 can be found under Item 7, Management’s Discussion and Analysis under the heading “ Liquidity and Capital Resources ” in AWR’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC.
Changes in the magnitude of flowed-through items either increase or decrease tax expense, thereby affecting diluted earnings per share. • A decrease in earnings of approximately $0.03 per share due to the dilutive effects from the issuance of equity under AWR’s ATM offering program.
Changes in the magnitude of flowed-through items either increase or decrease tax expense, thereby affecting diluted earnings per share. • A decrease in earnings of approximately $0.07 per share due to the dilutive effects from the issuance of equity under AWR’s ATM offering program.
As of December 31, 2024, Registrant’s total amount of unrecognized tax benefits was zero. Pension Benefits — Registrant’s pension benefit obligations and related costs are calculated using actuarial concepts within the framework of accounting guidance for employers’ accounting for pensions and post-retirement benefits other than pensions.
As of December 31, 2025, Registrant’s total amount of unrecognized tax benefits was zero. Pension Benefits — Registrant’s pension benefit obligations and related costs are calculated using actuarial concepts within the framework of accounting guidance for employers’ accounting for pensions and post-retirement benefits other than pensions.
Accordingly, the services under these contracts are accounted for under Topic 606 Revenue from Contracts with Customers and the water and/or wastewater systems are not recorded as Property, Plant and 50 Table of Contents Equipment on AWR’s consolidated balance sheet.
Accordingly, the services under these contracts are accounted for under Topic 606 Revenue from Contracts with Customers and the water and/or wastewater systems are not recorded as Property, Plant and 49 Table of Contents Equipment on AWR’s consolidated balance sheet.
Future cash flows from contracted services subsidiaries will depend on new business activities, existing operations, the 54 Table of Contents construction of new and/or replacement infrastructure at military bases, timely economic price and equitable adjustment of prices, and timely collection of payments from the U.S. government and other prime contractors operating at the military bases, and any adjustments arising out of an audit or investigation by federal governmental agencies.
Future cash flows from contracted services subsidiaries will depend on new business activities, existing operations, the construction of new and/or replacement infrastructure at military bases, timely economic price and equitable adjustment of prices, and timely collection of payments from the U.S. government and other prime contractors operating at the military bases, and any adjustments arising out of an audit or investigation by federal governmental agencies.
They also incur operating costs for testing to determine the levels, if any, of the constituents in its sources of supply, and additional expenses to treat contaminants in order to meet the federal and state maximum contaminant level standards and consumer demands.
They also incur operating costs for testing to determine the levels, if any, of the constituents in their sources of supply, and additional expenses to treat contaminants in order to meet the federal and state maximum contaminant level standards and consumer demands.
A hypothetical 25-basis point decrease in the assumed discount rate would have decreased total net periodic pension expense for 2024 by approximately $0.1 million, which includes an increase in service cost that was more than offset by the decrease in interest cost, and would have increased the projected benefit obligation and accumulated benefit obligation at December 31, 2024 by a total of $5.5 million.
A hypothetical 25-basis point decrease in the assumed discount rate would have decreased total net periodic pension expense for 2025 by approximately $0.1 million, which includes an increase in service cost that was more than offset by the decrease in interest cost, and would have increased the projected benefit obligation and accumulated benefit obligation at December 31, 2025 by a total of $5.6 million.
BVES has an electric-supply-cost balancing account, as approved by the CPUC, to alleviate any impacts to earnings. 59 Table of Contents Construction Program GSWC maintains an ongoing water distribution main replacement program throughout its customer service areas based on the age and type of distribution-system materials, priority of leaks detected, remaining productive life of the distribution system and an underlying replacement schedule.
BVES has an electric-supply-cost balancing account, as approved by the CPUC, to alleviate any impacts to earnings. Construction Program GSWC maintains an ongoing water distribution main replacement program throughout its customer service areas based on the age and type of distribution-system materials, priority of leaks detected, remaining productive life of the distribution system and an underlying replacement schedule.
For more information regarding significant regulatory matters, see Note 3 of “Notes to Financial Statements” included in Part II, Item 8, in Financial Statements and Supplementary Data. Environmental Matters AWR’s subsidiaries are subject to stringent environmental regulations. GSWC and ASUS are required to comply with the safe drinking water standards established by the U.S. EPA.
For more information regarding significant regulatory matters, see Note 3 of “Notes to Financial Statements” included in Part II, Item 8, in Financial Statements and Supplementary Data. 60 Table of Contents Environmental Matters AWR’s subsidiaries are subject to stringent environmental regulations. GSWC and ASUS are required to comply with the safe drinking water standards established by the U.S. EPA.
During sequestration or automatic spending cuts, the subsidiaries of ASUS did not experience any earnings impact to their existing operations and maintenance and renewal and replacement services, as utility privatization contracts are an “excepted service.” With the expiration of sequestration, similar issues including further sequestration pursuant to the Balanced Budget and Emergency Deficit Control Act may arise as part of the fiscal uncertainty and/or future debt-ceiling limits imposed by Congress.
During sequestration or automatic spending cuts, and the U.S. government shutdown, the subsidiaries of ASUS did not experience any earnings impact to their existing operations and maintenance and renewal and replacement services, as utility privatization contracts are an “excepted service.” With the expiration of sequestration, similar issues including further sequestration pursuant to the Balanced Budget and Emergency Deficit Control Act may arise as part of the fiscal uncertainty and/or future debt-ceiling limits imposed by Congress.
Each of the ASUS’s subsidiaries has the right to seek an equitable adjustment to its contract in the event that there are changes in environmental laws, a change in the quality of water used in providing water service or wastewater discharged by the U.S. government, or contamination of the air or soil not caused by the fault or negligence of ASUS’s subsidiary.
Each of the ASUS’s subsidiaries has the right to seek an equitable adjustment to its contract in the event that there are changes in environmental laws, a change in the quality of water used in providing water service or wastewater discharged by the U.S. government, or contamination of the air 62 Table of Contents or soil not caused by the fault or negligence of ASUS’s subsidiary.
BVES adjusts revenues in the BRRAM for the difference between what is billed to its electric customers and that which is authorized by the CPUC. As required by the accounting guidance for alternative revenue programs, GSWC and BVES are required to collect their WRAM and BRRAM balances, respectively, within 24 months following the year in which they are recorded.
BVES adjusts revenues in the BRRBA for the difference between what is billed to its electric customers and that which is authorized by the CPUC. As required by the accounting guidance for alternative revenue programs, GSWC and BVES are required to collect their M-WRAM/WRAM and BRRBA balances, respectively, within 24 months following the year in which they are recorded.
ASUS’s subsidiaries may also from time to time provide funding to ASUS or other subsidiaries of ASUS. Cash flows from operating activities are primarily generated by net income, adjusted for non-cash expenses such as depreciation and amortization, and deferred income taxes. Cash generated by operations varies during the year.
ASUS’s subsidiaries may also from time to time provide funding to ASUS or other subsidiaries of ASUS. 53 Table of Contents Cash flows from operating activities are primarily generated by net income, adjusted for non-cash expenses such as depreciation and amortization, and deferred income taxes. Cash generated by operations varies during the year.
Furthermore, included in the consolidated results for 2024 was a tax benefit of $5 million, or $0.13 per share, resulting from the final decision issued by the CPUC on January 30, 2025 in connection with GSWC’s recent general rate case proceeding.
Included in the consolidated results for 2024 was a tax benefit of $5.0 million, or $0.13 per share, resulting from the final decision issued by the CPUC on January 30, 2025 in connection with GSWC’s latest general rate case proceeding.
GSWC expects to incur additional capital costs as well as increased operating costs to maintain or improve the quality of water delivered to its customers in light of anticipated stress on water resources associated with watershed and aquifer pollution, drought impacts, and consumer 63 Table of Contents expectations.
GSWC expects to incur additional capital costs as well as increased operating costs to maintain or improve the quality of water delivered to its customers in light of anticipated stress on water resources associated with watershed and aquifer pollution, drought impacts, and consumer expectations.
GSWC’s request, in its most recent general rate case, to continue using a revenue decoupling mechanism, similar to the WRAM, has been denied by the CPUC. The CPUC has ordered GSWC to transition to a modified rate adjustment mechanism (a Monterey-style WRAM or “M-WRAM”) effective January 1, 2025.
GSWC’s request, in its most recent general rate case, to continue using a revenue decoupling mechanism, similar to the WRAM, has been denied by the CPUC. The CPUC has ordered GSWC to transition to a modified rate adjustment mechanism (a Monterey-style WRAM) effective January 1, 2025.
Without the MCBA mechanism in place beginning in 2025, there may be volatility to Registrant’s earnings as a result of changes in water supply cost mix.
Without the MCBA mechanism in place, beginning in 2025, there may be volatility to Registrant’s earnings as a result of changes in water supply source mix.
Currently, ASUS has one subsidiary that has entered into a task order agreement with the U.S. government that has a term of 15 years. The contract price for each of the contracts and recurring task order agreements is subject to annual economic price adjustments.
Currently, ASUS has one subsidiary that has entered into a task order agreement with the U.S. government that has a term of 15 years. The contract prices for each of the contracts and recurring task order agreements are subject to annual economic price adjustments.
GSWC supplemented its groundwater production with wholesale purchases from MWD member agencies and regional water suppliers (roughly 40% of total demand) and with authorized diversions from rivers (roughly 3%) under agreements with the United States Bureau of Reclamation and the Sacramento Municipal Utility District. GSWC also utilizes recycled water supplies to serve recycled water customers in several service areas.
GSWC supplemented its groundwater production with wholesale purchases from MWD member agencies and regional water suppliers (roughly 48% of total demand) and with authorized diversions from rivers (roughly 2%) under agreements with the United States Bureau of Reclamation and the Sacramento Municipal Utility District. GSWC also utilizes recycled water supplies to serve recycled water customers in several service areas.
Information comparing the consolidated results of operations for fiscal years 2023 and 2022 can be found under Item 7, Management’s Discussion and Analysis under the headings “Summary Results by Segment” and “Consolidated Results of Operations-Years Ended December 31, 2023 and 2022” in AWR’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC. 49 Table of Contents Critical Accounting Policies and Estimates Critical accounting policies and estimates are those that are important to the portrayal of AWR’s financial condition, results of operations and cash flows, and require the most difficult, subjective or complex judgments of AWR’s management.
Information comparing the consolidated results of operations for fiscal years 2024 and 2023 can be found under Item 7, Management’s Discussion and Analysis under the headings “Summary Results by Segment” and “Consolidated Results of Operations-Years Ended December 31, 2024 and 2023” in AWR’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC. 48 Table of Contents Critical Accounting Policies and Estimates Critical accounting policies and estimates are those that are important to the portrayal of AWR’s financial condition, results of operations and cash flows, and require the most difficult, subjective or complex judgments of AWR’s management.
Included in the $2.3 million is a remaining commitment of $1.1 million under an agreement with the City of Claremont to lease water rights that were ascribed to the City as part of the Six Basins adjudication. The initial term of the agreement expires in 2028. GSWC may exercise an option to renew this agreement for ten additional years.
Included in the $2.0 million is a remaining commitment of $0.9 million under an agreement with the City of Claremont to lease water rights that were ascribed to the City as part of the Six Basins adjudication. The initial term of the agreement expires in 2028. GSWC may exercise an option to renew this agreement for ten additional years.
The M-WRAM tracks the difference between the revenue based on actual metered sales through a tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a blended tier standard quantity rate had been in effect.
The M-WRAM tracks the difference between the revenue based on actual metered sales through a tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a standard single quantity rate had been in effect.
As of December 31, 2024, GSWC has a $1.7 million over-collection in its two-way pension balancing account for the general office and water regions. As of December 31, 2024, BVES has an insignificant balance in its two-way pension balancing account. Funding requirements for qualified defined benefit pension plans are determined by government regulations.
As of December 31, 2025, GSWC has a $2.1 million over-collection in its two-way pension balancing account for the general office and water regions. As of December 31, 2025, BVES has an insignificant balance in its two-way pension balancing account. Funding requirements for qualified defined benefit pension plans are determined by government regulations.
(11) Consists primarily of capital expenditures estimated to be required under signed contracts at GSWC and BVES as of December 31, 2024.
(11) Consists primarily of capital expenditures estimated to be required under signed contracts at GSWC and BVES as of December 31, 2025.
GSWC amortizes contributions in aid of construction at the same composite rate of depreciation for the related property. Cash Flows from Operating Activities : Net cash provided by operating activities was $158.6 million for the year ended December 31, 2024 as compared to $54.3 million for 2023.
GSWC amortizes contributions in aid of construction at the same composite rate of depreciation for the related property. Cash Flows from Operating Activities : Net cash provided by operating activities was $183.3 million for the year ended December 31, 2025 as compared to $158.6 million for 2024.
Earnings and cash flows from modifications to the initial 50-year contracts and additional contracts with the U.S. government and agreements with third-party prime contractors for additional construction projects may or may not continue in future periods. Operating Expenses: Supply Costs Total supply costs at the regulated utilities comprise the largest segment of total consolidated operating expenses.
Earnings and cash flows from modifications to the initial 50- and 15-year contracts with the U.S. government and agreements with third-party prime contractors for additional construction projects may or may not continue at current levels in future periods. Operating Expenses: Supply Costs Total supply costs at the regulated utilities comprise the largest portion of total consolidated operating expenses.
Rates charged to GSWC and BVES customers are authorized by the CPUC. These rates are intended to allow recovery of operating costs and a reasonable rate of return on invested capital. GSWC and BVES plan to continue seeking additional rate increases in future years from the CPUC to recover operating and supply costs, and receive reasonable returns on invested capital.
These rates are intended to allow recovery of operating costs and a reasonable rate of return on invested capital. GSWC and BVES plan to continue seeking additional rate increases in future years from the CPUC to recover operating and supply costs, and receive reasonable returns on invested capital.
The remaining $1.2 million is for commitments for purchased water with other third parties, which expire through 2038. Imported Water GSWC also manages a portfolio of water supply arrangements with water wholesalers who may import water from outside the immediate service area.
The remaining $1.1 million is for commitments for purchased water with other third parties, which expire through 2038. 63 Table of Contents Imported Water GSWC also manages a portfolio of water supply arrangements with water wholesalers who may import water from outside the immediate service area.
(15) Other commitments consist primarily of (i) $10.8 million in asset retirement obligations of GSWC that reflect the retirement of wells by GSWC, which by law need to be properly capped at the time of removal; (ii) irrevocable letters of credit in the amount of $0.9 million for the deductible in Registrant’s business automobile insurance policies; and (iii) a $15,000 irrevocable letter of credit issued on behalf of GSWC pursuant to a franchise agreement with the City of Rancho Cordova.
(14) Other commitments consist primarily of (i) $11.4 million in asset retirement obligations of GSWC that reflect the retirement of wells by GSWC, which by law need to be properly capped at the time of removal; (ii) irrevocable letters of credit in the amount of $1.0 million for the deductible in Registrant’s business automobile insurance policies; and (iii) a $15,000 irrevocable letter of credit issued on behalf of GSWC pursuant to a franchise agreement with the City of Rancho Cordova.
A portion of these capital expenditures was funded by developers through contributions in aid of construction, which are not required to be repaid, and refundable advances. During the years ended December 31, 2024, 2023 and 2022, capital expenditures funded by developers were $8.5 million, $7.0 million and $6.9 million, respectively.
A portion of these capital expenditures was funded by developers through contributions in aid of construction, which are not required to be repaid, and refundable advances. During the years ended December 31, 2025, 2024 and 2023, capital expenditures funded by developers were $12.5 million, $8.5 million and $7.0 million, respectively.
Internal cash generation is influenced by factors such as weather patterns, conservation efforts, environmental regulation, litigation, changes in tax law and deferred taxes, changes in supply costs and regulatory decisions affecting GSWC’s ability to recover these supply costs, timing of rate relief, increases in maintenance expenses and capital expenditures, surcharges authorized by the CPUC to enable GSWC to recover expenses previously incurred from customers, and CPUC requirements to refund amounts previously charged to customers.
Internal cash generation is influenced by factors such as weather patterns, conservation efforts, environmental and water quality regulations, litigation, changes in tax law and deferred taxes, 54 Table of Contents changes in supply costs and regulatory decisions affecting GSWC’s ability to recover these supply costs, timing of rate relief, increases in maintenance expenses and capital expenditures, surcharges authorized by the CPUC to enable GSWC to recover expenses previously incurred from customers, and CPUC requirements to refund amounts previously charged to customers.
In addition, the regulation established MCL for PFAS mixtures containing at least two of certain of the regulated PFAS compounds for the combined and co-occurring levels of PFAS in drinking water.
In addition, the regulation established a MCL for PFAS mixtures containing at least two of the regulated PFAS compounds for the combined and co-occurring levels of these PFAS in drinking water.
The M-WRAM tracks the difference between the revenue based on actual metered sales through a tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a blended tier standard quantity rate had been in effect. The CPUC also granted BVES a revenue decoupling mechanism through the BRRAM.
The M-WRAM tracks the difference between the revenue based on actual metered sales through a tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a standard single quantity rate had been in effect. The CPUC also granted BVES a revenue decoupling mechanism through the BRRBA.
(12) Water purchase agreements consist of (i) a remaining amount of $1.1 million under an agreement expiring in 2028 to use water rights from a third party, and (ii) an aggregate amount of $1.2 million of other water purchase commitments with other third parties, which expire between 2025 through 2038.
(12) Water purchase agreements consist of (i) a remaining amount of $0.9 million under an agreement expiring in 2028 to use water rights from a third party, and (ii) an aggregate amount of $1.1 million of water purchase commitments with other third parties, which expire between 2026 through 2038.
In addition, the approved settlement agreement includes $58.2 million of advice letter capital investments that began construction in 2023 that we expect to file for revenue recovery during the second and third year attrition increases when those projects are completed.
In addition, the approved settlement agreement includes $58.2 million of advice letter capital investments that began construction in 2023 to be filed for revenue recovery during the second- and third-year attrition increases when those projects are completed.
BVES is pursuing short- and long-term renewable energy contracts to replace any power purchase agreements that have expired in addition to satisfying its requirements related to its resource portfolio for the next compliance period (2025-2027) and beyond. The average price per MWh, including fixed costs, decreased to $71.89 per MWh in 2024 from $79.80 per MWh in 2023.
BVES is pursuing short- and long-term renewable energy contracts to replace any power purchase agreements that have expired in addition to satisfying its requirements related to its resource portfolio for the next compliance period (2025 - 2027) and beyond. The average price per MWh, including fixed costs, increased to $125.61 per MWh in 2025 from $71.89 per MWh in 2024.
As a result of receiving the final decision, the impact from retroactive rates for the full year of 2023 and from the second-year rate increases for the full year of 2024 have been reflected in the 2024 fourth quarter results.
As a result of receiving the final decision, the impact from retroactive rates for the full year of 2023 and from the second-year rate increases for the full year of 2024 were reflected in BVES’s 2024 fourth quarter results.
From time to time, GSWC may purchase or temporarily use water rights from others for delivery to customers. GSWC has contracts to purchase water or water rights for an aggregate amount of $2.3 million as of December 31, 2024.
From time to time, GSWC may purchase or temporarily use water rights from others for delivery to customers. GSWC has contracts to purchase water or water rights for an aggregate amount of $2.0 million as of December 31, 2025.
Projected capital expenditures and other investments are subject to periodic review and revision. During 2025, the regulated utilities’ company-funded capital expenditures are estimated to be approximately $170 – $210 million, barring any delays resulting from changes in capital improvement schedules due to unfavorable weather conditions and supply chain issues.
Projected capital expenditures and other investments are subject to periodic review and revision. During 2026, the regulated utilities’ company-funded capital expenditures are estimated to be approximately $185 – $225 million, barring any delays resulting from changes in capital improvement schedules due to unfavorable weather conditions and supply chain issues.
On June 28, 2023, GSWC executed its own separate credit agreement that provides for a $200.0 million unsecured revolving credit facility to support GSWC’s operations and capital expenditures. GSWC’s borrowing capacity under this credit agreement may be expanded up to an additional $75.0 million , subject to the lenders’ approval.
GSWC has its own separate credit agreement that provides for a $200.0 million unsecured revolving credit facility to support GSWC’s operations and capital expenditures. GSWC’s borrowing capacity under this credit agreement may be expanded up to an additional $75.0 million , subject to the lenders’ approval.
Internal cash flows have also been impacted by delays in receiving payments from GSWC customers due to the lingering effects of the COVID-19 pandemic. GSWC may, at times, utilize external sources for long-term financing, as well as obtain funds from equity investments from its parent, AWR, to help fund a portion of its operations and construction expenditures.
Internal cash flows have also been impacted by delays in receiving payments from GSWC customers. GSWC may, at times, utilize external sources for long-term financing, as well as obtain funds from equity investments from its parent, AWR, to help fund a portion of its operations and construction expenditures.
On January 14, 2025, the CPUC approved a request to defer the cost of capital application by another year. In December 2024, GSWC, along with three other investor-owned California water utilities, requested a further extension of the date by which each of them must file their cost of capital applications.
In November 2025, GSWC, along with three other investor-owned California water utilities, requested a further extension of the date by which each of them must file their cost of capital applications. In November 2025, the CPUC approved the request to defer the cost of capital application by another year.
(4) Consists of obligations at GSWC related to (i) a loan agreement supporting $7.7 million in outstanding debt issued by the California Pollution Control Financing Authority, and (ii) $1.8 million of obligations with respect to GSWC’s 500 acre-foot 58 Table of Contents entitlement to water from the State Water Project (“SWP”).
(4) Consists of obligations at GSWC related to (i) a loan agreement supporting $7.7 million in outstanding debt issued by the California Pollution Control Financing Authority, and (ii) $2.5 million of obligations with respect to GSWC’s 500 acre-foot entitlement to water from the State Water Project (“SWP”).
The final rule requires public water systems to implement PFAS monitoring and reporting within three years (2027), and where exceedances are identified, to implement solutions within five years (2029) to reduce PFAS levels to below the MCLs.
The final rule requires public water systems to implement PFAS monitoring and reporting within three years (2027), and where exceedances are identified, to implement solutions within five years (2029) to reduce PFAS levels to below the MCLs. In May 2025, U.S.
Finally, GSWC paid $35.1 million in dividends to AWR during 2024 as compared to $55.4 million during 2023. 57 Table of Contents Contractual Obligations and Commitments Registrant has various contractual obligations, which are recorded as liabilities in the consolidated financial statements.
Finally, GSWC paid $37.5 million in dividends to AWR during 2025 as compared to $35.1 million during 2024. 55 Table of Contents Contractual Obligations and Commitments Registrant has various contractual obligations, which are recorded as liabilities in the consolidated financial statements.
ASUS funds its operating expenses primarily through internal operating sources, which include U.S. government funding under long-term contracts with the U.S. government for operations and maintenance costs and construction activities, as well as investments by, or loans from, AWR. ASUS, in turn, provides funding to its subsidiaries.
ASUS funds its operating expenses primarily through internal operating sources, which include U.S. government funding under 15- and 50-year contracts for operations and maintenance costs and construction activities, as well as investments by, or loans from, AWR. ASUS, in turn, provides funding to its subsidiaries.
Among other things, the settlement agreement, (i) settles and adopts the revenue requirements for each of the four years 2023 through 2026, (ii) authorizes BVES to invest approximately $52.5 million in capital infrastructure included in base rates over the four-year rate cycle and at least an additional $23.1 million (plus an allowance for funds used during construction, or “AFUDC”) to be filed for revenue recovery through advice letters when the projects are completed; (iii) adopts a cost of capital that increases BVES’s adopted return on equity from 9.6% to 10.0%, lowers the cost of debt from 6.6% to 5.51%, and maintains the capital structure of 57% equity and 43% debt, and (iv) approves for recovery the requested capital expenditures and other incremental operating costs already incurred in connection with BVES’s wildfire mitigation plans that were previously not included in customer rates.
Among other things, the settlement agreement, (i) settled and adopted the revenue requirements for each of the four years 2023 through 2026, and the rate increases for 2024 through 2026 are not subject to an earnings test, (ii) authorized BVES to invest approximately $52.5 million in capital infrastructure included in base rates over the four-year rate cycle and at least an additional $23.1 million (plus an allowance for funds used during construction, or “AFUDC”) to be filed for revenue recovery through advice letters when the projects are completed; (iii) adopted a cost of capital that increased BVES’s adopted return on equity from 9.6% to 10.0%, lowered the cost of debt from 6.6% to 5.51%, and maintained the capital structure of 57% equity and 43% debt, and (iv) approved for recovery the requested capital expenditures and other incremental 37 Table of Contents operating costs already incurred prior to 2023 in connection with BVES’s wildfire mitigation plans that were previously not included in customer rates.
The change in the electric supply balancing account in 2024 when compared to 2023 is also due to decreases in energy prices. 45 Table of Contents Other Operation The primary components of other operation expenses include payroll costs, materials and supplies, chemicals and water treatment costs, and outside service costs of operating the regulated water and electric systems, including the costs associated with transmission and distribution, pumping, water quality, meter reading, billing, and operations of district offices.
The change in the electric supply balancing account in 2025 when compared to 2024 was due primarily to increases in energy prices. 44 Table of Contents Other Operation The primary components of other operation expenses include payroll costs, materials and supplies, chemicals and water treatment costs, and outside service costs of operating the regulated water and electric systems, including the costs associated with transmission and distribution, pumping, water quality, meter reading, billing, and operations of district offices and the electric system.
AWR’s quarterly dividend rate has grown at a compound annual growth rate (“CAGR”) of 8.8% over the last five years through 2024 and has achieved a 10-year CAGR of 8.0% in its calendar year dividend payments through 2024. AWR’s current policy is to achieve a CAGR in the dividend of more than 7% over the long-term.
AWR’s quarterly dividend rate has grown at a compound annual growth rate (“CAGR”) of 8.5% over the last five years since the first quarter of 2021, and has achieved a 10-year CAGR of 8.3% in its calendar year dividend payments through 2025. AWR’s current policy is to achieve a CAGR in the dividend of more than 7% over the long-term.
To determine the expected long-term rate of return on the plan assets, Registrant considers the current and expected asset allocation, as well as historical and expected returns on each plan asset class. A lower expected rate of return on plan assets will increase pension expense.
To determine the expected long-term rate of return on the plan assets, Registrant considers the current and expected asset allocation, as well as historical and expected returns on each plan asset class. A lower expected rate of return on plan assets will increase pension expense. The long-term expected return on the pension plan’s assets was 6.00% for 2025 and 2024.
During 2025, the water and electric segments’ company-funded capital expenditures are estimated to be approximately $170 - 210 million, barring any delays resulting from changes in capital improvement schedules due to unfavorable weather conditions and supply chain issues. These amounts include approximately $9.1 million estimated to be spent by BVES on wildfire mitigation projects.
During 2026, the water and electric segments’ company-funded capital expenditures are estimated to be approximately $185 - 225 million, barring any delays resulting from changes in capital improvement schedules due to unfavorable weather conditions and supply chain issues. These amounts include approximately $13.2 million estimated to be spent by BVES on wildfire mitigation projects.
Water Supply GSWC During 2024, GSWC delivered approximately 56.7 million hundred cubic feet (“ccf”) of water to its customers, which is an average of about 357 acre-feet per day or 116 million gallons per day (an acre-foot is approximately 435.6 ccf or 326,000 gallons). Approximately 57% of GSWC’s supply came from groundwater produced from wells situated throughout GSWC’s service areas.
Water Supply GSWC During 2025, GSWC delivered approximately 57.5 million hundred cubic feet (“ccf”) of water to its customers, which is an average of about 362 acre-feet per day or 118 million gallons per day (an acre-foot is approximately 435.6 ccf or 326,000 gallons). Approximately 50% of GSWC’s supply came from groundwater produced from wells situated throughout GSWC’s service areas.
This agreement commits to collective Colorado River water savings of 300,000 acre-feet annually with a three-year cap of 700,000 acre feet. In 2026, operational agreements on how the Colorado River is managed will expire. The Bureau is working with both the upper and lower states on a revised set of agreements and a draft is expected in early 2025.
This agreement commits to collective Colorado River water savings of 300,000 acre-feet annually with a three-year cap of 700,000 acre feet. Operational agreements on how the Colorado River is managed will expire in 2026. The Bureau is working with both the upper and lower states on a revised set of agreements and a consensus has not yet been reached.
Notification levels are health-based advisory levels established for contaminants in drinking water for which maximum contaminant levels have not been established. The U.S. EPA has also established health advisory levels for these compounds. Notification to consumers and stakeholders is required when the advisory levels or notification levels are exceeded.
Notification levels are health-based advisory levels established for contaminants in drinking water for which maximum contaminant levels have not been established. Notification to consumers and stakeholders is required when the advisory levels or notification levels are exceeded.
EPA announced the final regulations that established maximum contaminant levels (“MCLs”) for six PFAS compounds in drinking water. The regulation established MCLs for PFOA, PFOS, and several other contaminants with individual MCLs that range from 4 ppt to 10 ppt.
EPA announced the final regulations that established maximum contaminant levels (“MCLs”) for six PFAS compounds in drinking water. The regulation established MCLs for perfluorooctanoic acid (“PFOA”), perfluorooctane sulfonic acid (“PFOS”), and several other contaminants with individual MCLs that range from 4 ppt to 10 ppt.
AWR’s future cash flows from operating activities are expected to be affected by a number of factors, including utility regulation; changes in tax law; maintenance expenses; inflation; compliance with environmental, health and safety standards; production costs; customer growth; per-customer usage of water and electricity; weather and seasonality; conservation efforts; compliance with local governmental requirements, including mandatory restrictions on water use; the lingering effects of the COVID-19 pandemic on its customers’ ability to pay utility bills; and required cash contributions to pension and post-retirement plans.
AWR’s future cash flows from operating activities are expected to be affected by a number of factors, including utility regulation; delays in receiving approvals of general rate cases, changes in tax law; maintenance expenses; inflation; newly imposed tariffs; compliance with water quality regulations and environmental, health and safety standards; production costs; customer growth; per-customer usage of water and electricity; weather and seasonality; conservation efforts; compliance with local governmental requirements, including mandatory restrictions on water use; its customers’ ability to pay utility bills; and required cash contributions to pension and post-retirement plans.
The CPUC’s approval postponed this filing date by one year until May 1, 2026, with a corresponding effective date of January 1, 2027. The CPUC also approved the joint parties’ request to leave the current WCCM in place through the one-year deferral period.
The CPUC’s approval postponed the filing date by one year until May 1, 2027, with a corresponding effective date of January 1, 2028. The CPUC also approved the joint parties’ request to leave the current Water Cost of Capital Mechanism (“WCCM”) in place through the one-year deferral period.
Cash Flows from Financing Activities : Net cash provided by financing activities was $48.3 million for the year ended December 31, 2024 as compared to $110.6 million for 2023.
Cash Flows from Financing Activities : Net cash provided by financing activities was $19.4 million for the year ended December 31, 2025 as compared to $48.3 million for 2024.
Currently, there are more than 45 sources at GSWC and 7 sources at ASUS that have exceeded one or more of the PFAS MCLs. These new MCLs will increase capital investments and operations and maintenance expenses over the next five years.
Currently, there are more than 35 sources at GSWC and 7 sources at ASUS that have exceeded one or more of the PFAS MCLs. These new MCLs will increase capital investment expenditures over the next five years and increase operation and maintenance expenses over the long-term.
As a result of receiving approval of the new financing application, on February 12, 2025, BVES completed the issuance of $50.0 million in unsecured private-placement notes with a coupon rate of 6.12% maturing on February 12, 2030.
On February 12, 2025, BVES completed the issuance of $50.0 million in unsecured private-placement notes with a coupon rate of 6.12% maturing on February 12, 2030.
The decrease in cash provided by financing activities in 2024 was due primarily to a decrease in total new borrowings required in 2024 as compared to 2023 due, in large part, to an increase in cash flows from operating activities.
The change in cash from financing activities in 2025 was due primarily to a decrease in total net borrowings required in 2025 as compared to 2024 due, in large part, to an increase in cash flows from operating activities.
(9) Consists of agreements executed by BVES to purchase renewable energy credits through 2035. These renewable energy credits are used to meet California’s renewables portfolio standard. (10) Consists of BVES fixed-cost purchased power contract executed in July 2023 with Shell Energy North America (US), L.P.
(9) Consists of agreements executed by BVES to purchase renewable energy credits through 2035. These renewable energy credits are used to meet California’s renewables portfolio standard. (10) Consists of BVES fixed-cost purchased power contracts executed in July 2023 and in May 2025 with Shell Energy North America (US), L.P and Morgan Stanley Capital Group Inc., respectively.
Administrative and general expenses increased at the electric segment primarily due to the approval of the final decision in the electric general rate case proceeding with rates retroactive to January 1, 2023.
Administrative and general expenses decreased at the electric segment primarily due to the approval of the final decision in the electric general rate case proceeding with rates retroactive to 2023 but recorded in 2024.
The new rates are expected to go into effect on March 1, 2025. BVES was also authorized by the CPUC to establish a general rate case memorandum account that made the new rates retroactive to January 1, 2023.
The new electric rates were implemented on March 1, 2025. BVES was also authorized by the CPUC to establish a general rate case memorandum account that made the new rates retroactive to January 1, 2023.
ASUS’s earnings are also impacted by the level of construction projects at its subsidiaries, which may or may not continue at current levels in future periods. Water For the year ended December 31, 2024, revenues from water operations decreased by $16.1 million to $417.4 million, compared to 2023.
ASUS’s earnings are also impacted by the level of construction projects at its subsidiaries, which may or may not continue at current levels in future periods. Water For the year ended December 31, 2025, revenues from water operations increased to $464.1 million, an increase of $46.7 million compared to 2024.
Government, and/or (d) delays in solicitation for and/or awarding of new contracts under the Department of Defense contracting programs. At times, the DCAA and/or the DCMA may, at the request of a contracting officer, perform audits/reviews of contractors for compliance with certain government guidance and regulations, such as the Federal Acquisition Regulations and Defense Federal Acquisition Regulation Supplements.
At times, the DCAA and/or the DCMA may, at the request of a contracting officer, perform audits/reviews of contractors for compliance with certain government guidance and regulations, such as the Federal Acquisition Regulations and Defense Federal Acquisition Regulation Supplements.
Property and other taxes increased at the contracted services segment largely as a result of an increase in gross receipts taxes resulting from higher revenues, and an increase in payroll taxes due, in part, from the operations at the new bases.
Property and other taxes increased at the electric segment due largely to higher property taxes from capital additions and an increase in franchise fees from higher revenues. Property and other taxes increased at the contracted services segment largely as a result of an increase in payroll taxes due, in part, from the operations at the new bases.
The ability of GSWC and BVES to pay dividends to AWR is restricted by California law. Under these restrictions, approximately $805.8 million was available for GSWC to pay dividends to AWR on December 31, 2024. Approximately $102.1 million was available for BVES to pay dividends to AWR as of December 31, 2024.
The ability of GSWC and BVES to pay dividends to AWR is restricted by California law. Under these restrictions, approximately $933.7 million was available for GSWC to pay dividends to AWR on December 31, 2025. Approximately $117.7 million was available for BVES to pay dividends to AWR as of December 31, 2025.
AWR intends to use the net proceeds from these sales, after deducting commissions on such sales and offering expenses, for general corporate purposes, including, but not limited to, repayment of debt and making equity contributions to its subsidiaries.
In 2024, AWR began raising proceeds under its ATM offering program and has used the net proceeds from these sales, after deducting commissions on such sales and offering expenses, for general corporate purposes, including, but not limited to, repayment of debt and making equity contributions to its subsidiaries.

… 363 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

14 edited+0 added−0 removed20 unchanged
Biggest changeTo keep threat and vulnerability information up-to-date, the cybersecurity team subscribes to multiple national and state-level threat and vulnerability information disclosure services, both general-purpose and industry-specific in nature. Updates from these sources include general information delivered on a daily basis and more threat-specific information delivered as required.
Biggest changeRegistrant’s 28 Table of Contents cybersecurity team assesses ongoing cybersecurity threats and vulnerabilities to prioritize and implement mitigation factors and defense to help contain and combat identified risks. To keep threat and vulnerability information up-to-date, the cybersecurity team subscribes to multiple national and state-level threat and vulnerability information disclosure services, both general-purpose and industry-specific in nature.
In addition, Registrant’s plans require members of its senior management, such as its CEO and CFO, as well as members of management from its, and its subsidiaries’, Operations, Information Technology, Human Capital Management, Accounting and Legal teams to participate in Registrant’s Cybersecurity Incident Response Team (“CIRT”) and to be kept current on all aspects related to a cyberattack, if a cybersecurity incident were to occur.
Registrant’s plans require members of its senior management, such as its CEO and CFO, as well as members of management from its, and its subsidiaries’, Operations, Information Technology, Human Capital Management, Accounting and Legal teams to participate in Registrant’s Cybersecurity Incident Response Team (“CIRT”) and to be kept current on all aspects related to a cyberattack, if a cybersecurity incident were to occur.
Registrant is also taking actions intended to strengthen its cybersecurity posture and to improve its cybersecurity incident response plans and operating procedures. Despite the actions Registrant has taken and is taking and the fact that, to its knowledge, it has yet to experience a cybersecurity incident, there can be no assurance that Registrant will not experience a cybersecurity incident.
Registrant is also taking actions intended to strengthen its cybersecurity posture and to improve its cybersecurity incident response plans and operating procedures. Despite the actions Registrant has taken and is taking and the fact that, to its knowledge, it has yet to experience a cybersecurity incident; however, there can be no assurance that Registrant will not experience a cybersecurity incident.
Ransomware whereby hackers take control of a company’s systems and/or data has been identified as the most significant threat to Registrant’s critical infrastructure systems and is getting harder to detect and encrypted files are becoming harder to recover.
Ransomware whereby hackers take control of a company’s systems and/or data has been identified as the most significant threat to Registrant’s critical infrastructure systems and is getting harder to detect while encrypted files are becoming harder to recover.
Nevertheless, in order to continue meeting Registrant’s technological business needs and as more vendors build solutions in the cloud, Registrant expects to further expand its use of cloud-computing environments. As such, Registrant expects risks from cyberattacks and data breaches to increase due to the growth of its technological footprint in the cloud environments.
In addition, in order to continue meeting Registrant’s technological business needs and as more vendors build solutions in the cloud, Registrant expects to further expand its use of cloud-computing environments. As such, Registrant expects risks from cyberattacks and data breaches to increase due to the growth of its technological footprint in the cloud environments.
Its platform was designed to be consistent with industry best practices such as the U.S. National Institute of Standards and Technology (“NIST”) 27 Table of Contents cybersecurity frameworks. In addition, Registrant has dedicated employees with cybersecurity technical expertise and also leverages outside cybersecurity firms. Registrant has adopted multi-layered safeguards and educational measures to protect its operations, assets and digital information.
Its platform was designed to be consistent with industry best practices such as the U.S. National Institute of Standards and Technology (“NIST”) cybersecurity frameworks. In addition, Registrant has dedicated employees with cybersecurity technical expertise and also leverages outside cybersecurity firms. Registrant has adopted multi-layered safeguards and educational measures to protect its operations, assets and digital information.
Registrant is working on implementing across AWR and its subsidiaries a comprehensive, risk-based approach to identify and oversee cybersecurity risks presented by third parties, including vendors, service providers and other external users of its systems and data, as well as the systems of third parties that could adversely impact Registrant’s business in the event of a cybersecurity incident affecting those third-party systems.
Registrant is in the process of implementing across AWR and its subsidiaries a comprehensive, risk-based approach to identify and oversee cybersecurity risks presented by third parties, including vendors, service providers and other external users of its systems and data, as well as the systems of third parties that could adversely impact Registrant’s business in the event of a cybersecurity incident affecting those third-party systems.
In addition, any unauthorized access to sensitive information or data breaches could be detrimental to Registrant’s operations, critical corporate information and reputation and relationships with its customers, vendors, employees, directors and could negatively affect the future of contract awards at ASUS and could result in a termination of one or more of its existing contracts or the assessment of penalties.
In addition, any unauthorized access to sensitive information or data breaches could be detrimental to Registrant’s operations, critical corporate information and reputation and relationships with its customers, vendors, employees, directors and could negatively affect the future of contract awards at ASUS and could result in a termination of one or more of its existing contracts or the assessment of 29 Table of Contents penalties.
Threats can come from many sources, including, but not limited to, ransomware, malicious software, credential loss or theft, supervisory control and data acquisition system takeover, equipment theft, supply chain attacks, phishing attacks, identity-based attacks, denial-of-service attacks or the actions of employees either intentional or accidental.
Threats can come from many sources, including, but not limited to, ransomware, malicious software, credential loss or theft, supervisory control and data acquisition system takeover, equipment theft, supply chain attacks, phishing attacks, identity-based attacks, denial-of-service attacks, the actions of employees either intentional or accidental or artificial intelligence enabled attacks.
Registrant could also be assessed penalties if it is determined that applicable data privacy laws have been violated. 29 Table of Contents
Registrant could also be assessed penalties if it is determined that applicable data privacy laws have been violated. 30 Table of Contents
Members 28 Table of Contents of its CIRT team would work together to determine whether a cybersecurity breach is material and required to be reported to the Board and publicly under applicable law and regulation.
Members of its CIRT team would work together to determine whether a cybersecurity breach is material and required to be reported to the Board and publicly under applicable law and regulation.
Risk management, oversight and response Cyber risk management is an ongoing iterative process that requires continuous identification, assessment and management of possible cyber threats and has become a vital part of Registrant’s overall risk management efforts. Registrant’s cybersecurity team assesses ongoing cybersecurity threats and vulnerabilities to prioritize and implement mitigation factors and defense to help contain and combat identified risks.
Risk management, oversight and response Cyber risk management is an ongoing iterative process that requires continuous identification, assessment and management of possible cyber threats and has become a vital part of Registrant’s overall risk management efforts.
To determine the risk to Registrant’s systems, it engages in a continuous vulnerability management lifecycle process to identify and remediate vulnerable systems and system configurations. In this regard, Registrant leverages the NIST cybersecurity frameworks.
Registrant’s cybersecurity team meets regularly with product vendors for these tools to ensure optimal configurations are in place to protect its environment. To determine the risk to Registrant’s systems, it engages in a continuous vulnerability management lifecycle process to identify and remediate vulnerable systems and system configurations. In this regard, Registrant leverages the NIST cybersecurity frameworks.
Tools are in place within Registrant’s environment to monitor for anomalous behavior and provide rapid alerting for emerging threats and, in some cases, automated responses to threats. Registrant’s cybersecurity team meets regularly with product vendors for these tools to ensure optimal configurations are in place to protect its environment.
Updates from these sources include general information delivered on a daily basis and more threat-specific information delivered as required. Tools are in place within Registrant’s environment to monitor for anomalous behavior and provide rapid alerting for emerging threats and, in some cases, automated responses to threats.

Item 2. Properties

Properties — owned and leased real estate

7 edited+0 added−0 removed9 unchanged
Biggest changeAs of December 31, 2024, BVES owned and operated approximately 87.8 miles of overhead 34.5 kilovolt (kv) sub-transmission lines (21.94 circuit miles are insulated), 6.49 miles of underground 34.5 kv sub-transmission lines, 494.36 miles of overhead 4.16 kv or 2.4 kv distribution lines (45.01 circuit miles are insulated), 114.52 miles of underground cable, 13 sub-stations and a natural gas-fueled 8.4 MW peaking generation facility.
Biggest changeAs of December 31, 2025, BVES owned and operated approximately 87.8 miles of overhead 34.5 kilovolt (kv) sub-transmission lines (28.38 circuit miles are insulated), 6.57 miles of underground 34.5 kv sub-transmission lines, 495.89 miles of overhead 4.16 kv or 2.4 kv distribution lines (46.32 circuit miles are insulated), 114.98 miles of underground cable, 14 sub-stations and a natural gas-fueled 8.4 MW peaking generation facility.
Under the terms of certain debt instruments, AWR, GSWC and BVES are prohibited from issuing any secured debt, without providing equal and ratable security to the holders of this existing debt. 30 Table of Contents Condemnation of Properties The laws of the state of California provide for the acquisition of public utility property by governmental agencies through their power of eminent domain, also known as condemnation, where doing so constitutes a more necessary use.
Under the terms of certain debt instruments, AWR, GSWC and BVES are prohibited from issuing any secured debt, without providing equal and ratable security to the holders of this existing debt. 31 Table of Contents Condemnation of Properties The laws of the state of California provide for the acquisition of public utility property by governmental agencies through their power of eminent domain, also known as condemnation, where doing so constitutes a more necessary use.
ASUS leases office facilities in Virginia, North Carolina and Maryland, and owns service centers in Florida, Maryland, South Carolina, Virginia, Texas, North Carolina and Kansas. Mortgage and Other Liens As of December 31, 2024, neither AWR, GSWC, BVES, ASUS, nor any of its subsidiaries, had any mortgage debt or liens securing indebtedness outstanding.
ASUS leases office facilities in Virginia, North Carolina, Maryland and Massachusetts, and owns service centers in Florida, Maryland, South Carolina, Virginia, Texas, North Carolina and Kansas. Mortgage and Other Liens As of December 31, 2025, neither AWR, GSWC, BVES, ASUS, nor any of its subsidiaries, had any mortgage debt or liens securing indebtedness outstanding.
Properties Water Properties As of December 31, 2024, GSWC’s physical properties consisted of water transmission and distribution systems, which included 2,882 miles of pipeline together with services, meters and fire hydrants, and approximately 450 parcels of land generally less than 1 acre each, on which are located wells, pumping plants, reservoirs and other water utility facilities, including five surface water treatment plants.
Properties Water Properties As of December 31, 2025, GSWC’s physical properties consisted of water transmission and distribution systems, which included 2,890 miles of pipeline together with services, meters and fire hydrants, and approximately 450 parcels of land generally less than 1 acre each, on which are located wells, pumping plants, reservoirs and other water utility facilities, including five surface water treatment plants.
Surface water rights are quantified and managed by the SWRCB, unless the surface water rights originated prior to 1914. As of December 31, 2024, GSWC had adjudicated groundwater rights and surface water rights of 70,794 and 11,335 acre-feet per year, respectively.
Surface water rights are quantified and managed by the SWRCB, unless the surface water rights originated prior to 1914. As of December 31, 2025, GSWC had adjudicated groundwater rights and surface water rights of 70,362 and 11,335 acre-feet per year, respectively.
As of December 31, 2024, GSWC owned 238 wells, of which 176 are active with an aggregate production capacity of approximately 180 million gallons per day. GSWC has 59 connections to the water distribution facilities of the MWD, and other municipal water agencies. GSWC’s storage reservoirs and tanks have an aggregate capacity of approximately 119 million gallons.
As of December 31, 2025, GSWC owned 234 wells, of which 181 are active with an aggregate production capacity of approximately 188 million gallons per day. GSWC has 61 connections to the water distribution facilities of the MWD, and other municipal water agencies. GSWC’s storage reservoirs and tanks have an aggregate capacity of approximately 119 million gallons.
GSWC owns no dams. The following table provides, in greater detail, information regarding the water utility plant of GSWC: Pumps Distribution Facilities Reservoirs Well Booster Mains* Services Hydrants Tanks Capacity* 238 378 2,882 264,696 27,087 144 119 (1) * Reservoir capacity is measured in millions of gallons. Mains are in miles.
GSWC owns no dams. The following table provides, in greater detail, information regarding the water utility plant of GSWC: Pumps Distribution Facilities Reservoirs Well Booster Mains* Services Hydrants Tanks Capacity* 234 392 2,890 265,100 27,282 145 119 (1) * Reservoir capacity is measured in millions of gallons. Mains are in miles.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+5 added−1 removed0 unchanged
Biggest changeItem 3. Legal Proceedings Registrant is subject to ordinary routine litigation incidental to its business, some of which may include claims for compensatory and punitive damages. Management believes that rate recovery, proper insurance coverage and reserves are in place to insure against, among other things, property, general liability, employment, and workers’ compensation claims incurred in the ordinary course of business.
Biggest changeManagement believes that rate recovery, proper insurance coverage and reserves are in place to insure against, among other things, property, general liability, employment, and workers’ compensation claims incurred in the ordinary course of business. Insurance coverage may not cover certain claims involving punitive damages.
Removed
Insurance coverage may not cover certain claims involving punitive damages.
Added
Item 3. Legal Proceedings During the fourth quarter of 2025, GSWC and one of ASUS’s subsidiaries received class settlement payments of $2.2 million and $0.3 million, net of legal and other costs, respectively, from Dupont de Nemours, Inc. and related entities (“Dupont”) pursuant to respective class settlement agreements.
Added
A multidistrict litigation was created by a court order on December 7, 2018 that included Dupont, Tyco Fire Products LP, BASF Corp. and other defendants. A class settlement agreement among Dupont and the class of eligible public water systems was then entered into on June 30, 2023 and resolved any claims for PFAS contamination with Dupont.
Added
The class settlement agreement between the parties was approved by an order issued by the Federal District Court of South Carolina on February 28, 2024. GSWC and one of ASUS’s subsidiaries are plaintiffs in lawsuits seeking monetary damages related to PFAS contamination affecting public water systems with Tyco Fire Products LP and BASF Corp.
Added
Both defendants have reached class settlement agreements with the classes of eligible public water systems on April 26, 2024 and May 20, 2024, respectively, and both class settlement agreements have been approved by orders issued by the Federal District Court of South Carolina on November 22, 2024.
Added
Although class settlement agreements have been reached by the parties and approved by the Court, settlement amounts expected to be awarded to GSWC and ASUS’s subsidiary are not known at this time. Registrant is subject to ordinary routine litigation incidental to its business, some of which may include claims for compensatory and punitive damages.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+1 added−1 removed6 unchanged
Biggest changeOther Information The shareholders of AWR have approved the material features of all equity-compensation plans under which AWR directly issues equity securities. 33 Table of Contents The following table provides information about AWR repurchases of its Common Shares during the fourth quarter of 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares That May Yet Be Purchased under the Plans or Programs (1)(3) October 1 - 31, 2024 11,425 $ 83.37 — — November 1 - 30, 2024 302 $ 83.86 — — December 1 - 31, 2024 3,143 $ 84.87 — — Total 14,870 (2) $ 83.70 — (1) None of the Common Shares were repurchased pursuant to any publicly announced stock repurchase program.
Biggest changeThe following table provides information about AWR repurchases of its Common Shares during the fourth quarter of 2025: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Number of Shares That May Yet Be Purchased under the Plans or Programs (1)(3) October 1 - 31, 2025 277 $ 74.08 — — November 1 - 30, 2025 5,949 $ 70.72 — — December 1 - 31, 2025 3,828 $ 73.39 — — Total 10,054 (2) $ 71.83 — (1) None of the Common Shares were repurchased pursuant to any publicly announced stock repurchase program.
In accordance with SEC guidance, the returns of the seven utilities included in the peer group are weighted according to their respective market capitalization. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Common Shares, and in the common stock in the index and in the peer group on December 31, 2019.
In accordance with SEC guidance, the returns of the seven utilities included in the peer group are weighted according to their respective market capitalization. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Common Shares, and in the common stock in the index and in the peer group on December 31, 2020.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Performance Graph The graph below compares the cumulative 5-Year total return of American States Water Company’s Common Shares with the cumulative total returns of the S&P 500 index and a customized peer group of seven water utilities that includes: American Water Works Company Inc., Essential Utilities Inc., Artesian Resources Corporation, California Water Service Group, Middlesex Water Co., York Water Co. and SJW Group.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Performance Graph The graph below compares the cumulative 5-Year total return of American States Water Company’s Common Shares with the cumulative total returns of the S&P 500 index and a customized peer group of seven water utilities that includes: American Water Works Company Inc., Essential Utilities Inc., Artesian Resources Corporation, California Water Service Group, Middlesex Water Co., York Water Co. and H2O America (formerly SJW Group).
The following table lists the amounts of dividends paid on Common Shares of American States Water Company: 2024 2023 First Quarter $ 0.4300 $ 0.3975 Second Quarter $ 0.4300 $ 0.3975 Third Quarter $ 0.4655 $ 0.4300 Fourth Quarter $ 0.4655 $ 0.4300 Total $ 1.7910 $ 1.6550 AWR’s ability to pay dividends is subject to the requirement in its revolving credit facility to maintain compliance with all covenants described in Note 9 Bank Debt included in Part II, Item 8, in the Notes to Consolidated Financial Statements .
The following table lists the amounts of dividends paid on Common Shares of American States Water Company: 2025 2024 First Quarter $ 0.4655 $ 0.4300 Second Quarter $ 0.4655 $ 0.4300 Third Quarter $ 0.5040 $ 0.4655 Fourth Quarter $ 0.5040 $ 0.4655 Total $ 1.9390 $ 1.7910 AWR’s ability to pay dividends is subject to the requirement in its revolving credit facility to maintain compliance with all covenants described in Note 9 Bank Debt included in Part II, Item 8, in the Notes to Consolidated Financial Statements .
GSWC is prohibited under the terms of its senior notes from paying dividends if, after giving effect to the dividend, its total indebtedness to capitalization ratio (as defined) would be more than 0.6667-to-1. GSWC would have to issue additional debt of $881.7 million to invoke this covenant as of December 31, 2024.
GSWC is prohibited under the terms of its senior notes from paying dividends if, after giving effect to the dividend, its total indebtedness to capitalization ratio (as defined) would be more than 0.6667-to-1. GSWC would have to issue additional debt of $1,148 million to invoke this covenant as of December 31, 2025.
(2) Of these amounts, 11,016 Common Shares were acquired on the open market for employees pursuant to the 401(k) plan. The remainder of the shares were acquired on the open market for participants in the DRP.
(2) Of these amounts, 5,445 Common Shares were acquired on the open market for employees pursuant to the 401(k) plan. The remainder of the shares were acquired on the open market for participants in the DRP.
Under the least restrictive of the California tests, approximately $920.1 million was available to pay dividends to AWR’s common shareholders and repurchase shares from AWR’s common shareholders at December 31, 2024.
Under the least restrictive of the California tests, approximately $1,045.6 million was available to pay dividends to AWR’s common shareholders and repurchase shares from AWR’s common shareholders at December 31, 2025.
As a result, there is no public trading market in its common shares. Approximate Number of Holders of Common Shares As of February 18, 2025, there were 1,739 holders of record of the 38,156,568 outstanding Common Shares of American States Water Company. AWR owns all of the outstanding common shares of GSWC, BVES and ASUS.
As a result, there is no public trading market in its common shares. Approximate Number of Holders of Common Shares As of February 17, 2026, there were 1,648 holders of record of the 39,082,470 outstanding Common Shares of American States Water Company. AWR owns all of the outstanding common shares of GSWC, BVES and ASUS.
AWR paid $67.0 million in dividends to shareholders for the year ended December 31, 2024, as compared to $61.2 million for the year ended December 31, 2023. GSWC paid dividends of $35.1 million and $55.4 million to AWR in 2024 and 2023, respectively. BVES did not pay dividends to AWR in 2024 and 2023.
AWR paid $74.7 million in dividends to shareholders for the year ended December 31, 2025, as compared to $67.0 million for the year ended December 31, 2024. GSWC paid dividends of $37.5 million and $35.1 million to AWR in 2025 and 2024, respectively. BVES did not pay dividends to AWR in 2025 and 2024.
ASUS paid dividends of $16.0 million to AWR in 2024 and 2023. Unregistered Sales of Equity Securities On December 30, 2024, GSWC issued 2.7586 common shares to AWR in exchange for a contribution of $39,999,700.
ASUS paid dividends of $20.0 million and $16.0 million to AWR in 2025 and 2024, respectively. Unregistered Sales of Equity Securities On December 26, 2025, GSWC issued 0.975 common shares to AWR in exchange for a contribution of $12.0 million.
Approximately $805.8 million was available for GSWC to pay dividends to AWR at December 31, 2024, and approximately $102.1 million was available for BVES to pay dividends to AWR at December 31, 2024.
Approximately $933.7 million was available for GSWC to pay dividends to AWR at December 31, 2025, and approximately $117.7 million was available for BVES to pay dividends to AWR at December 31, 2025.
Relative performance is tracked through December 31, 2024. 12/2019 12/2020 12/2021 12/2022 12/2023 12/2024 American States Water Company $ 100.00 $ 93.24 $ 123.32 $ 112.29 $ 99.42 $ 98.24 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 Peer Group $ 100.00 $ 117.02 $ 144.49 $ 123.67 $ 105.94 $ 101.00 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 32 Table of Contents Market Information Relating to Common Shares Common Shares of American States Water Company are traded on the New York Stock Exchange (“NYSE”) under the symbol “AWR.” GSWC is a wholly-owned subsidiary of AWR.
Relative performance is tracked through December 31, 2025. 12/2020 12/2021 12/2022 12/2023 12/2024 12/2025 American States Water Company $ 100.00 $ 132.26 $ 120.43 $ 106.63 $ 105.36 $ 100.79 S&P 500 $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 Peer Group $ 100.00 $ 123.47 $ 105.68 $ 90.52 $ 86.31 $ 92.17 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 33 Table of Contents Market Information Relating to Common Shares Common Shares of American States Water Company are traded on the New York Stock Exchange (“NYSE”) under the symbol “AWR.” GSWC is a wholly-owned subsidiary of AWR.
Removed
AWR did not issue any unregistered equity securities during 2024.
Added
AWR did not issue any unregistered equity securities during 2025. 34 Table of Contents Other Information The shareholders of AWR have approved the material features of all equity-compensation plans under which AWR directly issues equity securities.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

4 edited+0 added−0 removed3 unchanged
Biggest changeThe impact of retroactive rates related to the full year of 2022 recorded during the year ended December 31, 2023 resulting from the final decision in the water general rate case approved in June 2023 and the impact from the reversal of revenues subject to refund recorded in 2022 due to a change in estimates recorded in 2023 following the receipt of a final cost of capital decision in June 2023 have been excluded in this analysis when communicating AWR’s consolidated and water segment results for the years ended December 31, 2024 and 2023 to help facilitate comparisons of Registrant’s performance from period to period.
Biggest changeThe impact of a one-time tax benefit recorded in 2024 at the water segment has been excluded in the analysis when communicating AWR’s consolidated and water segment results for the years ended December 31, 2025 and 2024. This adjustment has been excluded from the analysis to help facilitate comparisons of AWR’s performance from period to period.
AWR uses earnings per share by business segment, a non-GAAP financial measure, as an important measure in evaluating its operating results and believes it provides investors with clarity surrounding the performance of its segments. AWR reviews this measurement regularly and compares it to historical periods and to its operating budget.
AWR uses earnings per share by business segment and AWR (parent), a non-GAAP financial measure, as an important measure in evaluating its operating results and believes it provides investors with clarity surrounding the performance of its segments. AWR reviews this measurement regularly and compares it to historical periods and to its operating budget.
Included in the following analysis is a discussion of Registrant’s operations in terms of earnings per share by business segment and AWR (parent), which equals each business segment’s earnings divided by AWR’s weighted average number of diluted Common Shares.
Included in the following analysis is a discussion of Registrant’s operations in terms of earnings per share by business segment and AWR (parent), which equals each business segment’s recorded earnings and adjusted earnings (if applicable) divided by AWR’s weighted average number of diluted Common Shares.
A reconciliation to AWR’s consolidated diluted earnings per share prepared in accordance with GAAP is included in the discussion under the section titled “ Summary Results by Segment . ” Overview Factors affecting our financial performance are summarized under the Overview section in Item 1. Business and
Reconciliations of this measure and of diluted earnings per share as adjusted to AWR’s consolidated diluted earnings per share prepared in accordance with GAAP are included in the discussion under the section titled “ Summary Results by Segment . ” Overview Factors affecting our financial performance are summarized under the Overview section in Item 1. Business and

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+2 added−2 removed3 unchanged
Biggest changeThe new 67 Table of Contents contract provides for the purchase of electricity during a delivery period from November 1, 2024 through December 31, 2035. Under this contract, there is an embedded derivative that also requires mark-to-market accounting.
Biggest changeThe new contract provides for the purchase of electricity during a delivery period from June 1, 2025 through December 31, 2028 and is subject to the accounting guidance for derivatives and requires mark-to-market accounting.
A hypothetical ten percent change in market interest rates would result in an increase or decrease of approximately $21.4 million in the fair value of Registrant’s long-term debt. Registrant is also exposed to risks resulting from changes in interest rates as a result of its issuances of short-term debt through unsecured revolving credit facilities.
A hypothetical ten percent change in market interest rates would result in an increase or decrease of approximately $21.8 million in the fair value of Registrant’s long-term debt. Registrant is also exposed to risks resulting from changes in interest rates as a result of its issuances of short-term debt through unsecured revolving credit facilities.
The CPUC authorized the use of a regulatory asset and liability memorandum account to offset the mark-to-market entries required by the accounting guidance.
The CPUC authorized BVES’s use of a regulatory asset and liability memorandum account to offset the mark-to-market entries required by the accounting guidance.
Except as discussed above, Registrant has had no other derivative financial instruments, financial instruments with significant off-balance sheet risks or financial instruments with concentrations of credit risk. 68 Table of Contents
Except as discussed above, Registrant has had no other derivative financial instruments, financial instruments with significant off-balance sheet risks or financial instruments with concentrations of credit risk. 65 Table of Contents
Interest Rate Risk A significant portion of Registrant’s capital structure is comprised of fixed-rate debt consisting of notes and debentures. A market risk related to our fixed-rate debt is the potential increase in fair value resulting from a decrease in interest rates. At December 31, 2024, the fair value of Registrant’s long-term debt was $608.2 million.
Interest Rate Risk A significant portion of Registrant’s capital structure is comprised of fixed-rate debt consisting of notes and debentures. A market risk related to our fixed-rate debt is the potential increase in fair value resulting from a decrease in interest rates. At December 31, 2025, the fair value of Registrant’s long-term debt was $790.8 million.
At December 31, 2024, Registrant had outstanding consolidated borrowings under its credit facilities of $289.0 million that are exposed to variable short-term interest rate risk. The impact of a 100-basis point change in interest rates on pretax income is approximately $2.9 million as of December 31, 2024.
At December 31, 2025, Registrant had outstanding consolidated borrowings under its credit facilities of $141.0 million that are exposed to variable short-term interest rate risk. The impact of a 100-basis point change in interest rates on pretax income is approximately $1.4 million as of December 31, 2025.
As of December 31, 2024, the fair value of the derivative liability was $8.8 million for the purchase power contract, with a corresponding regulatory asset recorded in the derivative instrument memorandum account as a result of overall fixed prices under BVES’s purchase power contracts being higher than future energy prices.
As of December 31, 2025, the fair value of the derivative liability was $15.5 million for the purchase power contracts, with corresponding regulatory assets recorded in the derivative instrument memorandum account as a result of overall fixed prices under BVES’s purchase power contracts being higher than future energy prices.
Removed
BVES has entered into long-term fixed price contracts to purchase power over three and five -year terms. These long-term contracts expired during the fourth quarter of 2024 and were subject to the accounting guidance for derivatives and required mark-to-market derivative accounting.
Added
BVES has historically entered into long-term fixed price contracts to purchase power with current delivery periods that range from 2025 through 2035. In May 2025, the CPUC approved a new power purchase contract between BVES and a third party.
Removed
In July 2023, the CPUC approved a new power purchase agreement between BVES and a third party to procure renewable portfolio standard eligible energy and RECs as a bundled product. BVES began taking power under this long-term contract during the fourth quarter of 2024 to replace the existing expiring contracts.
Added
In addition, BVES continues to procure renewable portfolio standard eligible energy and renewable energy credits as a bundled product through a contract that delivers through December 31, 2035. Under this contract, there is an embedded derivative that also requires mark-to-market accounting.

Other AWR 10-K year-over-year comparisons