[Management View]
American States Water Company reported $0.87 GAAP earnings per share in Q2 2025, an increase of $0.02 per share compared to Q2 2024. The company emphasized the 8.3% dividend raise, marking 71 consecutive years of annual increases. The final CPUC decision introduced a new MRAM mechanism, altering the company’s exposure to consumption volatility. Golden State Water completed the acquisition of water and wastewater assets for a new community, advancing its customer base and future revenue streams. The company enhanced its liquidity by expanding its credit facility and successfully accessed private debt markets.

[Outlook]
The company projects ASUS to contribute $0.59-$0.63 per share for 2025. Bear Valley Electric’s proposed $28 million investment in solar and storage facilities awaits CPUC approval. Senate Bill 473 remains unresolved; if passed, it could restore mandatory revenue decoupling for California water utilities. The company expects robust and sustained growth in Golden State Water's rate base over the next few years.

[Financial Performance]
Consolidated revenues increased by $7.7 million in Q2 2025 compared to Q2 2024. Water revenues rose by $9.3 million, Electric revenues increased by $4.2 million, ASUS revenues declined by $5.8 million. Operating cash flow was $109.6 million for the first six months of 2025, a $39.1 million increase over the first six months of 2024.

[Q&A Highlights]
Question 1: In terms of sculpting our estimates for the remainder of the year, I know we can see that you reiterated the ASUS guidance for the year. Just curious if you are seeing more construction activity pacing towards the third quarter? Is that later in the year pickup in April just so we can kind of right-size our quarterly estimates there?

Answer: Well, it's you know, we'll see it in both the third and the fourth quarter. My guess is we'll probably see more in the fourth than the third, but it's really sort of a guess at this point. We're depending on other folks permitting, etcetera. It's how quickly we can get through those processes. But we're pretty confident on the $0.59 to $0.63.

Question 2: And then just on the decoupling legislation, it seems like it's moving through the legislature pretty nicely so far. Obviously, got some robust debate in the committee at this point, but can you just talk us through your confidence level of getting something done on that front and then just apologize if you already mentioned it, but just the process or timeline as the bill is currently written to effectuate that into your rate construct?

Answer: Yeah. So it is a pretty difficult thing to handicap here in California. We think we have there's a lot of great arguments on our side as to why we should get full decoupling. And probably the biggest one is the electric utilities have it. Why is it good for the electrics and not for water? Not to mention what it does for the ability to put tiered rates in and make rates more affordable to low-income customers. Yeah. We just I mean, we're cautiously optimistic, I would say. We've done very well to get it this far and I again, I don't want to handicap whether it's going to go through or not because I'm no political scientist, to be honest. We'll just have to watch it carefully. What are you hearing from the other companies, Ian?

Ian Rath: Yeah. I think that's a fair assessment of the landscape. Cautiously optimistic is a good term. But that's helpful from my end. I appreciate you guys' commentary. I'll jump back in the queue.

[Sentiment Analysis]
The tone of the management was cautiously optimistic regarding the decoupling legislation and confident about the ASUS guidance. Analysts seemed supportive and aligned with the management's outlook.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | Change |
|-------------------------------|---------|---------|--------|
| GAAP EPS | $0.87 | $0.85 | +$0.02 |
| Water Segment EPS | $0.73 | $0.67 | +$0.06 |
| Electric Segment EPS | $0.03 | $0.01 | +$0.02 |
| ASUS Segment EPS | $0.13 | $0.19 | -$0.06 |
| Consolidated Revenues | $7.7M | - | +$7.7M |
| Operating Cash Flow (6 months)| $109.6M | $70.5M | +$39.1M|

[Risks and Concerns]
Without the continuation of a full revenue decoupling mechanism and a full cost balancing account for water supply, the company may be subject to future volatility in revenues and earnings. Senate Bill 473 remains unresolved, which could impact revenue stability.

[Final Takeaway]
American States Water Company demonstrated solid financial performance in Q2 2025, with increased earnings and revenues. The company remains optimistic about future growth, supported by strategic acquisitions and infrastructure investments. However, the potential volatility in revenues due to regulatory changes and the pending Senate Bill 473 are key areas to monitor. The management's confidence in achieving the ASUS guidance and the dividend increase reflects a positive outlook for the remainder of the year.