On this page of StockholderLetter.com we present the latest annual shareholder letter from AMERICAN STATES WATER CO — ticker symbol AWR. Reading current and past AWR letters to shareholders can bring important insights into the investment thesis.

 •  4/4/2025 Letter Continued (Full PDF)
 •  4/7/2023 AWR Stockholder Letter
 •  4/5/2024 AWR Stockholder Letter
 •  More "Water Utilities" Category Stockholder Letters
 •  AWR Benford's Law Stock Score = 99

AWR Shareholder/Stockholder Letter Transcript:

2024
ANNUAL REPORT

American States Water Company and subsidiaries
Regulated Water and Electric Operations:
Golden State Water Company (GSWC) and
Bear Valley Electric Service, Inc. (BVES)
HEADQUARTERED
IN SAN DIMAS, CA,
Military bases served through American
States Utility Services, Inc. (ASUS)
contracted services business
T H E C O M PA N Y
SERVES OVER ONE
MILLION PEOPLE IN
T E N S TAT E S .
MASSACHUSETTS
MARYLAND
CALIFORNIA
KANSAS
VIRGINIA
NORTH CAROLINA
SOUTH CAROLINA
NEW MEXICO
TEXAS
Detailed customer
information on page 7.
FLORIDA
American States Water Company is the parent of Golden State Water Company, Bear Valley Electric Service, Inc. and American
States Utility Services, Inc., serving over one million people in ten states. Through its water utility subsidiary, Golden State Water
Company, the company provides water service to approximately 264,600 customer connections located within more than 80
communities in Northern, Coastal and Southern California. Through its electric utility subsidiary, Bear Valley Electric Service, Inc.,
the company distributes electricity to approximately 24,900 customer connections in the City of Big Bear Lake and surrounding
areas in San Bernardino County, California. Through its contracted services subsidiary, American States Utility Services, Inc., the
company provides operations, maintenance and construction management services for water distribution, wastewater collection,
and treatment facilities located on 12 military bases throughout the country under 50-year privatization contracts with the U.S.
government and one military base under a 15-year contract.

2024
Financial Highlights
(in thousands, except per share amounts)
2024
2023
Total Operating Revenues1
$ 595,459
$ 595,699
Total Operating Expenses
410,976
Operating Income1
Variance
% Change
Income Statement Information
(240)
0.0%
398,959
12,017
3.0%
184,483
196,740
(12,257)
-6.2%
Interest Charges (Net)
42,508
35,346
7,162
20.3%
Net Income1
119,268
124,921
(5,653)
-4.5%
Basic Earnings Per Common Share2
3.17
3.37
(0.20)
-5.9%
Fully Diluted Earnings per Common Share2
3.17
3.36
(0.19)
-5.7%
0.136
8.2%
Dividends Paid per Common Share

1.791

1.655


Average Number of Shares Outstanding
37,464
36,976
488
1.3%
Average Number of Diluted Shares Outstanding
37,583
37,077
506
1.4%
$2,500,209
$ 2,246,122
$ 254,087
11.3%
2,099,625
1,892,280
207,345
11.0%
Common Shareholders    Equity
920,051
776,109
143,942
18.5%
Long-Term Debt
640,382
575,555
64,827
11.3%
1,560,433
1,351,664
208,769
15.4%
3.13
14.9%
Balance Sheet Information
Total Assets
Net Utility Plant
Total Capitalization
Book Value per Common Share

24.12

20.99

1
Operating revenues, operating income and net income in 2023 re   ect the favorable impact of (i) recording retroactive rates related to the full year of 2022 as a result of receiving a
   nal decision in June 2023 on the water utility general rate case for 2022-2024 from the California Public Utilities Commission (CPUC), and (ii) reversing revenues subject to refund
that were previously recorded in 2022 as a result of receiving a    nal CPUC decision in the cost of capital proceeding also in June 2023.
2
$0.19 per share recorded (GAAP) decrease in 2024 consolidated diluted EPS compared to 2023, or $0.32 per share increase as adjusted (Non-GAAP) to exclude from 2023 (as also
discussed in footnote 1 above): (i) the impact of retroactive rates of $0.38 per share related to the full year of 2022 due to receiving a    nal decision in the water utility general rate
case for 2022-2024, and (ii) the impact of a favorable variance of $0.13 per share resulting from the reversal of revenues subject to refund previously recorded in 2022 following the
receipt of a    nal decision in the cost of capital proceeding in June 2023.
2024 ANNUAL REPORT
1

Dear shareholders,
American States Water Company and its subsidiaries (AWR) continued to deliver
safe and reliable service to over one million people in ten states     no small task
and one that remains a key driver for the entire organization. We are pleased to
share the highlights and progress for the year.
As we continued our unwavering focus and commitment
to our customers and shareholders, we had another very
productive and positive year. On the regulatory front, based
on the work we did in 2024, we received    nal decisions from
the California Public Utilities Commission (CPUC) in January
2025 on general rate cases for both our water and electric
utility subsidiaries. Both decisions represent constructive
regulatory outcomes and enable us to continue investing in
our water and electric infrastructure for generations to come.
At American States Utility Services, Inc. (ASUS), we began
work under two new military contracts serving bases on the
east coast, further expanding our footprint of managing water
and wastewater systems for the United States government.
GOLDEN STATE WATER
COMPANY (GSWC)
79.2%
$2.51
BEAR VALLEY ELECTRIC
SERVICE, INC. (BVES)
Earnings
Per Share
Total: $3.17 1
6.6%
$0.21
AMERICAN STATES UTILITY
SERVICES, INC. (ASUS)
17.4%
$0.55
F I N A N C I A L R E S U LTS
2024 produced another year of strong    nancial results. While
reported earnings per share (EPS) were $3.17, a decrease of
$0.19 compared to $3.36 per share recorded for 2023, when
compared against adjusted earnings2 of $2.85 for 2023, EPS
increased by $0.32, or 11.2%, primarily driven by rate increases
in both the water and electric utilities, and the commencement
of water and wastewater operations under two new military
contracts combined with successful economic price
adjustments at the legacy bases in our contracted services
business. Additionally, our water utility segment recorded a
tax bene   t of $0.13 per share following the    nal decision in its
recently approved general rate case. These increases were
partially offset by higher operating expenses and interest costs
and the dilutive effects from the issuance of equity under
AWR   s At-The-Market offering program, which decreased
consolidated earnings by approximately $0.04 per share.
We also achieved a consolidated return on equity of 14.1%,
despite a 14.2% increase in our average consolidated equity
balance compared to 2023. This compares very favorably
to other water utilities. We increased our quarterly dividend
by 8.3%. As a result, we have increased our calendar year
dividend for the 70th consecutive year. Our dividend growth
is consistent with our policy of achieving a compound annual
dividend growth rate of more than 7% over the long term.
K E Y D E V E LO P M E N TS I N 2 024
    On January 30, 2025, the CPUC issued a    nal decision in
Golden State Water Company   s (GSWC   s) general rate case
for 2025-2027 that adopted the settlement agreement
2
1
Also includes the parent company results of -$0.10 per share.
2
AMERICAN STATES WATER COMPANY
Adjusted earnings for 2023 exclude the favorable impact of retroactive rates related to the
full year of 2022 resulting from the    nal CPUC decision in the water general rate case for
2022-2024, and the impact of changes in estimates resulting in the reversal of revenues
subject to refund related to the    nal decision in GSWC   s cost of capital proceeding.

Regulated Utilities
2022
$8,573
$8,062
$9,340
investment per customer connection
2023
2024
reached between GSWC and the Public Advocates Office
at the CPUC in July 2024. The decision authorizes new rates
for the years 2025-2027, with rates retroactive to January 1,
2025. In addition, the decision authorizes the investment of
approximately $573.1 million in capital infrastructure over the
three-year capital cycle, including $17.7 million of advice letter
capital investments. It also authorizes advice letter capital
investments of $58.2 million already under construction at
the beginning of 2023. Revenue recovery for all advice letter
investments will commence during second- and third-year
attrition increases when projects are completed. Excluding
revenues for advice letter capital projects, adopted operating
revenues less water supply costs for 2025 are projected
to increase by approximately $23 million when compared
to 2024. In addition, there are potential additional revenue
increases of approximately $20 million for each of the years
2026 and 2027 based on in   ation factors used at the time of
the application    ling in August 2023, without factoring in the
revenues from those advice letter capital projects.
    In December 2024, GSWC, along with three other investorowned California water utilities, requested another extension
of the date by which each of them must    le their cost of capital
applications. The CPUC approved the utilities    request to defer
the cost of capital application by one year to May 1, 2026, with
a corresponding effective date of January 1, 2027. With the
deferral, GSWC will retain its authorized return on equity of
10.06% and a 57% equity ratio through the end of 2026.
    On January 16, 2025, the CPUC issued a    nal decision in
Bear Valley Electric Service, Inc.   s (BVES   s) general rate case,
adopting the settlement agreement in its entirety reached
last November by all parties in the proceeding. The decision
sets new electric rates for 2023-2026, retroactive to January
1, 2023, and, among other items, authorizes BVES to invest
$75.6 million in capital infrastructure over the four-year
rate cycle, including at least $23.1 million plus Allowance for
Funds Used During Construction (AFUDC) to be    led for
revenue recovery through advice letters when the projects
are completed; adopts a cost of capital that increases BVES   s
adopted return on equity to 10.0%, lowers the cost of debt
to 5.51%, and maintains the capital structure of 57% equity
and 43% debt; approves for recovery the requested capital
expenditures and other incremental operating costs already
incurred in connection with BVES   s wild   re mitigation plans that
were previously not included in customer rates; and increases
adopted operating revenues by $2.2 million for 2025 and $3.3
million in 2026. Rate increases for 2025-2026 are not subject
to an earnings test, and provide additional annual operating
revenues of approximately $3 million when the advice letter
projects of at least $23.1 million, plus AFUDC to be accrued, are
completed, placed in service and    led for recovery.
    In 2024, we invested the highest level of capital expenditures
in our utility systems in the company   s history, with a total
regulated utilities    spend on company-funded capital work of
$235.5 million, an increase of 34.2% over the prior year.
    Our contracted services subsidiary, ASUS, commenced
operations of the water and wastewater systems at Joint
Base Cape Cod and Naval Air Station Patuxent River in April
2024, contributing to ASUS   s earnings for the year.
    ASUS was awarded $56.5 million in new capital upgrade (NCU)
projects for military contracts, a record high and a signi   cant
increase as compared to $25.2 million awarded in 2023 and
amounts awarded in any one year during the last    ve years.
    Our record of maintaining strong credit ratings continued
this year. We have an A credit rating from S&P on AWR and
A+ for GSWC, with stable outlooks on both ratings. Moody   s
affirmed an A2 rating with a stable outlook on GSWC. These
are some of the highest credit ratings in the U.S. investorowned water utility industry.
    Our regulated utilities' spending with diverse suppliers was
33.9%, exceeding the CPUC's target for the 12th consecutive
year. Currently, the CPUC   s target is 23%.
    We continue to practice and promote conservation efforts.
Water usage per customer by GSWC customers is down
39.1% since 2007.
C O N T I N U I N G TO F O C U S O N LO N G -T E R M
SHAREHOLDER RETURNS
It was a challenging year for water utility stock returns in
general. The total shareholder return (TSR) of AWR stock was
-1.2% for 2024. Although shareholders experienced a negative
return for the year, AWR   s performance was the second best
of the eight publicly traded water utilities in the U.S.
On a ten-year basis, AWR   s TSR was the sixth best performing
stock of the forty-four large electric, gas and water utility
2024 ANNUAL REPORT
3



 4/4/2025 Letter Continued (Full PDF)