AMERICAN STATES WATER CO

Pursuant to a class settlement agreement, during the second quarter of 2025, GSWC was notified that it will receive from 3M Company approximately $19 million, net of legal fees. In June 2025, 3M Company paid a portion of this amount into a qualified settlement fund totaling approximately $12.5 million to be administered by a custodian for the benefit of GSWC. This amount is expected to be disbursed to GSWC during the third and fourth quarter of 2025, with the first payment received in August 2025. The class settlement agreement among 3M Company and the class of eligible public water systems was entered into on June 22, 2023 and resolved any claims for PFAS contamination with 3M Company. The class settlement agreement between the parties was approved by an order issued by the Federal District Court of South Carolina on March 29, 2024. Based on the settlement agreement with 3M Company, GSWC expects to be paid the remaining amount during 2026 – 2033. Furthermore, one of ASUS’s subsidiaries is also a participant in this class settlement agreement with 3M Company and is expected to receive approximately $2 million during 2025 – 2033.

GSWC and one of ASUS’s subsidiaries are also plaintiffs in class action lawsuits related to PFAS contamination affecting public water systems with Dupont, Tyco Fire Products LP and BASF Corp. All three defendants have reached class settlement agreements with the classes of eligible public water systems in June 2023, April 2024, and May 2024, respectively, and all three class settlement agreements have been approved by orders issued by the Federal District Court of South Carolina in 2024. 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 that may include claims for compensatory and punitive damages. No legal proceedings are pending that management believes to be material. 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. Insurance coverage may not cover certain claims involving punitive damages.