AMERICAN STATES WATER CO

CONDENSED BALANCE SHEETS

CONDENSED STATEMENTS OF INCOME

CONDENSED STATEMENTS OF CASH FLOWS

NOTES TO CONDENSED FINANCIAL INFORMATION OF PARENT

Note 1 — Basis of Presentation

The accompanying condensed financial statements of AWR (parent) should be read in conjunction with the consolidated financial statements and notes thereto of American States Water Company and subsidiaries (“Registrant”) included in Part II, Item 8 of this Form 10-K. AWR’s (parent) significant accounting policies are consistent with those of Registrant and its wholly owned subsidiaries, Golden State Water Company (“GSWC”), Bear Valley Electric Service, Inc. (“BVES”) and American States Utility Services, Inc. (“ASUS”), except that all subsidiaries are accounted for as equity method investments.

Related-Party Transactions:

As further discussed in Note 2 — Notes Payable to Banks, AWR (parent) currently has access to a $195.0 million syndicated credit facility. AWR (parent) borrows under this facility and provides funds to ASUS in support of their operations and itself. Any amounts owed to AWR (parent) for borrowings under this facility are reflected as intercompany note receivables on the Condensed Balance Sheets. The interest rate charged to its subsidiaries is sufficient to cover AWR (parent)’s interest cost under the credit facility.

AWR may, from time to time, also make equity investments in its subsidiaries in support of their operations as described below.

During 2025 and 2024, GSWC issued 4.6250 and 2.7586 Common Shares to AWR (parent) for total proceeds of $62.0 million and$40.0 million, respectively. GSWC used the proceeds from the stock issuances to pay down outstanding borrowings under its revolving credit facility and to fund its ongoing operations and capital expenditures.

During 2025 and 2024, BVES issued 3.33 andeleven Common Shares to AWR (parent) for total proceeds of $6.0 million and $22.0 million, respectively. BVES used the proceeds from the stock issuance to pay down outstanding borrowings under its revolving credit facility and to fund its ongoing operations and capital expenditures.

In January 2023, GSWC issued $130.0 million in unsecured long-term notes in a private placement. GSWC used the proceeds from both the issuance of equity and long-term debt to pay-off all intercompany borrowings from AWR (parent).

AWR (parent) guarantees performance of ASUS’s contracts with the U.S. government and agrees to provide necessary resources, including financing, which are necessary to assure the complete and satisfactory performance of such contracts.

Note 2 — Note Payable to Banks

On June 28, 2023, AWR (parent) entered into a new credit agreement with a term offive years provided by a syndicate of banks and financial institutions. The credit agreement, as amended on May 6, 2025, is now scheduled to mature in June 2029. In addition, as part of its amendment, AWR expanded its credit facility borrowing capacity from $165.0 million to $195.0 million through an existing bank from the original syndicate group and the addition of a new bank to the existing syndicate group participating in AWR’s credit facility. AWR’s credit facility is primarily used to provide support to AWR (parent) and ASUS. As of December 31, 2025, the credit agreements provided AWR unsecured revolving credit facilities with borrowing capacities of $195.0 million. Under the terms of the credit agreements, as of December 31, 2025, the borrowing capacities for AWR may be expanded up to an additional $30.0 million, subject to the lenders’ approval.

Loans may be obtained under the credit facilities at the option of AWR (parent) and bear interest at rates based on either a base rate plus an applicable margin or an adjusted term SOFR determined by the SOFR administrator, currently the Federal Reserve Bank of New York, plus an applicable margin. The applicable margin depends upon AWR’s credit ratings.

As of December 31, 2025, outstanding borrowings under its credit facility of $124.0 million have been classified as a non-current liability on its Condensed Balance Sheet.

The credit agreement contains affirmative and negative covenants and events of default customary for credit facilities of this type, including, among other things, affirmative covenants relating to compliance with law and material contracts, and negative covenants relating to additional indebtedness, liens, investments, restricted payments and asset sales by AWR (parent) and its subsidiaries, other than BVES. AWR (parent) is not permitted to have a consolidated total capitalization ratio (as defined in the credit agreement), excluding BVES, greater than 0.65 to 1.00 at the end of any quarter. Default under any indebtedness of any subsidiary of AWR (parent), other than BVES, will result in a default under its credit agreement. As of December 31, 2025, AWR (parent) had a debt ratio of 0.48 to 1.00.

AWR (parent)’s borrowing activities (excluding letters of credit) for the years ended December 31, 2025 and 2024 were as follows:

Note 3 — Income Taxes

AWR (parent) receives a tax benefit for expenses incurred at the parent-company level. AWR (parent) also recognizes the effect of AWR’s consolidated California unitary apportionment, which is beneficial or detrimental depending on a combination of the profitability of AWR’s consolidated non-California activities as well as the proportion of its consolidated California sales to total sales.

Note 4 — Dividend from Subsidiaries

Cash dividends in the amounts of$57.5 million, $51.1 million and $71.4 million were paid to AWR (parent) by its wholly owned subsidiaries during the years ended December 31, 2025, 2024 and 2023, respectively.