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Analogies for California Water Service (CWT):

• It's like your local electricity or natural gas utility, but for water services across California and other states.

• Think of it as the PG&E or Con Edison of water, serving communities in multiple states.

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• Water Utility Services: Provides production, treatment, distribution, and sale of water for domestic, industrial, public, irrigation, and fire protection uses.
• Wastewater Utility Services: Offers wastewater collection and treatment services.
• Water System Operations & Management: Operates water systems for municipalities and private entities, including meter reading and billing services.
• Antenna Site Leasing: Leases communication antenna sites located on its properties to telecommunication companies.
• Third-Party Insurance Program Billing: Handles the billing of optional third-party insurance programs to residential customers.
• Laboratory Services: Provides specialized laboratory testing and analysis services.

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California Water Service (CWT) primarily sells water utility services directly to a wide range of end-users across residential, commercial, and public sectors in the communities it serves. Given its business model as a regulated water utility, it does not have a few major corporate customers but rather a large, diversified customer base. The company serves approximately 494,500 customer connections in California and thousands more in Washington, New Mexico, and Hawaii.

The company serves the following primary categories of customers:

• Residential Customers: This category includes individual households that use water for domestic purposes such as drinking, bathing, and household chores. The company explicitly mentions serving hundreds of thousands of "customer connections" and offering services to "residential customers."
• Commercial and Industrial Customers: This category encompasses businesses, factories, and other commercial enterprises that utilize water for their operations, manufacturing processes, or general business needs. The company description mentions serving "industrial uses."
• Public and Irrigation Customers: This category includes public entities such as schools, parks, and government facilities that use water for public services, as well as agricultural users for irrigation purposes. The company description specifically notes serving "public, and irrigation uses."

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Martin A. Kropelnicki, Chairman, President & CEO

Martin A. Kropelnicki was named Chairman, President & CEO of California Water Service Group in May 2023, after serving as President & CEO since September 2013. He joined the company in 2006 as Vice President, Chief Financial Officer (CFO) and Treasurer. Prior to joining California Water Service Group, he held executive positions at PowerLight Corporation, Hall Kinion & Associates, Deloitte & Touche Consulting Group, and Pacific Gas & Electric Company. Mr. Kropelnicki brings over 33 years of experience in finance and operations to his role, including more than 15 years as CFO at publicly listed companies, with expertise in corporate leadership, strategic planning, rate making, and operational and financial reporting. He has been instrumental in strategic acquisitions, with the company completing 12 acquisitions, including seven in the five years leading up to July 2022. He is a past president of the National Association of Water Companies (NAWC) and currently serves on its Board of Directors and Executive Committee. In 2009, he was recognized as the Bay Area CFO of the Year by the San Francisco Business Times.

James P. Lynch, Senior Vice President, Chief Financial Officer and Treasurer

James P. Lynch was appointed Senior Vice President, Chief Financial Officer (CFO) and Treasurer of California Water Service Group in January 2024. He has over 22 years of experience in the rate-regulated utility industry. This includes a 12-year tenure as CFO and Treasurer, and a one-year term as Chief Accounting Officer at SJW Group. Before his time at SJW Group, Mr. Lynch spent 14 years as an Audit Partner with KPMG, LLP, where he served as a lead audit partner for a portfolio of international and domestic publicly traded and privately held companies, including both SJW Group and California Water Service Group.

Michael B. Luu, Senior Vice President, Corporate Services and Chief Risk Officer

Michael B. Luu serves as California Water Service Group's Senior Vice President, Corporate Services and Chief Risk Officer. He is a senior executive known for his successful track record in enterprise risk management (ERM), utility operations, safety and physical security, information technology, customer service, engineering, water quality, and environmental affairs. Under his leadership, Cal Water developed a robust ERM model, its first cybersecurity practice, and an award-winning customer experience program. Mr. Luu is also an advisory board member for three start-ups and a Fortune 1000 organization.

Shannon C. Dean, Senior Vice President, Customer Service & Chief Sustainability Officer

Shannon C. Dean is the Senior Vice President, Customer Service and Chief Sustainability Officer at California Water Service Group. In this role, she is responsible for corporate communications, government and community relations, customer service, water resource sustainability, and the company's Environmental, Social, and Governance (ESG) strategy. Her career in the water industry spans 30 years, during which she also served as Vice President, Customer Service and Chief Citizenship Officer.

Shilen M. Patel, Chief Business Development Officer and Vice President, TWSC, Inc.

Shilen M. Patel holds the position of Chief Business Development Officer for California Water Service Group and also serves as the Vice President of the Group's Texas subsidiary. He has played a significant role in the execution of the company's business development strategy and its growth. Before joining the company in 2019, Mr. Patel was the Director, Strategy & Development at Veolia North America. He possesses nearly 20 years of progressive experience in business development and corporate strategy.

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1. Regulatory and Political Uncertainty: California Water Service's financial performance is heavily influenced by regulatory decisions, particularly regarding its General Rate Cases (GRC) with state commissions like the California Public Utilities Commission (CPUC). Delays in these rate cases can significantly hinder the company's ability to recover escalating operating expenses and substantial capital investments for infrastructure improvements and compliance with new water quality standards, such as those for PFAS treatment. Unfavorable regulatory outcomes or shifts in policy can directly impact its revenue, profitability, and cost recovery, creating uncertainty around its earnings and growth prospects.
2. Environmental and Climate Risks: The company is highly vulnerable to environmental factors, including droughts, climate change impacts, and natural disasters like wildfires, which can severely affect its water supply availability and quality. Fluctuations in water availability can lead to reduced water sales and increased operational challenges, as the company relies on natural water sources. Public health emergencies or other unforeseen environmental events could also disrupt operations and lead to increased expenses.
3. Rising Operating Expenses and Capital Investment Needs: California Water Service faces increasing operating expenses, including significant costs for water production, power, and other operational activities, which can pressure profit margins. The company also has substantial and ongoing capital expenditure requirements for upgrading aging infrastructure (such as pipelines), expanding its systems, and complying with evolving water quality regulations. The challenge lies in ensuring that these rising costs and necessary investments are adequately and timely approved for recovery through customer rates, a process that is subject to regulatory review and potential delays.

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The addressable markets for California Water Service (CWT) for its main products and services in the regions where it operates are as follows:

• California:
• Water Utility Services: Approximately $37 billion annually (U.S. region, reflecting the state's spending on its water systems).
• Wastewater Treatment Services: $1.6 billion in 2026 (California region).
• Washington:
• Water Utility Services: null
• Wastewater Treatment Services: null
• New Mexico:
• Water Utility Services: null
• Wastewater Treatment Services: $496.1 million in 2026 (New Mexico region).
• Hawaii:
• Water Utility Services: $483.9 million in 2026 (Hawaii region, for Water Supply & Irrigation Systems).
• Wastewater Treatment Services: $97.0 million in 2026 (Hawaii region, for Waste Treatment & Disposal Services).
• Texas:
• Water Utility Services: $12.0 billion in 2026 (Texas region, for Water Supply & Irrigation Systems).
• Wastewater Treatment Services: null

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California Water Service (CWT) is expected to drive future revenue growth over the next 2-3 years through several key initiatives:

1. Rate Increases and Regulatory Activities: The company anticipates significant revenue increases stemming from ongoing regulatory processes. A decision on its 2024 California General Rate Case (GRC) is expected, with the company having requested revenue increases of 17.1% for 2026, 7.7% for 2027, and 8.1% for 2028. Additionally, inflation-based interim rate increases for California Water Service became effective January 1, 2026, pending a final decision on the GRC. Rate increases in Hawaii Water Service's five Waikoloa water and wastewater systems have also been approved, projected to increase annual revenues by $4.7 million.
2. Capital Investments and Rate Base Growth: California Water Service is making substantial investments in its water system infrastructure. In 2025, the company invested a record $517 million in infrastructure. These investments are projected to drive a compounded annual rate base growth of nearly 12% through 2027, reaching over $3.3 billion. The 2024 California General Rate Case also proposes $1.6 billion in investments from 2025-2027, further contributing to rate base expansion.
3. Strategic Acquisitions and Market Expansion: The company is expanding its geographical footprint and customer base through strategic acquisitions. This includes the acquisition of Nexus Water's operations in Nevada and Oregon. Furthermore, CWT has acquired the remaining minority interest in BVRT Holdings, gaining sole ownership of seven regulated water and wastewater utilities in the high-growth corridor between Austin and San Antonio, Texas, with over 19,000 total connected and committed customers in 2025.
4. PFAS Treatment Investments: Significant capital expenditures are planned for Per- and Polyfluoroalkyl Substances (PFAS) treatment, with $160 million expected over the next two years and anticipated costs of $235 million over the next few years. These critical investments, necessary for water quality compliance, will be integrated into the company's rate base, thereby contributing to future revenue generation.

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Share Repurchases

• California Water Service repurchased $1.4 million of its own shares in 2025.
• Annual share repurchases amounted to $1.435 million in 2024.
• In 2023, the company's annual share repurchases were $1.844 million.

Share Issuance

• In 2025, the company announced the sale and issuance of $170.0 million in Senior Unsecured Notes by the Group and $200.0 million in First Mortgage Bonds by Cal Water through private placement transactions.
• An equity distribution agreement was established to sell up to $350 million of common stock via an at-the-market equity program over the next three years.

Outbound Investments

• In February 2026, California Water Service Group agreed to acquire Nexus Water Group's water and wastewater systems in Nevada and Oregon for approximately $218 million, expected to close by the end of 2026.
• The company announced its intention to acquire the remaining membership interests of BVRT Utility Holding Company LLC, which would make it the sole owner of seven subsidiary water and wastewater utilities in the south Austin-San Antonio corridor.
• California Water Service entered an agreement to own and operate wastewater and recycled water systems in a master-planned development in San Bernardino County, California, starting with 500 customer connections and potentially expanding to 15,000.

Capital Expenditures

• California Water Service invested a record $517.0 million in water system infrastructure in 2025, marking a 9.8% increase over 2024.
• The company plans to invest over $1.6 billion in infrastructure improvements from 2025 to 2027, focusing on replacing aging pipelines, improving water quality, and enhancing water supply reliability, including anticipated PFAS treatment and system upgrades.
• Expected capital expenditures for 2026 are estimated to be between $580 million and $640 million.