AMERICAN STATES WATER COMPANY AMERICAN STATES WATER COMPANY AR 2005 JUST ADD...

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1 AMERICAN STATES WATER COMPANY AMERICAN STATES WATER COMPANY AR 2005 JUST ADD... AR 2005

2 WATER One of Arizona s largest cattle ranches used to be where the Town of Fountain Hills is now situated. In the 1960s, a developer brought in the designer of Disneyland and now the family-oriented community, incorporated in 1989, is home to the world s highest fountain and 35,000 residents. The fountain shoots eight tons of water as much as 625 feet in the air (70 feet higher than the Washington Monument), at the rate of 7,000 gallons per minute. It is the signature element of a master-planned residential community called Fountain Hills, Arizona. Located in the Town of Fountain Hills, Arizona, Chaparral City Water Company was acquired by American States Water Company in 2000 and provides water service to approximately 13,000 customers.

3 WHO WE ARE American States Water Company is the parent of Golden State Water Company (GSWC) (formerly, Southern California Water Company), Chaparral City Water Company (CCWC), and American States Utility Services, Inc. (ASUS). GSWC is a public utility company regulated by the California Public Utilities Commission (CPUC). GSWC engages principally in the delivery of reliable water service. GSWC operates 40 separate water systems within 75 communities in 10 counties in the State of California and provides water service to over 1 million people, or 1 out of every 30 Californians. In addition, GSWC provides electric service to approximately 23,000 customers in the Big Bear recreational area of California. CCWC, an Arizona public utility regulated by the Arizona Corporation Commission (ACC), provides water service to approximately 13,000 customers located in the Town of Fountain Hills and a portion of Scottsdale. ASUS is a non-regulated company and through its wholly-owned subsidiaries, Fort Bliss Water Services Company (FBWS), Terrapin Utility Services, Inc. (TUS) and Old Dominion Utility Services, Inc. (ODUS) provides full-service contracts to operate and maintain water and wastewater systems for the United States Army and Air Force in Texas, Maryland and Virginia, respectively. In addition, ODUS performs the same functions for the wastewater system at Fort Lee, Virginia for the United States Army. ASUS also contracts with various municipalities and private entities to provide water-related services, including billing and meter reading, water marketing and the operation and maintenance of water systems. AWR continues to offer its investors the opportunity to invest with a company whose track record is historically indicative of stability and growth. AWR has paid dividends to shareholders every year since 1931 and has increased the dividend payout received by shareholders annually since 1953.

4 FINANCIAL HIGHLIGHTS Variance % Change INCOME STATEMENT INFORMATION (in thousands, except per share amounts, ratios and percent) Total Operating Revenues $ 236,197 $ 228,005 $ 8, % Total Operating Expenses 195, ,915 3, % Operating Income 40,444 36,090 4, % Other Income (Loss) (79) 301 (380) % Interest Charges 13,599 17,850 (4,251) -23.8% Net Income 26,766 18,541 8, % Basic Earnings per Common Share (see Form 10-K, Item 6) % Dividends Declared per Common Share $ $ $ % Average Shares Outstanding 16,778 15,633 1, % Average Number of Diluted Shares Outstanding 16,809 15,663 1, % Fully Diluted Earnings per Common Share $ 1.57 $ 1.18 $ % BALANCE SHEET INFORMATION Total Assets $ 876,777 $ 810,277 $ 66, % Common Shareholders Equity 264, ,465 12, % Long-Term Debt 268, ,902 39, % Total Capitalization 532, ,367 52, % Book Value per Common Share $ $ $ % REVENUES IN MILLIONS BASIC EARNINGS PER SHARE DIVIDENDS PER SHARE

5 Everybody needs water. Indeed, while water is not a technological marvel, it remains a mystery. Smart people have thought about the nature of water for thousands of years. The business of distributing water providing the infrastructure to bring water where before there was none is a good business. Even during times of a slow economy, people will always pay for the availability of fresh, clean water. Which is why, we at American States Water Company, have been in the business of distributing water as well as other vital utility services for over 75 years. Which is also why, as an industry leader with over 500 employees, 6 subsidiaries, including 1 electric system and 40 water systems, we are always thinking of better ways to deliver service to our customers and our shareholders. And all we had to do was

6 ADD CONFIDENCE Everybody needs water. Human Beings, for example, are two-thirds water. Chickens, by contrast, are three-fourths water. Indeed, water is necessary for every living thing and other non-living things such as the production of consumer goods. Which is why water companies historically have been relatively safe waters for investors. Which is also why, as one of the largest publicly traded water companies in the country, American States Water Company has been a Company in which investors could confidently invest and in turn we have made the investments necessary to provide dependable service to well over one million people! And all we had to do was

7 ADD SUPPLY Everybody needs water. Our world is full of water and yet less than 1% is available as fresh water for our use. Not because there are diminishing amounts of water, but because there are increasing numbers of people. Which is why, as stewards of this precious resource, American States Water Company has provided thousands of low flush toilets and other water saving devices. It s also why we ve made it a priority to own nearly 52% of our water supply more than half of the 66 billion gallons of water that we treat and distribute to our customers, in more than 75 communities and 6 government installations across the country, every year. And all we had to do was

8 A garden without adequate water does not grow

9 that s a rock garden.

10 ADD INFRASTRUCTURE Everybody needs water. But in many communities throughout our country, the existing infrastructure can t accommodate the swelling population. As well, our nation s water supplies must be made more secure. Which is why, in combination with increasingly strict Federal and State standards for drinking water, many smaller water utilities simply can t comply with this ever-changing water quality landscape. Which is also why, at American States Water Company, we ve been able to acquire a number of these companies over the years in order to gain geographic diversity and increase revenues. But these have been more than just businesses on paper, they re pipes in the ground real pipes and a real infrastructure that we own and maintain to the highest standards in order to meet the needs of our growing customer base. And all we had to do was

11 ADD OPPORTUNITY Everybody needs water. But because we are primarily a regulated utility, we can only recover the actual cost for the delivery of your water, plus a fair rate of return on the shareholder s investment. Which definitely goes back to that water is a necessity of life thing. Which is exactly why, at American States Water Company, we ve also made it our strategy to diversify seeking additional opportunities in order to grow and enhance our Company s worth. And that s an opportunity for both our customers and our shareholders. Distributing water, electricity and our operational expertise. And all we had to do was

12 Fish cannot survive in a drought environment

13 that s a terrarium.

14 A pool is no fun without water

15 that s an empty pool in which to skateboard.

16 ADD SERVICE Everybody needs water. But no matter how dependable our water and electricity infrastructure is, there are times when our customers are in need of some extra special attention. Which is why, at American States Water Company, our state-of-the-art Customer Service Center is online and available 7 days a week, 24 hours a day. It s a proactive approach that resolves the vast majority of customer inquiries on the very first call. It s a dedicated, courteous and knowledgeable staff exceeding your service expectations. Which is yet another way we increase shareholder value because in business today, quality service generates positive growth. Enhanced telephone technology, innovative Internet services and outstanding service. And all we had to do was

17 ADD MANAGEMENT Everybody needs water. Great civilizations have risen and fallen with the ebb and flow of water. Not because there wasn t enough water, but because nature distributes it unevenly and mankind has polluted it. Which is why, in terms of our resources natural and man-made (our employees) sound management means planning for the future, both in terms of our Company and our civilization. Which is why, at American States Water Company, we manage to look at the big picture, always adapting to our changing environment natural and man-made. Forward thinking and community minded. Responsible to our Company, our customers, our employees and our shareholders. And all we had to do was

18 A washing machine absent water cannot remove grass stains

19 that s dry cleaning.

20 A world without water cannot exist

21 that s Mars.

22 ADD VALUE We re American States Water Company and we ve added it all up. We ve added investor confidence, a dependable supply and improved infrastructure. Added to that opportunities for growth, excellent service and sound management. But best of all, we ve added dividends an increase in dividend payouts every single year for over 50 straight years which could make American States Water Company one of the smartest values in your investment portfolio. A Company you ve counted on and service you can count on whether upstream or downstream!

23 And all you have to do is...

24 ...JUST ADD WATER!

25 American States Water Company

26 TO OUR SHAREHOLDERS 2005 was an exceptional year for American States Water Company, as achievements were made in improved earnings, significant growth in the stock price and an improving outlook from the bond rating agencies. It was also a year where we further positioned our Company for the future by continuing to make significant investments in our flagship utility, Golden State Water Company (GSWC). We also focused our attention on growing American States Utility Services, Inc. (ASUS). During the past few years, we have been investing in ASUS and, through the addition of three 50-year military contracts, additional traction was gained in The business connection with ASUS ties directly with a core strategy of American States Water Company, that is to diversify its holdings into other states so that shareholders assets are not primarily subjected to one regulatory body. While the current regulation in California is improving, we are mindful of the recent past which caused nearly all regulated utilities in California to be downgraded by the rating agencies. IMPROVED EARNINGS Incorporated within this Annual Report is the Form 10-K which highlights that the Company had basic earnings of $1.58 per share and fully diluted earnings of $1.57 per share in 2005 compared to earnings per share of $1.19 and $1.18 on a basic and fully diluted basis, respectively, for The 2005 earnings represent one of the highest earnings per share achieved in the Company s history. The Company is highly regulated, and as a result, year-to-year changes in profitability can result from significant regulatory decisions, as is the case when we compare 2005 to Please refer to the Form 10-K for specific details, of which only a few of the more significant items are discussed within this letter. Earnings in 2005 benefited from a favorable decision by the California Public Utilities Commission (CPUC) which allowed the Company to collect, through a surcharge over no more than twenty years, the balance of the memorandum account associated with the Company s litigation against Aerojet-General Corporation and the State of California. As a result of this decision, the Company recognized additional earnings of $0.25 per share. The CPUC s recognition of GSWC s obligation to protect its customers water supply was a gratifying aspect of this important decision. Other material events impacting the comparison between 2005 and 2004 were: A significant increase in the unrealized gain on purchased power contracts resulting from increased energy prices added approximately $0.19 per share A decrease in the supply cost balancing account improved earnings in 2005 by $0.15, while an increase to this account reduced earnings by $0.14 in earnings were affected by a favorable CPUC decision on the sale of the Company s water rights in the Charnock Groundwater basin, contributing $0.20 to 2004 earnings with no similar sale in 2005 A 4% decrease in billed water consumption in 2005 decreased earnings by approximately $0.12 per share A higher effective income tax rate in 2005 reduced earnings by $0.08 per share

27 STOCK PERFORMANCE Our Company s common stock closed 2005 at $30.80 per share, an 18.5% increase over the 2004 closing price of $ When the $0.90 per share dividend is included, the stock s total return for 2005 was 22.3% compared to a return by the S&P 500 of 4.9%. We would also like to highlight the fact that based on performance measures set forth by the Securities and Exchange Commission, a $10,000 investment in the common shares of American States Water Company on December 31, 2000, assuming all dividends are reinvested in additional Common Shares, would have increased in value to approximately $14,981 at December 31, By contrast, that same $10,000 invested in the S&P 500 would be worth only $10,275. IMPROVED OUTLOOK FROM BOND RATING AGENCIES The companies that rate our debt recognized American States Water Company s improving financial condition. In February 2005, Moody s Investors Services maintained its rating at A2 on $175 million of GSWC s senior unsecured debt and changed its outlook on this debt from negative to stable. In December 2005, Standard & Poor s Ratings Services affirmed its ratings on AWR and GSWC at A and revised the rating outlook for both from negative to stable. Both rating actions referenced the Company s improving financial profile as the reason for the outlook upgrade. SIGNIFICANT INVESTMENTS IN GOLDEN STATE WATER COMPANY During 2005, significant capital investments were made within our primary subsidiary, Golden State Water Company, a key component of the Company s strategy for the future. The Company is committed to replacing needed infrastructure to allow continued delivery of complete customer service, which our customers have grown to expect. We invested $65.2 million of capital in 2005 and with depreciation and amortization expense at $20.6 million, the Company s net utility plant grew from $628.8 million to $673.0 million, an increase of 7.0%. GSWC s water business is split into three regions for rate-making purposes. Every three years, each region files a general rate case and is allowed to include in the rate case filing a forecast of its capital expenditures and operating expenses for three years into the future. Rate case decisions typically include a general increase for the first year of the forecast period with additional increases for each of the next two years, subject to earnings review by the CPUC. From a shareholder s perspective, this means that most of the time the Company knows whether specific capital expenditures have been approved in rates before making the investment. This allows for better financial control on such substantial investments.

28 POSITIONING GOLDEN STATE WATER COMPANY FOR THE FUTURE With the advent of recent legislation in California requiring utilities to provide a 20-year water supply for all proposed land developments in excess of 500 units, we have engaged in an assessment of our water rights and groundwater storage assets. The Company has completed a comprehensive inventory of all water rights and supplies and is pursuing a management strategy where we assess our supplies on a company-wide basis, rather than through each individual system. Thirty-two of our network of 40 water systems are already interconnected to major water conveyance pipelines owned by public wholesale water agencies. Six additional systems can also be connected and 24 systems have multiple sources of water supplies for added reliability. We will be making a policy filing in the near future with the CPUC, consistent with its recently publicized Water Action Plan. This filing will include a proposed state-wide water tariff that recognizes the integrated nature of our water supplies. The policy filing will include provisions for rates which promote conservation, de-coupling of sales and revenues, infrastructure investment, rate restructuring, and water quality issues. If certain components of the policy filing are approved, this will allow us to position GSWC for the future through: (1) reducing some of the volatility in our earnings associated with water quality issues and fluctuating supply costs, weather, and infrastructure investment; (2) lessening the short-term earnings impact from conservation, and (3) reducing the effect of unique cost issues associated with a specific geographic customer service area. During 2005, the Company led a successful campaign at the CPUC and negotiated with key elected officials to open access to Proposition 50 public bond funds for regulated water utilities. Securing access to state bond funds, positions GSWC to make needed capital investments in water supply reliability and water quality, while mitigating rate increases to our customers. As a result of our efforts, regulated water utilities in California are now eligible to apply for Proposition 50 funds. We have also been included as eligible participants in the many recent infrastructure bond proposals which remain under discussion in California. 1 Proposition 50 (Prop 50) is the State of California s Water Quality, Supply and Safe Drinking Water Projects, Coastal Wetlands and Purchase and Protection Bonds which was passed November 5, Prop 50 authorized $3.44 billion of general obligation bonds, to be repaid from the California s General Fund, to fund a variety of water projects.

29 FOCUS ON GROWING AMERICAN STATES UTILITY SERVICES, INC. In 1998, we established ASUS to provide the Company with: (1) a relatively low-risk, growth investment that allows us to capitalize on our competencies in operating water systems and offering related services; (2) a vehicle to diversify our regulatory risk by investing in other high-growth states, similar to the way an investment manager diversifies his or her risk by owning several different securities, and (3) a footprint in other parts of the country to enable us to make additional acquisitions in the water industry. Prior to initiating this business, we had to make a choice between buying a going concern or building it ourselves. We chose the latter so that we could create ASUS the way we wanted was the first full year of operating the water and wastewater systems at Fort Bliss in El Paso, Texas. We recognized $1.8 million in revenue from the operation of the facility and expect to see that revenue stream grow over time. In September 2005, ASUS was notified that we had been selected to operate the water and wastewater systems at Andrews Air Force Base in Maryland and Fort Monroe, Fort Eustis, and Fort Story in Virginia and the wastewater system at Fort Lee, also in Virginia. ASUS signed 50-year contracts which are expected to generate revenues of $238 million for these five bases over the life of the contracts. By the time you receive this annual report, we will have commenced operations at each of these five bases. We have also submitted bids on twentyfive other bases throughout the country, which should assist in achieving the Company s long term strategic objective of obtaining regulatory diversity. ASUS has also been pursuing an opportunity to provide retail water services within the corporate boundaries of Natomas Central Mutual Water Company (Natomas) in northern California. Natomas currently provides water service to agricultural customers in portions of Sacramento and Sutter counties. In 2004, Natomas granted ASUS the exclusive right to market the mutual s surplus surface water rights. In addition, in early 2006, ASUS entered into a water purchase agreement to acquire 5,000 acre-feet of water rights from Natomas. This acquisition provides ASUS and AWR with a water rights platform that offers options for ASUS to engage in transactional opportunities with developers and/or to have GSWC initiate a CPUC-regulated franchise in Sutter County. IN CLOSING Our board of directors, management, and all the Company s dedicated employees remain committed to providing superior service to customers and maximizing shareholder value. We believe that these two objectives are both necessary and achievable. On behalf of the men and women of the Company, we would like to thank you for your continued support. Sincerely Lloyd E. Ross Chairman of the Board Floyd E. Wicks President and Chief Executive Officer

30 CUSTOMER LOCATION AND SERVICE AREA MAP CALIFORNIA ARIZONA C A B D F E G N M J K S R L I H P O V U T Q R W (W) CHAPARRAL CITY WATER COMPANY Chaparral City Water Company provides water services to 13,001 customers in the Town of Fountain Hills, Arizona and a portion of Scottsdale, Arizona. GOLDEN STATE WATER COMPANY Golden State Water Company provides water and electric services to 275,811 customers throughout northern and Southern California. REGION I CUSTOMERS Northern District (A) Arden 15,504 (B) Bay Point 4,958 (C) Clearlake 2,124 Coastal District (D) Los Osos 3,278 (E) Ojai 2,853 (F) Santa Maria 13,035 (G) Simi Valley 13,320 REGION II CUSTOMERS Central District (H) Central Basin East 20,003 (I) Central Basin West 19,954 (J) Culver City 9,470 Southwest District (K) Southwest 50,822 REGION III CUSTOMERS Foothill District (L) Claremont 10,802 (M) San Dimas 15,945 (N) San Gabriel 12,107 Mountain/Desert District (O) Apple Valley 2,840 (P) Barstow 8,772 (Q) Calipatria 1,181 (R) Morongo Valley 942 (S) Wrightwood 2,687 Orange County District (T) Los Alamitos 26,981 (U) Placentia 15,267 (V) BEAR VALLEY ELECTRIC SERVICE 22,966

31 NEW MEXICO TEXAS MARYLAND VIRGINIA Z X Y AMERICAN STATES UTILITY SERVICES, INC. ASUS contracts with various municipalities, private entities to provide water and wastewater services, and to the US Government through wholly-owned subsidiaries to provide water and wastewater services, including furnishing all necessary labor, management, supervision, permits, equipment, supplies, materials, transportation and any other incidentals for the complete operation, maintenance, repair, upgrades and improvements to the utility systems as identified below: (X) FORT BLISS WATER SERVICES COMPANY Fort Bliss Water Services Company provides services to the United States Army at the Fort Bliss military installation in El Paso, Texas. The service area also includes Dona Ana, Macgregor and Myers Range Camps located in New Mexico. (Y) OLD DOMINION UTILITY SERVICES, INC. Old Dominion Utility Services, Inc. (ODUS) provides services to the United States Army at Fort Story, Fort Eustis, and Fort Monroe in Virginia. In addition, ODUS performs the same functions for the wastewater system at Fort Lee, Virginia for the United States Army. (Z) TERRAPIN UTILITY SERVICES, INC. Terrapin Utility Services, Inc. provides services to the United States Air Force at Andrews Air Force Base in Maryland.

32 AWR WATER SYSTEMS SOURCES IN CALIFORNIA Northern California Yolo County FC&WCD Clearlake Clearlake System Sacramento River Source of CVP Sacramento River Feather River Source of State Water Project Central Valley Project Natomas System North Sacramento Basin Arden System Cache Creek American River Source of Central Valley Project American River Bay Point System Contra Costa WD Contra Costa Canal Central Sacramento Basin Rancho Cordova System Pittsburg Plain Basin Sacramento River Delta California Aqueduct State Water Project Southern California Edna Valley Basin Edna Road System Wrightwood System El Mirage Valley Basin Los Osos Valley Basin Los Osos System Nipomo System Coastal Branch Mojave Water Agency Barstow System Mojave Basin Santa Maria Valley Basin Tanglewood System Orcutt System CCWA Morongo Systems (2) Victorville Systems (4) Lake Marie System Morongo Valley Basin Sisquoc System California Aqueduct Due to recent legislation in California requiring a utility to provide a 20-year water supply for all proposed land developments, AWR s Golden State Water Company subsidiary completed a comprehensive inventory of all water rights and supplies and is pursuing a management strategy which assesses its supplies on a company-wide basis, rather that the 40 individual-owned systems.

33 MWD Colorado River Aqueduct Calleguas MWD Three Valley MWD Chino Basin Claremont System Simi Valley System Six Basins Simi Valley Basin USGV MWD San Dimas Canyon Creek San Dimas System Santa Monica Basin Culver City System West Basin MWD Central Basin MWD South San Gabriel System South Arcadia System Main San Gabriel Basin Covina Irrigating Comp. Colorado River West Coast Basin Southwest System San Gabriel River Artesia System Bell-Bell Gardens System Calipatria System Central Basin Florence-Graham System Sisquoc System Niland System Imperial Irrigation District All American Canal Castaic MWD Ojai System Ventura River Lake Marie System Sisquoc System Orange County River West Orange Co. System Placentia System Yorba Linda System MWDOC Ojai Valley Basin Cowan Heights System EOCWD

34 AMERICAN STATES WATER COMPANY 10-YEAR CONSOLIDATED STATISTICAL REVIEW FINANCIAL INFORMATION (in thousands, except per share and per customer amounts) Revenues by Classification Residential and Commercial $ 185,363 $ 181,171 Industrial 2,723 2,667 Fire Service 1,484 1,584 Other - Water 15,936 15,212 Total Water Revenue 205, ,635 Electric Revenue 27,224 25,594 Other Revenue 3,467 1,776 Total Operation Revenues 236, ,005 Net Income 26,766 18,541 Earnings Available for Common Shareholders 26,766 18,541 Earnings per Common Share Earnings per Common Share Diluted Dividends Declared per Common Share Book Value per Common Share Total Assets 876, ,277 Net Utility Plant 713, ,165 Capital Additions 71,184 84,216 Long-term Debt (Net) 268, ,902 Preferred Shares 0 0 Preferred Shares Mandatory Redemption 0 0 Investment per Customer $ 3,369 $ 3,157 OPERATION INFORMATION (in thousands, except per share and per customer amounts) Water Sold by Classification (mg) Residential and Commercial 53,843 55,911 Industrial Fire Service Other 5,222 5,511 Total Water 59,874 62,405 Total Electric Sales (mwh) 135, ,857 Water Production by Source (mg) Purchased 30,484 31,531 Pumped Electric 33,264 33,588 Pumped Gas Gravity and Surface 1,801 2,176 Total Supply 65,578 67,380 Customers by Classification Residential and Commercial 258, ,206 Industrial Fire Service 3,596 3,471 Other 3,450 3,189 Total Water 265, ,225 Electric 22,966 22,692 Total Company 288, ,917 Miles of Main in Service 2,891 2,863 Number of Employees mg=millions of gallons mwh=megawatt hours

35 $ 169,374 $ 169,870 $ 164,868 $ 154,012 $ 144,273 $ 123,271 $ 131,007 $ 126,456 2,559 2,470 2,470 2,340 2,278 1,917 1,998 1,847 1,580 1,552 1,505 1,433 1,374 1,329 1,319 1,269 13,650 13,169 12,631 11,010 11,768 8,277 6,664 10, , , , , , , , ,997 24,492 21,298 15,251 14,366 13,338 13,201 12,767 11,532 1, , , , , , , , ,529 11,892 20,339 21,456 20,031 16,101 13,444 14,059 13,460 11,892 20,310 21,372 19,945 16,013 13,354 13,967 13, , , , , , , , , , , , , , , , ,776 57,211 40,655 47,750 46,091 57,823 43,623 36,799 31, , , , , , , , , ,600 1,600 1,600 1,600 1,600 1, $ 2,899 $ 2,728 $ 2,610 $ 2,457 $ 2,267 $ 2,099 $ 1,900 $ 1,808 54,770 56,387 55,012 55,501 53,742 49,302 54,623 52, ,389 5,741 5,215 5,135 4,828 4,124 5,070 4,932 61,737 63,658 61,613 62,060 59,834 54,907 61,009 59, , , , , , , , ,139 29,411 29,173 28,828 28,241 25,647 22,885 28,894 27,147 34,139 36,819 37,095 36,469 36,969 35,596 34,531 35, ,298 1,926 1,219 1,282 1, , ,887 67,923 67,260 66,022 63,830 58,630 64,888 63, , , , , , , , , ,425 3,349 3,305 3,223 3,140 3,112 2,964 2,925 3,124 2,911 2,515 2,555 2,107 2,033 2,016 2, , , , , , , , ,548 22,276 21,987 21,747 21,484 21,181 20,865 20,698 20, , , , , , , , ,985 2,852 2,831 2,899 2,884 2,742 2,654 2,638 2,

36 CORPORATE INFORMATION BOARD OF DIRECTORS AMERICAN STATES WATER COMPANY AND SUBSIDIARIES Lloyd E. Ross (65,11) (Chairman of the Board of Directors) Indian Wells, California Floyd E. Wicks (62,16) (a) President and Chief Executive Officer James L. Anderson (62,9) (a,c,d) (Chairperson of the Compensation Committee) Senior Vice President Americo Life Inc. Austin, Texas N. P. Dodge, Jr. (69,16) (a,b,c,d) (Chairperson of the ASUS Committee) President, N.P. Dodge Company Omaha, Nebraska Anne M. Holloway (53,8) (a,b,c,d) (Chairperson of the Nominating and Governance Committee) Atherton, California Robert F. Kathol (65,11) (a,b,c) (Chairperson of the Audit and Finance Committee) Executive Vice President Smith Hayes Financial Service Corp. Omaha, Nebraska (age as of April 1, 2006, years of service) (a) Member ASUS Committee (b) Member Audit and Finance Committee (c) Member Compensation Committee (d) Member Nominating and Governance Committee OFFICERS AMERICAN STATES WATER COMPANY AND SUBSIDIARIES AMERICAN STATES WATER COMPANY Floyd E. Wicks (62,18) President and Chief Executive Officer Robert J. Sprowls (48,1) Chief Financial Officer, Senior Vice President, Corporate Secretary and Treasurer GOLDEN STATE WATER COMPANY Floyd E. Wicks (62,18) President and Chief Executive Officer Robert J. Sprowls (48,1) Chief Financial Officer, Senior Vice President of Finance and Secretary Joel A. Dickson (53,15) Senior Vice President Denise L. Kruger (42,13) Senior Vice President of Operations Susan L. Conway (44,17) Senior Vice President of Administrative Services Roland S. Tanner (49,12) Vice President of Customer Service Region I Patrick R. Scanlon (48,27) Vice President of Customer Service Region II James B. Gallagher (51,18) Vice President of Customer Service Region III Eva G. Tang (50,9) Vice President, Treasurer and Assistant Secretary William C. Gedney (51,8) Vice President of Water Quality Bryan K. Switzer (49,5) Vice President of Regulatory Affairs CHAPARRAL CITY WATER COMPANY Floyd E. Wicks (62,18) President and Chief Executive Officer Robert J. Sprowls (48,1) Chief Financial Officer, Senior Vice President of Finance, Secretary and Treasurer Joel A. Dickson (53,15) Senior Vice President Denise L. Kruger (42,13) Senior Vice President of Operations OFFICERS AMERICAN STATES UTILITY SERVICES, INC. AND SUBSIDIARIES AMERICAN STATES UTILITY SERVICES, INC. Floyd E. Wicks (62,18) President and Chief Executive Officer Robert J. Sprowls (48,1) Chief Financial Officer and Senior Vice President of Finance McClellan Harris III (54,15) Senior Vice President and Secretary Eva G. Tang (50,9) Treasurer FORT BLISS WATER SERVICES COMPANY Floyd E. Wicks (62,18) Chief Executive Officer Robert J. Sprowls (48,1) Chief Financial Officer McClellan Harris III (54,15) Senior Vice President and Secretary Eva G. Tang (50,9) Treasurer OLD DOMINION UTILITY SERVICES, INC. Floyd E. Wicks (62,18) Chief Executive Officer Robert J. Sprowls (48,1) Chief Financial Officer McClellan Harris III (54,15) Senior Vice President and Secretary Eva G. Tang (50,9) Treasurer TERRAPIN UTILITY SERVICES, INC. Floyd E. Wicks (62,18) Chief Executive Officer Robert J. Sprowls (48,1) Chief Financial Officer McClellan Harris III (54,15) Senior Vice President and Secretary Eva G. Tang (50,9) Treasurer

37 2005 FORM 10-K

38

39 SHAREHOLDER INFORMATION Design: McNulty & Company www. mcnultyco.com Editorial: Richard Huvard Photography: Marcelo Coelho ANNUAL MEETING OF SHAREHOLDERS All shareholders are invited to attend the Annual Meeting of Shareholders, which will be held on Tuesday, May 9, 2006, beginning at 10:00 am at the Pasadena Hilton, 168 South Los Robles Avenue, Pasadena, California Notice of meeting and proxy materials will be mailed. STOCK LISTING Common Shares of American States Water Company (AWR) are traded on the New York Stock Exchange (NYSE) under the symbol AWR. The high and low NYSE prices and the dividends paid on the Common Shares for the past two years were: Dividends 2005 High Low Paid First Quarter $ $ $ Second Quarter Third Quarter Fourth Quarter $ Dividends 2004 High Low Paid First Quarter $ $ $ Second Quarter Third Quarter Fourth Quarter $ INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS PricewaterhouseCoopers, LLP 350 South Grand Avenue, 49th Floor Los Angeles, California CORPORATE REPORTS Shareholders with questions, or who wish to obtain a copy of the Company s reports to the Securities and Exchange Commission without charge, should contact: American States Water Company Attn: Corporate Secretary 630 East Foothill Boulevard San Dimas, California Phone: (909) Fax: (909) SHAREHOLDER ASSISTANCE Shareholders with questions about replacement of dividend checks, transferring stock, replacing lost or stolen certificates or other matters related to their ownership of stock, should contact: Mellon Investor Services LLC Newport Office Center VII 480 Washington Boulevard Jersey City, New Jersey COMMON SHARE PURCHASE AND DIVIDEND REINVESTMENT PLAN The Company has a Common Shares Purchase and Dividend Reinvestment Plan (Plan) that is sponsored and administered by Mellon Investor Services LLC. The Plan provides a simple and cost-effective method for current and potential shareholders to build ownership in the Company through the direct purchase of Common Shares from the Company and the reinvestment of their cash dividends. A Prospectus and enrollment form may be obtained from Mellon Investor Services LLC at (800) or from the Company at (877) (INFOAWR) DIVIDEND SCHEDULE The following schedule shows the anticipated Common Share dividend record and payment dates for 2006: Record Dates Payment Dates February 10 March 1 May 15 June 1 August 18 September 1 November 17 December 1 INTERNET ADDRESS

40 AMERICAN STATES WATER COMPANY 630 East Foothill Boulevard, San Dimas, California