Exhibit 99 [LOGO] CALIFORNIA WATER SERVICE GROUP NEWS RELEASE CALIFORNIA WATER SERVICE GROUP 1720 North First Street San Jose, CA 95112-4598 July 23, 2003 For Immediate Release Contact: Richard Nye (408) 367-8216 (analysts) Shannon Dean (310) 257-1435 (media) 03GO8 ----- CAL WATER ANNOUNCES SECOND QUARTER 2003 RESULTS; BOARD DECLARES 235H CONSECUTIVE QUARTERLY DIVIDEND - -------------------------------------------------------------------------------- SAN JOSE, CA - California Water Service Group (NYSE : CWT) today announced second quarter net income of $4.6 million and earnings of $0.30 per share, compared to net income of $6.6 million and earnings of $0.43 per share in the second quarter of 2002. According to President and Chief Executive Officer Peter C. Nelson, the company's financial performance continues to be hampered by lower water usage due to cool, wet weather and ongoing delays in receiving rate relief from the California Public Utilities Commission ("Commission"). "In the second quarter, we continued to experience cooler than normal temperatures and a good deal of unseasonable rain in our service areas. More significantly, we continue to await considerable rate relief from the Commission," he said. Revenue for the quarter was $68.0 million, down $1.2 million or 1.7% from the second quarter of 2002. A $4.5 million decrease in water sales to existing customers was partially offset by $1.4 million in sales to new customers and $1.9 million in rate increases. Total operating expenses decreased 0.5%, or $0.3 million. Water production costs decreased by $1.0 million, primarily due to lower usage and partially offset by higher rates for water and power. Other operations expense increased $1.4 million or 7%, due principally to increases in pension, health and other benefits. Depreciation expense was higher by $0.4 million due to 2002 capital expenditures driven by more stringent water quality standards. Income taxes decreased $1.3 million due to lower profits. According to Nelson, regulatory delays had the greatest impact on the company's performance. "We are still awaiting a decision on the 15 rate cases we submitted in July 2001. When the decision is finally issued, we anticipate that it will add at least $12.8 million in annual revenues," he said. In May, the company began collecting surcharges for some of its districts to recover higher electricity costs incurred prior to November 29, 2001 but not yet billed to customers. The surcharges approved thus far by the Commission will add net revenue of $2.8 million, which will be collected from May 2003 through June 2004. The Commission has also approved an additional $1.8 million in surcharges to be collected from May 2004 through June 2005. Pending applications to the Commission include general rate case filings made in November 2002 and January 2003. The company cannot predict the amount or the timing of CPUC decisions on those applications. In a June 2003 decision, the Commission authorized water utilities to request recovery of "balancing-type memorandum accounts," which are primarily comprised of higher electricity costs incurred between November 29, 2001 and December 31, 2002. Unlike the recovery of costs for the period prior to November 29, 2001, recovery for balances accrued during this period will be subject to certain limitations. Prior to the June 2003 decision, water utilities had not been allowed to request recovery of increased electricity costs for this period at all. The company intends to request approximately $6 million in the third quarter, although it cannot predict the amount it will be authorized to recover. A decision is expected from the Commission by the end of 2003. Also in the third quarter of 2003, the company expects to file the third of three filings to recover costs associated with the Bakersfield Treatment Plant, which began operating in June 2003 and will add 20 million gallons of high quality water per day to the Bakersfield supply. The third filing may or may not impact 2003 revenues, depending upon the timing and amount authorized by the Commission. "We continue to be proactive in requesting rate relief, requesting timely decisions on general rate case filings and requesting fair reimbursement for balancing accounts." Nelson said. At their meeting today, Directors declared the 235th consecutive quarterly dividend on common stock in the amount of $0.28125. It is payable on August 15, 2003, to stockholders of record on August, 1, 2003. The regular dividend on Series C preferred stock was also declared. On Thursday, July 24, 2003, at 1 p.m. Pacific Standard Time (4 p.m. Eastern Standard Time), the Company will conduct a teleconference call, at which time management will provide comments about second quarter 2003 operating results and other pertinent matters. Any stockholder or interested investor can listen to the teleconference or a replay. The dial-in number to access the teleconference is 1-877-679-9045, call ID #98736. Additional information about the call, including replay information, is available at the Company's web site, at www.calwater.com. California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, Inc. and CWS Utility Services. Together these companies provide regulated and non-regulated water service to over 2 million people in 99 California, Washington, New Mexico and Hawaii communities. Group's common stock trades on the New York Stock Exchange under the symbol "CWT". This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the Act. Forward-looking statements are based on currently available information, expectations, estimates, assumptions and projections, and management's judgment about the Company, the water utility industry and general economic conditions. Such words as expects, intends, plans, believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not guarantees of future performance. They are subject to uncertainty and changes in circumstances. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause a result different than expected or anticipated include: governmental and regulatory commissions' decisions; changes in regulatory commissions' policies and procedures; the timeliness of regulatory commissions' actions concerning rate relief; new legislation; electric power interruptions; increases in suppliers' prices and the availability of supplies including water and power; fluctuations in interest rates; changes in environmental compliance and water quality requirements; acquisitions and our ability to successfully integrate acquired companies; the ability to successfully implement business plans; changes in customer water use patterns; the impact of weather on water sales and operating results; access to sufficient capital on satisfactory terms; civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences of acts of this type; the involvement of the United States in war or other hostilities; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt or pay dividends; and, other risks and unforeseen events. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph. The Company assumes no obligation to provide public updates of forward-looking statements. Additional information is available at our Web site at www.calwater.com. Attachments (3). ### CALIFORNIA WATER SERVICE GROUP CONDENSED CONSOLIDATED BALANCE SHEET Unaudited (In thousands, except per share data) June 30, December 31, 2003 2002 ----------- ----------- ASSETS Utility plant: Utility plant $ 1,054,394 $ 1,001,310 Less accumulated depreciation and amortization 316,121 304,322 ----------- ----------- Net utility plant 738,273 696,988 ----------- ----------- Current assets: Cash and cash equivalents 992 1,063 Receivables 28,061 23,961 Unbilled revenue 10,039 7,969 Materials and supplies at average cost 2,800 2,760 Taxes and other prepaid expenses 5,571 7,234 ----------- ----------- Total current assets 47,463 42,987 ----------- ----------- Other assets: Regulatory assets 52,703 46,089 Other assets 16,825 14,518 ----------- ----------- Total other assets 69,528 60,607 ----------- ----------- ----------- ----------- $ 855,264 $ 800,582 =========== =========== CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $.01 par value $ 152 $ 152 Additional paid-in capital 49,984 49,984 Retained earnings 144,416 149,215 Accumulated other comprehensive loss (134) (134) ----------- ----------- Total common stockholders' equity 194,418 199,217 Preferred stock 3,475 3,475 Long-term debt, less current maturities 270,918 250,365 ----------- ----------- Total capitalization 468,811 453,057 ----------- ----------- Current liabilities: Current maturities of long-term debt 1,000 1,000 Short-term borrowings 50,058 36,379 Accounts payable 28,550 23,706 Accrued expenses and other liabilities 31,690 30,456 ----------- ----------- Total current liabilities 111,298 91,541 Unamortized investment tax credits 2,819 2,774 Deferred income taxes 33,855 31,371 Regulatory and other liabilities 34,015 28,804 Advances for construction 119,549 115,459 Contributions in aid of construction 84,917 77,576 Commitments and contingencies ----------- ----------- $ 855,264 $ 800,582 =========== =========== CALIFORNIA WATER SERVICE GROUP CONDENSED CONSOLIDATED STATEMENT OF INCOME (In thousands, except per share data) Unaudited For the three months ended: June 30, June 30, 2003 2002 -------- -------- Operating revenue $67,994 $69,183 -------- -------- Operating expenses: Operations 45,693 45,330 Maintenance 3,063 2,935 Depreciation and amortization 5,838 5,389 Income taxes 3,314 4,573 Property and other taxes 2,538 2,551 -------- -------- Total operating expenses 60,446 60,778 -------- -------- Net operating income 7,548 8,405 -------- -------- Other income and expenses: Non-regulated income, net 559 508 Gain on sale of non-utility property 958 1,922 -------- -------- 1,517 2,430 Interest expense: Long-term debt interest 4,039 3,837 Other interest 441 380 -------- -------- Total interest expense 4,480 4,217 Net income $ 4,585 $ 6,618 ======== ======== Earnings per share Basic $ 0.30 $ 0.43 ======== ======== Diluted $ 0.30 $ 0.43 ======== ======== Weighted average shares outstanding Basic 15,182 15,182 ======== ======== Diluted 15,198 15,185 ======== ======== Dividends per share of common stock $0.28125 $0.28000 ======== ======== CALIFORNIA WATER SERVICE GROUP CONDENSED CONSOLIDATED STATEMENT OF INCOME (In thousands, except per share data) Unaudited For the six months ended: June 30, June 30, 2003 2002 -------- -------- Operating revenue $119,305 $120,794 -------- -------- Operating expenses: Operations 83,453 80,032 Maintenance 6,316 5,355 Depreciation and amortization 11,598 10,783 Income taxes 2,761 5,852 Property and other taxes 5,003 5,014 -------- -------- Total operating expenses 109,131 107,036 -------- -------- Net operating income 10,174 13,758 -------- -------- Other income and expenses: Non-regulated income, net 1,169 891 Gain on sale of non-utility property 1,511 1,973 -------- -------- 2,680 2,864 Interest expense: Long-term debt interest 8,217 7,369 Other interest 820 706 -------- -------- Total interest expense 9,037 8,075 Net income $ 3,817 $ 8,547 ======== ======== Earnings per share Basic $ 0.25 $ 0.56 ======== ======== Diluted $ 0.25 $ 0.56 ======== ======== Weighted average shares outstanding Basic 15,182 15,182 ======== ======== Diluted 15,191 15,185 ======== ======== Dividends per share of common stock $ 0.5625 $ 0.5600 ======== ========