Exhibit 99 [CALIFORNIA WATER SERVICE GROUP LOGO] [CWT Listed NYSE Logo] NEWS RELEASE CALIFORNIA WATER SERVICE GROUP 1720 North First Street San Jose, CA 95112-4598 July 28, 2004 For Immediate Release Contact: Richard D. Nye (408) 367-8216 (analysts) Shannon Dean (310) 257-1435 (media) CAL WATER ANNOUNCES SECOND QUARTER 2004 RESULTS; BOARD DECLARES 239TH CONSECUTIVE QUARTERLY DIVIDEND - -------------------------------------------------------------------------------- SAN JOSE, CA - California Water Service Group (NYSE : CWT) today announced net income of $10.1 million and earnings of $0.59 per share for the second quarter of 2004, compared to net income of $4.6 million and earnings of $0.30 per share in the second quarter of 2003. Revenue for the second quarter increased $20.8 million, or 31%, to $88.8 million. Rate increases added $9.7 million to revenue and sales to new customers added $1.7 million. Sales to existing customers were also higher, increasing $9.4 million over the same period last year. Total operating expenses for the second quarter increased 24%, or $14.3 million. Water production costs increased 28%, primarily due to increased water usage and rate increases by wholesale water suppliers. Other operations expenses increased by 12% as a result of increased costs for water treatment, insurance, labor, regulatory fees, and employee benefits. Depreciation expense increased 12% due to increases in 2003 capital expenditures. Income tax expense doubled due to the higher pre-tax income. There was no effect from property sales for the current quarter, while gains of $1.0 million were posted in the second quarter of 2003. "Our second quarter water sales were positively affected by hot, dry weather, which increased sales over the same period last year. Also, our 3 improved results reflected rate relief we received from the California Public Utilities Commission," said President and Chief Executive Officer Peter C. Nelson. On July 8, 2004, the California Public Utilities Commission (CPUC), in approving a rate increase of $1.1 million for the Salinas district, found that the Company should be fined $75,000 and reduced the return on equity by 50 basis points for the Salinas district as a result of the Company not properly reporting the acquisition of three small water systems. The time frame for the return on equity reduction is expected to be one year. The decision closes a proceeding in which the CPUC's Office of Ratepayer Advocates had recommended a penalty of nearly $10 million for the reporting error. Including the Salinas decision, the CPUC has authorized rate increases totaling approximately $10 million in annual revenues year-to-date. At their meeting today, Directors declared the 239th consecutive quarterly dividend on common stock in the amount of $0.2825. It is payable on August 20, 2004, to stockholders of record on August 9, 2004. The regular dividend on Series C preferred stock was also declared. Investors are invited to listen to the Company's analyst teleconference, which is scheduled for 4:00 p.m. EDT / 1:00 p.m. PDT on July 29, 2004. The call-in number is 1-866-206-5917 and the ID No. is 485611. A replay is available through August 5, 2004, by calling 1-888-266-2081 and entering pass code 485611. 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 more than 2 million people in 100 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, 4 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; the ability to satisfy requirements related to the Sarbanes Oxley Act section 404 and other regulation on internal controls; 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.calwatergroup.com. Attachments (3). ### 5 CALIFORNIA WATER SERVICE GROUP CONDENSED CONSOLIDATED BALANCE SHEET Unaudited (In thousands, except per share data) June 30, December 31, 2004 2003 ----------- ----------- ASSETS Utility plant: Utility plant $ 1,106,534 $ 1,078,975 Less accumulated depreciation and amortization 331,150 319,477 ----------- ----------- Net utility plant 775,384 759,498 ----------- ----------- Current assets: Cash and cash equivalents 24,109 2,856 Customer receivables 23,095 18,434 Other receivables 13,608 5,125 Unbilled revenue 13,108 8,522 Materials and supplies 3,225 2,957 Taxes and other prepaid expenses 6,934 5,609 ----------- ----------- Total current assets 84,079 43,503 ----------- ----------- Regulatory assets 54,747 53,326 Other assets 18,228 16,708 ----------- ----------- $ 932,438 $ 873,035 =========== =========== CAPITALIZATION AND LIABILITIES Capitalization: Common stock, $.01 par value $ 183 $ 169 Additional paid-in capital 130,636 93,748 Retained earnings 152,764 150,908 Accumulated other comprehensive loss (301) (301) ----------- ----------- Total common stockholders' equity 283,282 244,524 Preferred stock 3,475 3,475 Long-term debt, less current maturities 271,968 272,226 ----------- ----------- Total capitalization 558,725 520,225 ----------- ----------- Current liabilities: Current maturities of long-term debt 846 904 Short-term borrowings -- 6,454 Accounts payable 28,624 23,776 Accrued expenses and other liabilities 36,406 32,430 ----------- ----------- Total current liabilities 65,876 63,564 Unamortized investment tax credits 2,925 2,925 Deferred income taxes 48,144 38,005 Regulatory and other liabilities 38,100 35,835 Advances for construction 126,642 121,952 Contributions in aid of construction 92,026 90,529 Commitments and contingencies -- -- ----------- ----------- $ 932,438 $ 873,035 =========== =========== 6 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, 2004 2003 ------- -------- Operating revenue 88,845 $67,994 ------- -------- Operating expenses: Operations 55,450 45,693 Maintenance 3,032 3,063 Depreciation and amortization 6,521 5,838 Income taxes 6,844 3,314 Property and other taxes 2,915 2,538 ------- -------- Total operating expenses 74,762 60,446 ------- -------- Net operating income 14,083 7,548 ------- -------- Other income and expenses: Non-regulated income, net 573 559 Gain on sale of non-utility property 0 958 ------- -------- Total other income and expenses 573 1,517 Interest expense: Interest expense 4,752 5,090 Less capitalized interest 150 610 ------- -------- Total interest expense 4,602 4,480 Net income 10,054 $ 4,585 ======= ======== Earnings per share Basic 0.59 $ 0.30 ======= ======== Diluted 0.59 $ 0.30 ======= ======= Weighted average shares outstanding Basic 16,965 15,182 ======= ======== Diluted 16,983 15,198 ======= ======== Dividends per share of common stock 0.28250 $0.28125 ======= ======== 7 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, 2004 2003 -------- -------- Operating revenue $149,085 $119,305 -------- -------- Operating expenses: Operations 96,948 83,453 Maintenance 6,213 6,316 Depreciation and amortization 13,039 11,598 Income taxes 7,802 2,761 Property and other taxes 5,609 5,003 -------- -------- Total operating expenses 129,611 109,131 -------- -------- Net operating income 19,474 10,174 -------- -------- Other income and expenses: Non-regulated income, net 1,123 1,169 Gain on sale of non-utility property 1 1,511 -------- -------- Total other income and expenses 1,124 2,680 Interest expense: Interest expense 9,398 9,947 Less capitalized interest 300 910 -------- -------- Total interest expense 9,098 9,037 Net income $ 11,500 $ 3,817 ======== ======== Earnings per share Basic $ 0.67 $ 0.25 ======== ======== Diluted $ 0.67 $ 0.25 ======== ======== Weighted average shares outstanding Basic 16,949 15,182 ======== ======== Diluted 16,967 15,191 ======== ======== Dividends per share of common stock $0.56500 $0.56250 ======== ======== 8