EXHIBIT 99.1 [CALIFORNIA WATER [CWT SERVICE GROUP LISTED LOGO] NYSE LOGO] NEWS RELEASE CALIFORNIA WATER SERVICE GROUP 1720 North First Street San Jose, CA 95112-4598 October 27, 2004 For Immediate Release Contact: Richard D. Nye (408) 367-8216 (analysts) Shannon Dean (310) 257-1435 (media) CAL WATER ANNOUNCES THIRD QUARTER 2004 RESULTS; BOARD DECLARES 240TH CONSECUTIVE QUARTERLY DIVIDEND - -------------------------------------------------------------------------------- SAN JOSE, CA - California Water Service Group (NYSE : CWT) today announced net income of $10.8 million and earnings of $0.59 per share for the third quarter of 2004, compared to net income of $8.6 million and earnings of $0.53 per share in the third quarter of 2003. Revenue for the third quarter increased $8.9 million, or 10%, to $97.1 million. Rate increases added $9.9 million to revenue, while sales to new customers added $1.3 million. Partially offsetting these higher revenues was a 3%, or $2.3 million, decrease in sales to existing customers compared to the same period last year. Total operating expenses for the third quarter increased 9%, or $6.9 million. Water production costs increased 3% due to rate increases by wholesale water suppliers. Other operations expenses increased by 14%. For the quarter, the Company experienced unexpected cost increases from higher claims for health benefits and workers' compensation. Both of these programs are basically self insured with stop loss insurance coverage for extraordinary claims. In addition, costs increases were incurred to comply with the Sarbanes Oxley (SOX) requirements on internal controls. SOX costs have increased more than originally estimated. Areas of cost increases that were in line with internal expectations were depreciation and property taxes due to capital investments, and higher income taxes driven by the higher taxable income. "Our third quarter results were good. Although we had some unexpected cost increases for health benefits and workers' compensation claims, net income increased 26% over last year," said President and Chief Executive Officer Peter C. Nelson. "Also, we are very pleased to announce that we have prevailed in our efforts to stop the City of Selma from taking over our Selma water system," Nelson said. At a public hearing on October 18, 2004, the Selma City Council voted unanimously to abandon efforts to acquire Cal Water's Selma system. Hundreds of customers made calls, signed petitions, wrote letters, and attended the public hearing to speak on the Company's behalf. The Company will also pay its 240th consecutive dividend. On October 27, 2004, Directors declared a dividend of $0.2825 on common stock. It is payable on November 19, 2004, to stockholders of record on November 8, 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 October 28, 2004. The call-in number is 1-866-244-4742 and the ID No. is 558049. A replay is available through January 26, 2005, by calling 1-888-266-2081 and entering pass code 558049. 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, 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). ###