Condensed Consolidating Financial Statements

3 Months Ended

Mar. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements

On April 17, 2009, Cal Water issued $100.0 million aggregate principal amount of 5.875% First Mortgage Bonds due 2019, and on November 17, 2010, Cal Water issued $100.0 million aggregate principal amount of 5.500% First Mortgage Bonds due 2040, all of which are fully and unconditionally guaranteed by the Company.  As a result of these guarantee arrangements, the Company is required to present the following condensed consolidating financial information.  The investments in affiliates are accounted for and presented using the “equity method” of accounting.

The following tables present the condensed consolidating balance sheets as of March 31, 2016 and December 31, 2015, the condensed consolidating statements of income for the three months ended March 31, 2016 and 2015, and the condensed consolidating statements of cash flows for the three months ended March 31, 2016 and 2015 of (i) California Water Service Group, the guarantor of the first mortgage bonds and the parent company; (ii) California Water Service Company, the issuer of the first mortgage bonds and a 100% owned consolidated subsidiary of California Water Service Group; and (iii) the other 100% owned non-guarantor consolidated subsidiaries of California Water Service Group. The condensed consolidating balance sheet as of December 31, 2015 reflects the retrospective adoption of ASU 2015-03 (refer to Note 2. Summary of Significant Accounting Policies for more details).

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING BALANCE SHEET

As of March 31, 2016

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS
Utility plant:
Utility plant	$	1,318		$	2,366,430		$	200,236		$	(7,197	)	$	2,560,787
Less accumulated depreciation and amortization	(662		)	(772,988		)	(49,305		)	1,847			(821,108		)
Net utility plant	656			1,593,442			150,931			(5,350		)	1,739,679
Current assets:
Cash and cash equivalents	707			26,512			3,659			—			30,878
Receivables and unbilled revenue	—			97,211			4,003			—			101,214
Receivables from affiliates	19,902			23,851			78			(43,831		)	—
Other current assets	367			15,004			1,058			—			16,429
Total current assets	20,976			162,578			8,798			(43,831		)	148,521
Other assets:
Regulatory assets	—			357,586			3,663			—			361,249
Investments in affiliates	642,254			—			—			(642,254		)	—
Long-term affiliate notes receivable	24,806			—			—			(24,806		)	—
Other assets	564			46,009			4,699			(916		)	50,356
Total other assets	667,624			403,595			8,362			(667,976		)	411,605
TOTAL ASSETS	$	689,256		$	2,159,615		$	168,091		$	(717,157	)	$	2,299,805
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders’ equity	$	632,967		$	572,846		$	74,761		$	(647,607	)	$	632,967
Affiliate long-term debt	—			—			24,806			(24,806		)	—
Long-term debt, less current maturities	—			556,813			1,036			—			557,849
Total capitalization	632,967			1,129,659			100,603			(672,413		)	1,190,816
Current liabilities:
Current maturities of long-term debt	—			5,655			458			—			6,113
Short-term borrowings	34,500			—			—			—			34,500
Payables to affiliates	20,600			568			22,663			(43,831		)	—
Accounts payable	—			62,276			3,078			—			65,354
Accrued expenses and other liabilities	109			49,313			2,754			—			52,176
Total current liabilities	55,209			117,812			28,953			(43,831		)	158,143
Unamortized investment tax credits	—			1,872			—			—			1,872
Deferred income taxes	1,080			263,986			—			(913		)	264,153
Pension and postretirement benefits other than pensions	—			239,164			—			—			239,164
Regulatory liabilities and other	—			85,035			2,983			—			88,018
Advances for construction	—			179,653			557			—			180,210
Contributions in aid of construction	—			142,434			34,995			—			177,429
TOTAL CAPITALIZATION AND LIABILITIES	$	689,256		$	2,159,615		$	168,091		$	(717,157	)	$	2,299,805

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2015

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS
Utility plant:
Utility plant	$	1,318		$	2,313,704		$	199,121		$	(7,197	)	$	2,506,946
Less accumulated depreciation and amortization	(605		)	(758,362		)	(48,034		)	1,823			(805,178		)
Net utility plant	713			1,555,342			151,087			(5,374		)	1,701,768
Current assets:
Cash and cash equivalents	582			4,270			3,985			—			8,837
Receivables and unbilled revenue	—			100,777			3,728			—			104,505
Receivables from affiliates	19,677			26,219			—			(45,896		)	—
Other current assets	79			13,077			1,080			—			14,236
Total current assets	20,338			144,343			8,793			(45,896		)	127,578
Other assets:
Regulatory assets	—			358,254			3,639			—			361,893
Investments in affiliates	651,449			—			—			(651,449		)	—
Long-term affiliate notes receivable	25,099			—			—			(25,099		)	—
Other assets	758			45,544			4,616			(904		)	50,014
Total other assets	677,306			403,798			8,255			(677,452		)	411,907
TOTAL ASSETS	$	698,357		$	2,103,483		$	168,135		$	(728,722	)	$	2,241,253
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders’ equity	$	642,155		$	581,792		75,024			$	(656,816	)	$	642,155
Affiliate long-term debt	—			—			25,099			(25,099		)	—
Long-term debt, less current maturities	—			507,034			968			—			508,002
Total capitalization	642,155			1,088,826			101,091			(681,915		)	1,150,157
Current liabilities:
Current maturities of long-term debt	—			5,654			389			—			6,043
Short-term borrowings	33,615			—			—			—			33,615
Payables to affiliates	21,500			667			23,729			(45,896		)	—
Accounts payable	—			63,814			2,566			—			66,380
Accrued expenses and other liabilities	102			40,173			1,585			—			41,860
Total current liabilities	55,217			110,308			28,269			(45,896		)	147,898
Unamortized investment tax credits	—			1,872			—			—			1,872
Deferred income taxes	985			264,823			—			(911		)	264,897
Pension and postretirement benefits other than pensions	—			236,266			—			—			236,266
Regulatory and other liabilities	—			79,477			2,937			—			82,414
Advances for construction	—			179,630			542			—			180,172
Contributions in aid of construction	—			142,281			35,296			—			177,577
TOTAL CAPITALIZATION AND LIABILITIES	$	698,357		$	2,103,483		$	168,135		$	(728,722	)	$	2,241,253

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the three months ended March 31, 2016

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	113,027		$	8,700		$	—		$	121,727
Operating expenses:
Operations:
Water production costs	—			39,245			1,824			—			41,069
Administrative and general	—			24,943			2,884			—			27,827
Other operations	—			17,726			1,702			(126		)	19,302
Maintenance	—			5,840			223			—			6,063
Depreciation and amortization	57			14,915			1,098			(24		)	16,046
Income tax benefit	(94		)	(1,037		)	(51		)	257			(925		)
Property and other taxes	—			5,390			685			—			6,075
Total operating (income) expenses	(37		)	107,022			8,365			107			115,457
Net operating income	37			6,005			335			(107		)	6,270
Other Income and Expenses:
Non-regulated revenue	464			3,196			374			(606		)	3,428
Non-regulated expenses	—			(2,705		)	(275		)	—			(2,980		)
Income tax (expense) on other income and expense	(189		)	(200		)	(39		)	247			(181		)
Total other income	275			291			60			(359		)	267
Interest:
Interest expense	173			7,899			473			(480		)	8,065
Less: capitalized interest	—			(714		)	(16		)	—			(730		)
Net interest expense	173			7,185			457			(480		)	7,335
Equity loss of subsidiaries	(937		)	—			—			937			—
Net loss	$	(798	)	$	(889	)	$	(62	)	$	951		$	(798	)

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the three months ended March 31, 2015

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	114,507		$	7,478		$	—		$	121,985
Operating expenses:
Operations:
Water production costs	—			43,376			1,826			—			45,202
Administrative and general	—			24,855			2,840			—			27,695
Other	—			14,270			1,699			(126		)	15,843
Maintenance	—			4,264			193			—			4,457
Depreciation and amortization	57			14,203			1,084			(25		)	15,319
Income tax (benefit) expense	(68		)	930			(453		)	204			613
Taxes other than income taxes	—			4,750			609			—			5,359
Total operating expenses	(11		)	106,648			7,798			53			114,488
Net operating income (loss)	11			7,859			(320		)	(53		)	7,497
Other Income and Expenses:
Non-regulated revenue	454			2,873			398			(478		)	3,247
Non-regulated expenses, net	—			(2,032		)	(211		)	—			(2,243		)
Income tax (expense) on other income and expense	(185		)	(343		)	(69		)	194			(403		)
Net other income	269			498			118			(284		)	601
Interest:
Interest expense	110			6,860			451			(352		)	7,069
Less: capitalized interest	—			(533		)	(13		)	—			(546		)
Net interest expense	110			6,327			438			(352		)	6,523
Equity earnings of subsidiaries	1,405			—			—			(1,405		)	—
Net income (loss)	$	1,575		$	2,030		$	(640	)	$	(1,390	)	$	1,575

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the three months endedMarch 31, 2016

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating activities:
Net loss	$	(798	)	$	(889	)	$	(62	)	$	951		$	(798	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity loss of subsidiaries	937			—			—			(937		)	—
Dividends received from affiliates	8,258			—			—			(8,258		)	—
Depreciation and amortization	57			15,277			1,144			(24		)	16,454
Changes in value of life insurance contracts	—			43			—			—			43
Changes in operating assets and liabilities	(280		)	9,414			1,589			—			10,723
Other changes in noncurrent assets and liabilities	155			4,432			7			10			4,604
Net cash provided by operating activities	8,329			28,277			2,678			(8,258		)	31,026
Investing activities:
Utility plant expenditures	—			(54,944		)	(1,519		)	—			(56,463		)
Changes in affiliate advances	40			1,468			(140		)	(1,368		)	—
Reduction of affiliate short-term borrowings	—			21,500			—			(21,500		)	—
Issuance of affiliate short-term borrowings	(250		)	(20,600		)	—			20,850			—
Reduction of affiliate long-term debt	279			—			—			(279		)	—
Life insurance proceeds	—			495			—			—			495
Purchase of life insurance contracts	—			(960		)	—			—			(960		)
Changes in restricted cash	—			(465		)	—			—			(465		)
Net cash provided by (used in) investing activities	69			(53,506		)	(1,659		)	(2,297		)	(57,393		)
Financing Activities:
Short-term borrowings	21,500			33,000			—			—			54,500
Repayment of short-term borrowings	(20,615		)	(33,000		)	—			—			(53,615		)
Changes in affiliate advances	—			(98		)	(1,270		)	1,368			—
Proceeds from affiliate short-term borrowings	20,600			—			250			(20,850		)
Repayment of affiliate short-term borrowings	(21,500		)	—			—			21,500
Repayment of affiliate long-term borrowings	—			—			(279		)	279			—
Proceeds from long-term debt, net of expenses	—			49,823			216			—			50,039
Repayment of long-term debt	—			(175		)	(79		)	—			(254		)
Advances and contributions in aid for construction	—			7,590			18			—			7,608
Refunds of advances for construction	—			(1,611		)	(1		)	—			(1,612		)
Dividends paid to non-affiliates	(8,258		)	—			—			—			(8,258		)
Dividends paid to affiliates	—			(8,058		)	(200		)	8,258			—
Net cash (used in) provided by financing activities	(8,273		)	47,471			(1,345		)	10,555			48,408
Change in cash and cash equivalents	125			22,242			(326		)	—			22,041
Cash and cash equivalents at beginning of period	582			4,270			3,985			—			8,837
Cash and cash equivalents at end of period	$	707		$	26,512		$	3,659		$	—		$	30,878

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2015

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating activities:
Net income (loss)	$	1,575		$	2,030		$	(640	)	$	(1,390	)	$	1,575
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity earnings of subsidiaries	(1,405		)	—			—			1,405			—
Dividends received from affiliates	8,007			—			—			(8,007		)	—
Depreciation and amortization	57			14,575			1,129			(25		)	15,736
Change in value of life insurance contracts	—			(161		)	—			—			(161		)
Changes in operating assets and liabilities	(1,151		)	(2,185		)	6,624			(84		)	3,204
Other changes in noncurrent assets and liabilities	1,109			10,717			(5,385		)	94			6,535
Net cash provided by operating activities	8,192			24,976			1,728			(8,007		)	26,889
Investing activities:
Utility plant expenditures	—			(33,793		)	(1,254		)	—			(35,047		)
Investment in affiliates	(1,000		)	—			—			1,000			—
Changes in affiliate advances	(3,220		)	2,725			(172		)	667			—
Proceeds from affiliates long-term debt	243			—			—			(243		)	—
Changes in restricted cash	—			(26		)	—			—			(26		)
Net cash used in investing activities	(3,977		)	(31,094		)	(1,426		)	1,424			(35,073		)
Financing Activities:
Short-term borrowings	—			30,000			—			—			30,000
Investment from affiliates	—			—			1,000			(1,000		)	—
Changes in affiliate advances	—			1,309			(642		)	(667		)	—
Repayment of affiliates long-term borrowings	—			—			(243		)	243			—
Proceeds from long-term debt	—			—			50			—			50
Repayment of long-term debt	—			(197		)	(141		)	—			(338		)
Advances and contributions in aid for construction	—			1,759			18			—			1,777
Refunds of advances for construction	—			(1,573		)	(1		)	—			(1,574		)
Dividends paid to non-affiliates	(8,007		)	—			—			—			(8,007		)
Dividends paid to affiliates	—			(7,909		)	(98		)	8,007			—
Net cash (used in) provided by financing activities	(8,007		)	23,389			(57		)	6,583			21,908
Change in cash and cash equivalents	(3,792		)	17,271			245			—			13,724
Cash and cash equivalents at beginning of period	4,108			13,929			1,550			—			19,587
Cash and cash equivalents at end of period	$	316		$	31,200		$	1,795		$	—		$	33,311