Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 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 June 30, 2016 and December 31, 2015, the condensed consolidating statements of income for the three months ended June 30, 2016 and 2015, condensed consolidating statements of income for the six months ended June 30, 2016 and 2015, and the condensed consolidating statements of cash flows for the six months ended June 30, 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 June 30, 2016

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS
Utility plant:
Utility plant	$	1,318		$	2,425,934		$	201,267		$	(7,197	)	$	2,621,322
Less accumulated depreciation and amortization	(719		)	(786,807		)	(50,590		)	1,871			(836,245		)
Net utility plant	599			1,639,127			150,677			(5,326		)	1,785,077
Current assets:
Cash and cash equivalents	999			24,606			5,221			—			30,826
Receivables and unbilled revenue	—			103,802			4,722			—			108,524
Receivables from affiliates	20,793			3,931			126			(24,850		)	—
Other current assets	279			18,197			1,174			—			19,650
Total current assets	22,071			150,536			11,243			(24,850		)	159,000
Other assets:
Regulatory assets	—			359,661			3,660			—			363,321
Investments in affiliates	645,349			—			—			(645,349		)	—
Long-term affiliate notes receivable	24,616			—			—			(24,616		)	—
Other assets	484			46,519			4,081			(359		)	50,725
Total other assets	670,449			406,180			7,741			(670,324		)	414,046
TOTAL ASSETS	$	693,119		$	2,195,843		$	169,661		$	(700,500	)	$	2,358,123
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders’ equity	$	636,760		$	575,196		$	75,492		$	(650,688	)	$	636,760
Affiliate long-term debt	—			—			24,616			(24,616		)	—
Long-term debt, less current maturities	—			554,825			962			—			555,787
Total capitalization	636,760			1,130,021			101,070			(675,304		)	1,192,547
Current liabilities:
Current maturities of long-term debt	—			5,665			468			—			6,133
Short-term borrowings	55,100			20,000			—			—			75,100
Payables to affiliates	—			1,318			23,532			(24,850		)	—
Accounts payable	—			74,883			2,721			—			77,604
Accrued expenses and other liabilities	84			39,637			3,455			—			43,176
Total current liabilities	55,184			141,503			30,176			(24,850		)	202,013
Unamortized investment tax credits	—			1,872			—			—			1,872
Deferred income taxes	1,175			270,578			—			(346		)	271,407
Pension and postretirement benefits other than pensions	—			238,823			—			—			238,823
Regulatory liabilities and other	—			89,108			3,033			—			92,141
Advances for construction	—			179,869			560			—			180,429
Contributions in aid of construction	—			144,069			34,822			—			178,891
TOTAL CAPITALIZATION AND LIABILITIES	$	693,119		$	2,195,843		$	169,661		$	(700,500	)	$	2,358,123

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 June 30, 2016

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	142,342		$	10,103		$	—		$	152,445
Operating expenses:
Operations:
Water production costs	—			55,643			1,946			—			57,589
Administrative and general	—			20,667			2,699			—			23,366
Other operations	—			17,365			1,622			(84		)	18,903
Maintenance	—			5,692			242			—			5,934
Depreciation and amortization	57			14,735			1,074			(24		)	15,842
Income tax (benefit) expense	(93		)	6,228			497			238			6,870
Property and other taxes	—			4,669			738			—			5,407
Total operating (income) expenses	(36		)	124,999			8,818			130			133,911
Net operating income	36			17,343			1,285			(130		)	18,534
Other income and expenses:
Non-regulated revenue	462			3,439			423			(560		)	3,764
Non-regulated expenses	—			(2,547		)	(262		)	—			(2,809		)
Income tax expense on other income and expenses	(188		)	(364		)	(60		)	228			(384		)
Total other income	274			528			101			(332		)	571
Interest:
Interest expense	173			8,263			474			(476		)	8,434
Less: capitalized interest	—			(820		)	(17		)	—			(837		)
Net interest expense	173			7,443			457			(476		)	7,597
Equity earnings of subsidiaries	11,371			—			—			(11,371		)	—
Net income	$	11,508		$	10,428		$	929		$	(11,357	)	$	11,508

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the three months ended June 30, 2015

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	135,440		$	8,974		$	—		$	144,414
Operating expenses:
Operations:
Water production costs	—			51,044			1,978			—			53,022
Administrative and general	—			23,796			2,841			—			26,637
Other operations	—			16,033			1,606			(127		)	17,512
Maintenance	—			5,162			164			—			5,326
Depreciation and amortization	57			14,225			1,098			(26		)	15,354
Income tax (benefit) expense	(119		)	4,886			37			298			5,102
Property and other taxes	—			4,304			664			—			4,968
Total operating (income) expenses	(62		)	119,450			8,388			145			127,921
Net operating income	62			15,990			586			(145		)	16,493
Other income and expenses:
Non-regulated revenue	455			3,312			392			(680		)	3,479
Non-regulated expenses, net	—			(3,193		)	(311		)	—			(3,504		)
Income tax (expense) benefit on other income and expenses	(183		)	(48		)	(46		)	287			10
Total other income (loss)	272			71			35			(393		)	(15		)
Interest:
Interest expense	240			6,922			452			(553		)	7,061
Less: capitalized interest	—			(417		)	(11		)	—			(428		)
Net interest expense	240			6,505			441			(553		)	6,633
Equity from subsidiaries	9,751			—			—			(9,751		)	—
Net income	$	9,845		$	9,556		$	180		$	(9,736	)	$	9,845

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the six months endedJune 30, 2016

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	255,369		$	18,803		$	—		$	274,172
Operating expenses:
Operations:
Water production costs	—			94,888			3,770			—			98,658
Administrative and general	—			45,610			5,583			—			51,193
Other operations	—			35,091			3,324			(210		)	38,205
Maintenance	—			11,532			465			—			11,997
Depreciation and amortization	114			29,650			2,172			(48		)	31,888
Income tax (benefit) expense	(187		)	5,191			446			495			5,945
Property and other taxes	—			10,059			1,423			—			11,482
Total operating (income) expenses	(73		)	232,021			17,183			237			249,368
Net operating income	73			23,348			1,620			(237		)	24,804
Other income and expenses:
Non-regulated revenue	926			6,635			797			(1,166		)	7,192
Non-regulated expenses	—			(5,252		)	(537		)	—			(5,789		)
Income tax expense on other income and expenses	(377		)	(564		)	(99		)	475			(565		)
Total other income	549			819			161			(691		)	838
Interest:
Interest expense	346			16,162			947			(956		)	16,499
Less: capitalized interest	—			(1,534		)	(33		)	—			(1,567		)
Net interest expense	346			14,628			914			(956		)	14,932
Equity earnings of subsidiaries	10,434			—			—			(10,434		)	—
Net income	$	10,710		$	9,539		$	867		$	(10,406	)	$	10,710

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF INCOME

For the six months ended June 30, 2015

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	249,947		$	16,452		$	—		$	266,399
Operating expenses:
Operations:
Water production costs	—			94,420			3,804			—			98,224
Administrative and general	—			48,651			5,681			—			54,332
Other Operations	—			30,303			3,305			(253		)	33,355
Maintenance	—			9,426			357			—			9,783
Depreciation and amortization	114			28,428			2,182			(51		)	30,673
Income tax (benefit) expense	(187		)	5,816			(416		)	502			5,715
Property and other taxes	—			9,054			1,273			—			10,327
Total operating (income) expenses	(73		)	226,098			16,186			198			242,409
Net operating income	73			23,849			266			(198		)	23,990
Other income and expenses:
Non-regulated revenue	909			6,185			790			(1,158		)	6,726
Non-regulated expenses, net	—			(5,225		)	(522		)	—			(5,747		)
Income tax expense on other income and expenses	(368		)	(391		)	(115		)	481			(393		)
Net other income	541			569			153			(677		)	586
Interest:
Interest expense	350			13,782			903			(905		)	14,130
Less: capitalized interest	—			(950		)	(24		)	—			(974		)
Net interest expense	350			12,832			879			(905		)	13,156
Equity earnings of subsidiaries	11,156			—			—			(11,156		)	—
Net income (loss)	$	11,420		$	11,586		$	(460	)	$	(11,126	)	$	11,420

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months endedJune 30, 2016

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating activities:
Net income	$	10,710		$	9,539		$	867		$	(10,406	)	$	10,710
Adjustments to reconcile net income to net cash provided by operating activities:
Equity earnings of subsidiaries	(10,434		)	—			—			10,434			—
Dividends received from affiliates	16,532			—			—			(16,532		)	—
Depreciation and amortization	114			30,372			2,263			(48		)	32,701
Changes in value of life insurance contracts	—			(336		)	—			—			(336		)
Changes in operating assets and liabilities	(218		)	(987		)	984			—			(221		)
Other changes in noncurrent assets and liabilities	892			14,567			730			20			16,209
Net cash provided by operating activities	17,596			53,155			4,844			(16,532		)	59,063
Investing activities:
Utility plant expenditures	—			(113,894		)	(2,261		)	—			(116,155		)
Changes in affiliate advances	(561		)	787			(199		)	(27		)	—
Reduction of affiliate short-term borrowings	2,000			42,100			—			(44,100		)	—
Issuance of affiliate short-term borrowings	(2,615		)	(20,600		)	—			23,215			—
Reduction of affiliates long-term debt	544			—			—			(544		)	—
Life insurance proceeds	—			495			—			—			495
Purchase of life insurance contracts	—			(1,065		)	—			—			(1,065		)
Changes in restricted cash	—			(653		)	—			—			(653		)
Net cash used in investing activities	(632		)	(92,830		)	(2,460		)	(21,456		)	(117,378		)
Financing Activities:
Short-term borrowings	42,100			61,000			—			—			103,100
Repayment of short-term borrowings	(20,615		)	(41,000		)	—			—			(61,615		)
Changes in affiliate advances	—			651			(678		)	27			—
Proceeds from affiliate short-term borrowings	20,600			—			2,615			(23,215		)	—
Repayment of affiliate short-term borrowings	(42,100		)	—			(2,000		)	44,100			—
Repayment of affiliates long-term borrowings	—			—			(544		)	544			—
Proceeds from long-term debt, net of issuance costs	—			49,823			—			—			49,823
Repayment of long-term debt	—			(2,287		)	(176		)	—			(2,463		)
Advances and contributions in aid for construction	—			11,413			50			—			11,463
Refunds of advances for construction	—			(3,454		)	(18		)	—			(3,472		)
Dividends paid to non-affiliates	—			(16,135		)	(397		)	—			(16,532		)
Dividends paid to affiliates	(16,532		)	—			—			16,532			—
Net cash (used in) provided by financing activities	(16,547		)	60,011			(1,148		)	37,988			80,304
Change in cash and cash equivalents	417			20,336			1,236			—			21,989
Cash and cash equivalents at beginning of period	582			4,270			3,985			—			8,837
Cash and cash equivalents at end of period	$	999		$	24,606		$	5,221		$	—		$	30,826

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2015

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating activities:
Net income (loss)	$	11,420		$	11,586		$	(460	)	$	(11,126	)	$	11,420
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity earnings of subsidiaries	(11,156		)	—			—			11,156			—
Dividends received from affiliates	16,027			—			—			(16,027		)	—
Depreciation and amortization	114			29,170			2,419			(51		)	31,652
Change in value of life insurance contracts	—			50			—			—			50
Changes in operating assets and liabilities	(1,049		)	(9,161		)	6,901			(94		)	(3,403		)
Other changes in noncurrent assets and liabilities	1,897			12,057			(5,439		)	115			8,630
Net cash provided by operating activities	17,253			43,702			3,421			(16,027		)	48,349
Investing activities:
Utility plant expenditures	—			(72,872		)	(2,955		)	—			(75,827		)
Investment in affiliates	(1,000		)	—			—			1,000			—
Changes in affiliate advances	(4,234		)	2,885			(118		)	1,467			—
Proceeds from affiliates long-term debt	517			—			—			(517		)	—
Purchase of life insurance contracts	—			(214		)	—			—			(214		)
Changes in restricted cash	—			46			—			—			46
Net cash used in investing activities	(4,717		)	(70,155		)	(3,073		)	1,950			(75,995		)
Financing Activities:
Short-term borrowings	2,500			50,000			—			—			52,500
Repayment of short-term borrowings	—			(5,000		)	—			—			(5,000		)
Investment from affiliates	—			—			1,000			(1,000		)	—
Changes in affiliate advances	102			2,077			(712		)	(1,467		)	—
Repayment of affiliates long-term borrowings	—			—			(517		)	517			—
Proceeds from long-term debt	—			—			50			—			50
Repayment of long-term debt	—			(2,310		)	(244		)	—			(2,554		)
Advances and contributions in aid for construction	—			6,881			40			—			6,921
Refunds of advances for construction	—			(3,284		)	(32		)	—			(3,316		)
Dividends paid to non-affiliates	(16,027		)	—			—			—			(16,027		)
Dividends paid to affiliates	—			(15,867		)	(160		)	16,027			—
Net cash (used in) provided by financing activities	(13,425		)	32,497			(575		)	14,077			32,574
Change in cash and cash equivalents	(889		)	6,044			(227		)	—			4,928
Cash and cash equivalents at beginning of period	4,108			13,929			1,550			—			19,587
Cash and cash equivalents at end of period	$	3,219		$	19,973		$	1,323		$	—		$	24,515