UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to              

Commission file number 1-13883

CALIFORNIA WATER SERVICE GROUP

(Exact name of registrant as specified in its charter)

Delaware	77-0448994
(State or other jurisdiction	(I.R.S. Employer identification No.)
of incorporation or organization)

1720 North First Street

San Jose, California 95112

(Address of principal executive offices)

408-367-8200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Trading Symbol(s)	Name of Each Exchange on Which Registered:
Common Stock, $0.01 par value per share	CWT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý  No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit). Yes ý  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o  

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act) Yes ☐  No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common shares outstanding as of June 30, 2020 — 49,398,000

1

TABLE OF CONTENTS

	Page
PART I Financial Information	3
Item 1 Financial Statements	3
Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2020 and December 31, 2019	3
Condensed Consolidated Statements of Income (unaudited) For the Three Months Ended June 30, 2020 and 2019	4
Condensed Consolidated Statements of (Loss) Income (unaudited) For the Six Months Ended June 30, 2020 and 2019	5
Condensed Consolidated Statements of Cash Flows (unaudited) For the Six Months Ended June 30, 2020 and 2019	6
Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3 Quantitative and Qualitative Disclosure about Market Risk	39
Item 4 Controls and Procedures	39
PART II Other Information	40
Item 1 Legal Proceedings	40
Item 1A Risk Factors	40
Item 6 Exhibits	40
Signatures	41

2

PART I FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

The condensed consolidated financial statements presented in this filing on Form 10-Q have been prepared by management and are unaudited.

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited (In thousands, except per share data)

	June 30, 2020		December 31, 2019
ASSETS
Utility plant:
Utility plant	$	3,752,243	$	3,550,485
Less accumulated depreciation and amortization	(1,214,427)		(1,144,115)
Net utility plant	2,537,816		2,406,370
Current assets:
Cash and cash equivalents	114,388		42,653
Receivables:
Customers, net	46,087		32,058
Regulatory balancing accounts	23,738		38,225
Other, net	13,605		14,187
Unbilled revenue, net	39,599		34,879
Materials and supplies at weighted average cost	8,375		7,745
Taxes, prepaid expenses, and other assets	21,097		14,965
Total current assets	266,889		184,712
Other assets:
Regulatory assets	440,986		433,322
Goodwill	31,132		2,615
Other assets	83,110		84,289
Total other assets	555,228		520,226
TOTAL ASSETS	$	3,359,933	$	3,111,308
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $0.01 par value; 68,000 shares authorized, 49,398 and 48,532 outstanding in 2020 and 2019, respectively	$	494	$	485
Additional paid-in capital	400,080		362,275
Retained earnings	381,449		417,146
Total common stockholders’ equity	782,023		779,906
Long-term debt, net	785,257		786,754
Total capitalization	1,567,280		1,566,660
Current liabilities:
Current maturities of long-term debt, net	21,872		21,868
Short-term borrowings	375,100		175,100
Accounts payable	128,216		108,463
Regulatory balancing accounts	1,602		4,462
Accrued interest	5,330		5,810
Accrued expenses and other liabilities	45,432		43,018
Total current liabilities	577,552		358,721
Deferred income taxes	223,955		222,590
Pension and postretirement benefits other than pensions	261,119		258,907
Regulatory liabilities and other	270,177		271,831
Advances for construction	195,056		191,062
Contributions in aid of construction	264,794		241,537
Commitments and contingencies (Note 10)
TOTAL CAPITALIZATION AND LIABILITIES	$	3,359,933	$	3,111,308

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

3

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Unaudited (In thousands, except per share data)

For the three months ended	June 30, 2020		June 30, 2019
Operating revenue	$	175,484	$	179,031
Operating expenses:
Operations:
Water production costs	71,142		64,635
Administrative and general	26,939		25,434
Other operations	25,898		22,542
Maintenance	6,722		5,692
Depreciation and amortization	24,542		22,326
Income taxes	622		4,321
Property and other taxes	7,126		7,068
Total operating expenses	162,991		152,018
Net operating income	12,493		27,013
Other income and expenses:
Non-regulated revenue	4,208		5,130
Non-regulated expenses	(492)		(3,900)
Other components of net periodic benefit cost	(1,332)		(1,192)
Allowance for equity funds used during construction	1,705		1,686
Income tax expense on other income and expenses	(820)		(487)
Net other income	3,269		1,237
Interest expense:
Interest expense	11,613		12,178
Allowance for borrowed funds used during construction	(1,132)		(924)
Net interest expense	10,481		11,254
Net income	$	5,281	$	16,996
Earnings per share:	0		—
Basic	$	0.11	$	0.35
Diluted	0.11		0.35
Weighted average shares outstanding:
Basic	48,936		48,136
Diluted	48,936		48,136

 See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

4

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

Unaudited (In thousands, except per share data)

For the six months ended	June 30, 2020		June 30, 2019
Operating revenue	$	301,047	$	305,142
Operating expenses:
Operations:
Water production costs	125,118		110,227
Administrative and general	56,619		54,531
Other operations	39,872		40,363
Maintenance	13,795		12,147
Depreciation and amortization	49,034		44,694
Income tax (benefit) expense	(3,315)		1,330
Property and other taxes	14,354		14,361
Total operating expenses	295,477		277,653
Net operating income	5,570		27,489
Other income and expenses:
Non-regulated revenue	8,035		10,031
Non-regulated expenses	(8,946)		(6,119)
Other components of net periodic benefit cost	(2,762)		(2,451)
Allowance for equity funds used during construction	3,319		3,219
Income tax benefit (expense) on other income and expenses	93		(1,315)
Net other (loss) income	(261)		3,365
Interest expense:
Interest expense	22,411		23,253
Allowance for borrowed funds used during construction	(2,076)		(1,755)
Net interest expense	20,335		21,498
Net (loss) income	$	(15,026)	$	9,356
(Loss) earnings per share:
Basic	$	(0.31)	$	0.19
Diluted	(0.31)		0.19
Weighted average shares outstanding:
Basic	48,759		48,111
Diluted	48,759		48,111

 See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

5

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited (In thousands)

For the six months ended:	June 30, 2020		June 30, 2019
Operating activities:
Net (loss) income	$	(15,026)	$	9,356
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	50,251		45,744
Change in value of life insurance contracts	872		(3,147)
Allowance for equity funds used during construction	(3,319)		(3,219)
Changes in operating assets and liabilities:
Receivables and unbilled revenue	(6,215)		(16,619)
Accounts payable	3,405		5,928
Other current assets	(6,759)		(5,750)
Other current liabilities	(970)		(396)
Other changes in noncurrent assets and liabilities	(2,235)		11,494
Net cash provided by operating activities	20,004		43,391
Investing activities:
Utility plant expenditures	(133,537)		(121,936)
Business acquisition, net of cash acquired	(37,655)		—
Net cash used in investing activities	(171,192)		(121,936)
Financing activities:
Short-term borrowings	270,000		190,000
Repayment of short-term borrowings	(70,000)		(90,000)
Issuance of long-term debt, net of expenses of $1,558 for 2019	—		398,442
Repayment of long-term debt	(1,293)		(401,358)
Advances and contributions in aid of construction	12,569		12,755
Refunds of advances for construction	(4,341)		(3,555)
Repurchase of common stock	(1,479)		(2,203)
Issuance of common stock	38,006		829
Dividends paid	(20,671)		(19,000)
Net cash provided by financing activities	222,791		85,910
Change in cash, cash equivalents, and restricted cash	71,603		7,365
Cash, cash equivalents, and restricted cash at beginning of period	43,298		47,715
Cash, cash equivalents, and restricted cash at end of period	$	114,901	$	55,080
Supplemental information:
Cash paid for interest (net of amounts capitalized)	$	20,433	$	21,033
Supplemental disclosure of non-cash activities:
Accrued payables for investments in utility plant	$	54,049	$	31,464
Utility plant contribution by developers	$	13,818	$	11,092

 See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements

6

CALIFORNIA WATER SERVICE GROUP

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2020

Dollar amounts in thousands unless otherwise stated

Note 1. Organization and Operations and Basis of Presentation

California Water Service Group (the Company) is a holding company that provides water utility and other related services in California, Washington, New Mexico and Hawaii through its wholly-owned subsidiaries. California Water Service Company (Cal Water), Washington Water Service Company (Washington Water), New Mexico Water Service Company (New Mexico Water), and Hawaii Water Service Company, Inc. (Hawaii Water) provide regulated utility services under the rules and regulations of their respective state’s regulatory commissions (jointly referred to herein as the Commissions). CWS Utility Services and HWS Utility Services LLC provide non-regulated water utility and utility-related services.

The Company operates in one reportable segment, providing water and related utility services.

Basis of Presentation

The unaudited condensed consolidated interim financial information has been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (SEC) and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on February 27, 2020.

The preparation of the Company’s unaudited condensed consolidated interim financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses for the periods presented. These include, but are not limited to, estimates and assumptions used in determining the Company’s regulatory asset and liability balances based upon probability assessments of regulatory recovery, revenues earned but not yet billed, asset retirement obligations, allowance for credit losses, pension and other employee benefit plan liabilities, and income tax-related assets and liabilities. Actual results could differ from these estimates.

In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring transactions that are necessary to provide a fair presentation of the results for the periods covered.

Due to the seasonal nature of the water business, the results for interim periods are not indicative of the results for a 12-month period. Revenue and income are generally higher in the warm, dry summer months when water usage and sales are greater. Revenue and income are generally lower in the winter months when cooler temperatures and rainfall curtail water usage and sales.

7

Note 2. Summary of Significant Accounting Policies

Operating revenue

The following tables disaggregate the Company’s operating revenue by source for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30
	2020		2019
Revenue from contracts with customers	$	172,497	$	167,467
Regulatory balancing account revenue (a)	2,987		11,564
Total operating revenue	$	175,484	$	179,031

	Six Months Ended June 30
	2020		2019
Revenue from contracts with customers	$	307,330	$	284,877
Regulatory balancing account revenue (a)	(6,283)		20,265
Total operating revenue	$	301,047	$	305,142

(a) As further discussed below, no amounts were recorded for the Company’s Water Revenue Adjustment Mechanism (WRAM), Modified Cost Balancing Account (MCBA), Pension Cost Balancing Account (PCBA), and Health Cost Balancing Account (HCBA) for the three and six months ended June 30, 2020 due to the delay in the resolution of the 2018 General Rate Case (GRC).

Revenue from contracts with customers

The Company principally generates operating revenue from contracts with customers by providing regulated water and wastewater services at tariff-rates authorized by the Commissions in the states in which they operate and non-regulated water and wastewater services at rates authorized by contracts with government agencies. Revenue from contracts with customers reflects amounts billed for the volume of consumption at authorized per unit rates, for a service charge, and for other authorized charges.

The Company satisfies its performance obligation to provide water and wastewater services over time as services are rendered. The Company applies the invoice practical expedient and recognizes revenue from contracts with customers in the amount for which the Company has a right to invoice. The Company has a right to invoice for the volume of consumption, for the service charge, and for other authorized charges.

The measurement of sales to customers is generally based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, the Company estimates consumption since the date of the last meter reading and a corresponding unbilled revenue is recognized. The estimate is based upon the number of unbilled days that month and the average daily customer billing rate from the previous month (which fluctuates based upon customer usage).

Contract terms are generally short-term and at will by customers and, as a result, no separate financing component is recognized for the Company's collections from customers, which generally require payment within 30 days of billing. The Company applies judgment, based principally on historical payment experience, in estimating its customers’ ability to pay.

Certain customers are not billed for volumetric consumption, but are instead billed a flat rate at the beginning of each monthly service period. The amount billed is initially deferred and subsequently recognized over the monthly service period, as the performance obligation is satisfied. The deferred revenue balance or contract liability, which is included in "accrued expenses and other liabilities" on the consolidated balance sheets, is inconsequential.

8

In the following tables, revenue from contracts with customers is disaggregated by class of customers for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30
	2020		2019
Residential	$	116,453	$	107,349
Business	28,531		31,706
Industrial	6,622		7,524
Public authorities	7,711		7,613
Other (a)	13,180		13,275
Total revenue from contracts with customers	$	172,497	$	167,467

	Six Months Ended June 30
	2020		2019
Residential	$	208,998	$	191,609
Business	56,223		57,186
Industrial	14,500		14,788
Public authorities	13,608		12,084
Other (a)	14,001		9,210
Total revenue from contracts with customers	$	307,330	$	284,877

(a) Other includes the accrued unbilled revenue.

Regulatory balancing account revenue

The Company’s ability to recover revenue requirements authorized by the California Public Utilities Commission (CPUC) in its triennial GRC, is decoupled from the volume of the sales. Regulatory balancing account revenue is revenue related to rate mechanisms authorized in California by the CPUC, which allow the Company to recover the authorized revenue and are not considered contracts with customers. These mechanisms include the following:

The WRAM allows the Company to recognize the adopted level of volumetric revenues. The variance between adopted volumetric revenues and actual billed volumetric revenues for metered accounts is recorded as regulatory balancing account revenue.

Cost-recovery rates, such as the MCBA, Conservation Expense Balancing Account (CEBA), PCBA, and HCBA, generally provide for recovery of the adopted levels of expenses for purchased water, purchased power, pump taxes, water conservation program costs, pension, and health care. Variances between adopted and actual costs are recorded as regulatory balancing account revenue.

The WRAM, MCBA, PCBA, and HCBA are being litigated in the pending 2018 GRC, which is further discussed in Note 9. As the mechanisms are being litigated, the Company did not record regulatory assets for the WRAM, MCBA, PCBA, and HCBA for the first six months of 2020. The Company determined that these mechanisms did not meet the regulatory asset recognition criteria under accounting standards for regulated utilities. As the CEBA is not being litigated in the pending 2018 GRC, the Company recorded a regulatory liability for the CEBA for the first six months of 2020. The Company determined that the CEBA met the regulatory liability recognition criteria under accounting standards for regulated utilities.

Each district's WRAM and MCBA regulatory assets and liabilities are allowed to be netted against one another. The Company recognizes regulatory balancing account revenues that have been authorized for rate recovery, are objectively determinable and probable of recovery, and are expected to be collected within 24 months. To the extent that regulatory balancing account revenue is estimated to be collectible beyond 24 months, recognition is deferred.

9

Non-regulated Revenue

The following tables disaggregate the Company’s non-regulated revenue by source for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30
	2020		2019
Operating and maintenance revenue	$	2,789	$	3,273
Other non-regulated revenue	834		1,267
Non-regulated revenue from contracts with customers	$	3,623	$	4,540
Lease revenue	$	585	$	590
Total non-regulated revenue	$	4,208	$	5,130

	Six Months Ended June 30
	2020		2019
Operating and maintenance revenue	$	5,288	$	6,319
Other non-regulated revenue	1,599		2,563
Non-regulated revenue from contracts with customers	$	6,887	$	8,882
Lease revenue	$	1,148	$	1,149
Total non-regulated revenue	$	8,035	$	10,031

Operating and maintenance services are provided for non-regulated water and wastewater systems owned by private companies and municipalities. The Company negotiates formal agreements with the customers, under which they provide operating, maintenance and customer billing services related to the customers’ water system. The formal agreements outline the fee schedule for the services provided. The agreements typically call for a fee-per-service or a flat-rate amount per month. The Company satisfies its performance obligation of providing operating and maintenance services over time as services are rendered; as a result, the Company employs the invoice practical expedient and recognizes revenue in the amount that it has the right to invoice. Contract terms are generally short-term and, as a result, no separate financing component is recognized for its collections from customers, which generally require payment within 30 days of billing.

Other non-regulated revenue primarily relates to services for the design and installation of water mains and other water infrastructure for customers outside the regulated service areas and insurance program administration.

Lease revenue is not considered revenue from contracts with customers and is recognized following operating lease standards. The Company is the lessor in operating lease agreements with telecommunications companies under which cellular phone antennas are placed on the Company's property.

Allowance for credit losses

The Company measures expected credit losses for Customer Receivables, Other Receivables, and Unbilled Revenue on an aggregated level. These receivables are generally trade receivables due in one year or less or expected to be billed and collected in one year or less. The expected credit losses for Other Receivables is inconsequential. Although the Company has residential, business, industrial, public authorities, and other customers, the risk characteristics of each of these customer classes is similar as the Company has determined that the differences in the customer write-off behavior among its customer classes is inconsequential. The overall risks related to the Company’s receivables is low as water and wastewater services are seen as essential services. The estimate for the allowance for credit losses is based off of a historical loss ratio that is adjusted for current conditions and reasonable and supportable forecasts. For the first six months of 2020, the estimate includes adjustments made for the effects of the COVID-19 pandemic. As the states in which the Company operates have issued ‘shelter-in-place” and social distancing ordinances, the Company is expecting segments of its customer base to continue to experience employment layoffs and business closures that negatively impact their ability to pay utility bills. The Company has also ceased all shutoffs for nonpayment during the pandemic.

10

The following table presents the activity in the allowance for credit losses for the period ended June 30, 2020:

	As of June 30, 2020
Allowance for credit losses	Customer Receivables		Unbilled Revenue
Beginning balance	374		397
Provision for credit loss expense	875		727
Write-offs	(509)		(511)
Recoveries	135		112
Total ending allowance balance	$	875	$	725

Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown on the Condensed Consolidated Statements of Cash Flows:

	June 30, 2020		December 31, 2019
Cash and cash equivalents	114,388		42,653
Restricted cash (included in "taxes, prepaid expenses and other assets")	513		645
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows	$	114,901	$	43,298

Adoption of New Accounting Standards

In June of 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changed the impairment model for certain financial assets that have a contractual right to receive cash, including trade and loan receivables. The new model required recognition based upon an estimation of expected credit losses rather than recognition of losses when it is probable that they have been incurred. ASU 2016-13 was effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted the standard utilizing the modified retrospective method for its trade receivables and unbilled revenue on January 1, 2020. Based on the composition of the Company’s trade receivables and unbilled revenue, and expected future losses, the adoption of ASU 2016-13 did not have a material impact on its consolidated financial statements.

In January of 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminated the second step of the goodwill impairment test that required a hypothetical purchase price allocation to measure goodwill impairment. Under the new guidance, a goodwill impairment loss will be measured at the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 was effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted for any impairment test performed on testing dates after January 1, 2017. The Company adopted the standard on January 1, 2020 and the adoption of the standard did not have a material impact on its consolidated financial statements.

In August of 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure for Fair Value Measurement, which modified the disclosure requirements on fair value measurements. The modifications in this update eliminated, amended, and added disclosure requirements for fair value measurements. ASU 2018-13 was effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company adopted the standard in part prospectively and in part retrospectively, in accordance with the requirements of ASU 2018-13, on January 1, 2020. Since the Company does not have level 3 fair value measurements or transfers between level 1 and level 2 fair value measurements, the adoption of the standard did not have a material impact on its footnote disclosures.

11

Note 3. Stock-based Compensation

Equity Incentive Plan

The following table lists the number of annual Restricted Stock Awards (RSAs) granted and canceled during the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30		Six Months Ended June 30
	2020	2019	2020	2019
RSAs granted	—	—	39,915	36,183
RSAs canceled	2,151	2,544	7,185	10,878

During the first six months of 2020 and 2019, the RSAs granted were valued at $51.41 and $52.83 per share, respectively, based upon the fair value of the Company’s common stock on the date of grant. RSAs granted to officers vest over 36 months with the first year cliff vesting. RSAs granted to directors generally cliff vest at the end of 12 months.

The following table lists the number of performance-based Restricted Stock Unit Awards (RSUs) granted, issued, and canceled during the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30		Six Months Ended June 30
	2020	2019	2020	2019
RSUs granted	—	—	32,720	26,473
RSUs issued	—	—	41,731	62,726
RSUs canceled	—	—	22,936	31,177

Each RSU award reflects a target number of shares that may be issued to the award recipient. The 2020 and 2019 RSUs granted may be issued upon completion of the three-year performance period and are recognized as expense ratably over the period using a fair value of $51.41 per share and $52.83 per share, respectively, and an estimate of RSUs earned during the period.

The Company has recorded compensation costs for the RSAs and RSUs in administrative and general operating expenses in the amount of $0.5 million and $1.2 million for the three months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020 and 2019, the Company has recorded compensation costs for the RSAs and RSUs in the amount of $1.3 million and $3.9 million, respectively.

Note 4. Equity

The Company sold 677,318 shares of common stock through its at-the-market equity program and raised proceeds of $31.1 million net of $0.3 million in commissions paid under the equity distribution agreement during the three months ended June 30, 2020. During the six months ended June 30, 2020, the Company sold 793,152 shares of common stock through its at-the-market equity program and raised proceeds of $37.1 million net of $0.4 million in commissions paid under the equity distribution agreement.

12

The Company’s changes in total common stockholders’ equity for the six months ended June 30, 2020 and 2019 were as follows:

	Six months ended June 30, 2020
	Common Stock			Additional Paid-in Capital		Retained Earnings		Total Stockholders' Equity
	Shares	Amount
	(In thousands)
Balance at January 1, 2020	48,532	$	485	$	362,275	$	417,146	$	779,906
Net loss						(20,307)		(20,307)
Issuance of common stock	210	2		7,227				7,229
Repurchase of common stock	(28)	—		(1,373)				(1,373)
Dividends paid on common stock ($0.2125 per share)						(10,315)		(10,315)
Balance at March 31, 2020	48,714	487		368,129		386,524		755,140
Net income						5,281		5,281
Issuance of common stock	686	7		32,056				32,063
Repurchase of common stock	(2)	—		(105)				(105)
Dividends paid on common stock ($0.2125 per share)						(10,356)		(10,356)
Balance at June 30, 2020	49,398	494		400,080		381,449		782,023

	Six months ended June 30, 2019
	Common Stock			Additional Paid-in Capital		Retained Earnings		Total Stockholders' Equity
	Shares	Amount
	(In thousands)
Balance at January 1, 2019	48,065	$	481	$	337,623	$	392,053	$	730,157
Net loss						(7,640)		(7,640)
Issuance of common stock	109	—		3,179				3,179
Repurchase of common stock	(40)	—		(2,074)				(2,074)
Dividends paid on common stock ($0.1975 per share)						(9,493)		(9,493)
Balance at March 31, 2019	48,134	481		338,728		374,920		714,129
Net income						16,996		16,996
Issuance of common stock	8	—		1,675				1,675
Repurchase of common stock	(2)	—		(129)				(129)
Dividends paid on common stock ($0.1975 per share)						(9,507)		(9,507)
Balance at June 30, 2019	48,140	481		340,274		382,409		723,164

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Note 5. Earnings (Loss) Per Share

The computations of basic and diluted earnings (loss) per share are noted in the table below. Basic earnings (loss) per share are computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. RSAs are included in the weighted average common shares outstanding because the shares have all the same voting and dividend rights as issued and unrestricted common stock. RSUs are not included in diluted shares for financial reporting until authorized by the Organization & Compensation Committee of the Board of Directors.

	Three Months Ended June 30
	2020		2019
	(In thousands, except per share data)
Net income available to common stockholders	$	5,281	$	16,996
Weighted average common shares outstanding, basic	48,936		48,136
Weighted average common shares outstanding, dilutive	48,936		48,136
Earnings per share - basic	$	0.11	$	0.35
Earnings per share - diluted	$	0.11	$	0.35

	Six Months Ended June 30
	2020		2019
	(In thousands, except per share data)
Net (loss) income available to common stockholders	$	(15,026)	$	9,356
Weighted average common shares outstanding, basic	48,759		48,111
Weighted average common shares outstanding, dilutive	48,759		48,111
(Loss) earnings per share - basic	$	(0.31)	$	0.19
(Loss) earnings per share - diluted	$	(0.31)	$	0.19

Note 6. Pension Plan and Other Postretirement Benefits

The Company provides a qualified, defined-benefit, non-contributory pension plan for substantially all employees. The Company makes annual contributions to fund the amounts accrued for in the qualified pension plan. The Company also maintains an unfunded, non-qualified, supplemental executive retirement plan. The costs of the plans are charged to expense or are capitalized in utility plant as appropriate.

The Company offers medical, dental, vision, and life insurance benefits for retirees and their spouses and dependents. Participants are required to pay a premium, which offsets a portion of the cost.

Cash contributions made by the Company to the pension plans were $16.8 million and $6.3 million for the six months ended June 30, 2020 and 2019, respectively. Cash contributions made by the Company to the other postretirement benefit plans were $3.9 million and $3.4 million for the six months ended June 30, 2020 and 2019, respectively. The total 2020 estimated cash contribution to the pension plans and other postretirement benefits plans are expected to be approximately $38.0 million and $7.5 million, respectively.

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The following tables list components of net periodic benefit costs for the pension plans and other postretirement benefits. The data listed under “pension plan” includes the qualified pension plan and the non-qualified supplemental executive retirement plan. The data listed under “other benefits” is for all other postretirement benefits.

	Three Months Ended June 30
	Pension Plan				Other Benefits
	2020		2019		2020		2019
Service cost	$	8,811	$	6,565	$	2,106	$	1,762
Interest cost	6,433		6,642		1,210		1,337
Expected return on plan assets	(8,265)		(7,567)		(1,811)		(1,435)
Amortization of prior service cost	1,057		1,262		49		49
Recognized net actuarial loss	3,196		1,312		14		104
Net periodic benefit cost	$	11,232	$	8,214	$	1,568	$	1,817

	Six Months Ended June 30
	Pension Plan				Other Benefits
	2020		2019		2020		2019
Service cost	$	17,622	$	13,129	$	4,212	$	3,524
Interest cost	12,866		13,284		2,420		2,674
Expected return on plan assets	(16,530)		(15,133)		(3,622)		(2,871)
Amortization of prior service cost	2,114		2,524		98		99
Recognized net actuarial loss	6,392