Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 2020

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Statements

On November 17, 2010, Cal Water issued $100.0 million aggregate principal amount of 5.500% First Mortgage Bonds due 2040, all of which is fully and unconditionally guaranteed by the Company. As a result of this guarantee arrangement, 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, 2020 and December 31, 2019, the Condensed Consolidating Statements of (Loss) Income for the three and six months ended June 30, 2020 and 2019, and the Condensed Consolidating Statements of Cash Flows for the six months ended June 30, 2020 and 2019 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. No other subsidiary of the Company guarantees the securities.

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING BALANCE SHEET

As of June 30, 2020

(In thousands)


	Parent Company		Cal Water		All Other Subsidiaries		Consolidating Adjustments		Consolidated
ASSETS
Utility plant:
Utility plant	$	1,318	$	3,478,007	$	280,115	$	(7,197)	$	3,752,243
Less accumulated depreciation and amortization	(1,154)		(1,127,493)		(87,999)		2,219		(1,214,427)
Net utility plant	164		2,350,514		192,116		(4,978)		2,537,816
Current assets:
Cash and cash equivalents	19,229		87,158		8,001		—		114,388
Receivables and unbilled revenue, net	—		116,442		6,587		—		123,029
Receivables from affiliates	23,391		831		143		(24,365)		—
Other current assets	453		26,448		2,571		—		29,472
Total current assets	43,073		230,879		17,302		(24,365)		266,889
Other assets:
Regulatory assets	—		436,197		4,789		—		440,986
Investments in affiliates	811,993		—		—		(811,993)		—
Long-term affiliate notes receivable	33,160		—		—		(33,160)		—
Other assets	422		79,519		34,521		(220)		114,242
Total other assets	845,575		515,716		39,310		(845,373)		555,228
TOTAL ASSETS	$	888,812	$	3,097,109	$	248,728	$	(874,716)	$	3,359,933
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders’ equity	$	782,023	$	702,210	$	114,972	$	(817,182)	$	782,023
Affiliate long-term debt	—		—		33,160		(33,160)		—
Long-term debt, net	—		784,845		412		—		785,257
Total capitalization	782,023		1,487,055		148,544		(850,342)		1,567,280
Current liabilities:
Current maturities of long-term debt, net	—		21,753		119		—		21,872
Short-term borrowings	105,100		270,000		—		—		375,100
Payables to affiliates	—		409		23,956		(24,365)		—
Accounts payable	—		122,926		5,290		—		128,216
Accrued expenses and other liabilities	90		48,029		4,245		—		52,364
Total current liabilities	105,190		463,117		33,610		(24,365)		577,552
Deferred income taxes	1,599		215,464		6,901		(9)		223,955
Pension and postretirement benefits other than pensions	—		261,119		—		—		261,119
Regulatory liabilities and other	—		264,351		5,826		—		270,177
Advances for construction	—		194,542		514		—		195,056
Contributions in aid of construction	—		211,461		53,333		—		264,794
TOTAL CAPITALIZATION AND LIABILITIES	$	888,812	$	3,097,109	$	248,728	$	(874,716)	$	3,359,933

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 31, 2019

(In thousands)


	Parent Company		Cal Water		All Other Subsidiaries		Consolidating Adjustments		Consolidated
ASSETS
Utility plant:
Utility plant	$	1,318	$	3,332,331	$	224,033	$	(7,197)	$	3,550,485
Less accumulated depreciation and amortization	(1,107)		(1,079,627)		(65,561)		2,180		(1,144,115)
Net utility plant	211		2,252,704		158,472		(5,017)		2,406,370
Current assets:
Cash and cash equivalents	3,096		29,098		10,459		—		42,653
Receivables and unbilled revenue, net	—		114,999		4,350		—		119,349
Receivables from affiliates	25,803		3,621		209		(29,633)		—
Other current assets	90		20,615		2,005		—		22,710
Total current assets	28,989		168,333		17,023		(29,633)		184,712
Other assets:
Regulatory assets	—		428,639		4,683		—		433,322
Investments in affiliates	777,170		—		—		(777,170)		—
Long-term affiliate notes receivable	30,060		—		—		(30,060)		—
Other assets	409		81,591		5,125		(221)		86,904
Total other assets	807,639		510,230		9,808		(807,451)		520,226
TOTAL ASSETS	$	836,839	$	2,931,267	$	185,303	$	(842,101)	$	3,111,308
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders’ equity	$	779,906	$	700,784	81,604		$	(782,388)	$	779,906
Affiliate long-term debt	—		—		30,060		(30,060)		—
Long-term debt, net	—		786,310		444		—		786,754
Total capitalization	779,906		1,487,094		112,108		(812,448)		1,566,660
Current liabilities:
Current maturities of long-term debt, net	—		21,732		136		—		21,868
Short-term borrowings	55,100		120,000		—		—		175,100
Payables to affiliates	—		6,115		23,518		(29,633)		—
Accounts payable	—		104,419		4,044		—		108,463
Accrued expenses and other liabilities	313		50,569		2,408		—		53,290
Total current liabilities	55,413		302,835		30,106		(29,633)		358,721
Deferred income taxes	1,520		217,847		3,243		(20)		222,590
Pension and postretirement benefits other than pensions	—		258,907		—		—		258,907
Regulatory and other liabilities	—		264,434		7,397		—		271,831
Advances for construction	—		190,568		494		—		191,062
Contributions in aid of construction	—		209,582		31,955		—		241,537
TOTAL CAPITALIZATION AND LIABILITIES	$	836,839	$	2,931,267	$	185,303	$	(842,101)	$	3,111,308

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2020

(In thousands)


	Parent Company		Cal Water		All Other Subsidiaries		Consolidating Adjustments		Consolidated
Operating activities:
Net (loss) income	$	(15,026)	$	(16,235)	$	976	$	15,259	$	(15,026)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Equity loss of subsidiaries	15,230		—		—		(15,230)		—
Dividends received from affiliates	20,671		—		—		(20,671)		—
Depreciation and amortization	47		47,053		3,190		(39)		50,251
Changes in value of life insurance contracts	—		872		—		—		872
Allowance for equity funds used during construction	—		(3,319)		—		—		(3,319)
Changes in operating assets and liabilities	(593)		(10,083)		137		—		(10,539)
Other changes in noncurrent assets and liabilities	1,361		(4,089)		483		10		(2,235)
Net cash provided by operating activities	21,690		14,199		4,786		(20,671)		20,004
Investing activities:
Utility plant expenditures	—		(127,959)		(5,578)		—		(133,537)
Business acquisition, net of cash acquired	—		—		(37,655)		—		(37,655)
Investment in affiliates	(70,724)		—		—		70,724		—
Changes in affiliate advances	5,783		2,790		4		(8,577)		—
Issuance of affiliate short-term borrowings	(3,500)		—		—		3,500		—
Issuance of affiliate long-term borrowings	(4,076)		—		—		4,076		—
Reduction of affiliates long-term debt	1,104		—		—		(1,104)		—
Net cash used in investing activities	(71,413)		(125,169)		(43,229)		68,619		(171,192)
Financing Activities:
Short-term borrowings	50,000		220,000		—		—		270,000
Repayment of short-term borrowings	—		(70,000)		—		—		(70,000)
Investment from affiliates	—		37,119		33,605		(70,724)		—
Changes in affiliate advances	—		(5,706)		(2,871)		8,577		—
Proceeds from affiliate short-term borrowings	—		—		3,500		(3,500)		—
Proceeds from affiliate long-term borrowings	—		—		4,076		(4,076)		—
Repayment of affiliates long-term borrowings	—		—		(1,104)		1,104		—
Repayment of long-term debt	—		(1,244)		(49)		—		(1,293)
Advances and contributions in aid of construction	—		12,493		76		—		12,569
Refunds of advances for construction	—		(4,340)		(1)		—		(4,341)
Repurchase of common stock	(1,479)		—		—		—		(1,479)
Issuance of common stock	38,006		—		—		—		38,006
Dividends paid to non-affiliates	(20,671)		—		—		—		(20,671)
Dividends paid to affiliates	—		(19,450)		(1,221)		20,671		—
Net cash provided by financing activities	65,856		168,872		36,011		(47,948)		222,791
Change in cash, cash equivalents, and restricted cash	16,133		57,902		(2,432)		—		71,603
Cash, cash equivalents, and restricted cash at beginning of period	3,096		29,679		10,523		—		43,298
Cash, cash equivalents, and restricted cash at end of period	$	19,229	$	87,581	$	8,091	—		$	114,901

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2019

(In thousands)


	Parent Company		Cal Water		All Other Subsidiaries		Consolidating Adjustments		Consolidated
Operating activities:
Net income	$	9,356	$	7,374	$	1,786	$	(9,160)	$	9,356
Adjustments to reconcile net income to net cash provided by operating activities:
Equity earnings of subsidiaries	(9,189)		—		—		9,189		—
Dividends received from affiliates	19,000		—		—		(19,000)		—
Depreciation and amortization	47		42,717		3,021		(41)		45,744
Changes in value of life insurance contracts	—		(3,147)		—		—		(3,147)
Allowance for equity funds used during construction	—		(3,219)		—		—		(3,219)
Changes in operating assets and liabilities	63		(16,581)		(319)		—		(16,837)
Other changes in noncurrent assets and liabilities	3,763		6,289		1,430		12		11,494
Net cash provided by operating activities	23,040		33,433		5,918		(19,000)		43,391
Investing activities:
Utility plant expenditures	—		(116,384)		(5,552)		—		(121,936)
Changes in affiliate advances	(1,453)		2,856		(165)		(1,238)		—
Issuance of affiliate short-term borrowings	(4,300)		—		—		4,300		—
Reduction of affiliates long-term debt	848		—		—		(848)		—
Net cash used in investing activities	(4,905)		(113,528)		(5,717)		2,214		(121,936)
Financing Activities:
Short-term borrowings	—		190,000		—		—		190,000
Repayment of short-term borrowings	—		(90,000)		—		—		(90,000)
Changes in affiliate advances	(17)		2,430		(3,651)		1,238		—
Proceeds from affiliate short-term borrowings	—		—		4,300		(4,300)		—
Repayment of affiliates long-term borrowings	—		—		(848)		848		—
Issuance of long-term debt, net of expenses	—		398,442		—		—		398,442
Repayment of long-term debt	—		(401,256)		(102)		—		(401,358)
Advances and contributions in aid for construction	—		12,679		76		—		12,755
Refunds of advances for construction	—		(3,554)		(1)		—		(3,555)
Repurchase of common stock	(2,203)		—		—		—		(2,203)
Issuance of common stock	829		—		—		—		829
Dividends paid to non-affiliates	(19,000)		—		—		—		(19,000)
Dividends paid to affiliates	—		(18,348)		(652)		19,000		—
Net cash (used in) provided by financing activities	(20,391)		90,393		(878)		16,786		85,910
Change in cash, cash equivalents, and restricted cash	(2,256)		10,298		(677)		—		7,365
Cash, cash equivalents, and restricted cash at beginning of period	3,779		34,238		9,698		—		47,715
Cash, cash equivalents, and restricted cash at end of period	$	1,523	$	44,536	$	9,021	—		$	55,080