Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2013

Condensed Consolidating Financial Statements

Schedule of Condensed Consolidating Balance Sheet

As of September 30, 2013

(In thousands)

	ParentCompany			Cal Water			All OtherSubsidiaries			ConsolidatingAdjustments			Consolidated
ASSETS
Utility plant:
Utility plant	$	1,246		$	2,013,475		$	183,049		$	(7,197	)	$	2,190,573
Less accumulated depreciation and amortization	(150		)	(650,679		)	(36,109		)	1,587			(685,351		)
Net utility plant	1,096			1,362,796			146,940			(5,610		)	1,505,222
Current assets:
Cash and cash equivalents	4,272			42,545			2,030			—			48,847
Receivables and unbilled revenue, net	—			100,810			4,833			—			105,643
Receivables from affiliates	28,964			5,539			181			(34,684		)	—
Other current assets	73			15,038			951			—			16,062
Total current assets	33,309			163,932			7,995			(34,684		)	170,552
Other assets:
Regulatory assets	—			352,232			2,647			—			354,879
Investments in affiliates	546,123			—			—			(546,123		)	—
Long-term affiliate notes receivable	30,252			—			—			(30,252		)	—
Other assets	1,196			44,610			7,179			(205		)	52,780
Total other assets	577,571			396,842			9,826			(576,580		)	407,659
	$	611,976		$	1,923,570		$	164,761		$	(616,874	)	$	2,083,433
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders’ equity	$	600,254		$	500,359		$	51,271		$	(551,630	)	$	600,254
Affiliate long-term debt	—			—			30,252			(30,252		)	—
Long-term debt, less current maturities	—			428,878			1,349			—			430,227
Total capitalization	600,254			929,237			82,872			(581,882		)	1,030,481
Current liabilities:
Current maturities of long-term debt	—			46,129			1,884			—			48,013
Short-term borrowings	11,515			—			—			—			11,515
Payables to affiliates	24			180			34,480			(34,684		)	—
Accounts payable	—			57,434			2,980			—			60,414
Accrued expenses and other liabilities	762			75,168			1,059			82			77,071
Total current liabilities	12,301			178,911			40,403			(34,602		)	197,013
Unamortized investment tax credits	—			2,180			—			—			2,180
Deferred income taxes, net	(579		)	164,716			4,344			(390		)	168,091
Pension and postretirement benefits other than pensions	—			247,335			—			—			247,335
Regulatory and other liabilities	—			82,416			8,769			—			91,185
Advances for construction	—			184,110			769			—			184,879
Contributions in aid of construction	—			134,665			27,604			—			162,269
	$	611,976		$	1,923,570		$	164,761		$	(616,874	)	$	2,083,433

As of December 31, 2012

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
ASSETS
Utility plant:
Utility plant	$	606		$	1,927,190		$	175,764		$	(7,197	)	$	2,096,363
Less accumulated depreciation and amortization	(108		)	(607,992		)	(32,710		)	1,503			(639,307		)
Net utility plant	498			1,319,198			143,054			(5,694		)	1,457,056
Current assets:
Cash and cash equivalents	1,470			34,609			2,711			—			38,790
Receivables, net	—			87,482			3,833			—			91,315
Receivables from affiliates	19,367			3,195			1,152			(23,714		)	—
Other current assets	—			15,535			924			—			16,459
Total current assets	20,837			140,821			8,620			(23,714		)	146,564
Other assets:
Regulatory assets	—			341,877			2,542			—			344,419
Investments in affiliates	492,188			—			—			(492,188		)	—
Long-term affiliate notes receivable	31,218			7,781			—			(38,999		)	—
Other assets	1,023			40,005			7,062			(205		)	47,885
Total other assets	524,429			389,663			9,604			(531,392		)	392,304
	$	545,764		$	1,849,682		$	161,278		$	(560,800	)	$	1,995,924
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders’ equity	$	473,712		$	442,923		$	54,774		$	(497,697	)	$	473,712
Affiliate long-term debt	7,781			—			31,218			(38,999		)	—
Long-term debt, less current maturities	—			431,433			3,034			—			434,467
Total capitalization	481,493			874,356			89,026			(536,696		)	908,179
Current liabilities:
Current maturities of long-term debt	—			46,104			679			—			46,783
Short-term borrowings	64,475			25,000			—			—			89,475
Payables to affiliates	77			1,152			22,485			(23,714		)	—
Accounts payable	—			41,352			5,847			—			47,199
Accrued expenses and other liabilities	298			58,293			1,019			—			59,610
Total current liabilities	64,850			171,901			30,030			(23,714		)	243,067
Unamortized investment tax credits	—			2,180			—			—			2,180
Deferred income taxes, net	(579		)	155,481			4,334			(390		)	158,846
Pension and postretirement benefits other than pensions	—			244,901			—			—			244,901
Regulatory and other liabilities	—			83,942			8,651			—			92,593
Advances for construction	—			186,753			831			—			187,584
Contributions in aid of construction	—			130,168			28,406			—			158,574
	$	545,764		$	1,849,682		$	161,278		$	(560,800	)	$	1,995,924

Schedule of Condensed Consolidating Statement of Income

For the three months ended September 30, 2013

(In thousands)

	ParentCompany			Cal Water			All OtherSubsidiaries			ConsolidatingAdjustments			Consolidated
Operating revenue	$	—		$	174,699		$	9,705		$	—		$	184,404
Operating expenses:
Operations:
Water production costs	—			67,981			2,633			—			70,614
Administrative and general	—			22,354			2,316			—			24,670
Other operations	—			15,883			1,900			(126		)	17,657
Maintenance	—			4,382			193			—			4,575
Depreciation and amortization	14			13,714			805			(28		)	14,505
Income tax (benefit) expense	(17		)	10,721			107			354			11,165
Property and other taxes	—			4,680			734			—			5,414
Total operating (income) expenses	(3		)	139,715			8,688			200			148,600
Net operating income (loss)	3			34,984			1,017			(200		)	35,804
Other Income and Expenses:
Non-regulated revenue	572			3,385			475			(783		)	3,649
Non-regulated expense, net	—			(2,515		)	(310		)	—			(2,825		)
Income tax (expense) benefit on other income and expense	(232		)	(355		)	(85		)	342			(330		)
Net other income (expense)	340			515			80			(441		)	494
Interest:
Interest expense	30			7,608			707			(658		)	7,687
Less: capitalized interest	—			(495		)	(45		)	—			(540		)
Net interest expense	30			7,113			662			(658		)	7,147
Equity earnings of subsidiaries	28,838			—			—			(28,838		)	—
Net income (loss)	$	29,151		$	28,386		$	435		$	(28,821	)	$	29,151

For the nine months ended September 30, 2013

(In thousands)

	ParentCompany			Cal Water			All OtherSubsidiaries			ConsolidatingAdjustments			Consolidated
Operating revenue	$	—		$	425,860		$	24,543		$	—		$	450,403
Operating expenses:
Operations:
Water production costs	—			164,524			7,432			—			171,956
Administrative and general	—			65,423			7,683			—			73,106
Other operations	—			45,490			5,220			(378		)	50,332
Maintenance	—			12,376			520			—			12,896
Depreciation and amortization	42			41,168			2,499			(84		)	43,625
Income tax (benefit) expense	(246		)	19,807			(1,064		)	1,070			19,567
Property and other taxes	—			14,549			2,015			—			16,564
Total operating (income) expenses	(204		)	363,337			24,305			608			388,046
Net operating income (loss)	204			62,523			238			(608		)	62,357
Other Income and Expenses:
Non-regulated revenue	1,739			9,572			1,415			(2,340		)	10,386
Non-regulated expense, net	—			(7,308		)	(1,174		)	—			(8,482		)
Income tax (expense) on other income and expense	(708		)	(923		)	(169		)	1,035			(765		)
Net other income (expense)	1,031			1,341			72			(1,305		)	1,139
Interest:
Interest expense	563			22,966			1,961			(1,963		)	23,527
Less: capitalized interest	—			(1,279		)	(340		)	—			(1,619		)
Net interest expense	563			21,687			1,621			(1,963		)	21,908
Equity earnings of subsidiaries	40,916			—			—			(40,916		)	—
Net income (loss)	$	41,588		$	42,177		$	(1,311	)	$	(40,866	)	$	41,588

For the three months ended September 30, 2012

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	168,680		$	9,455		$	—		$	178,135
Operating expenses:
Operations:
Water production costs	—			63,647			2,842			—			66,489
Administrative and general	—			21,639			2,286			—			23,925
Other operations	—			16,177			1,607			(126		)	17,658
Maintenance	—			4,238			139			—			4,377
Depreciation and amortization	—			13,051			699			(30		)	13,720
Income tax (benefit) expense	(150		)	9,831			372			334			10,387
Property and other taxes	—			4,552			666			—			5,218
Total operating expenses	(150		)	133,135			8,611			178			141,774
Net operating income	150			35,545			844			(178		)	36,361
Other Income and Expenses:
Non-regulated revenue	474			3,372			617			(707		)	3,756
Non-regulated expense, net	—			(2,217		)	(483		)	3			(2,697		)
Income tax (expense) on other income and expense	(193		)	(469		)	(82		)	322			(422		)
Net other income	281			686			52			(382		)	637
Interest:
Interest expense	368			7,702			535			(581		)	8,024
Less: capitalized interest	—			(505		)	(293		)	—			(798		)
Net interest expense	368			7,197			242			(581		)	7,226
Equity earnings of subsidiaries	29,709			—			—			(29,709		)	—
Net income (loss)	$	29,772		$	29,034		$	654		$	(29,688	)	$	29,772

For the nine months ended September 30, 2012

(In thousands)

	Parent Company			Cal Water			All Other Subsidiaries			Consolidating Adjustments			Consolidated
Operating revenue	$	—		$	413,796		$	24,640		$	—		$	438,436
Operating expenses:
Operations:
Water production costs	—			150,396			7,723			—			158,119
Administrative and general	—			62,043			7,067			—			69,110
Other operations	—			54,584			5,008			(379		)	59,213
Maintenance	—			14,247			495			—			14,742
Depreciation and amortization	—			39,393			2,079			(89		)	41,383
Income tax (benefit) expense	(416		)	19,094			(198		)	997			19,477
Property and other taxes	—			11,819			1,983			—			13,802
Total operating expenses	(416		)	351,576			24,157			529			375,846
Net operating income (loss)	416			62,220			483			(529		)	62,590
Other Income and Expenses:
Non-regulated revenue	1,429			10,867			1,805			(2,158		)	11,943
Non-regulated expense, net	—			(7,072		)	(1,422		)	3			(8,491		)
Income tax (expense) on other income and expense	(582		)	(1,545		)	(216		)	960			(1,383		)
Net other income	847			2,250			167			(1,195		)	2,069
Interest:
Interest expense	1,022			22,648			1,594			(1,780		)	23,484
Less: capitalized interest	—			(1,785		)	(862		)	—			(2,647		)
Net interest expense	1,022			20,863			732			(1,780		)	20,837
Equity earnings of subsidiaries	43,581			—			—			(43,581		)	—
Net income (loss)	$	43,822		$	43,607		$	(82	)	$	(43,525	)	$	43,822

Schedule of Condensed Consolidating Statement of Cash Flows

For the nine months ended September 30, 2013

(In thousands)

	ParentCompany			Cal Water			All OtherSubsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income (loss)	$	41,588		$	42,177		$	(1,311	)	$	(40,866	)	$	41,588
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity earnings of subsidiaries	(40,916		)	—			—			40,916			—
Dividends received from affiliates	21,981			—			—			(21,981		)	—
Depreciation and amortization	42			42,509			2,600			(84		)	45,067
Change in value of life insurance contracts	—			(1,147		)	—			—			(1,147		)
Other changes in noncurrent assets and liabilities	1,164			12,415			(29		)	(49		)	13,501
Changes in operating assets and liabilities	390			4,220			(1,803		)	83			2,890
Net cash provided by (used in) operating activities	24,249			100,174			(543		)	(21,981		)	101,899
Investing activities:
Utility plant expenditures	(640		)	(84,688		)	(9,454		)	—			(94,782		)
Investment in affiliates	(35,000		)	—			—			35,000			—
Net changes in affiliate advances	(9,583		)	(2,359		)	1,141			10,801			—
Repayment of affiliates long-term debt	913			7,797			—			(8,710		)	—
Purchase of life insurance	—			(3,204		)	—			—			(3,204		)
Restricted cash and other changes, net	—			1,148			—			—			1,148
Net cash provided by (used in) investing activities	(44,310		)	(81,306		)	(8,313		)	37,091			(96,838		)
Financing Activities:
Short-term borrowings	15,315			20,000			—			—			35,315
Repayment of short-term borrowings	(68,275		)	(45,000		)	—			—			(113,275		)
Proceeds from long-term debt	—			—			48			—			48
Repayment of long-term debt	—			(2,531		)	(527		)	—			(3,058		)
Net changes in affiliate advances	—			(972		)	11,773			(10,801		)	—
Repayment of affiliates long-term debt	(7,796		)	—			(914		)	8,710			—
Advances and contributions in aid for construction	—			7,545			32			—			7,577
Refunds of advances for construction	—			(5,184		)	(46		)	—			(5,230		)
Dividends paid to non-affiliates	(21,981		)	—			—			—			(21,981		)
Dividends paid to affiliates	—			(19,790		)	(2,191		)	21,981			—
Issuance of common stock	105,600			—			—			—			105,600
Investment from affiliates	—			35,000			—			(35,000		)	—
Net cash (used in) provided by financing activities	22,863			(10,932		)	8,175			(15,110		)	4,996
Change in cash and cash equivalents	2,802			7,936			(681		)	—			10,057
Cash and cash equivalents at beginning of period	1,470			34,609			2,711			—			38,790
Cash and cash equivalents at end of period	$	4,272		$	42,545		$	2,030		$	—		$	48,847

For the nine months ended September 30, 2012

(In thousands)

	ParentCompany			Cal Water			All OtherSubsidiaries			ConsolidatingAdjustments			Consolidated
Operating activities:
Net income (loss)	$	43,822		$	43,607		$	(82	)	$	(43,525	)	$	43,822
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity earnings of subsidiaries	(43,581		)	—			—			43,581			—
Dividends received from affiliates	19,785			—			—			(19,785		)	—
Depreciation and amortization	—			40,604			2,207			(89		)	42,722
Change in value of life insurance contracts	—			(2,244		)	—			—			(2,244		)
Other changes in noncurrent assets and liabilities	1,180			30,928			(3,815		)	118			28,411
Changes in operating assets and liabilities	(247		)	(10,557		)	(2,417		)	(85		)	(13,306		)
Net cash provided by (used in) operating activities	20,959			102,338			(4,107		)	(19,785		)	99,405
Investing activities:
Utility plant expenditures	—			(88,593		)	(11,007		)	—			(99,600		)
Investment in affiliates	—			—			—			—			—
Net changes in affiliate advances	(13,975		)	2,708			—			11,267			—
Repayment of affiliates long-term debt	411			36			—			(447		)	—
Purchase of life insurance	—			(3,199		)	—			—			(3,199		)
Restricted cash and other changes, net	—			1,553			—			—			1,553
Net cash provided by (used in) investing activities	(13,564		)	(87,495		)	(11,007		)	10,820			(101,246		)
Financing Activities:
Short-term borrowings	14,535			51,030			—			—			65,565
Repayment of short-term borrowings	(1,000		)	(51,030		)	—			—			(52,030		)
Proceeds from long-term debt	—			—			123			—			123
Repayment of long-term debt	—			(1,573		)	(550		)	—			(2,123		)
Net changes in affiliate advances	—			524			10,743			(11,267		)	—
Repayment of affiliates long-term debt	(36		)	—			(411		)	447			—
Advances and contributions in aid for construction	—			5,416			75			—			5,491
Refunds of advances for construction	—			(5,575		)	(57		)	—			(5,632		)
Dividends paid to non-affiliates	(19,785		)	—			—			—			(19,785		)
Dividends paid to affiliates	—			(17,671		)	(2,114		)	19,785			—
Issuance of common stock	—			—			—			—			—
Investment from affiliates	—			—			—			—			—
Net cash (used in) provided by financing activities	(6,286		)	(18,879		)	7,809			8,965			(8,391		)
Change in cash and cash equivalents	1,109			(4,036		)	(7,305		)	—			(10,232		)
Cash and cash equivalents at beginning of period	89			18,475			8,639			—			27,203
Cash and cash equivalents at end of period	$	1,198		$	14,439		$	1,334		$	—		$	16,971