Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 27, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | CALIFORNIA WATER SERVICE GROUP | |
Entity Central Index Key | 1035201 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 47,880,233 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Utility plant: | ||
Utility plant | $2,373,167 | $2,342,471 |
Less accumulated depreciation and amortization | -766,545 | -752,040 |
Net utility plant | 1,606,622 | 1,590,431 |
Current assets: | ||
Cash and cash equivalents | 33,311 | 19,587 |
Receivables: | ||
Customers | 24,327 | 25,803 |
Regulatory balancing accounts | 50,016 | 53,199 |
Other | 13,349 | 14,136 |
Unbilled revenue | 22,599 | 23,740 |
Materials and supplies at weighted average cost | 6,158 | 6,041 |
Taxes, prepaid expenses and other assets | 9,495 | 11,618 |
Total current assets | 159,255 | 154,124 |
Other assets: | ||
Regulatory assets | 401,089 | 390,331 |
Goodwill | 2,615 | 2,615 |
Other assets | 51,164 | 49,850 |
Total other assets | 454,868 | 442,796 |
Total assets | 2,220,745 | 2,187,351 |
Capitalization: | ||
Common stock, $.01 par value; 68,000 shares authorized, 47,880 and 47,806 outstanding in 2015 and 2014, respectively | 479 | 478 |
Additional paid-in capital | 331,029 | 330,558 |
Retained earnings | 289,158 | 295,590 |
Total common stockholders' equity | 620,666 | 626,626 |
Long-term debt, less current maturities | 419,014 | 419,233 |
Total capitalization | 1,039,680 | 1,045,859 |
Current liabilities: | ||
Current maturities of long-term debt | 6,596 | 6,607 |
Short-term borrowings | 109,115 | 79,115 |
Accounts payable | 57,684 | 59,395 |
Regulatory balancing accounts | 5,580 | 6,126 |
Accrued interest | 9,583 | 4,194 |
Accrued expenses and other liabilities | 65,385 | 62,269 |
Total current liabilities | 253,943 | 217,706 |
Unamortized investment tax credits | 2,032 | 2,032 |
Deferred income taxes, net | 214,814 | 214,842 |
Pension and postretirement benefits other than pensions | 277,094 | 270,865 |
Regulatory and other liabilities | 81,499 | 83,279 |
Advances for construction | 181,553 | 182,284 |
Contributions in aid of construction | 170,130 | 170,484 |
Commitments and contingencies (Note 10) | ||
Total capitalization and liabilities | $2,220,745 | $2,187,351 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 68,000 | 68,000 |
Common stock, shares outstanding | 47,880 | 47,806 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Operating revenue | $121,985 | $110,515 |
Operations: | ||
Water production costs | 45,202 | 45,402 |
Administrative and general | 27,695 | 25,141 |
Other operations | 15,843 | 16,376 |
Maintenance | 4,457 | 5,005 |
Depreciation and amortization | 15,319 | 16,053 |
Income tax expense (benefit) | 613 | -3,839 |
Property and other taxes | 5,359 | 5,225 |
Total operating expenses | 114,488 | 109,363 |
Net operating income | 7,497 | 1,152 |
Other income and expenses: | ||
Non-regulated revenue | 3,247 | 4,280 |
Non-regulated expenses, net | -2,243 | -4,119 |
Income tax expense on other income and expenses | -403 | -79 |
Net other income | 601 | 82 |
Interest expense: | ||
Interest expense | 7,069 | 7,075 |
Less: capitalized interest | -546 | -365 |
Net interest expense | 6,523 | 6,710 |
Net income (loss) | $1,575 | ($5,476) |
Net income (loss) per share | ||
Basic | $0.03 | ($0.11) |
Diluted | $0.03 | ($0.11) |
Weighted average shares outstanding | ||
Basic | 47,825 | 47,756 |
Diluted | 47,854 | 47,756 |
Dividends declared per share of common stock (in dollars per share) | $0.17 | $0.16 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities | ||
Net income (loss) | $1,575 | ($5,476) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 15,736 | 16,564 |
Change in value of life insurance contracts | -161 | -158 |
Changes in operating assets and liabilities: | ||
Receivables | 600 | 6,006 |
Accounts payable | -419 | 178 |
Other current assets | -4,604 | -5,065 |
Other current liabilities | 7,627 | 7,458 |
Other changes in noncurrent assets and liabilities | 6,535 | -9,034 |
Net cash provided by operating activities | 26,889 | 10,473 |
Investing activities: | ||
Utility plant expenditures | -35,047 | -24,620 |
Purchase of life insurance | -1,674 | |
Changes in restricted cash and other changes, net | -26 | 418 |
Net cash (used in) investing activities | -35,073 | -25,876 |
Financing activities: | ||
Short-term borrowings | 30,000 | 22,200 |
Repayment of short-term borrowings | -5,000 | |
Issuance of long-term debt | 50 | |
Repayment of long-term debt | -338 | -460 |
Advances and contributions in aid of construction | 1,777 | 2,194 |
Refunds of advances for construction | -1,574 | -1,535 |
Dividends paid | -8,007 | -7,758 |
Net cash provided by financing activities | 21,908 | 9,641 |
Change in cash and cash equivalents | 13,724 | -5,762 |
Cash and cash equivalents at beginning of period | 19,587 | 27,506 |
Cash and cash equivalents at end of period | 33,311 | 21,744 |
Supplemental information | ||
Cash paid for interest (net of amounts capitalized) | 749 | 837 |
Supplemental disclosure of non-cash activities: | ||
Accrued payables for investments in utility plant | 14,374 | 10,690 |
Utility plant contribution by developers | $1,823 | $1,020 |
Organization_and_Operations_an
Organization and Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Organization and Operations and Basis of Presentation | |
Organization and Operations and Basis of Presentation | |
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 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 condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2014, included in its annual report on Form 10-K as filed with the SEC on February 26, 2015. | |
The preparation of the Company’s condensed consolidated unaudited 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 doubtful accounts, 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 condensed consolidated unaudited 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. The results for interim periods are not necessarily indicative of the results for any future period. | |
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. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | |
Note 2. Summary of Significant Accounting Policies | |
Revenue | |
Revenue generally includes monthly cycle customer billings for regulated water and wastewater services at rates authorized by the commissions (plus an estimate for water used between the customer’s last meter reading and the end of the accounting period) and billings to certain non-regulated customers at rates authorized by contract with government agencies. | |
The Company’s regulated water and waste water revenue requirements are authorized by the commissions in the states in which it operates. The revenue requirements are intended to provide the Company an opportunity to recover its operating costs and earn a reasonable return on investments. | |
For metered customers, Cal Water recognizes revenue from rates which are designed and authorized by the California Public Utilities Commission (CPUC). Under the Water Revenue Adjustment Mechanism (WRAM), Cal Water records the adopted level of volumetric revenues, which would include recovery of cost of service and a return on investments, as established by the CPUC for metered accounts (adopted volumetric revenues). In addition to volumetric-based revenues, the revenue requirements approved by the CPUC include service charges, flat rate charges, and other items not subject to the WRAM. The adopted volumetric revenue considers the seasonality of consumption of water based upon historical averages. The variance between adopted volumetric revenues and actual billed volumetric revenues for metered accounts is recorded as a component of revenue with an offsetting entry to a regulatory asset or liability balancing account (tracked individually for each Cal Water district) subject to certain criteria under the accounting for regulated operations being met. The variance amount may be positive or negative and represents amounts that will be billed or refunded to customers in the future. | |
Cost-recovery rates are designed to permit full recovery of certain costs. Cost-recovery rates such as the Modified Cost Balancing Account (MCBA) provides for recovery of adopted expense levels for purchased water, purchased power and pump taxes, as established by the CPUC. In addition, cost-recovery rates include recovery of cost related to water conservation programs and certain other operation expenses adopted by the CPUC. There is no markup for return or profit for cost-recovery expenses and such costs are generally recognized when expenses are incurred. Variances (which include the effects of changes in both rate and volume for the MCBA) between adopted and actual costs are recorded as a component of revenue, as the amount of such variances will be recovered from or refunded to our customers at a later date. The variance between adopted costs and actual costs for metered accounts is recorded as a component of revenue with an offsetting entry to a regulatory asset or liability balancing account (transferred individually for each Cal Water District) subject to certain criteria under the accounting for regulated operations being met. | |
The balances in the WRAM and MCBA assets and liabilities accounts will fluctuate on a monthly basis depending upon the variance between adopted and actual results. The recovery or refund of the WRAM is netted against the MCBA over or under-recovery for the corresponding district and is interest bearing at the current 90 day commercial paper rate. At the end of any calendar year, Cal Water files with the CPUC to refund or collect the balance in the accounts. Most undercollected net WRAM and MCBA receivable balances are collected over 12 or 18 months. Cal Water defers net WRAM and MCBA operating revenues and associated costs whenever the net receivable balances are estimated to be collected more than 24 months after the respective reporting periods in which it was recognized. The deferred net WRAM and MCBA revenues and associated costs were determined using forecasts of rate payer consumption trends in future reporting periods and the timing of when the CPUC will authorize Cal Water’s filings to recover the undercollected balances. Deferred net WRAM and MCBA revenues and associated costs will be recognized as revenues and costs in future periods when collection is within twenty-four months of the respective reporting period. | |
Flat rate customers are billed in advance at the beginning of the service period. The revenue is prorated so that the portion of revenue applicable to the current period is included in that period’s revenue, with the balance recorded as unearned revenue on the balance sheet and recognized as revenue when earned in the subsequent accounting period. The unearned revenue liability was $1.5 million as of March 31, 2015 and $1.5 million as of December 31, 2014. This liability is included in “accrued expenses and other liabilities” on the condensed consolidated balance sheets. | |
Cash and Cash Equivalents | |
Cash equivalents include highly liquid investments with maturities of three months or less. Cash and cash equivalents was $33.3 million and $19.6 million as of March 31, 2015 and December 31, 2014, respectively. Restricted cash of $0.8 million was presented on the condensed consolidated balance sheet as “taxes, prepaid expenses and other assets” as of March 31, 2015 and December 31, 2014. | |
Adoption of New Accounting Standards | |
On May 28, 2014 the Financial Accounting Standards Board (FASB) issued an accounting standards update (ASU) 2014-09, Revenue from Contracts with Customers. This update creates a single, principles based framework for revenue recognition and is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when goods or services are transferred to customers. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements and related disclosures. | |
On April 7, 2015 the FASB issued ASU 2015-03, simplifying the Presentation of Debt Issuance Costs. This update requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability because these costs provide no future economic benefit. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The new accounting standard will be applied on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new accounting standard on its consolidated financial statements and related disclosures. | |
Stockbased_Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2015 | |
Stock-based Compensation | |
Stock-based Compensation | |
Note 3. Stock-based Compensation | |
Equity Incentive Plan | |
During the three months ended March 31, 2015 and 2014, the Company granted annual Restricted Stock Awards (RSAs) of 59,151 and 58,378 shares, respectively, of common stock to officers and directors of the Company and 5,193 shares of RSAs were cancelled during the three months ended March 31, 2015. Employee RSAs granted in 2015 and 2014 vest over 36 months. Director RSAs generally vest at the end of 12 months. During the first three months of 2015 and 2014, the RSAs granted were valued at $24.30 and $23.61 per share, respectively, based upon the fair market value of the Company’s common stock on the date of grant. | |
During the three months ended March 31, 2015 and 2014, the Company granted performance-based Restricted Stock Unit Awards (RSUs) of 37,137 shares and 37,143 shares of common stock, respectively, to officers. Each award reflects a target number of shares that may be issued to the award recipient. The 2015 and 2014 awards may be earned upon the completion of the three-year performance period ending on March 3, 2018 and March 4, 2017, respectively. Whether RSUs are earned at the end of the performance period will be determined based on the achievement of certain performance objectives set by the Board of Director Compensation Committee in connection with the issuance of the RSUs. The performance objectives are based on the Company’s business plan covering the performance period. The performance objectives include achieving the budgeted return on equity, budgeted investment in utility plant, customer service standards, water quality standards, and safety standards. Depending on the results achieved during the three-year performance period, the actual number of shares that a grant recipient receives at the end of the performance period may range from 0% to 200% of the target shares granted, provided that the grantee is continuously employed by the Company through the vesting date. If prior to the vesting date employment is terminated by reason of death, disability or normal retirement, then a pro rata portion of this award will vest. RSUs are not included in diluted shares for financial reporting until authorized by the Board of Director Compensation Committee. The 2015 and 2014 RSUs are recognized as expense ratably over the three year performance period using a fair market value of $24.30 per share and $23.61 per share, respectively, and an estimate of RSUs earned during the performance period. | |
The Company has recorded compensation costs for the RSAs and RSUs in Operating Expense in the amount of $0.6 million and $0.5 million for the three months ended March 31, 2015 and March 31, 2014, respectively. | |
Equity
Equity | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Equity | |||||
Equity | |||||
Note 4. Equity | |||||
The Company’s changes in total common stockholders’ equity for the three months ended March 31, 2015 were as follows: | |||||
Total Common | |||||
Stockholders’ Equity | |||||
Balance at December 31, 2014 | $ | 626,626 | |||
Common stock issued | — | ||||
Share-based compensation expense | 472 | ||||
Common stock dividends declared | (8,007 | ) | |||
Net income | 1,575 | ||||
Balance at March 31, 2015 | $ | 620,666 | |||
Net_Income_Loss_Per_Share_Calc
Net Income (Loss) Per Share Calculations | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Net Income (Loss) Per Share Calculations | ||||||||
Net Income (Loss) Per Share Calculations | ||||||||
Note 5. Net Income (Loss) Per Share Calculations | ||||||||
The computations of basic and diluted net income or loss per weighted average common share are noted below. Basic net income or loss per share is computed by dividing the net income or loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income or loss per share reflects the potential dilution that could occur if securities or other contracts were exercised or converted into common stock. 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. | ||||||||
A total of 65,436 shares of Stock Appreciation Rights (SARs) were vested and outstanding and all were dilutive as of March 31, 2015 and there were 212,920 shares of SARs vested and outstanding and all were anti-dilutive as of March 31, 2014, as shown in the table below. | ||||||||
Three Months Ended March 31 | ||||||||
2015 | 2014 | |||||||
Net income (loss) available to common stockholders | $ | 1,575 | $ | (5,476 | ) | |||
Weighted average common shares outstanding, basic | 47,825 | 47,756 | ||||||
Dilutive SARs (treasury method) | 29 | — | ||||||
Weighted average common shares outstanding, dilutive | 47,854 | 47,756 | ||||||
Net income (loss) per share - basic | $ | 0.03 | $ | (0.11 | ) | |||
Net income (loss) per share - diluted | $ | 0.03 | $ | (0.11 | ) | |||
Pension_Plan_and_Other_Postret
Pension Plan and Other Postretirement Benefits | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Pension Plan and Other Postretirement Benefits | ||||||||||||||
Pension Plan and Other Postretirement Benefits | ||||||||||||||
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 by the Company related to pension plans were $5.5 million and $7.7 million for the three months ended March 31, 2015 and March 31, 2014, respectively. There were no contributions to the other postretirement benefit plans during the three months ended March 31, 2015 and March 31, 2014. The 2015 estimated cash contribution to the pension plans is $31.2 million and to the other postretirement benefit plans is $15.0 million. | ||||||||||||||
The following table lists 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 March 31 | ||||||||||||||
Pension Plan | Other Benefits | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Service cost | $ | 5,632 | $ | 4,217 | $ | 2,500 | $ | 1,619 | ||||||
Interest cost | 5,003 | 4,726 | 1,614 | 1,337 | ||||||||||
Expected return on plan assets | (4,792 | ) | (4,179 | ) | (876 | ) | (753 | ) | ||||||
Amortization of prior service cost | 1,502 | 1,510 | 11 | 11 | ||||||||||
Recognized net actuarial loss | 2,400 | 1,003 | 1,458 | 775 | ||||||||||
Net periodic benefit cost | $ | 9,745 | $ | 7,277 | $ | 4,707 | $ | 2,989 | ||||||
Shortterm_and_Longterm_Borrowi
Short-term and Long-term Borrowings | 3 Months Ended |
Mar. 31, 2015 | |
Short-term and Long-term Borrowings | |
Short-term and Long-term Borrowings | |
Note 7. Short-term and Long-term Borrowings | |
On March 10, 2015, the Company and Cal Water entered into Syndicated Credit Agreements, which provide for unsecured revolving credit facilities of up to an initial aggregate amount of $450 million for a term of five years. The Syndicated Credit Facilities amend, expand, and replace the Company’s and its subsidiaries’ existing credit facilities originally entered into on June 29, 2011. The new credit facilities extended the terms until March 10, 2020, and increased the Company’s unsecured revolving line of credit. The Company and subsidiaries that it designates may borrow up to $150 million under the Company’s revolving credit facility. Cal Water may borrow up to $300 million under its revolving credit facility; however, all borrowings need to be repaid within 12-months unless otherwise authorized by the CPUC. The credit facilities may each be expanded by up to $50 million subject to certain conditions. The proceeds from the revolving credit facilities may be used for working capital purposes, including the short-term financing of capital projects. The base loan rate may vary from LIBOR plus 72.5 basis points to LIBOR plus 95 basis points, depending on the Company’s total capitalization ratio. Likewise, the unused commitment fee may vary from 8 basis points to 12.5 basis points based on the same ratio. | |
Both short-term unsecured credit agreements contain affirmative and negative covenants and events of default customary for credit facilities of this type including, among other things, limitations and prohibitions relating to additional indebtedness, liens, mergers, and asset sales. Also, these unsecured credit agreements contain financial covenants governing the Company and its subsidiaries’ consolidated total capitalization ratio and interest coverage ratio. | |
The outstanding borrowings on the Company lines of credit were $61.7 million as of March 31, 2015 and December 31, 2014. The outstanding borrowings on the Cal Water lines of credit were $47.4 million and $17.4 million as of March 31, 2015 and December 31, 2014, respectively. The average borrowing rate for borrowings on the Company and Cal Water lines of credit during the three months ended March 31, 2015 was 1.09% compared to 1.31% for the same period last year. | |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | |
Note 8. Income Taxes | |
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Measurement of the deferred tax assets and liabilities is at enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. | |
We anticipate that future rate actions by the commissions will reflect revenue requirements for the tax effects of temporary differences recognized, which have previously flowed through to customers. The commissions have granted us rate increases to reflect the normalization of the tax benefits of the federal accelerated methods and available Investment Tax Credits (ITCs) for all assets placed in service after 1980. ITCs are deferred and amortized over the lives of the related properties for book purposes. | |
During 2012, the Company filed an application for a change in tax accounting method with the Internal Revenue Service (IRS) regarding the classification of expenditures related to tangible property as deductible repairs and capitalizable improvements deductible over time as tax depreciation. In September 2013, the U.S. Department of the Treasury (U.S. Treasury) and the IRS issued the final regulations for repairs and maintenance deductions with an effective date of January 1, 2014. In August 2014, the U.S. Treasury and IRS issued the final regulations regarding dispositions of tangible property with an effective date of January 1, 2014. These tax regulations allow the Company to deduct a significant amount of costs to maintain its depreciable plant that were previously capitalized for tax purposes and continue to be capitalizable for book purposes. The Company intends to implement the final regulations on its 2014 tax return. The Company’s total federal NOL was $43.8 million and state NOL was $49.9 million as of March 31, 2015 and December 31, 2014. The NOL carry-forward amounts are more likely than not to be recovered and therefore require no valuation allowance. The NOL carry-forward does not begin to expire until 2033. | |
As of March 31, 2015 and December 31, 2014, the Company had unrecognized tax benefits of approximately $7.9 million. Included in the balance of unrecognized tax benefits is approximately $1.6 million of tax benefits that, if recognized, would result in an adjustment to the Company’s effective tax rate. The Company does not expect its unrecognized tax benefits to change significantly within the next twelve months. | |
The State of Hawaii Department of Taxation has completed the 2010, 2011 and 2012 audit in the first quarter of 2015. The State of California Board of Equalization has completed auditing the Company’s 2010, 2011, and 2012 sales and use tax filings. The State of California Franchise Tax Board is presently auditing the Company’s 2008 through 2011 enterprise zone filings. It is uncertain when the state audits will be completed. The Company believes that the final resolution of the state audits will not have a material impact on its financial condition or results of operations. | |
Regulatory_Assets_and_Liabilit
Regulatory Assets and Liabilities | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Regulatory Assets and Liabilities | ||||||||
Regulatory Assets and Liabilities | ||||||||
Note 9. Regulatory Assets and Liabilities | ||||||||
Regulatory assets and liabilities were comprised of the following as of March 31, 2015 and December 31, 2014: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Regulatory Assets | ||||||||
Pension and retiree group health | $ | 244,843 | $ | 245,008 | ||||
Property-related temporary differences (tax benefits flowed through to ratepayers) | 72,350 | 72,350 | ||||||
Other accrued benefits | 32,684 | 32,959 | ||||||
Net WRAM and MCBA long-term accounts receivable | 19,413 | 14,449 | ||||||
Asset retirement obligations, net | 14,169 | 13,863 | ||||||
Interim rates long-term accounts receivable | 8,996 | 10,627 | ||||||
Tank coating | 5,097 | — | ||||||
Health care balancing account | 1,875 | 1,075 | ||||||
Other regulatory assets | 1,662 | — | ||||||
Total Regulatory Assets | $ | 401,089 | $ | 390,331 | ||||
Regulatory Liabilities | ||||||||
Future tax benefits due ratepayers | $ | 26,114 | $ | 26,114 | ||||
Conservation program | 3,406 | 2,669 | ||||||
Pension balancing account | 3,170 | 4,291 | ||||||
Other regulatory liabilities | 2,412 | 3,373 | ||||||
Total Regulatory Liabilities | $ | 35,102 | $ | 36,447 | ||||
Short-term regulatory assets and liabilities are excluded from the above table. The short-term regulatory assets were $50.0 million as of March 31, 2015 and $53.2 million as of December 31, 2014. The short-term regulatory assets were primarily interim rates and net WRAM and MCBA accounts receivable as of March 31, 2015 and December 31, 2014. The short-term portions of regulatory liabilities were $5.6 million as of March 31, 2015 and $6.1 million as of December 31, 2014. The short-term regulatory liabilities were primarily net WRAM and MCBA liability balances and net refund balances to rate payers for the water conservation program from the 2009 General Rate Case (GRC). | ||||||||
Commitment_and_Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitment and Contingencies | |
Commitment and Contingencies | |
Note 10. Commitment and Contingencies | |
Commitments | |
The Company has significant commitments to lease certain office spaces and water systems and to purchase water from water wholesalers. These commitments are described in Form 10-K for the year ended December 31, 2014. As of March 31, 2015, there were no significant changes from December 31, 2014. | |
Contingencies | |
Groundwater Contamination | |
The Company has undertaken litigation against third parties to recover past and anticipated costs related to ground water contamination in our service areas. The cost of litigation is expensed as incurred and any settlement is first offset against such costs. The CPUC’s general policy requires all proceeds from groundwater contamination litigation to be used first to pay transactional expenses, then to make ratepayers whole for water treatment costs to comply with the CPUC’s water quality standards. The CPUC allows for a risk-based consideration of contamination proceeds which exceed the costs of the remediation described above and may result in some sharing of proceeds with the shareholder, determined on a case by case basis. The CPUC has authorized various memorandum accounts that allow the Company to track significant litigation costs to request recovery of these costs in future filings and uses of proceeds to comply with CPUC’s general policy. | |
LEGAL PROCEEDINGS | |
From time to time, the Company has been named as a co-defendant in asbestos-related lawsuits. Several of these cases against the Company have been dismissed without prejudice. In other cases, the Company’s contractors and insurance policy carriers have settled the cases with no effect on the Company’s financial statements. As such, the Company does not currently believe there is any potential loss that is probable to occur related to these matters and therefore no accrual has been recorded. | |
Other Legal Matters | |
From time to time, the Company is involved in various disputes and litigation matters that arise in the ordinary course of business. The status of each significant matter is reviewed and assessed for potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount of the range of loss can be estimated, a liability is accrued for the estimated loss in accordance with the accounting standards for contingencies. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. While the outcome of these disputes and litigation matters cannot be predicted with any certainty, management does not believe when taking into account existing reserves the ultimate resolution of these matters will materially affect the Company’s financial position, results of operations, or cash flows. The Company recognized a liability of $2.6 million and $3.2 million for known legal matters as of March 31, 2015 and December 31, 2014, respectively. The reasonably possible losses in excess of the amounts accrued were $1.5 million. The cost of litigation is expensed as incurred and any settlement is first offset against such costs. Any settlement in excess of the cost to litigate is accounted for on a case by case basis, dependent on the nature of the settlement. | |
Fair_Value_of_Financial_Assets
Fair Value of Financial Assets and Liabilities | 3 Months Ended | ||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | |||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | |||||||||||||||||||||||||||||||
Note 11. Fair Value of Financial Assets and Liabilities | |||||||||||||||||||||||||||||||
The accounting guidance for fair value measurements and disclosures provides a single definition of fair value and requires certain disclosures about assets and liabilities measured at fair value. A hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value is established by this guidance. The three levels in the hierarchy are as follows: | |||||||||||||||||||||||||||||||
Level 1 -Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices. | |||||||||||||||||||||||||||||||
Level 2 -Pricing inputs are other than quoted prices inactive markets, but are either directly or indirectly observable as of the reporting date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts, or priced with discounted cash flow or option pricing models using highly observable inputs. | |||||||||||||||||||||||||||||||
Level 3 -Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 are those valued with models requiring significant management judgment or estimation. | |||||||||||||||||||||||||||||||
Specific valuation methods include the following: | |||||||||||||||||||||||||||||||
Cash equivalents, restricted cash, accounts receivable and accounts payable carrying amounts approximated the fair value because of the short-term maturity of the instruments. | |||||||||||||||||||||||||||||||
Long-term debt fair values were estimated using the published quoted market price, if available, or the discounted cash flow analysis, based on the current rates available using a risk-free rate (a U.S. Treasury securities yield curve) plus a risk premium of 1.19%. | |||||||||||||||||||||||||||||||
Advances for construction fair values were estimated using broker quotes from companies that frequently purchase these investments. | |||||||||||||||||||||||||||||||
March 31, 2015 | |||||||||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||||
Cost | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Long -term debt, including current maturities | $ | 425,610 | — | $ | 544,493 | — | $ | 544,493 | |||||||||||||||||||||||
Advances for construction | 181,553 | — | 74,217 | — | 74,217 | ||||||||||||||||||||||||||
Total | $ | 607,163 | $ | — | $ | 618,710 | $ | — | $ | 618,710 | |||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||||
Cost | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Long -term debt, including current maturities | $ | 425,840 | $ | — | $ | 534,068 | $ | — | $ | 534,068 | |||||||||||||||||||||
Advances for construction | 182,284 | — | 72,571 | — | 72,571 | ||||||||||||||||||||||||||
Total | $ | 608,124 | $ | 606,639 | $ | — | $ | 606,639 | |||||||||||||||||||||||
Condensed_Consolidating_Financ
Condensed Consolidating Financial Statements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Condensed Consolidating Financial Statements | |||||||||||||||||
Condensed Consolidating Financial Statements | |||||||||||||||||
Note 12. Condensed Consolidating Financial Statements | |||||||||||||||||
On April 17, 2009, Cal Water issued $100 million aggregate principal amount of 5.875% First Mortgage Bonds due 2019, and on November 17, 2010, Cal Water issued $100 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, 2015 and December 31, 2014, the condensed consolidating statements of operations for the three months ended March 31, 2015 and 2014 and the condensed consolidating statements of cash flows for the three months ended March 31, 2015 and 2014 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. | |||||||||||||||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
ASSETS | |||||||||||||||||
Utility plant: | |||||||||||||||||
Utility plant | $ | 1,318 | $ | 2,183,726 | $ | 195,320 | $ | (7,197 | ) | $ | 2,373,167 | ||||||
Less accumulated depreciation and amortization | (434 | ) | (723,893 | ) | (43,965 | ) | 1,747 | (766,545 | ) | ||||||||
Net utility plant | 884 | 1,459,833 | 151,355 | (5,450 | ) | 1,606,622 | |||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | 316 | 31,200 | 1,795 | — | 33,311 | ||||||||||||
Receivables and unbilled revenue | — | 106,800 | 3,491 | — | 110,291 | ||||||||||||
Receivables from affiliates | 23,235 | 883 | 84 | (24,202 | ) | — | |||||||||||
Other current assets | 406 | 14,016 | 1,231 | — | 15,653 | ||||||||||||
Total current assets | 23,957 | 152,899 | 6,601 | (24,202 | ) | 159,255 | |||||||||||
Other assets: | |||||||||||||||||
Regulatory assets | — | 398,090 | 2,999 | — | 401,089 | ||||||||||||
Investments in affiliates | 632,396 | — | — | (632,396 | ) | — | |||||||||||
Long-term affiliate notes receivable | 25,006 | — | — | (25,006 | ) | — | |||||||||||
Other assets | 894 | 48,829 | 5,180 | (1,124 | ) | 53,779 | |||||||||||
Total other assets | 658,296 | 446,919 | 8,179 | (658,526 | ) | 454,868 | |||||||||||
$ | 683,137 | $ | 2,059,651 | $ | 166,135 | $ | (688,178 | ) | $ | 2,220,745 | |||||||
CAPITALIZATION AND LIABILITIES | |||||||||||||||||
Capitalization: | |||||||||||||||||
Common stockholders’ equity | $ | 620,666 | $ | 563,439 | $ | 74,369 | $ | (637,808 | ) | $ | 620,666 | ||||||
Affiliate long-term debt | — | — | 25,006 | (25,006 | ) | — | |||||||||||
Long-term debt, less current maturities | — | 417,678 | 1,336 | — | 419,014 | ||||||||||||
Total capitalization | 620,666 | 981,117 | 100,711 | (662,814 | ) | 1,039,680 | |||||||||||
Current liabilities: | |||||||||||||||||
Current maturities of long-term debt | — | 6,182 | 414 | — | 6,596 | ||||||||||||
Short-term borrowings | 61,715 | 47,400 | — | — | 109,115 | ||||||||||||
Payables to affiliates | — | 1,579 | 22,623 | (24,202 | ) | — | |||||||||||
Accounts payable | — | 54,851 | 2,833 | — | 57,684 | ||||||||||||
Accrued expenses and other liabilities | 116 | 78,199 | 2,224 | 9 | 80,548 | ||||||||||||
Total current liabilities | 61,831 | 188,211 | 28,094 | (24,193 | ) | 253,943 | |||||||||||
Unamortized investment tax credits | — | 2,032 | — | — | 2,032 | ||||||||||||
Deferred income taxes, net | 640 | 215,345 | — | (1,171 | ) | 214,814 | |||||||||||
Pension and postretirement benefits other than pensions | — | 277,094 | — | — | 277,094 | ||||||||||||
Regulatory and other liabilities | — | 72,456 | 9,043 | — | 81,499 | ||||||||||||
Advances for construction | — | 181,039 | 514 | — | 181,553 | ||||||||||||
Contributions in aid of construction | — | 142,357 | 27,773 | — | 170,130 | ||||||||||||
$ | 683,137 | $ | 2,059,651 | $ | 166,135 | $ | (688,178 | ) | $ | 2,220,745 | |||||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
ASSETS | |||||||||||||||||
Utility plant: | |||||||||||||||||
Utility plant | $ | 1,318 | $ | 2,154,146 | $ | 194,204 | $ | (7,197 | ) | $ | 2,342,471 | ||||||
Less accumulated depreciation and amortization | (377 | ) | (710,840 | ) | (42,545 | ) | 1,722 | (752,040 | ) | ||||||||
Net utility plant | 941 | 1,443,306 | 151,659 | (5,475 | ) | 1,590,431 | |||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | 4,108 | 13,929 | 1,550 | — | 19,587 | ||||||||||||
Receivables | — | 108,815 | 9,114 | (1,051 | ) | 116,878 | |||||||||||
Receivables from affiliates | 20,001 | 3,608 | — | (23,609 | ) | — | |||||||||||
Other current assets | — | 16,443 | 1,216 | — | 17,659 | ||||||||||||
Total current assets | 24,109 | 142,795 | 11,880 | (24,660 | ) | 154,124 | |||||||||||
Other assets: | |||||||||||||||||
Regulatory assets | — | 387,387 | 2,944 | — | 390,331 | ||||||||||||
Investments in affiliates | 637,998 | — | — | (637,998 | ) | — | |||||||||||
Long-term affiliate notes receivable | 25,263 | — | — | (25,263 | ) | — | |||||||||||
Other assets | 891 | 47,617 | 4,278 | (321 | ) | 52,465 | |||||||||||
Total other assets | 664,152 | 435,004 | 7,222 | (663,582 | ) | 442,796 | |||||||||||
$ | 689,202 | $ | 2,021,105 | $ | 170,761 | $ | (693,717 | ) | $ | 2,187,351 | |||||||
CAPITALIZATION AND LIABILITIES | |||||||||||||||||
Capitalization: | |||||||||||||||||
Common stockholders’ equity | $ | 626,626 | $ | 569,319 | $ | 74,107 | $ | (643,426 | ) | $ | 626,626 | ||||||
Affiliate long-term debt | — | — | 25,263 | (25,263 | ) | — | |||||||||||
Long-term debt, less current maturities | — | 417,884 | 1,349 | — | 419,233 | ||||||||||||
Total capitalization | 626,626 | 987,203 | 100,719 | (668,689 | ) | 1,045,859 | |||||||||||
Current liabilities: | |||||||||||||||||
Current maturities of long-term debt | — | 6,173 | 434 | — | 6,607 | ||||||||||||
Short-term borrowings | 61,715 | 17,400 | — | — | 79,115 | ||||||||||||
Payables to affiliates | — | 270 | 23,339 | (23,609 | ) | — | |||||||||||
Accounts payable | — | 56,666 | 2,930 | (201 | ) | 59,395 | |||||||||||
Accrued expenses and other liabilities | 861 | 71,203 | 1,281 | (756 | ) | 72,589 | |||||||||||
Total current liabilities | 62,576 | 151,712 | 27,984 | (24,566 | ) | 217,706 | |||||||||||
Unamortized investment tax credits | — | 2,032 | — | — | 2,032 | ||||||||||||
Deferred income taxes, net | — | 210,789 | 4,515 | (462 | ) | 214,842 | |||||||||||
Pension and postretirement benefits other than pensions | — | 270,865 | — | — | 270,865 | ||||||||||||
Regulatory and other liabilities | — | 74,282 | 8,997 | — | 83,279 | ||||||||||||
Advances for construction | — | 181,763 | 521 | — | 182,284 | ||||||||||||
Contributions in aid of construction | — | 142,459 | 28,025 | — | 170,484 | ||||||||||||
$ | 689,202 | $ | 2,021,105 | $ | 170,761 | $ | (693,717 | ) | $ | 2,187,351 | |||||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS | |||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
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 operations | — | 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 (income) 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) benefit on other income and expense | (185 | ) | (343 | ) | (69 | ) | 194 | (403 | ) | ||||||||
Net other income (expense) | 269 | 498 | 118 | (284 | ) | 601 | |||||||||||
Interest expense: | |||||||||||||||||
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 (loss) income | $ | 1,575 | $ | 2,030 | $ | (640 | ) | $ | (1,390 | ) | $ | 1,575 | |||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
Operating revenue | $ | — | $ | 103,749 | $ | 6,766 | $ | — | $ | 110,515 | |||||||
Operating expenses: | |||||||||||||||||
Operations: | |||||||||||||||||
Water production costs | — | 43,368 | 2,034 | — | 45,402 | ||||||||||||
Administrative and general | — | 22,772 | 2,369 | — | 25,141 | ||||||||||||
Other operations | — | 14,662 | 1,840 | (126 | ) | 16,376 | |||||||||||
Maintenance | — | 4,823 | 182 | — | 5,005 | ||||||||||||
Depreciation and amortization | 43 | 14,954 | 1,083 | (27 | ) | 16,053 | |||||||||||
Income tax (benefit) | (50 | ) | (3,348 | ) | (658 | ) | 217 | (3,839 | ) | ||||||||
Taxes other than income taxes | — | 4,650 | 575 | — | 5,225 | ||||||||||||
Total operating (income) expenses | (7 | ) | 101,881 | 7,425 | 64 | 109,363 | |||||||||||
Net operating income (loss) | 7 | 1,868 | (659 | ) | (64 | ) | 1,152 | ||||||||||
Other Income and Expenses: | |||||||||||||||||
Non-regulated revenue | 467 | 4,029 | 377 | (593 | ) | 4,280 | |||||||||||
Non-regulated expenses, net | — | (3,639 | ) | (480 | ) | — | (4,119 | ) | |||||||||
Income tax (expense) benefit on other income and expense | (190 | ) | (159 | ) | 64 | 206 | (79 | ) | |||||||||
Net other income (expense) | 277 | 231 | (39 | ) | (387 | ) | 82 | ||||||||||
Interest expense: | |||||||||||||||||
Interest expense | 79 | 6,960 | 503 | (467 | ) | 7,075 | |||||||||||
Less: capitalized interest | — | (341 | ) | (24 | ) | — | (365 | ) | |||||||||
Net interest expense | 79 | 6,619 | 479 | (467 | ) | 6,710 | |||||||||||
Equity earnings of subsidiaries | (5,681 | ) | — | — | 5,681 | — | |||||||||||
Net (loss) | $ | (5,476 | ) | $ | (4,520 | ) | $ | (1,177 | ) | $ | 5,697 | $ | (5,476 | ) | |||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
Operating activities: | |||||||||||||||||
Net income | $ | 1,575 | $ | 2,030 | $ | (640 | ) | $ | (1,390 | ) | $ | 1,575 | |||||
Adjustments to reconcile net income 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 | ) | ||||||||||
Other changes in noncurrent assets and liabilities | 1,109 | 10,717 | (5,385 | ) | 94 | 6,535 | |||||||||||
Changes in operating assets and liabilities: | (1,151 | ) | (2,185 | ) | 6,624 | (84 | ) | 3,204 | |||||||||
Net cash provided by (used in) 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 | — | |||||||||||
Change 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 provided by (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 of 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 provided by (used in) 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 | |||||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
Operating activities: | |||||||||||||||||
Net (loss) | $ | (5,476 | ) | $ | (4,520 | ) | $ | (1,177 | ) | $ | 5,697 | $ | (5,476 | ) | |||
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||
Equity earnings of subsidiaries | 5,681 | — | — | (5,681 | ) | — | |||||||||||
Dividends received from affiliates | 7,758 | — | — | (7,758 | ) | — | |||||||||||
Depreciation and amortization | 43 | 15,424 | 1,124 | (27 | ) | 16,564 | |||||||||||
Change in value of life insurance contracts | — | (158 | ) | — | — | (158 | ) | ||||||||||
Other changes in noncurrent assets and liabilities | 772 | (9,176 | ) | (641 | ) | 11 | (9,034 | ) | |||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Other changes, net | (229 | ) | 7,582 | 1,224 | — | 8,577 | |||||||||||
Net cash provided by operating activities | 8,549 | 9,152 | 530 | (7,758 | ) | 10,473 | |||||||||||
Investing activities: | |||||||||||||||||
Utility plant expenditures | — | (22,896 | ) | (1,724 | ) | — | (24,620 | ) | |||||||||
Changes in affiliate advances | (2,989 | ) | 1,510 | (181 | ) | 1,660 | — | ||||||||||
Proceeds from affiliates long-term debt | 230 | — | — | (230 | ) | — | |||||||||||
Purchase of life insurance | — | (1,674 | ) | — | — | (1,674 | ) | ||||||||||
Changes in restricted cash and other changes, net | — | 418 | — | — | 418 | ||||||||||||
Net cash (used in) investing activities | (2,759 | ) | (22,642 | ) | (1,905 | ) | 1,430 | (25,876 | ) | ||||||||
Financing Activities: | |||||||||||||||||
Short-term borrowings | 2,200 | 20,000 | — | — | 22,200 | ||||||||||||
Repayment of short-term borrowings | (5,000 | ) | — | — | — | (5,000 | ) | ||||||||||
Changes in affiliate advances | — | 356 | 1,304 | (1,660 | ) | — | |||||||||||
Repayment of affiliates long-term borrowings | — | — | (230 | ) | 230 | — | |||||||||||
Repayment of long-term debt | — | (304 | ) | (156 | ) | — | (460 | ) | |||||||||
Advances and contributions in aid for construction | — | 1,735 | 459 | — | 2,194 | ||||||||||||
Refunds of advances for construction | — | (1,521 | ) | (14 | ) | — | (1,535 | ) | |||||||||
Dividends paid to non-affiliates | (7,758 | ) | — | — | — | (7,758 | ) | ||||||||||
Dividends paid to affiliates | — | (7,469 | ) | (289 | ) | 7,758 | — | ||||||||||
Net cash provided by (used in) financing activities | (10,558 | ) | 12,797 | 1,074 | 6,328 | 9,641 | |||||||||||
Change in cash and cash equivalents | (4,768 | ) | (693 | ) | (301 | ) | — | (5,762 | ) | ||||||||
Cash and cash equivalents at beginning of period | 5,280 | 20,790 | 1,436 | — | 27,506 | ||||||||||||
Cash and cash equivalents at end of period | $ | 512 | $ | 20,097 | $ | 1,135 | $ | — | $ | 21,744 | |||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Summary of Significant Accounting Policies | |
Revenue | |
Revenue | |
Revenue generally includes monthly cycle customer billings for regulated water and wastewater services at rates authorized by the commissions (plus an estimate for water used between the customer’s last meter reading and the end of the accounting period) and billings to certain non-regulated customers at rates authorized by contract with government agencies. | |
The Company’s regulated water and waste water revenue requirements are authorized by the commissions in the states in which it operates. The revenue requirements are intended to provide the Company an opportunity to recover its operating costs and earn a reasonable return on investments. | |
For metered customers, Cal Water recognizes revenue from rates which are designed and authorized by the California Public Utilities Commission (CPUC). Under the Water Revenue Adjustment Mechanism (WRAM), Cal Water records the adopted level of volumetric revenues, which would include recovery of cost of service and a return on investments, as established by the CPUC for metered accounts (adopted volumetric revenues). In addition to volumetric-based revenues, the revenue requirements approved by the CPUC include service charges, flat rate charges, and other items not subject to the WRAM. The adopted volumetric revenue considers the seasonality of consumption of water based upon historical averages. The variance between adopted volumetric revenues and actual billed volumetric revenues for metered accounts is recorded as a component of revenue with an offsetting entry to a regulatory asset or liability balancing account (tracked individually for each Cal Water district) subject to certain criteria under the accounting for regulated operations being met. The variance amount may be positive or negative and represents amounts that will be billed or refunded to customers in the future. | |
Cost-recovery rates are designed to permit full recovery of certain costs. Cost-recovery rates such as the Modified Cost Balancing Account (MCBA) provides for recovery of adopted expense levels for purchased water, purchased power and pump taxes, as established by the CPUC. In addition, cost-recovery rates include recovery of cost related to water conservation programs and certain other operation expenses adopted by the CPUC. There is no markup for return or profit for cost-recovery expenses and such costs are generally recognized when expenses are incurred. Variances (which include the effects of changes in both rate and volume for the MCBA) between adopted and actual costs are recorded as a component of revenue, as the amount of such variances will be recovered from or refunded to our customers at a later date. The variance between adopted costs and actual costs for metered accounts is recorded as a component of revenue with an offsetting entry to a regulatory asset or liability balancing account (transferred individually for each Cal Water District) subject to certain criteria under the accounting for regulated operations being met. | |
The balances in the WRAM and MCBA assets and liabilities accounts will fluctuate on a monthly basis depending upon the variance between adopted and actual results. The recovery or refund of the WRAM is netted against the MCBA over or under-recovery for the corresponding district and is interest bearing at the current 90 day commercial paper rate. At the end of any calendar year, Cal Water files with the CPUC to refund or collect the balance in the accounts. Most undercollected net WRAM and MCBA receivable balances are collected over 12 or 18 months. Cal Water defers net WRAM and MCBA operating revenues and associated costs whenever the net receivable balances are estimated to be collected more than 24 months after the respective reporting periods in which it was recognized. The deferred net WRAM and MCBA revenues and associated costs were determined using forecasts of rate payer consumption trends in future reporting periods and the timing of when the CPUC will authorize Cal Water’s filings to recover the undercollected balances. Deferred net WRAM and MCBA revenues and associated costs will be recognized as revenues and costs in future periods when collection is within twenty-four months of the respective reporting period. | |
Flat rate customers are billed in advance at the beginning of the service period. The revenue is prorated so that the portion of revenue applicable to the current period is included in that period’s revenue, with the balance recorded as unearned revenue on the balance sheet and recognized as revenue when earned in the subsequent accounting period. The unearned revenue liability was $1.5 million as of March 31, 2015 and $1.5 million as of December 31, 2014. This liability is included in “accrued expenses and other liabilities” on the condensed consolidated balance sheets. | |
Cash and Cash Equivalents | |
Cash and Cash Equivalents | |
Cash equivalents include highly liquid investments with maturities of three months or less. Cash and cash equivalents was $33.3 million and $19.6 million as of March 31, 2015 and December 31, 2014, respectively. Restricted cash of $0.8 million was presented on the condensed consolidated balance sheet as “taxes, prepaid expenses and other assets” as of March 31, 2015 and December 31, 2014. | |
Adoption of New Accounting Standards | |
Adoption of New Accounting Standards | |
On May 28, 2014 the Financial Accounting Standards Board (FASB) issued an accounting standards update (ASU) 2014-09, Revenue from Contracts with Customers. This update creates a single, principles based framework for revenue recognition and is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when goods or services are transferred to customers. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements and related disclosures. | |
On April 7, 2015 the FASB issued ASU 2015-03, simplifying the Presentation of Debt Issuance Costs. This update requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability because these costs provide no future economic benefit. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The new accounting standard will be applied on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new accounting standard on its consolidated financial statements and related disclosures. | |
Equity_Tables
Equity (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Equity | |||||
Schedule of changes in equity | |||||
Total Common | |||||
Stockholders’ Equity | |||||
Balance at December 31, 2014 | $ | 626,626 | |||
Common stock issued | — | ||||
Share-based compensation expense | 472 | ||||
Common stock dividends declared | (8,007 | ) | |||
Net income | 1,575 | ||||
Balance at March 31, 2015 | $ | 620,666 | |||
Net_Income_Loss_Per_Share_Calc1
Net Income (Loss) Per Share Calculations (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Net Income (Loss) Per Share Calculations | ||||||||
Schedule of SARs which were dilutive | ||||||||
Three Months Ended March 31 | ||||||||
2015 | 2014 | |||||||
Net income (loss) available to common stockholders | $ | 1,575 | $ | (5,476 | ) | |||
Weighted average common shares outstanding, basic | 47,825 | 47,756 | ||||||
Dilutive SARs (treasury method) | 29 | — | ||||||
Weighted average common shares outstanding, dilutive | 47,854 | 47,756 | ||||||
Net income (loss) per share - basic | $ | 0.03 | $ | (0.11 | ) | |||
Net income (loss) per share - diluted | $ | 0.03 | $ | (0.11 | ) | |||
Pension_Plan_and_Other_Postret1
Pension Plan and Other Postretirement Benefits (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Pension Plan and Other Postretirement Benefits | ||||||||||||||
Schedule of components of net periodic benefit costs for the pension plans and other postretirement benefits | ||||||||||||||
Three Months Ended March 31 | ||||||||||||||
Pension Plan | Other Benefits | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Service cost | $ | 5,632 | $ | 4,217 | $ | 2,500 | $ | 1,619 | ||||||
Interest cost | 5,003 | 4,726 | 1,614 | 1,337 | ||||||||||
Expected return on plan assets | (4,792 | ) | (4,179 | ) | (876 | ) | (753 | ) | ||||||
Amortization of prior service cost | 1,502 | 1,510 | 11 | 11 | ||||||||||
Recognized net actuarial loss | 2,400 | 1,003 | 1,458 | 775 | ||||||||||
Net periodic benefit cost | $ | 9,745 | $ | 7,277 | $ | 4,707 | $ | 2,989 | ||||||
Regulatory_Assets_and_Liabilit1
Regulatory Assets and Liabilities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Regulatory Assets and Liabilities | ||||||||
Schedule of regulatory assets and liabilities | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Regulatory Assets | ||||||||
Pension and retiree group health | $ | 244,843 | $ | 245,008 | ||||
Property-related temporary differences (tax benefits flowed through to ratepayers) | 72,350 | 72,350 | ||||||
Other accrued benefits | 32,684 | 32,959 | ||||||
Net WRAM and MCBA long-term accounts receivable | 19,413 | 14,449 | ||||||
Asset retirement obligations, net | 14,169 | 13,863 | ||||||
Interim rates long-term accounts receivable | 8,996 | 10,627 | ||||||
Tank coating | 5,097 | — | ||||||
Health care balancing account | 1,875 | 1,075 | ||||||
Other regulatory assets | 1,662 | — | ||||||
Total Regulatory Assets | $ | 401,089 | $ | 390,331 | ||||
Regulatory Liabilities | ||||||||
Future tax benefits due ratepayers | $ | 26,114 | $ | 26,114 | ||||
Conservation program | 3,406 | 2,669 | ||||||
Pension balancing account | 3,170 | 4,291 | ||||||
Other regulatory liabilities | 2,412 | 3,373 | ||||||
Total Regulatory Liabilities | $ | 35,102 | $ | 36,447 | ||||
Fair_Value_of_Financial_Assets1
Fair Value of Financial Assets and Liabilities (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | |||||||||||||||||||||||||||||||
Schedule of fair value of long-term debt, including current maturities, and advances for construction | |||||||||||||||||||||||||||||||
March 31, 2015 | |||||||||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||||
Cost | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Long -term debt, including current maturities | $ | 425,610 | — | $ | 544,493 | — | $ | 544,493 | |||||||||||||||||||||||
Advances for construction | 181,553 | — | 74,217 | — | 74,217 | ||||||||||||||||||||||||||
Total | $ | 607,163 | $ | — | $ | 618,710 | $ | — | $ | 618,710 | |||||||||||||||||||||
December 31, 2014 | |||||||||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||||||||
Cost | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||
Long -term debt, including current maturities | $ | 425,840 | $ | — | $ | 534,068 | $ | — | $ | 534,068 | |||||||||||||||||||||
Advances for construction | 182,284 | — | 72,571 | — | 72,571 | ||||||||||||||||||||||||||
Total | $ | 608,124 | $ | 606,639 | $ | — | $ | 606,639 | |||||||||||||||||||||||
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Statements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Condensed Consolidating Financial Statements | |||||||||||||||||
Schedule of Condensed Consolidating Balance Sheet | |||||||||||||||||
As of March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
ASSETS | |||||||||||||||||
Utility plant: | |||||||||||||||||
Utility plant | $ | 1,318 | $ | 2,183,726 | $ | 195,320 | $ | (7,197 | ) | $ | 2,373,167 | ||||||
Less accumulated depreciation and amortization | (434 | ) | (723,893 | ) | (43,965 | ) | 1,747 | (766,545 | ) | ||||||||
Net utility plant | 884 | 1,459,833 | 151,355 | (5,450 | ) | 1,606,622 | |||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | 316 | 31,200 | 1,795 | — | 33,311 | ||||||||||||
Receivables and unbilled revenue | — | 106,800 | 3,491 | — | 110,291 | ||||||||||||
Receivables from affiliates | 23,235 | 883 | 84 | (24,202 | ) | — | |||||||||||
Other current assets | 406 | 14,016 | 1,231 | — | 15,653 | ||||||||||||
Total current assets | 23,957 | 152,899 | 6,601 | (24,202 | ) | 159,255 | |||||||||||
Other assets: | |||||||||||||||||
Regulatory assets | — | 398,090 | 2,999 | — | 401,089 | ||||||||||||
Investments in affiliates | 632,396 | — | — | (632,396 | ) | — | |||||||||||
Long-term affiliate notes receivable | 25,006 | — | — | (25,006 | ) | — | |||||||||||
Other assets | 894 | 48,829 | 5,180 | (1,124 | ) | 53,779 | |||||||||||
Total other assets | 658,296 | 446,919 | 8,179 | (658,526 | ) | 454,868 | |||||||||||
$ | 683,137 | $ | 2,059,651 | $ | 166,135 | $ | (688,178 | ) | $ | 2,220,745 | |||||||
CAPITALIZATION AND LIABILITIES | |||||||||||||||||
Capitalization: | |||||||||||||||||
Common stockholders’ equity | $ | 620,666 | $ | 563,439 | $ | 74,369 | $ | (637,808 | ) | $ | 620,666 | ||||||
Affiliate long-term debt | — | — | 25,006 | (25,006 | ) | — | |||||||||||
Long-term debt, less current maturities | — | 417,678 | 1,336 | — | 419,014 | ||||||||||||
Total capitalization | 620,666 | 981,117 | 100,711 | (662,814 | ) | 1,039,680 | |||||||||||
Current liabilities: | |||||||||||||||||
Current maturities of long-term debt | — | 6,182 | 414 | — | 6,596 | ||||||||||||
Short-term borrowings | 61,715 | 47,400 | — | — | 109,115 | ||||||||||||
Payables to affiliates | — | 1,579 | 22,623 | (24,202 | ) | — | |||||||||||
Accounts payable | — | 54,851 | 2,833 | — | 57,684 | ||||||||||||
Accrued expenses and other liabilities | 116 | 78,199 | 2,224 | 9 | 80,548 | ||||||||||||
Total current liabilities | 61,831 | 188,211 | 28,094 | (24,193 | ) | 253,943 | |||||||||||
Unamortized investment tax credits | — | 2,032 | — | — | 2,032 | ||||||||||||
Deferred income taxes, net | 640 | 215,345 | — | (1,171 | ) | 214,814 | |||||||||||
Pension and postretirement benefits other than pensions | — | 277,094 | — | — | 277,094 | ||||||||||||
Regulatory and other liabilities | — | 72,456 | 9,043 | — | 81,499 | ||||||||||||
Advances for construction | — | 181,039 | 514 | — | 181,553 | ||||||||||||
Contributions in aid of construction | — | 142,357 | 27,773 | — | 170,130 | ||||||||||||
$ | 683,137 | $ | 2,059,651 | $ | 166,135 | $ | (688,178 | ) | $ | 2,220,745 | |||||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEET | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
ASSETS | |||||||||||||||||
Utility plant: | |||||||||||||||||
Utility plant | $ | 1,318 | $ | 2,154,146 | $ | 194,204 | $ | (7,197 | ) | $ | 2,342,471 | ||||||
Less accumulated depreciation and amortization | (377 | ) | (710,840 | ) | (42,545 | ) | 1,722 | (752,040 | ) | ||||||||
Net utility plant | 941 | 1,443,306 | 151,659 | (5,475 | ) | 1,590,431 | |||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | 4,108 | 13,929 | 1,550 | — | 19,587 | ||||||||||||
Receivables | — | 108,815 | 9,114 | (1,051 | ) | 116,878 | |||||||||||
Receivables from affiliates | 20,001 | 3,608 | — | (23,609 | ) | — | |||||||||||
Other current assets | — | 16,443 | 1,216 | — | 17,659 | ||||||||||||
Total current assets | 24,109 | 142,795 | 11,880 | (24,660 | ) | 154,124 | |||||||||||
Other assets: | |||||||||||||||||
Regulatory assets | — | 387,387 | 2,944 | — | 390,331 | ||||||||||||
Investments in affiliates | 637,998 | — | — | (637,998 | ) | — | |||||||||||
Long-term affiliate notes receivable | 25,263 | — | — | (25,263 | ) | — | |||||||||||
Other assets | 891 | 47,617 | 4,278 | (321 | ) | 52,465 | |||||||||||
Total other assets | 664,152 | 435,004 | 7,222 | (663,582 | ) | 442,796 | |||||||||||
$ | 689,202 | $ | 2,021,105 | $ | 170,761 | $ | (693,717 | ) | $ | 2,187,351 | |||||||
CAPITALIZATION AND LIABILITIES | |||||||||||||||||
Capitalization: | |||||||||||||||||
Common stockholders’ equity | $ | 626,626 | $ | 569,319 | $ | 74,107 | $ | (643,426 | ) | $ | 626,626 | ||||||
Affiliate long-term debt | — | — | 25,263 | (25,263 | ) | — | |||||||||||
Long-term debt, less current maturities | — | 417,884 | 1,349 | — | 419,233 | ||||||||||||
Total capitalization | 626,626 | 987,203 | 100,719 | (668,689 | ) | 1,045,859 | |||||||||||
Current liabilities: | |||||||||||||||||
Current maturities of long-term debt | — | 6,173 | 434 | — | 6,607 | ||||||||||||
Short-term borrowings | 61,715 | 17,400 | — | — | 79,115 | ||||||||||||
Payables to affiliates | — | 270 | 23,339 | (23,609 | ) | — | |||||||||||
Accounts payable | — | 56,666 | 2,930 | (201 | ) | 59,395 | |||||||||||
Accrued expenses and other liabilities | 861 | 71,203 | 1,281 | (756 | ) | 72,589 | |||||||||||
Total current liabilities | 62,576 | 151,712 | 27,984 | (24,566 | ) | 217,706 | |||||||||||
Unamortized investment tax credits | — | 2,032 | — | — | 2,032 | ||||||||||||
Deferred income taxes, net | — | 210,789 | 4,515 | (462 | ) | 214,842 | |||||||||||
Pension and postretirement benefits other than pensions | — | 270,865 | — | — | 270,865 | ||||||||||||
Regulatory and other liabilities | — | 74,282 | 8,997 | — | 83,279 | ||||||||||||
Advances for construction | — | 181,763 | 521 | — | 182,284 | ||||||||||||
Contributions in aid of construction | — | 142,459 | 28,025 | — | 170,484 | ||||||||||||
$ | 689,202 | $ | 2,021,105 | $ | 170,761 | $ | (693,717 | ) | $ | 2,187,351 | |||||||
Schedule of Condensed Consolidating Statement of Operations | |||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
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 operations | — | 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 (income) 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) benefit on other income and expense | (185 | ) | (343 | ) | (69 | ) | 194 | (403 | ) | ||||||||
Net other income (expense) | 269 | 498 | 118 | (284 | ) | 601 | |||||||||||
Interest expense: | |||||||||||||||||
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 (loss) income | $ | 1,575 | $ | 2,030 | $ | (640 | ) | $ | (1,390 | ) | $ | 1,575 | |||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
Operating revenue | $ | — | $ | 103,749 | $ | 6,766 | $ | — | $ | 110,515 | |||||||
Operating expenses: | |||||||||||||||||
Operations: | |||||||||||||||||
Water production costs | — | 43,368 | 2,034 | — | 45,402 | ||||||||||||
Administrative and general | — | 22,772 | 2,369 | — | 25,141 | ||||||||||||
Other operations | — | 14,662 | 1,840 | (126 | ) | 16,376 | |||||||||||
Maintenance | — | 4,823 | 182 | — | 5,005 | ||||||||||||
Depreciation and amortization | 43 | 14,954 | 1,083 | (27 | ) | 16,053 | |||||||||||
Income tax (benefit) | (50 | ) | (3,348 | ) | (658 | ) | 217 | (3,839 | ) | ||||||||
Taxes other than income taxes | — | 4,650 | 575 | — | 5,225 | ||||||||||||
Total operating (income) expenses | (7 | ) | 101,881 | 7,425 | 64 | 109,363 | |||||||||||
Net operating income (loss) | 7 | 1,868 | (659 | ) | (64 | ) | 1,152 | ||||||||||
Other Income and Expenses: | |||||||||||||||||
Non-regulated revenue | 467 | 4,029 | 377 | (593 | ) | 4,280 | |||||||||||
Non-regulated expenses, net | — | (3,639 | ) | (480 | ) | — | (4,119 | ) | |||||||||
Income tax (expense) benefit on other income and expense | (190 | ) | (159 | ) | 64 | 206 | (79 | ) | |||||||||
Net other income (expense) | 277 | 231 | (39 | ) | (387 | ) | 82 | ||||||||||
Interest expense: | |||||||||||||||||
Interest expense | 79 | 6,960 | 503 | (467 | ) | 7,075 | |||||||||||
Less: capitalized interest | — | (341 | ) | (24 | ) | — | (365 | ) | |||||||||
Net interest expense | 79 | 6,619 | 479 | (467 | ) | 6,710 | |||||||||||
Equity earnings of subsidiaries | (5,681 | ) | — | — | 5,681 | — | |||||||||||
Net (loss) | $ | (5,476 | ) | $ | (4,520 | ) | $ | (1,177 | ) | $ | 5,697 | $ | (5,476 | ) | |||
Schedule of Condensed Consolidating Statement of Cash Flows | |||||||||||||||||
For the three months ended March 31, 2015 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
Operating activities: | |||||||||||||||||
Net income | $ | 1,575 | $ | 2,030 | $ | (640 | ) | $ | (1,390 | ) | $ | 1,575 | |||||
Adjustments to reconcile net income 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 | ) | ||||||||||
Other changes in noncurrent assets and liabilities | 1,109 | 10,717 | (5,385 | ) | 94 | 6,535 | |||||||||||
Changes in operating assets and liabilities: | (1,151 | ) | (2,185 | ) | 6,624 | (84 | ) | 3,204 | |||||||||
Net cash provided by (used in) 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 | — | |||||||||||
Change 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 provided by (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 of 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 provided by (used in) 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 | |||||||
CALIFORNIA WATER SERVICE GROUP | |||||||||||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS | |||||||||||||||||
For the three months ended March 31, 2014 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Parent | Cal Water | All Other | Consolidating | Consolidated | |||||||||||||
Company | Subsidiaries | Adjustments | |||||||||||||||
Operating activities: | |||||||||||||||||
Net (loss) | $ | (5,476 | ) | $ | (4,520 | ) | $ | (1,177 | ) | $ | 5,697 | $ | (5,476 | ) | |||
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||
Equity earnings of subsidiaries | 5,681 | — | — | (5,681 | ) | — | |||||||||||
Dividends received from affiliates | 7,758 | — | — | (7,758 | ) | — | |||||||||||
Depreciation and amortization | 43 | 15,424 | 1,124 | (27 | ) | 16,564 | |||||||||||
Change in value of life insurance contracts | — | (158 | ) | — | — | (158 | ) | ||||||||||
Other changes in noncurrent assets and liabilities | 772 | (9,176 | ) | (641 | ) | 11 | (9,034 | ) | |||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Other changes, net | (229 | ) | 7,582 | 1,224 | — | 8,577 | |||||||||||
Net cash provided by operating activities | 8,549 | 9,152 | 530 | (7,758 | ) | 10,473 | |||||||||||
Investing activities: | |||||||||||||||||
Utility plant expenditures | — | (22,896 | ) | (1,724 | ) | — | (24,620 | ) | |||||||||
Changes in affiliate advances | (2,989 | ) | 1,510 | (181 | ) | 1,660 | — | ||||||||||
Proceeds from affiliates long-term debt | 230 | — | — | (230 | ) | — | |||||||||||
Purchase of life insurance | — | (1,674 | ) | — | — | (1,674 | ) | ||||||||||
Changes in restricted cash and other changes, net | — | 418 | — | — | 418 | ||||||||||||
Net cash (used in) investing activities | (2,759 | ) | (22,642 | ) | (1,905 | ) | 1,430 | (25,876 | ) | ||||||||
Financing Activities: | |||||||||||||||||
Short-term borrowings | 2,200 | 20,000 | — | — | 22,200 | ||||||||||||
Repayment of short-term borrowings | (5,000 | ) | — | — | — | (5,000 | ) | ||||||||||
Changes in affiliate advances | — | 356 | 1,304 | (1,660 | ) | — | |||||||||||
Repayment of affiliates long-term borrowings | — | — | (230 | ) | 230 | — | |||||||||||
Repayment of long-term debt | — | (304 | ) | (156 | ) | — | (460 | ) | |||||||||
Advances and contributions in aid for construction | — | 1,735 | 459 | — | 2,194 | ||||||||||||
Refunds of advances for construction | — | (1,521 | ) | (14 | ) | — | (1,535 | ) | |||||||||
Dividends paid to non-affiliates | (7,758 | ) | — | — | — | (7,758 | ) | ||||||||||
Dividends paid to affiliates | — | (7,469 | ) | (289 | ) | 7,758 | — | ||||||||||
Net cash provided by (used in) financing activities | (10,558 | ) | 12,797 | 1,074 | 6,328 | 9,641 | |||||||||||
Change in cash and cash equivalents | (4,768 | ) | (693 | ) | (301 | ) | — | (5,762 | ) | ||||||||
Cash and cash equivalents at beginning of period | 5,280 | 20,790 | 1,436 | — | 27,506 | ||||||||||||
Cash and cash equivalents at end of period | $ | 512 | $ | 20,097 | $ | 1,135 | $ | — | $ | 21,744 | |||||||
Organization_and_Operations_an1
Organization and Operations and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2015 | |
segment | |
Organization and Operations and Basis of Presentation | |
Number of reportable segments | 1 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Revenue | ||
Markup for return or profit for cost-recovery expenses | $0 | |
Maturity period of commercial paper | 90 days | |
Minimum collection period after net receivable balances were recognized in which the Company defers net WRAM and MCBA operating revenues and associated costs | 24 months | |
Maximum collection period in which deferred net WRAM and MCBA revenues and associated costs will be recognized | 24 months | |
Unearned revenue liability | $1,500,000 | $1,500,000 |
Minimum | ||
Regulatory Assets and Liabilities | ||
Expected collection period for undercollected net WRAM and MCBA receivables | 12 months | |
Maximum | ||
Regulatory Assets and Liabilities | ||
Expected collection period for undercollected net WRAM and MCBA receivables | 18 months |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Cash and Cash Equivalents | ||||
Carrying value of cash and cash equivalents | $33,311,000 | $19,587,000 | $21,744,000 | $27,506,000 |
Carrying value of restricted cash | $800,000 | $800,000 |
Stockbased_Compensation_Detail
Stock-based Compensation (Details) (Equity Incentive Plan, USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Compensation expense | ||
Recorded compensation costs for the RSAs and RSUs | $0.60 | $0.50 |
Restricted Stock Awards (RSAs) | ||
Stock-based Compensation | ||
Awards granted (in shares) | 59,151 | 58,378 |
Awards cancelled (in shares) | 5,193 | |
Weighted average grant date fair value (in dollars per share) | $24.30 | $23.61 |
Restricted Stock Awards (RSAs) | Employees | ||
Stock-based Compensation | ||
Vesting period | 36 months | 36 months |
Restricted Stock Awards (RSAs) | Director | ||
Stock-based Compensation | ||
Vesting period | 12 months | |
Restricted Stock Unit Award (RSUs) | Officer | ||
Stock-based Compensation | ||
Awards granted (in shares) | 37,137 | 37,143 |
Expiration period of award | 3 years | 3 years |
Weighted average grant date fair value (in dollars per share) | $24.30 | $23.61 |
Restricted Stock Unit Award (RSUs) | Officer | Minimum | ||
Stock-based Compensation | ||
Options vested on anniversary date (as a percent) | 0.00% | |
Restricted Stock Unit Award (RSUs) | Officer | Maximum | ||
Stock-based Compensation | ||
Options vested on anniversary date (as a percent) | 200.00% |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Changes in total common stockholders' equity | ||
Balance at the beginning of the period | $626,626 | |
Share-based compensation expense | 472 | |
Common stock dividends declared | -8,007 | |
Net income (loss) | 1,575 | -5,476 |
Balance at the end of the period | $620,666 |
Net_Income_Loss_Per_Share_Calc2
Net Income (Loss) Per Share Calculations (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net Income (Loss) Per Share Calculations | ||
Net income (loss) available to common stockholders | $1,575 | ($5,476) |
Weighted average common shares outstanding, basic | 47,825,000 | 47,756,000 |
Dilutive SARs (treasury method) | 29,000 | |
Weighed average common shares outstanding, dilutive | 47,854,000 | 47,756,000 |
Net income (loss) per share - basic | $0.03 | ($0.11) |
Net income (loss) per share - diluted | $0.03 | ($0.11) |
Net Loss per share calculations | ||
Dilutive SARs (treasury method) | 29,000 | |
Stock Appreciation Rights (SARs) | ||
Net Income (Loss) Per Share Calculations | ||
Dilutive SARs (treasury method) | 65,436 | |
Net Loss per share calculations | ||
Dilutive SARs (treasury method) | 65,436 | |
Anti-dilutive shares | 212,920 |
Pension_Plan_and_Other_Postret2
Pension Plan and Other Postretirement Benefits (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Pension Plan | ||
Pension Plan and Other Postretirement Benefits | ||
Cash contributions by the entity related to pension plans and other postretirement benefits | $5,500,000 | $7,700,000 |
Estimated cash contributions in the current fiscal year | 31,200,000 | |
Components of the pension plans and other postretirement benefits | ||
Service cost | 5,632,000 | 4,217,000 |
Interest cost | 5,003,000 | 4,726,000 |
Expected return on plan assets | -4,792,000 | -4,179,000 |
Amortization of prior service cost | 1,502,000 | 1,510,000 |
Recognized net actuarial loss | 2,400,000 | 1,003,000 |
Net periodic benefit cost | 9,745,000 | 7,277,000 |
Other Benefits | ||
Pension Plan and Other Postretirement Benefits | ||
Cash contributions by the entity related to pension plans and other postretirement benefits | 0 | 0 |
Estimated cash contributions in the current fiscal year | 15,000,000 | |
Components of the pension plans and other postretirement benefits | ||
Service cost | 2,500,000 | 1,619,000 |
Interest cost | 1,614,000 | 1,337,000 |
Expected return on plan assets | -876,000 | -753,000 |
Amortization of prior service cost | 11,000 | 11,000 |
Recognized net actuarial loss | 1,458,000 | 775,000 |
Net periodic benefit cost | $4,707,000 | $2,989,000 |
Shortterm_and_Longterm_Borrowi1
Short-term and Long-term Borrowings (Details) (Revolving Credit Facility, USD $) | 0 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 10, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Short-term borrowings | ||||
Maximum borrowing capacity | $450 | |||
Debt maturity period | 5 years | |||
LIBOR | ||||
Short-term borrowings | ||||
Basis of interest rate | LIBOR | |||
Minimum | ||||
Short-term borrowings | ||||
Commitment fee (as a percent) | 0.08% | |||
Minimum | LIBOR | ||||
Short-term borrowings | ||||
Interest rate margin (as a percent) | 0.73% | |||
Maximum | ||||
Short-term borrowings | ||||
Commitment fee (as a percent) | 0.13% | |||
Maximum | LIBOR | ||||
Short-term borrowings | ||||
Interest rate margin (as a percent) | 0.95% | |||
Parent Company | ||||
Short-term borrowings | ||||
Maximum borrowing capacity | 150 | |||
Amount outstanding under line of credit | 61.7 | 61.7 | ||
Average borrowing rate (as a percent) | 1.09% | 1.31% | ||
Cal Water | ||||
Short-term borrowings | ||||
Maximum borrowing capacity | 300 | |||
Period within which borrowings are to be repaid | 12 months | |||
Additional capacity available | 50 | |||
Amount outstanding under line of credit | 47.4 | $17.40 | ||
Average borrowing rate (as a percent) | 1.09% | 1.31% |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Income taxes | ||
Valuation allowance | $0 | $0 |
Unrecognized tax benefits | 7.9 | 7.9 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1.6 | 1.6 |
State | ||
Income taxes | ||
Net operating loss resulting from repairs and maintenance deductions | 49.9 | 49.9 |
Federal | ||
Income taxes | ||
Net operating loss resulting from repairs and maintenance deductions | $43.80 | $43.80 |
Regulatory_Assets_and_Liabilit2
Regulatory Assets and Liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | $401,089 | $390,331 |
Regulatory liabilities | 35,102 | 36,447 |
Short-term portion of the regulatory assets | 50,016 | 53,199 |
Short-term portion of the regulatory liabilities | 5,580 | 6,126 |
Future tax benefits due ratepayers | ||
Regulatory Assets and Liabilities | ||
Regulatory liabilities | 26,114 | 26,114 |
Conservation program | ||
Regulatory Assets and Liabilities | ||
Regulatory liabilities | 3,406 | 2,669 |
Pension balancing account | ||
Regulatory Assets and Liabilities | ||
Regulatory liabilities | 3,170 | 4,291 |
Other regulatory liabilities | ||
Regulatory Assets and Liabilities | ||
Regulatory liabilities | 2,412 | 3,373 |
Pension and retiree group health | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 244,843 | 245,008 |
Future tax benefits due ratepayers | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 72,350 | 72,350 |
Other accrued benefits | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 32,684 | 32,959 |
Net WRAM and MCBA long-term accounts receivable | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 19,413 | 14,449 |
Asset retirement obligations, net | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 14,169 | 13,863 |
Interim rates long-term accounts receivable | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 8,996 | 10,627 |
Tank coating | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 5,097 | |
Health care balancing account | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | 1,875 | 1,075 |
Other regulatory assets | ||
Regulatory Assets and Liabilities | ||
Regulatory assets | $1,662 |
Commitment_and_Contingencies_D
Commitment and Contingencies (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Commitment and Contingencies | ||
Accrual for asbestos-related lawsuits | $0 | |
Contingency loss recognized liability | 2.6 | 3.2 |
Possible losses in excess of the amount accrued | $1.50 |
Fair_Value_of_Financial_Assets2
Fair Value of Financial Assets and Liabilities (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value of Financial Assets and Liabilities | ||
Risk premium (as a percent) | 1.19% | |
Advances for construction | $181,553 | $182,284 |
Level 2 | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities | 544,493 | 534,068 |
Advances for construction | 74,217 | 72,571 |
Total liabilities | 618,710 | 606,639 |
Cost | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities | 425,610 | 425,840 |
Advances for construction | 181,553 | 182,284 |
Total liabilities | 607,163 | 608,124 |
Total | ||
Fair Value of Financial Assets and Liabilities | ||
Long-term debt, including current maturities | 544,493 | 534,068 |
Advances for construction | 74,217 | 72,571 |
Total liabilities | $618,710 | $606,639 |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Statements (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Apr. 17, 2009 | Nov. 17, 2010 |
In Millions, unless otherwise specified | ||||
Cal Water | ||||
Long-term debt | ||||
Ownership interest (as a percent) | 100.00% | 100.00% | ||
All Other Subsidiaries | ||||
Long-term debt | ||||
Ownership interest (as a percent) | 100.00% | 100.00% | ||
First Mortgage Bonds, 5.875% due 2019 | Cal Water | ||||
Long-term debt | ||||
Debt issued | $100 | |||
Interest rate (as a percent) | 5.88% | |||
First Mortgage Bonds, 5.500% due 2040 | Cal Water | ||||
Long-term debt | ||||
Debt issued | $100 | |||
Interest rate (as a percent) | 5.50% |
Condensed_Consolidating_Financ3
Condensed Consolidating Financial Statements (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||||
Utility plant: | ||||
Utility plant | $2,373,167 | $2,342,471 | ||
Less accumulated depreciation and amortization | -766,545 | -752,040 | ||
Net utility plant | 1,606,622 | 1,590,431 | ||
Current assets: | ||||
Cash and cash equivalents | 33,311 | 19,587 | 21,744 | 27,506 |
Receivables and unbilled revenue | 110,291 | |||
Receivables | 116,878 | |||
Other current assets | 15,653 | 17,659 | ||
Total current assets | 159,255 | 154,124 | ||
Other assets: | ||||
Regulatory assets | 401,089 | 390,331 | ||
Other assets | 53,779 | 52,465 | ||
Total other assets | 454,868 | 442,796 | ||
Total assets | 2,220,745 | 2,187,351 | ||
Capitalization: | ||||
Common stockholders' equity | 620,666 | 626,626 | ||
Long-term debt, less current maturities | 419,014 | 419,233 | ||
Total capitalization | 1,039,680 | 1,045,859 | ||
Current liabilities: | ||||
Current maturities of long-term debt | 6,596 | 6,607 | ||
Short-term borrowings | 109,115 | 79,115 | ||
Accounts payable | 57,684 | 59,395 | ||
Accrued expenses and other liabilities | 80,548 | 72,589 | ||
Total current liabilities | 253,943 | 217,706 | ||
Unamortized investment tax credits | 2,032 | 2,032 | ||
Deferred income taxes, net | 214,814 | 214,842 | ||
Pension and postretirement benefits other than pensions | 277,094 | 270,865 | ||
Regulatory and other liabilities | 81,499 | 83,279 | ||
Advances for construction | 181,553 | 182,284 | ||
Contributions in aid of construction | 170,130 | 170,484 | ||
Total capitalization and liabilities | 2,220,745 | 2,187,351 | ||
Consolidating Adjustments | ||||
Utility plant: | ||||
Utility plant | -7,197 | -7,197 | ||
Less accumulated depreciation and amortization | 1,747 | 1,722 | ||
Net utility plant | -5,450 | -5,475 | ||
Current assets: | ||||
Receivables | -1,051 | |||
Receivables from affiliates | -24,202 | -23,609 | ||
Total current assets | -24,202 | -24,660 | ||
Other assets: | ||||
Investments in affiliates | -632,396 | -637,998 | ||
Long-term affiliate notes receivable | -25,006 | -25,263 | ||
Other assets | -1,124 | -321 | ||
Total other assets | -658,526 | -663,582 | ||
Total assets | -688,178 | -693,717 | ||
Capitalization: | ||||
Common stockholders' equity | -637,808 | -643,426 | ||
Affiliate long-term debt | -25,006 | -25,263 | ||
Total capitalization | -662,814 | -668,689 | ||
Current liabilities: | ||||
Payables to affiliates | -24,202 | -23,609 | ||
Accounts payable | -201 | |||
Accrued expenses and other liabilities | 9 | -756 | ||
Total current liabilities | -24,193 | -24,566 | ||
Deferred income taxes, net | -1,171 | -462 | ||
Total capitalization and liabilities | -688,178 | -693,717 | ||
Parent Company | ||||
Utility plant: | ||||
Utility plant | 1,318 | 1,318 | ||
Less accumulated depreciation and amortization | -434 | -377 | ||
Net utility plant | 884 | 941 | ||
Current assets: | ||||
Cash and cash equivalents | 316 | 4,108 | 512 | 5,280 |
Receivables from affiliates | 23,235 | 20,001 | ||
Other current assets | 406 | |||
Total current assets | 23,957 | 24,109 | ||
Other assets: | ||||
Investments in affiliates | 632,396 | 637,998 | ||
Long-term affiliate notes receivable | 25,006 | 25,263 | ||
Other assets | 894 | 891 | ||
Total other assets | 658,296 | 664,152 | ||
Total assets | 683,137 | 689,202 | ||
Capitalization: | ||||
Common stockholders' equity | 620,666 | 626,626 | ||
Total capitalization | 620,666 | 626,626 | ||
Current liabilities: | ||||
Short-term borrowings | 61,715 | 61,715 | ||
Accrued expenses and other liabilities | 116 | 861 | ||
Total current liabilities | 61,831 | 62,576 | ||
Deferred income taxes, net | 640 | |||
Total capitalization and liabilities | 683,137 | 689,202 | ||
Cal Water | ||||
Utility plant: | ||||
Utility plant | 2,183,726 | 2,154,146 | ||
Less accumulated depreciation and amortization | -723,893 | -710,840 | ||
Net utility plant | 1,459,833 | 1,443,306 | ||
Current assets: | ||||
Cash and cash equivalents | 31,200 | 13,929 | 20,097 | 20,790 |
Receivables and unbilled revenue | 106,800 | |||
Receivables | 108,815 | |||
Receivables from affiliates | 883 | 3,608 | ||
Other current assets | 14,016 | 16,443 | ||
Total current assets | 152,899 | 142,795 | ||
Other assets: | ||||
Regulatory assets | 398,090 | 387,387 | ||
Other assets | 48,829 | 47,617 | ||
Total other assets | 446,919 | 435,004 | ||
Total assets | 2,059,651 | 2,021,105 | ||
Capitalization: | ||||
Common stockholders' equity | 563,439 | 569,319 | ||
Long-term debt, less current maturities | 417,678 | 417,884 | ||
Total capitalization | 981,117 | 987,203 | ||
Current liabilities: | ||||
Current maturities of long-term debt | 6,182 | 6,173 | ||
Short-term borrowings | 47,400 | 17,400 | ||
Payables to affiliates | 1,579 | 270 | ||
Accounts payable | 54,851 | 56,666 | ||
Accrued expenses and other liabilities | 78,199 | 71,203 | ||
Total current liabilities | 188,211 | 151,712 | ||
Unamortized investment tax credits | 2,032 | 2,032 | ||
Deferred income taxes, net | 215,345 | 210,789 | ||
Pension and postretirement benefits other than pensions | 277,094 | 270,865 | ||
Regulatory and other liabilities | 72,456 | 74,282 | ||
Advances for construction | 181,039 | 181,763 | ||
Contributions in aid of construction | 142,357 | 142,459 | ||
Total capitalization and liabilities | 2,059,651 | 2,021,105 | ||
All Other Subsidiaries | ||||
Utility plant: | ||||
Utility plant | 195,320 | 194,204 | ||
Less accumulated depreciation and amortization | -43,965 | -42,545 | ||
Net utility plant | 151,355 | 151,659 | ||
Current assets: | ||||
Cash and cash equivalents | 1,795 | 1,550 | 1,135 | 1,436 |
Receivables and unbilled revenue | 3,491 | |||
Receivables | 9,114 | |||
Receivables from affiliates | 84 | |||
Other current assets | 1,231 | 1,216 | ||
Total current assets | 6,601 | 11,880 | ||
Other assets: | ||||
Regulatory assets | 2,999 | 2,944 | ||
Other assets | 5,180 | 4,278 | ||
Total other assets | 8,179 | 7,222 | ||
Total assets | 166,135 | 170,761 | ||
Capitalization: | ||||
Common stockholders' equity | 74,369 | 74,107 | ||
Affiliate long-term debt | 25,006 | 25,263 | ||
Long-term debt, less current maturities | 1,336 | 1,349 | ||
Total capitalization | 100,711 | 100,719 | ||
Current liabilities: | ||||
Current maturities of long-term debt | 414 | 434 | ||
Payables to affiliates | 22,623 | 23,339 | ||
Accounts payable | 2,833 | 2,930 | ||
Accrued expenses and other liabilities | 2,224 | 1,281 | ||
Total current liabilities | 28,094 | 27,984 | ||
Deferred income taxes, net | 4,515 | |||
Regulatory and other liabilities | 9,043 | 8,997 | ||
Advances for construction | 514 | 521 | ||
Contributions in aid of construction | 27,773 | 28,025 | ||
Total capitalization and liabilities | $166,135 | $170,761 |
Condensed_Consolidating_Financ4
Condensed Consolidating Financial Statements (Details 3) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidating Financial Statements | ||
Operating revenue | $121,985 | $110,515 |
Operations: | ||
Water production costs | 45,202 | 45,402 |
Administrative and general | 27,695 | 25,141 |
Other operations | 15,843 | 16,376 |
Maintenance | 4,457 | 5,005 |
Depreciation and amortization | 15,319 | 16,053 |
Income tax (benefit) expense | 613 | -3,839 |
Taxes other than income taxes | 5,359 | 5,225 |
Total operating expenses | 114,488 | 109,363 |
Net operating income | 7,497 | 1,152 |
Other Income and Expenses: | ||
Non-regulated revenue | 3,247 | 4,280 |
Non-regulated expenses, net | -2,243 | -4,119 |
Income tax (expense) benefit on other income and expense | -403 | -79 |
Net other income | 601 | 82 |
Interest expense: | ||
Interest expense | 7,069 | 7,075 |
Less: capitalized interest | -546 | -365 |
Net interest expense | 6,523 | 6,710 |
Net income (loss) | 1,575 | -5,476 |
Consolidating Adjustments | ||
Operations: | ||
Other operations | -126 | -126 |
Depreciation and amortization | -25 | -27 |
Income tax (benefit) expense | 204 | 217 |
Total operating expenses | 53 | 64 |
Net operating income | -53 | -64 |
Other Income and Expenses: | ||
Non-regulated revenue | -478 | -593 |
Income tax (expense) benefit on other income and expense | 194 | 206 |
Net other income | -284 | -387 |
Interest expense: | ||
Interest expense | -352 | -467 |
Net interest expense | -352 | -467 |
Equity earnings of subsidiaries | -1,405 | 5,681 |
Net income (loss) | -1,390 | 5,697 |
Parent Company | ||
Operations: | ||
Depreciation and amortization | 57 | 43 |
Income tax (benefit) expense | -68 | -50 |
Total operating expenses | -11 | -7 |
Net operating income | 11 | 7 |
Other Income and Expenses: | ||
Non-regulated revenue | 454 | 467 |
Income tax (expense) benefit on other income and expense | -185 | -190 |
Net other income | 269 | 277 |
Interest expense: | ||
Interest expense | 110 | 79 |
Net interest expense | 110 | 79 |
Equity earnings of subsidiaries | 1,405 | -5,681 |
Net income (loss) | 1,575 | -5,476 |
Cal Water | ||
Condensed Consolidating Financial Statements | ||
Operating revenue | 114,507 | 103,749 |
Operations: | ||
Water production costs | 43,376 | 43,368 |
Administrative and general | 24,855 | 22,772 |
Other operations | 14,270 | 14,662 |
Maintenance | 4,264 | 4,823 |
Depreciation and amortization | 14,203 | 14,954 |
Income tax (benefit) expense | 930 | -3,348 |
Taxes other than income taxes | 4,750 | 4,650 |
Total operating expenses | 106,648 | 101,881 |
Net operating income | 7,859 | 1,868 |
Other Income and Expenses: | ||
Non-regulated revenue | 2,873 | 4,029 |
Non-regulated expenses, net | -2,032 | -3,639 |
Income tax (expense) benefit on other income and expense | -343 | -159 |
Net other income | 498 | 231 |
Interest expense: | ||
Interest expense | 6,860 | 6,960 |
Less: capitalized interest | -533 | -341 |
Net interest expense | 6,327 | 6,619 |
Net income (loss) | 2,030 | -4,520 |
All Other Subsidiaries | ||
Condensed Consolidating Financial Statements | ||
Operating revenue | 7,478 | 6,766 |
Operations: | ||
Water production costs | 1,826 | 2,034 |
Administrative and general | 2,840 | 2,369 |
Other operations | 1,699 | 1,840 |
Maintenance | 193 | 182 |
Depreciation and amortization | 1,084 | 1,083 |
Income tax (benefit) expense | -453 | -658 |
Taxes other than income taxes | 609 | 575 |
Total operating expenses | 7,798 | 7,425 |
Net operating income | -320 | -659 |
Other Income and Expenses: | ||
Non-regulated revenue | 398 | 377 |
Non-regulated expenses, net | -211 | -480 |
Income tax (expense) benefit on other income and expense | -69 | 64 |
Net other income | 118 | -39 |
Interest expense: | ||
Interest expense | 451 | 503 |
Less: capitalized interest | -13 | -24 |
Net interest expense | 438 | 479 |
Net income (loss) | ($640) | ($1,177) |
Condensed_Consolidating_Financ5
Condensed Consolidating Financial Statements (Details 4) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities: | ||
Net income (loss) | $1,575 | ($5,476) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 15,736 | 16,564 |
Change in value of life insurance contracts | -161 | -158 |
Other changes in noncurrent assets and liabilities | 6,535 | -9,034 |
Changes in operating assets and liabilities: | ||
Other changes, net | 8,577 | |
Changes in operating assets and liabilities: | 3,204 | |
Net cash provided by operating activities | 26,889 | 10,473 |
Investing activities: | ||
Utility plant expenditures | -35,047 | -24,620 |
Purchase of life insurance | -1,674 | |
Changes in restricted cash and other changes, net | -26 | 418 |
Net cash (used in) investing activities | -35,073 | -25,876 |
Financing Activities: | ||
Short-term borrowings | 30,000 | 22,200 |
Repayment of short-term borrowings | -5,000 | |
Proceeds from long-term debt | 50 | |
Repayment of long-term debt | -338 | -460 |
Advances and contributions in aid of construction | 1,777 | 2,194 |
Refunds of advances for construction | -1,574 | -1,535 |
Dividends paid to non-affiliates | -8,007 | -7,758 |
Net cash provided by financing activities | 21,908 | 9,641 |
Change in cash and cash equivalents | 13,724 | -5,762 |
Cash and cash equivalents at beginning of period | 19,587 | 27,506 |
Cash and cash equivalents at end of period | 33,311 | 21,744 |
Consolidating Adjustments | ||
Operating activities: | ||
Net income (loss) | -1,390 | 5,697 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Equity earnings of subsidiaries | 1,405 | -5,681 |
Dividends received from affiliates | -8,007 | -7,758 |
Depreciation and amortization | -25 | -27 |
Other changes in noncurrent assets and liabilities | 94 | 11 |
Changes in operating assets and liabilities: | ||
Changes in operating assets and liabilities: | -84 | |
Net cash provided by operating activities | -8,007 | -7,758 |
Investing activities: | ||
Investment in affiliates | 1,000 | |
Changes in affiliate advances | 667 | 1,660 |
Proceeds from affiliates long-term debt | -243 | -230 |
Net cash (used in) investing activities | 1,424 | 1,430 |
Financing Activities: | ||
Investment from affiliates | -1,000 | |
Changes in affiliate advances | -667 | -1,660 |
Repayment of affiliates long-term borrowings | 243 | 230 |
Dividends paid to affiliates | 8,007 | 7,758 |
Net cash provided by financing activities | 6,583 | 6,328 |
Parent Company | ||
Operating activities: | ||
Net income (loss) | 1,575 | -5,476 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Equity earnings of subsidiaries | -1,405 | 5,681 |
Dividends received from affiliates | 8,007 | 7,758 |
Depreciation and amortization | 57 | 43 |
Other changes in noncurrent assets and liabilities | 1,109 | 772 |
Changes in operating assets and liabilities: | ||
Other changes, net | -229 | |
Changes in operating assets and liabilities: | -1,151 | |
Net cash provided by operating activities | 8,192 | 8,549 |
Investing activities: | ||
Investment in affiliates | -1,000 | |
Changes in affiliate advances | -3,220 | -2,989 |
Proceeds from affiliates long-term debt | 243 | 230 |
Net cash (used in) investing activities | -3,977 | -2,759 |
Financing Activities: | ||
Short-term borrowings | 2,200 | |
Repayment of short-term borrowings | -5,000 | |
Dividends paid to non-affiliates | -8,007 | -7,758 |
Net cash provided by financing activities | -8,007 | -10,558 |
Change in cash and cash equivalents | -3,792 | -4,768 |
Cash and cash equivalents at beginning of period | 4,108 | 5,280 |
Cash and cash equivalents at end of period | 316 | 512 |
Cal Water | ||
Operating activities: | ||
Net income (loss) | 2,030 | -4,520 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 14,575 | 15,424 |
Change in value of life insurance contracts | -161 | -158 |
Other changes in noncurrent assets and liabilities | 10,717 | -9,176 |
Changes in operating assets and liabilities: | ||
Other changes, net | 7,582 | |
Changes in operating assets and liabilities: | -2,185 | |
Net cash provided by operating activities | 24,976 | 9,152 |
Investing activities: | ||
Utility plant expenditures | -33,793 | -22,896 |
Changes in affiliate advances | 2,725 | 1,510 |
Purchase of life insurance | -1,674 | |
Changes in restricted cash and other changes, net | -26 | 418 |
Net cash (used in) investing activities | -31,094 | -22,642 |
Financing Activities: | ||
Short-term borrowings | 30,000 | 20,000 |
Changes in affiliate advances | 1,309 | 356 |
Repayment of long-term debt | -197 | -304 |
Advances and contributions in aid of construction | 1,759 | 1,735 |
Refunds of advances for construction | -1,573 | -1,521 |
Dividends paid to affiliates | -7,909 | -7,469 |
Net cash provided by financing activities | 23,389 | 12,797 |
Change in cash and cash equivalents | 17,271 | -693 |
Cash and cash equivalents at beginning of period | 13,929 | 20,790 |
Cash and cash equivalents at end of period | 31,200 | 20,097 |
All Other Subsidiaries | ||
Operating activities: | ||
Net income (loss) | -640 | -1,177 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,129 | 1,124 |
Other changes in noncurrent assets and liabilities | -5,385 | -641 |
Changes in operating assets and liabilities: | ||
Other changes, net | 1,224 | |
Changes in operating assets and liabilities: | 6,624 | |
Net cash provided by operating activities | 1,728 | 530 |
Investing activities: | ||
Utility plant expenditures | -1,254 | -1,724 |
Changes in affiliate advances | -172 | -181 |
Net cash (used in) investing activities | -1,426 | -1,905 |
Financing Activities: | ||
Investment from affiliates | 1,000 | |
Changes in affiliate advances | -642 | 1,304 |
Repayment of affiliates long-term borrowings | -243 | -230 |
Proceeds from long-term debt | 50 | |
Repayment of long-term debt | -141 | -156 |
Advances and contributions in aid of construction | 18 | 459 |
Refunds of advances for construction | -1 | -14 |
Dividends paid to affiliates | -98 | -289 |
Net cash provided by financing activities | -57 | 1,074 |
Change in cash and cash equivalents | 245 | -301 |
Cash and cash equivalents at beginning of period | 1,550 | 1,436 |
Cash and cash equivalents at end of period | $1,795 | $1,135 |