# EDGAR Filing Document

**Accession Number:** 0001035201
**File Stem:** 0001104659-23-027435
**Filing Date:** 2023-3
**Character Count:** 48164
**Document Hash:** 323463c7bce3aa9e87726c3313a3b973
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-23-027435.hdr.sgml**: 20230301

**ACCESSION NUMBER**: 0001104659-23-027435

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 37

**CONFORMED PERIOD OF REPORT**: 20230301

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230301

**DATE AS OF CHANGE**: 20230301

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CALIFORNIA WATER SERVICE GROUP
- **CENTRAL INDEX KEY:** 0001035201
- **STANDARD INDUSTRIAL CLASSIFICATION:** WATER SUPPLY [4941]
- **IRS NUMBER:** 770448994
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-13883
- **FILM NUMBER:** 23694922

**BUSINESS ADDRESS:**
- **STREET 1:** 1720 N FIRST ST
- **STREET 2:** C/O CALIFORNIA WATER SERVICE CO
- **CITY:** SAN JOSE
- **STATE:** CA
- **ZIP:** 95112
- **BUSINESS PHONE:** 4083678200

**MAIL ADDRESS:**
- **STREET 1:** 1720 FIRST ST
- **STREET 2:** C/O CALIFORNIA WATER SERVICE CO
- **CITY:** SAN JOSE
- **STATE:** CA
- **ZIP:** 95112

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934**

Date of Report (date of earliest event reported): **March 1, 2023**

**CALIFORNIA WATER SERVICE GROUP**

(Exact name of Registrant as Specified in its Charter)

---

| | | |
|:---|:---|:---|
| **Delaware**<br> (State or other jurisdiction<br> of incorporation) | **1-13883**<br> (Commission file number) | **77-0448994**<br> (I.R.S. Employer<br> Identification Number) |

---

---

| | |
|:---|:---|
| **1720 North First Street**<br>**San Jose, California**<br> (Address of principal executive offices) | **95112**<br> (Zip Code) |

---

**(408) 367-8200**

(Registrant's telephone number, including area code)

**N/A**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

---

| |
|:---|
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |

---

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

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Shares, par value $0.01 | CWT | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined by Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ◻

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

---

| | |
|:---|:---|
| **Item 2.02.** | **Results of Operations and Financial Condition** |

---

On March 1, 2023, California Water Service Group (the "Company") issued a press release (a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference) announcing its financial results for the fourth quarter and year-end of 2022, ended December 31, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

As announced, the Company will host a conference call on Thursday, March 2, 2023 at 11:00 am EST to discuss financial results and management's business outlook. The financial results announcement contains information about how to access the conference call. A slide presentation, which includes supplemental information relating to the Company, will be used by management during the conference call. A copy of the slide presentation is attached hereto as Exhibit 99.2 and is incorporated by reference herein. The Exhibits will be posted on the Company's website at www.calwatergroup.com under the "Investor Relations" tab.

The information furnished pursuant to Item 2.02 of this Current Report shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

---

| | |
|:---|:---|
| **Item 7.01.** | **Regulation FD Disclosure.** |

---

The information included in the Exhibits to this report is incorporated by reference in response to this Item 7.01.

The information furnished pursuant to Item 7.01 of this Current Report shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

---

| | |
|:---|:---|
| **Item 9.01.** | **Financial Statements and Exhibits.** |

---

We hereby furnish the following exhibits, which shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act, with this report:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| [99.1](tm238238d1_ex99-1.htm) | [Press Release issued March 1, 2023](tm238238d1_ex99-1.htm) |
| [99.2](tm238238d1_ex99-2.htm) | [Slide presentation relating to conference call](tm238238d1_ex99-2.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | **CALIFORNIA WATER SERVICE GROUP** | **CALIFORNIA WATER SERVICE GROUP** |
| Date: March 1, 2023 | By: | /s/ Thomas F. Smegal |
|  | Name: | Thomas F. Smegal |
|  | Title: | Vice President, Chief Financial Officer & Treasurer |

---

## Exhibit 99.1

**Exhibit 99.1**

![](tm238238d1_ex99-1img02.jpg)

March 1, 2023

*For immediate release*

CALIFORNIA WATER SERVICE GROUP ANNOUNCES

2022 EARNINGS FOR YEAR AND FOURTH QUARTER

SAN JOSE, CA – California Water Service Group (NYSE: CWT) ("Company" or "CWT") today announced net income attributable to CWT of $96.0 million and diluted earnings per share of $1.77 for 2022, compared to net income attributable to CWT of $101.1 million and diluted earnings per share of $1.96 in 2021.

The $5.1 million decrease in net income was primarily due to a decrease of $11.0 million in unrealized gains in non-qualified benefit plan investments and an increase of $1.1 million in financing costs. Additionally, operating expenses increased $54.6 million, driven primarily by increases in other operations expenses of $29.8 million, water production costs of $7.8 million, administrative and general expenses of $6.0 million, depreciation and amortization expense of $5.9 million, income taxes of $0.5 million, property and other taxes of $2.6 million, and maintenance expenses of $2.1 million. These operating expense increases were offset by an increase in operating revenue of $55.5 million, driven primarily by rate increases of $34.5 million, changes in deferred revenue of $16.5 million, and an accrued unbilled revenue increase of $1.7 million. Additionally, the Company recorded a $2.7 million gain from company-owned life insurance.

The Company considers changes in unrealized gains on non-qualified benefit plan investments, proceeds from company-owned life insurance, and accrued unbilled revenue as factors outside the company's immediate control. Seasonal weather patterns and the number of unbilled days have typically been the primary influences of accrued unbilled revenue.

President & Chief Executive Officer Martin A. Kropelnicki said that 2022 financial results were in line with expectations, given the challenges posed by regulatory delays, inflation, and other factors beyond the company's control.

"I am proud of all we accomplished despite these challenges. We met or surpassed all applicable water quality standards set to protect public health, we closed acquisitions in Hawaii, New Mexico, Texas, and Washington, and we invested $327.8 million in the infrastructure needed to deliver a safe, reliable water supply, despite supply chain shortages. And we did all of this while continuing to provide excellent service to customers and support to our communities," he said.

<u>Additional Financial Results for 2022</u>

Operating revenue in 2022 was $846.4 million, a $55.5 million increase over 2021 operating revenue of $790.9 million. The increase in operating revenue was primarily due to rate increases of $34.5 million, of which $12.6 million was related to increased water costs, as well as a $16.5 million change in deferred revenue.

Total operating expenses increased $54.6 million, or 8.2%, to $718.8 million in 2022 compared to the prior year.

Water production expenses increased $7.9 million to $285.3 million in 2022, primarily due to rate increases from our purchase power providers. As designed, the California revenue decoupling mechanisms recorded an increase to revenue equal to the increase in California water production costs.

Administrative and general expense increased $6.0 million, or 4.8%, in 2022 compared to 2021. The increase was mainly due to increases in outside consulting service costs of $1.8 million, employee and retiree medical costs of $1.7 million, travel costs of $1.3 million, legal costs of $1.1 million, and training and seminars costs of $0.7 million. These cost increases were partially offset by a $0.9 million decrease in employee pension benefit costs. Changes in employee pension benefits and employee and retiree medical costs for regulated California operations generally do not affect net income attributable to CWT, as the Company has been allowed by the California Public Utilities Commission ("CPUC") to record these costs in balancing accounts for future recovery, creating a corresponding change to revenue.

Other operations expense increased $29.8 million, or 34.5%, in 2022 as compared to 2021. The increase was primarily due to increases of $13.3 million in expenses associated with the deferral of operating revenue, $5.0 million in conservation program costs, $3.2 million in bad debt expense, $1.5 million in water and waste water treatment costs, $1.2 million in employee wages, $1.1 million in customer accounts expenses, $1.0 million in waste water system operating costs, $1.0 million in district office maintenance and landscaping costs, $0.6 million in transportation costs, and $0.6 million in property loss. Changes in conservation program costs for regulated California operations generally do not affect net income attributable to California Water Service Group, as the CPUC has allowed the Company to record these costs in balancing accounts for future recovery, creating a corresponding change to revenue.

Maintenance expenses increased $2.1 million, or 7.2%, to $31.7 million in 2022, due to increases in costs for repairs of pumping equipment, labor costs in maintaining the water systems, cost for repairs of reservoirs and tanks, as well as amortization of tank coating projects in accordance with CPUC orders, and transportation costs.

Depreciation and amortization increased $5.9 million, or 5.4%, in 2022 primarily due to utility plant placed in service in 2021.

Income taxes increased $0.5 million, or 16.3%, to $3.3 million in 2022, mostly due to a $5.5 million decrease in customer refunds of excess deferred federal income taxes in 2022 as compared to 2021, which was partially offset by a tax benefit from life insurance proceeds.

Property and other taxes increased $2.6 million, or 8.0%, to $35.1 million, due mostly to an increase in our assessed property values for utility plant placed in service during the year.

In 2022, net other income and expenses decreased $5.5 million from $17.4 million in 2021. The decrease was due primarily to an $11.0 million decrease in the unrealized gain from non-qualified benefit plan investments due to market conditions and a $1.4 million increase in new business and community outreach program expenses. The decreases were partially offset by a $4.6 million decrease in other components of net periodic benefit costs, a $2.7 million gain on Company-owned life insurance, and a $0.9 million increase in allowance for funds used during construction. Changes in other components of net periodic benefit costs for regulated California operations generally do not affect net income, as the CPUC has allowed the Company to record these costs in balancing accounts for future recovery, creating a corresponding change to revenue.

In 2022, net interest expense increased $1.1 million as compared to 2021. The increase was due primarily to the 2021 issuance of $280 million in First Mortgage Bonds to finance new infrastructure investment.

<u>Fourth Quarter 2022 Results</u>

For the fourth quarter of 2022, net income attributable to CWT was $19.6 million and diluted earnings per share was $0.35 compared to net income attributable to CWT of $3.5 million and diluted earnings per share of $0.07 in the fourth quarter of 2021. The $16.1 million increase in net income attributable to CWT resulted primarily from an $11.1 million increase in accrued unbilled revenue, $10.7 million in rate increases, and $5.7 million change in deferred revenue, which were partially offset by an $11.2 million increase in other operations expenses.

Operating revenue for the fourth quarter increased $27.6 million, or 15.9%, to $200.9 million, mostly due to an increase in unbilled revenue of $11.1 million, rate increases of $10.1 million, of which $4.6 million was related to increases in water production costs, and a decrease in deferred revenue of $5.7 million.

Total operating expenses for the quarter increased $11.8 million to $174.7 million. The increase was mostly due to a $4.6 million increase in costs associated with the deferral of operating revenue, conservation program costs of $3.0 million, water production costs of $1.3 million, employee and retiree medical costs of $1.2 million, depreciation and amortization of $1.0 million, and property and other taxes of 1.0 million, which were partially offset by a $1.9 million income tax benefit increase.

<u>Liquidity and Financing</u>

Our liquidity remains strong. As of December 31, 2022 we maintained $62.1 million of cash and had additional short-term borrowing capacity of $480 million, subject to meeting the borrowing conditions on the Company's lines of credit facilities. Aged accounts receivable past due more than 60 days decreased to $17.6 million as of December 31, 2022 from $26.2 million as of December 31, 2021 due to net receipt of $17.2 million from the Water Arrearages Payment Program (WAPP). On January 25, 2022, Cal Water received $20.8 million from WAPP to help customers unable to pay their water bills from March 4, 2021 to June 15, 2022, and $3.6 million in unused funds was returned to WAPP in July 2022. Additionally, Cal Water offers interest- and penalty-free payment plans or extensions, subject to certain terms and conditions, to help customers pay water bills after June 15, 2022.

We invested $327.8 million in infrastructure in all of our subsidiaries in 2022 compared to $293.2 million in 2021. At our Board of Directors meeting on January 25, 2023, the Board increased the quarterly cash dividend by 4.0%, declaring an annual dividend of $1.04 per share of common stock.

<u>Water Revenue Adjustment Mechanism (WRAM) Receivable</u>

The net receivable balance in the WRAM and Modified Cost Balancing Account (MCBA) was $104.7 million as of December 31, 2022, an increase of 43.8%, or $31.9 million, from the receivable balance of $72.8 million as of December 31, 2021. The decoupling program will not record additional changes in sales and costs in 2023, but the Company expects to be allowed to amortize the receivable balance in customer rates.

<u>Other Information</u>

All stockholders and interested investors are invited to listen to the 2022 year-end and fourth quarter conference call on March 2, 2023 at 8:00 a.m. PT (11:00 a.m. ET) by dialing 1-800-715-9871 or 1-646-307-1963 and keying in ID #3437186, or you may access the live audio webcast at <u>www.calwatergroup.com/2022q4-call</u>. Please join at least 15 minutes in advance of the call to ensure a timely connection. A replay of the call will be available from 11:00 a.m. PT (2:00 p.m. ET) on March 2, 2023 through May 1, 2023, at 1-800-770-2030 or 1-609-800-9909, ID #3437186. The replay will also be available under the investor relations tab at <u>www.calwatergroup.com/2022q4-call</u>. Prior to the call, Cal Water will post a slide presentation on its website. The presentation can be found at <u>www.calwatergroup.com/2022q4-call</u> after 4:00 p.m. PT today. The call will be hosted by President and Chief Executive Officer Martin A. Kropelnicki, Vice President and Chief Financial Officer Thomas F. Smegal, Vice President Rates and Regulatory Affairs Greg Milleman, and Corporate Controller Thomas A. Scanlon.

California Water Service Group is the parent company of California Water Service, Washington Water Service, New Mexico Water Service, Hawaii Water Service, Inc., Texas Water Service, CWS Utility Services, and HWS Utility Services LLC. Together, these companies provide regulated and non-regulated water service to more than 2.1 million people in California, Washington, New Mexico, Hawaii and Texas. California Water Service Group's common stock trades on the New York Stock Exchange under the symbol "CWT." Additional information is available online at <u>www.calwatergroup.com</u>.

***This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the PSLRA. Forward-looking statements in this news release are based on currently available information, expectations, estimates, assumptions and projections, and our management's beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like will, would, expects, intends, plans, believes, may, could , estimates, assumes, anticipates, projects, progress, predicts, hopes, targets, forecasts, should, seeks or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this news release include, but are not limited to, statements describing an indicated annual dividend. The forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results to be different than those expected or anticipated include, but are not limited to: the impact of the ongoing COVID-19 pandemic and related public health measures; our ability to invest or apply the proceeds from the issuance of common stock in an accretive manner; governmental and regulatory commissions' decisions, including decisions on proper disposition of property; consequences of eminent domain actions relating to our water systems; changes in regulatory commissions' policies and procedures, such as the CPUC's decision in 2020 to preclude companies from proposing fully decoupled WRAMs in their next GRC filing (which impacted our 2021 GRC filing related to our operations commencing in 2023); the outcome and timeliness of regulatory commissions' actions concerning rate relief and other matters, including with respect to our 2021 GRC filing and our Cost of Capital filing; increased risk of inverse condemnation losses as a result of climate change and drought; our ability to renew leases to operate water systems owned by others on beneficial terms; changes in California State Water Resources Control Board water quality standards; changes in environmental compliance and water quality requirements; electric power interruptions, especially as a result of Public Safety Power Shutoff (PSPS) programs; housing and customer growth; the impact of opposition to rate increases; our ability to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our enterprise risk management processes to identify or address risks adequately; labor relations matters as we negotiate with the unions; changes in customer water use patterns and the effects of conservation, including as a result of drought conditions; our ability to complete, in a timely manner or at all, successfully integrate and achieve anticipated benefits from announced acquisitions; the impact of weather, climate change, natural disasters, and actual or threatened public health emergencies, including disease outbreaks, on our operations, water quality, water availability, water sales and operating results and the adequacy of our emergency preparedness; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt or pay dividends; risks associated with expanding our business and operations geographically; the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown or a recession, increasing interest rates, and changes in monetary policy; the impact of market conditions and volatility on unrealized gains or losses on our non-qualified benefit plan investments and our operating results; the impact of weather and timing of meter reads on our accrued unbilled revenue; and other risks and unforeseen events described in our SEC filings. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as the Annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise*.**

***##***

**Contact**

Tom Smegal

(408) 367-8200 (analysts)

Shannon Dean

(408) 367-8243 (media)

**CALIFORNIA WATER SERVICE GROUP**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

Unaudited

(In thousands, except per share data)

---

| | | |
|:---|:---|:---|
|  | **December 31**<br>**2022** | **December 31**<br>**2021** |
| **ASSETS** |  |  |
| **Utility plant:** |  |  |
| &nbsp;&nbsp;&nbsp;Utility plant | $4536272 | $4197344 |
| &nbsp;&nbsp;&nbsp;Less accumulated depreciation and amortization | (1477402) | (1350482) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net utility plant | 3058870 | 2846862 |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 62100 | 78380 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 22925 | 2273 |
| &nbsp;&nbsp;&nbsp;Receivables: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customers | 55079 | 60785 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory balancing accounts | 66826 | 78597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other, net | 20932 | 18452 |
| &nbsp;&nbsp;&nbsp;Unbilled revenue, net | 33140 | 32760 |
| &nbsp;&nbsp;&nbsp;Materials and supplies at weighted average cost | 12564 | 9511 |
| &nbsp;&nbsp;&nbsp;Taxes, prepaid expenses, and other assets | 21969 | 19700 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 295535 | 300458 |
| **Other assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Regulatory assets | 283620 | 285692 |
| &nbsp;&nbsp;&nbsp;Goodwill | 36814 | 36814 |
| &nbsp;&nbsp;&nbsp;Other assets | 175913 | 153445 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other assets | 496347 | 475951 |
| **TOTAL ASSETS** | $3850752 | $3623271 |
| **CAPITALIZATION AND LIABILITIES** |  |  |
| **Capitalization:** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $.01 par value; 136,000 shares authorized, 55,598 and 53,716 outstanding in 2022 and 2021, respectively | $556 | $537 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 760336 | 651121 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 556698 | 514873 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interests | 4804 | 5386 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity | 1322394 | 1171917 |
| &nbsp;&nbsp;&nbsp;Long-term debt, net | 1052487 | 1055794 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total capitalization | 2374881 | 2227711 |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Current maturities of long-term debt, net | 3310 | 5192 |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 70000 | 35000 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 140986 | 144369 |
| &nbsp;&nbsp;&nbsp;Regulatory balancing accounts | 12240 | 32908 |
| &nbsp;&nbsp;&nbsp;Accrued interest | 6490 | 6542 |
| &nbsp;&nbsp;&nbsp;Accrued other liabilities | 61624 | 47926 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 294650 | 271937 |
| **Deferred income taxes** | 330251 | 294647 |
| **Pension** | 78443 | 92287 |
| **Regulatory liabilities and other** | 287294 | 252938 |
| **Advances for construction** | 199832 | 198086 |
| **Contributions in aid of construction** | 285401 | 285665 |
| **Commitments and contingencies** |  |  |
| **TOTAL CAPITALIZATION AND LIABILITIES** | $3850752 | $3623271 |

---

**CALIFORNIA WATER SERVICE GROUP**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

Unaudited

(In thousands, except per share data)

---

| | | |
|:---|:---|:---|
| **For the Three Months ended:** | | |
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| **Operating revenue** | $200937 | $173326 |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Operations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Water production costs | 64069 | 62786 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative and general | 33293 | 33849 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operations | 34227 | 23074 |
| &nbsp;&nbsp;&nbsp;Maintenance | 8326 | 8474 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 28188 | 27199 |
| &nbsp;&nbsp;&nbsp;Income tax benefits | (2665) | (771) |
| &nbsp;&nbsp;&nbsp;Property and other taxes | 9212 | 8262 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | 174650 | 162873 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net operating income | 26287 | 10453 |
| **Other income and expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Non-regulated revenue | 4504 | 6003 |
| &nbsp;&nbsp;&nbsp;Non-regulated expenses | (2389) | (4786) |
| &nbsp;&nbsp;&nbsp;Other components of net periodic benefit credit | 2960 | 2383 |
| &nbsp;&nbsp;&nbsp;Allowance for equity funds used during construction | 1106 | 896 |
| &nbsp;&nbsp;&nbsp;Income tax expense on other income and expenses | (1903) | (210) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net other income | 4278 | 4286 |
| **Interest expense:** |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 11714 | 11816 |
| &nbsp;&nbsp;&nbsp;Allowance for borrowed funds used during construction | (620) | (513) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest expense | 11094 | 11303 |
| **Net income** | 19471 | 3436 |
| **Loss attributable to noncontrolling interests** | (98) | (67) |
| **Net income attributable to California Water Service Group** | $19569 | $3503 |
| **Earnings per share of common stock** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $0.36 | $0.07 |
| &nbsp;&nbsp;&nbsp;Diluted | $0.35 | $0.07 |
| **Weighted average shares outstanding** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 55083 | 53157 |
| &nbsp;&nbsp;&nbsp;Diluted | 55133 | 53157 |
| **Dividends per share of common stock** | $0.2500 | $0.2300 |

---

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**

Unaudited

(In thousands, except per share data)

---

| | | |
|:---|:---|:---|
| **For the Twelve Months ended:** | | |
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| **Operating revenue** | $846431 | $790909 |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Operations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Water production costs | 285264 | 277474 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative and General | 132718 | 126686 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operations | 116172 | 86392 |
| &nbsp;&nbsp;&nbsp;Maintenance | 31715 | 29592 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 114575 | 108715 |
| &nbsp;&nbsp;&nbsp;Income taxes | 3262 | 2805 |
| &nbsp;&nbsp;&nbsp;Property and other taxes | 35065 | 32475 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 718771 | 664139 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net operating income | 127660 | 126770 |
| **Other income and expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;Non-regulated revenue | 21276 | 22761 |
| &nbsp;&nbsp;&nbsp;Non-regulated expenses | (24821) | (17140) |
| &nbsp;&nbsp;&nbsp;Other components of net periodic benefit credit | 14476 | 9903 |
| &nbsp;&nbsp;&nbsp;Allowance for equity funds used during construction | 4127 | 3186 |
| &nbsp;&nbsp;&nbsp;Income tax expense on other income and expenses | (3113) | (1287) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net other income | 11945 | 17423 |
| **Interest expense:** |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 46686 | 44980 |
| &nbsp;&nbsp;&nbsp;Allowance for borrowed funds used during construction | (2344) | (1766) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest expense | 44342 | 43214 |
| **Net income** | 95263 | 100979 |
| **Loss attributable to noncontrolling interests** | (748) | (146) |
| **Net income attributable to California Water Service Group** | $96011 | $101125 |
| **Earnings per share of common stock** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $1.77 | $1.96 |
| &nbsp;&nbsp;&nbsp;Diluted | $1.77 | $1.96 |
| **Weighted average shares outstanding** |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 54320 | 51633 |
| &nbsp;&nbsp;&nbsp;Diluted | 54363 | 51633 |
| **Dividends per share of common stock** | $1.0000 | $0.9200 |

---

## Exhibit 99.2

**Exhibit 99.2**

![](tm238238d1_ex99-2img001.jpg)

0 Fourth Quarter and Year End 2022 Results Presentation March 2, 2023

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INVESTOR RELATIONS Forward - Looking Statements This presentation contains forward - looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("PSLRA"). The forward - looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the PSLRA. Fo rward - looking statements in this presentation are based on currently available information, expectations, estimates, assumptions and projections, and our management's beliefs, assum pti ons, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our do cum ents, statements that are not historical in nature, including words like will, would, expects, intends, plans, believes, may, could, should, estimates, assumes, anticipates, pro jec ts, progress, predicts, hopes, targets, forecasts, should, seeks, mission, goals, promise or variations of these words or similar expressions are intended to identify forward - looking stat ements. Examples of forward - looking statements in this presentation include, but are not limited to, statements describing our strategic goals, mission and promise, expectations re gar ding the California General Rate Case, California Cost of Capital, impacts from decoupling, our ability to estimate for certain mechanisms, drought conditions, expected or target capi tal expenditure, completion of pending acquisitions, estimated investments and depreciation, rate base estimates and our expectations regarding regulatory outcomes and potential imp acts, growth efforts and risk management. The forward - looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results may vary materially from what is contained in a forward - looking s tatement. Factors that may cause actual results to be different than those expected or anticipated include, but are not limited to: the impact of the ongoing COVID - 19 pandemic and re lated public health measures; our ability to invest or apply the proceeds from the issuance of common stock in an accretive manner; governmental and regulatory commissions' decisio ns, including decisions on proper disposition of property; consequences of eminent domain actions relating to our water systems; changes in regulatory commissions' policies a nd procedures, such as the CPUC's decision in 2020 to preclude companies from proposing fully decoupled WRAMs in their next GRC filing (which impacted our 2021 GRC filing related to our operations commencing in 2023); the outcome and timeliness of regulatory commissions' actions concerning rate relief and other matters, including with respect to our 202 1 G RC filing and our Cost of Capital filing; increased risk of inverse condemnation losses as a result of climate change and drought; our ability to renew leases to operate water systems o wne d by others on beneficial terms; changes in California State Water Resources Control Board water quality standards; changes in environmental compliance and water quality requiremen ts; electric power interruptions, especially as a result of Public Safety Power Shutoff (PSPS) programs; housing and customer growth; the impact of opposition to rate increases; our abi lity to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrori st threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our enterprise risk management processes to identify or address ri sks adequately; labor relations matters as we negotiate with the unions; changes in customer water use patterns and the effects of conservation, including as a result of drought conditio ns; our ability to complete, in a timely manner or at all, successfully integrate and achieve anticipated benefits from announced acquisitions; the impact of weather, climate change, n atu ral disasters, and actual or threatened public health emergencies, including disease outbreaks, on our operations, water quality, water availability, water sales and operating res ult s and the adequacy of our emergency preparedness; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing cos ts or affect our ability to borrow, make payments on debt or pay dividends; risks associated with expanding our business and operations geographically; the impact of stagnating or worsen ing business and economic conditions, including inflationary pressures, general economic slowdown or a recession, increasing interest rates, and changes in monetary policy; the impact of market conditions and volatility on unrealized gains or losses on our non - qualified benefit plan investments and our operating results; the impact of weather and timing of met er reads on our accrued unbilled revenue; and other risks and unforeseen events described in our SEC filings. When considering forward - looking statements, you should keep in mind t he cautionary statements included in this paragraph, as well as the Annual 10 - K, Quarterly 10 - Q, and other reports filed from time - to - time with the Securities and Exchange Commissio n (SEC). We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward - looking statements, whether as a result of new information, fu ture events or otherwise . 1

![](tm238238d1_ex99-2img003.jpg)

INVESTOR RELATIONS Tom Smegal Vice President, CFO & Treasurer Tom Scanlon Corporate Controller Marty Kropelnicki President & CEO Greg Milleman Vice President, Rates & Regulatory Affairs Today's Participants 2

![](tm238238d1_ex99-2img004.jpg)

INVESTOR RELATIONS Presentation Overview o Our Values and Priorities o Financial Results o Financial Highlights and Earnings Bridges o California Regulatory Update o California Drought Update o Capital Update o Business Development Status o CapEx and Rate Base Tables o Looking Forward 3

![](tm238238d1_ex99-2img005.jpg)

4 BOARD UPDATE 4 BOARD UPDATE INVESTOR RELATIONS 4

![](tm238238d1_ex99-2img006.jpg)

INVESTOR RELATIONS Financial Results: Full Year 2022 (Amounts are in millions, except for EPS) 2021 2022 Variance Operating Revenue $790.9 $846.4 7.0% Operating Expenses $664.1 $718.8 8.2% Net Interest Expense $43.2 $44.3 2.6% Net In come attributable to CWT $101.1 $96.0 (5.1%) Diluted EPS $1.96 $1.77 (9.8%) Capital Investments $293.2 $327.8 11.8% 6

![](tm238238d1_ex99-2img007.jpg)

INVESTOR RELATIONS NET INCOME ATTRIBUTABLE TO CWT DECREASED $5.1M PRIMARILY DUE TO AN $11.0M UNREALIZED CHANGE IN THE VALUATION OF NONQUALIFIED RETIREMENT PLAN ASSETS AND A $1.1M INCREASE IN INTEREST EXPENSE, OFFSET BY A $1.7M INCREASE IN UNBILLED REVENUE AS EXPECTED, THE THIRD YEAR OF A CALIFORNIA GENERAL RATE CASE (GRC) RESULTED IN OPERATING EXPENSE INCREASES ALONG WITH CAPITAL - RELATED COSTS INCREASING FASTER THAN RATE RELIEF HIGHER CAPITAL INVESTMENTS IN THE 4 TH QUARTER LED TO A RECORD AMOUNT OF CAPEX FOR THE FULL YEAR 2022 Full Year Financial Highlights 8

![](tm238238d1_ex99-2img008.jpg)

INVESTOR RELATIONS (Amounts are in millions, except for EPS) Q4 2021 Q4 2022 Variance Operating Revenue $173.3 $200.9 15.9% Operating Expenses $162.9 $174.7 7.2% Net Interest Expense $11.3 $11.1 (1.8%) Net In come Attributable to CWT $3.5 $19.6 458.6% Diluted EPS $0.07 $0.35 438.6% Capital Investments $85.4 $105.7 23.8% Financial Results: Fourth Quarter 2022 5

![](tm238238d1_ex99-2img009.jpg)

INVESTOR RELATIONS NET INCOME ATTRIBUTABLE TO CWT INCREASED $16.1M UNBILLED REVENUE INCREASED $11.1M AND WE RECORDED A $0.5M INCREASED CHANGE IN VALUATION OF THE COMPANY'S NONQUALIFIED RETIREMENT PLAN ASSETS AS COMPARED TO Q4 2021. $11.8M INCREASED TOTAL OPERATING EXPENSES DUE MAINLY TO COST CHANGES TIED TO UPDATED DEFERRAL OF OPERATING REVENUE AND INCREASES IN CONSERVATION, WATER PRODUCTION, AND MEDICAL EXPENSES AS COMPARED TO Q4 2021 GENERAL RATE INCREASES OF $5.5M Fourth Quarter Financial Highlights 7

![](tm238238d1_ex99-2img010.jpg)

INVESTOR RELATIONS EPS Bridge Q4 2021 to Q4 2022 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.02 $0.14 - $0.09 $0.20 $0.35 $0.01 $0.07 9

![](tm238238d1_ex99-2img011.jpg)

INVESTOR RELATIONS EPS Bridge Full Year 2021 to 2022 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 - $0.02 $0.51 $1.96 - $0.14 - $0.11 $1.77 - $0.43 10

![](tm238238d1_ex99-2img012.jpg)

California Cost of Capital Update • Once again, no new updates in the quarter from the Administrative Law Judge on the open cost of capital case. It is not clear to the parties when a proposed decision will be issued, but as of today the earliest a final decision could be approved is April 2023. • Because of the delay in issuing a decision, the company cannot determine whether changes in market conditions since the filing could affect the final decision on any of the components of cost of capital. • Given the success of the company's financing program, our proposed cost of debt in the application was lower than last adopted. The company has not reserved for any potential outcome of the proceeding. In the event the CPUC adopts capital components retroactively, 2023 results may include any customer refund liability associated with that retroactivity, including up to an $11 million annual impact for reduced debt costs, with additional unknown impacts from potential changes to adopted capital structure and allowed return on equity. 11

![](tm238238d1_ex99-2img013.jpg)

California General Rate Case Update • No update on timing of a proposed decision. • The ALJ assigned to our case is also assigned to Golden State Water's GRC, which is currently delayed over 15 months. • Cal Water and the Public Advocates Office filed a settlement on September 2, 2022 covering issues of rate design, sales forecast, and other issues. • Litigated items not included in the settlement included capital investment budgets, WRAM balancing account recovery, and some expenses. • The ALJ ruled on February 13, 2023 that Cal Water's interim rates, effective January 1, 2023, can include a 4% rate increase in most California districts beginning April 15, 2023. • Interim rates are subject to adjustment based on the final outcome of the case. 12

![](tm238238d1_ex99-2img014.jpg)

INVESTOR RELATIONS Focus on Decoupling for 2023 • Starting in 2023, Cal Water will no longer be decoupled and expects again to experience revenue (sales) and production cost (source mix) variability. • The 2021 General Rate Case settlement and stipulations contain provisions designed to mitigate the absence of a decoupling program: • Lower estimated sales factoring in continued conservation efforts • Rates designed to reduce revenue volatility by increasing the amount collected in fixed monthly service charges but still send a price signal to the highest users • Estimated production costs accounting for a realistic mix of water sources • Legislation asking the CPUC to reconsider decoupling was signed into law by Governor Newsom on September 30, 2022. • Cal Water and others have appealed the CPUC decoupling decision to the California Supreme Court – the case is fully briefed and we anticipate oral arguments by mid - 2023. 13

![](tm238238d1_ex99-2img015.jpg)

INVESTOR RELATIONS CA Tracker Status for 2023 • Mechanisms we should be able to estimate prior to a GRC decision: • Incremental Cost Balancing Account (ICBA) covers changes in unit prices for production costs. • Conservation Balancing Account covers conservation expenses • Mechanisms which are in effect, but which we will not be able to estimate due to uncertainty of the GRC adopted revenue requirement: • Drought Lost Revenue Account tracks lost sales revenue due to the drought • Interim Rate Memorandum account tracks the difference between interim rates and final rates adopted in the GRC • Unopposed mechanisms , but which we do not currently have enough information to estimate: • Monterey - style revenue adjustment mechanism would track differential effect of tiered pricing on changes in water sales • 2023 - 2025 Health Care Balancing account (HCBA) covers changes in medical costs • 2023 - 2025 Pension Balancing Account would track changes in pension costs 14

![](tm238238d1_ex99-2img016.jpg)

INVESTOR RELATIONS A SERIES OF "ATMOSPHERIC RIVER" STORMS IN JANUARY 2023 AND A WET, COLD FEBRUARY HAS DRAMATICALLY IMPROVED WATER SUPPLY CONDITIONS FOR CALIFORNIA'S REGIONAL SURFACE WATER SYSTEMS GROUNDWATER LEVELS REACT SLOWLY TO SEASONAL PRECIPITATION AND MAY RECOVER SOMEWHAT THIS YEAR COLORADO RIVER CONTINUES IN LONG - TERM DEFICIT WITH CONTINUED IMPACTS TO SUPPLY IN SOUTHERN CALIFORNIA CONSERVATION CONTINUES – CALIFORNIA CUSTOMER USAGE IN Q4 2022 WAS 8.2% LOWER THAN 2021 AND 17% LOWER THAN ADOPTED CAL WATER'S Q4 DROUGHT EXPENDITURES OF $0.5M ARE RECORDED IN A MEMORANDUM ACCOUNT FOR POTENTIAL FUTURE RECOVERY. TOTAL BALANCE SINCE 2021 IS $1.9M. California Drought Update 15

![](tm238238d1_ex99-2img017.jpg)

INVESTOR RELATIONS Capital Investment Update • We invested a record amount in capital in 2022, in part due to growth in spending in all subsidiaries • Q4 capital spending increased due to good weather conditions during the quarter and previous planning efforts to improve materials availability • 2023 target capital spending will still be in a wide range due to uncertainty over the California GRC outcome • We expect increased capital expenditures in non - California utilities in 2023 due to the recent acquisitions and expansions 16

![](tm238238d1_ex99-2img018.jpg)

INVESTOR RELATIONS Business Development Project Updates System Water Connections Wastewater Connections Total Status Animas Valley (NM) 2,000 2,000 Closed April 2022 Railyard (TX) – BVRT Utility 350 (up to 1,500 at buildout) 350 (up to 1,500 at buildout) Closed June 2022 Keahou (HI) 1,500 Equivalent Dwelling Units (EDUs) 1,500 EDUs Closed December 2022 Skylonda (CA) 176 176 CPUC Approved June 2022\* HOH Utilities (HI) 1,800 EDUs 1,800 EDUs HPUC Approved June 2022 \* Stroh's Water (WA) 900 900 WUTC Approved January 2023\* Bethel Green Acres (WA) 200 200 WUTC Approved February 2023\* Monterey Water (NM) 380 380 Announced March 2022\* KSSCS (HI) 400 EDUs 400 EDUs Announced April 2022\* Camino Real (TX) – BVRT Utility Up to 5,000 for current phase Up to 5,000 for current phase Up to 10,000 for current phase Announced water supply agreement August 2022\* Lake Section (NM) 5,000 5,000 Announced January 2023\* \*All announced acquisitions are subject to customary closing conditions and regulatory approval unless noted 17

![](tm238238d1_ex99-2img019.jpg)

INVESTOR RELATIONS $118 $116 $131 $177 $229 $259 $272 $274 $299 $293 $328 $360 $365 $55 $58 $61 $61 $64 $77 $84 $89 $99 $115 $124 $133 $0 $50 $100 $150 $200 $250 $300 $350 $400 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023\* 2024\* Capital Investment Depreciation Capital Investment and Depreciation (in millions) \* 2023 - 2024 Estimated investments and depreciation include amounts filed in the California 2021 GRC plus estimates for other sta tes. 2008 - 2019 CAGR 9.7% 2015 - 2022 TOTAL CapEx 3x DEPRECIATION $109 18

![](tm238238d1_ex99-2img020.jpg)

INVESTOR RELATIONS Estimated Regulated Rate Base of CWT (in billions) \*2023 - 2025 Rate Base Estimates include filed proposal in 2021 California General Rate Case plus estimated rate base in other sta tes. These values are not yet adopted and are subject to review and approval of the CPUC and other regulators. $1.06 $1.12 $1.24 $1.61 $2.74 $1.26 $1.82 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 2016 2017 2018 2019 2020 2021 2022 \*2023 \*2024 \*2025 $1.95 $2.24 $2.49 19

![](tm238238d1_ex99-2img021.jpg)

INVESTOR RELATIONS Looking Forward o Short - term regulatory uncertainty remains in California as we await two significant case outcomes. Over the long - term, we remain optimistic about the CPUC regulatory compact and our long - term capital investment growth o Our quarterly financial results will not include the potential effects of several regulatory mechanisms in the California GRC until the outcome of that case is clear o While focused on regulation, we continue to make progress on business development efforts and risk management, including close attention to supply chains, drought, and climate change issues 2 0

![](tm238238d1_ex99-2img022.jpg)

DISCUSSION