California Water Service Group (CWT) announced that its subsidiary California Water Service (Cal Water) has acquired Kings Mountain Park Mutual Water Company's (Kings Mountain) water system assets. The agreement was originally approved by the California Public Utilities Commission in late 2022. In order to ensure the extension of high-quality services to customers and investments needed to upgrade the existing and acquired assets, large water utility companies are acquiring small players. Per the U.S. Envir ...

SAN JOSE, Calif., May 28, 2024 (GLOBE NEWSWIRE) -- California Water Service (Cal Water), the largest subsidiary of California Water Service Group (NYSE: CWT), has finalized the acquisition of Kings Mountain Park Mutual Water Company's (Kings Mountain) water system assets. Cal Water's Bear Gulch District, which has provided water in recent years to Kings Mountain through a system interconnection, will now provide water utility services directly to Kings Mountain customers. The Bear Gulch District already ser ...

Core Viewpoint - California Water Service (Cal Water) has completed the acquisition of Kings Mountain Park Mutual Water Company's water system assets, enhancing service reliability and firefighting capabilities for the local community [1][2][3]. Group 1: Acquisition Details - The acquisition allows Cal Water's Bear Gulch District to provide direct water utility services to Kings Mountain customers, which were previously served through a system interconnection [1][2]. - The integration of Kings Mountain's system with the Bear Gulch District is expected to improve water supply reliability and support future infrastructure improvements [2][3]. Group 2: Investment and Infrastructure - Cal Water plans to invest in Kings Mountain's water infrastructure to ensure safety and reliability for both everyday needs and emergency services [3]. - The acquisition is anticipated to enhance the affordability of future infrastructure improvements within the Kings Mountain system [3]. Group 3: Company Background - California Water Service Group is the largest regulated water utility in the western United States, serving over 2.1 million people across multiple states [5]. - The company is committed to enhancing the quality of life for its customers and communities through responsible investments in water and wastewater infrastructure [6].

SAN JOSE, Calif., May 22, 2024 (GLOBE NEWSWIRE) -- As part of its dedication to enhancing the transparency of its environmental, social, and governance (ESG) program, California Water Service Group (Group or Company) (NYSE: CWT) today released its 2023 ESG Report and ESG Analyst Download. The ESG Report—which is aligned with recognized reporting frameworks and standards, including the Sustainability Accounting Standards Board Water Utilities & Services Industry Standards, the Recommendations of the Task For ...

Core Insights - California Water Service Group has released its 2023 ESG Report and ESG Analyst Download, emphasizing its commitment to transparency in environmental, social, and governance matters [1][2] - The report aligns with recognized frameworks such as the Sustainability Accounting Standards Board and the Global Reporting Initiative, showcasing the company's progress in ESG focus areas [1][2] ESG Strategy and Achievements - The company aims to enhance the quality of life for customers and communities through responsible investments in water infrastructure and sustainability initiatives [4] - Significant achievements in 2023 include a commitment to reduce Scope 1 and 2 greenhouse gas emissions by 63% by 2035 from a 2021 base year, and an investment of $383.7 million in infrastructure [6] - The company saved nearly 95 million gallons of water annually through conservation programs [6] Customer Engagement and Support - California Water Service Group achieved 100% compliance with federal and state water quality standards and received $83 million in funding to assist customers with past-due balances from the pandemic [6] - The company donated over $1.5 million to local community organizations [6] Workforce Development - The company invested $728,000 in employee training, averaging 13.6 hours of training per employee, and doubled its veteran hiring rate to 8% [6] - Scholarships totaling $10,000 were awarded to children of employees [6] Governance and Diversity - The Board of Directors maintains 36% gender diversity and 18% ethnic diversity, with ongoing discussions on ESG matters [6] - The company spent 27.2% of net procurement with diverse suppliers [6]

California Water Service Group is a member of the Utilities sector. This group includes 106 individual stocks and currently holds a Zacks Sector Rank of #12. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups. The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estima ...

James Lynch Sr. Vice President, CFO & Treasurer Forward-Looking Statements INVESTOR RELATIONS 2 First Quarter 2024 Highlights • Authorization to invest $1.2 billion in water system improvement projects (2021-2024) • Adoption of progressive rate design • Recognition of interim rates (FY 2023 -Q1 2024) $83 million in additional state funding to relieve California customers of past-due balances accumulated during the COVID-19 pandemic Commitment to reducing absolute Scope 1 and 2 greenhouse gas (GHG) emissions ...

Financial Data and Key Metrics Changes - Reported net income for the first quarter was $69.9 million, up nearly 415% compared to a loss of $22.2 million in the first quarter of 2023 [71] - Diluted earnings per share for the first quarter 2024 was $1.21, compared to a loss of $0.48 per share in the first quarter of 2023 [102] - Net interest expense increased 25.5% to $15 million during the first quarter compared to $12 million for the first quarter of 2023 [5] Business Line Data and Key Metrics Changes - Operating revenue for the quarter increased 106.5% to $270.7 million compared to $131.1 million in the prior year [101] - First quarter operating expenses increased to $192.9 million from $148.6 million, primarily driven by higher water production costs and deferred costs associated with recognized revenue [80] Market Data and Key Metrics Changes - The overall rate base grew to an estimated $2.2 billion by the end of 2023, an increase of 15.4% over 2022 [72] - The company anticipates making approximately $380 million in capital investments for the year, including an estimated $20 million in developer-funded projects [81] Company Strategy and Development Direction - The company is committed to investing in infrastructure improvements and addressing PFAS treatment, with plans to spend between $12 million and $20 million this year on PFAS treatment [89] - The company aims to maintain a strong liquidity position with cash and cash equivalents of $88.3 million and additional short-term borrowing capacity of $320 million [82] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the water supply situation in California, noting good snowpack levels and replenishment of underground aquifers [117] - The company is focused on achieving a return on equity (ROE) of 10.27% for 2024 and aims to drive towards hitting that ROE despite regulatory lag and inflation concerns [41] Other Important Information - The company received approximately $83 million under the State of California Extended Arrearage Program to assist customers with past due balances from the COVID-19 pandemic [73] - The company has a commitment to reduce absolute Scope 1 and Scope 2 greenhouse gases by 63% by 2023 from a 2021 baseline [111] Q&A Session All Questions and Answers Question: How should we think about the timing of the cash recovery of the retroactive 2023 GRC revenues? - The company will start requesting it in the third quarter, with cash flows expected to come in more during 2025 and 2026 [58][60] Question: Will you be booking AFUDC earnings associated with PFAS CapEx? - The company will accrue AFUDC on capital projects, which will flow through the income statement [90] Question: Is dividend growth a lever to adjust downwards if there are higher equity needs? - The company aims to maintain a dividend growth rate above inflation and considers market conditions and capital needs when making decisions [144]

PART I Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2024 include balance sheets, operations, and cash flows Q1 2024 vs Q1 2023 Statement of Operations Highlights | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Operating Revenue** | $270.7 million | $131.1 million | | **Net Income (Loss) Attributable to CWT** | $69.9 million | $(22.2) million | | **Diluted EPS** | $1.21 | $(0.40) | Balance Sheet Summary | Metric | As of March 31, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | $4,780.8 million | $4,595.5 million | | **Total Equity** | $1,470.8 million | $1,430.3 million | | **Total Liabilities & Capitalization** | $4,780.8 million | $4,595.5 million | [Notes to Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, regulatory impacts, and key financial items for the quarter - Due to the seasonal nature of the water business, interim results are not indicative of a full 12-month period, with revenue and income typically higher in the warmer, drier summer months[133](index=133&type=chunk) - In Q1 2024, the company reclassified **$13.7 million** from a regulatory asset to accumulated other comprehensive loss for its SERP plan, as the 2021 GRC decision did not approve recovery of these expenses from customers[102](index=102&type=chunk)[174](index=174&type=chunk) - As a subsequent event, Cal Water received **$82.0 million** in April 2024 from the California Extended Water and Wastewater Arrearages Payment Program to provide relief for eligible customer unpaid bills[2](index=2&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2024 net income significantly increased due to the retroactive 2021 General Rate Case (GRC) decision [Results of Operations](index=21&type=section&id=Results%20of%20Operations) A $92.1 million increase in net income was driven by a GRC-related revenue rise of $139.6 million Net Income (Loss) Comparison (Q1 2024 vs Q1 2023) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Net Income (Loss)** | $69.9 million | $(22.2) million | | **Diluted EPS (Loss)** | $1.21 | $(0.40) | Sources of Operating Revenue Increase (in thousands) | Source | Amount | | :--- | :--- | | Net change due to rate changes, usage, and other | $13,986 | | Interim Rates Memorandum Account (IRMA) revenue | $80,664 | | Monterey-Style Water Revenue Adjustment Mechanism (MWRAM) revenue | $31,066 | | Deferral of revenue | $13,933 | | **Net operating revenue increase** | **$139,649** | - Total operating expenses rose by **$44.2 million (29.8%)** year-over-year, primarily due to a $9.2 million increase in water production costs, a $10.3 million increase in other operations expenses, and a $21.2 million increase in income tax expense[4](index=4&type=chunk)[10](index=10&type=chunk) [Regulatory Matters](index=23&type=section&id=Regulatory%20Matters) The March 2024 GRC decision retroactively increased 2023 revenue and authorized $1.2 billion in infrastructure investment - The 2021 GRC decision, approved in March 2024, increased adopted revenues for 2023 by approximately **$41.5 million**, retroactive to January 1, 2023[18](index=18&type=chunk) - The decision authorizes Cal Water to invest approximately **$1.2 billion** from 2021 through 2024 in water system infrastructure projects[19](index=19&type=chunk) - Due to the GRC delay, Cal Water recorded a regulatory asset of **$80.7 million** and a corresponding increase to revenue under the Interim Rates Memorandum Account (IRMA)[23](index=23&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow increased to $26.5 million, with $109.8 million in capital expenditures for the quarter Cash Flow Summary (Q1 2024 vs Q1 2023) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $26.5 million | $21.0 million | | **Net Cash used in Investing Activities** | $(109.8) million | $(82.0) million | | **Net Cash from Financing Activities** | $86.6 million | $62.5 million | - Estimated utility capital expenditures for the full year 2024 are projected to be **$365.0 million**[36](index=36&type=chunk)[54](index=54&type=chunk) - The company has access to a total of **$600.0 million** in unsecured revolving credit facilities for short-term borrowings[31](index=31&type=chunk)[52](index=52&type=chunk) - The quarterly common stock dividend was increased to **$0.28 per share** in Q1 2024 from $0.26 per share in Q1 2023, with a long-term goal of a 60% payout ratio[50](index=50&type=chunk) [Water Supply](index=26&type=section&id=Water%20Supply) Water supply is deemed adequate for 2024, but new PFAS and Chromium-6 regulations pose future capital costs - Management believes water supply will be adequate for 2024, with the California snowpack water content at **127% of long-term averages** as of April 9, 2024[58](index=58&type=chunk) - The EPA finalized a new regulation for six PFAS in drinking water, which will require an estimated capital investment of approximately **$215.0 million** to comply by the 2029 deadline[60](index=60&type=chunk) - In April 2024, the California Water Board adopted a new Maximum Contaminant Level (MCL) of **10 parts per billion for Chromium-6**, requiring compliance within two to four years[61](index=61&type=chunk) [Quantitative and Qualitative Disclosure about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) Market risk is limited to interest rates and commodity prices, mitigated by cost recovery through regulated rates - The company **does not use derivative financial instruments** and has no foreign currency exchange risk[64](index=64&type=chunk) - Market risk from interest rate exposure and commodity price changes is limited because these costs are typically covered in consumer water rates approved by the Commissions[64](index=64&type=chunk)[65](index=65&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective as of March 31, 2024, with no material changes - Management concluded that as of March 31, 2024, the company's disclosure controls and procedures were **effective at the reasonable assurance level**[67](index=67&type=chunk) - **No changes** in internal control over financial reporting occurred during Q1 2024 that have materially affected, or are reasonably likely to materially affect, internal controls[68](index=68&type=chunk) PART II Other Information [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal matters are not expected to have a material financial impact on the company - The company is involved in various legal matters in the ordinary course of business, but management **does not expect their resolution to have a material financial impact**[74](index=74&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors from the 2023 Annual Report - **No material changes** have been made to the risk factors previously disclosed in the company's 2023 Annual Report on Form 10-K[75](index=75&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No directors or Section 16 officers adopted or terminated Rule 10b5-1 trading plans last quarter - **No director or Section 16 officer** adopted or terminated any Rule 10b5-1 or similar trading plans during the last fiscal quarter[76](index=76&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) Filed exhibits include CEO/CFO certifications and iXBRL-formatted financial data - The report includes standard exhibits such as **CEO/CFO certifications** under Sarbanes-Oxley Sections 302 and 906, and iXBRL formatted financial statements[77](index=77&type=chunk)

California Water Service Group (CWT) recorded first-quarter 2024 adjusted earnings of $1.21 per share, which surpassed the Zacks Consensus Estimate of 21 cents by 476.2%. The company reported a loss of 40 cents per share in the year-ago quarter.Total RevenuesOperating revenues totaled $270.7 million, which surpassed the Zacks Consensus Estimate of $169 million by 60%. The top line also increased 106.5% from $131.1 million recorded in the prior-year quarter. The year-over-year increase was due to the adoptio ...