How do we measure
Success?
California Water Service Group 2012 Annual Report
California Water Ser vice Group
1720 North First Street
San Jose, California 95112-4598
(408) 367-8200
www.calwatergroup.com
NYSE: CWT
Table of Contents
2
By the Numbers
19
Letter to Stockholders
32
Ser vice Area Maps
36
Eight-Year Financial Review
38
Board of Directors
40
Corporate Officers
Stock Transfer, Dividend Disbursing, and Reinvestment Agent
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
(800) 937-5449
To Transfer Stock
A change of ownership of shares (such as when stock is sold or gifted or when owners are deleted from or added to
stock certificates) requires a transfer of stock. To transfer stock, the owner must complete the assignment on the back
of the certificate and sign it exactly as his or her name appears on the front. This signature must be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings and loan associations, and credit unions with membership in
approved signature medallion programs) pursuant to SEC Rule 17Ad -15. A notary’s acknowledgement is not acceptable.
This certificate should then be sent to American Stock Transfer & Trust Company, by registered or certified mail with
complete transfer instructions. Alternatively, the Direct Registration System can be utilized, which allows electronic share
transactions between your broker or dealer and American Stock Transfer & Trust Company.
Bond Registrar
US Bank Trust, N.A.
One California Street
San Francisco, CA 94111-5402
(415) 273-4580
Annual Meeting
The Annual Meeting of Stockholders will be held on Tuesday, May 21, 2013, at 9:30 a.m. at the Company’s Executive Office,
located at 1720 North First Street in San Jose, California. Details of the business to be transacted during the meeting will
be contained in the proxy material, which will be mailed to stockholders on or about April 12, 2013.
Anticipated Dividend Dates For 2013
Quarter Declaration Record Date Payment Date
First January 30 February 11 February 22
Second April 24 May 6 May 17
Third July 31 August 12 August 23
Fourth October 30 November 12 November 25
Annual Report For 2012 On Form 10-K
A copy of the Company’s report for 2012 filed with the Securities and Exchange Commission (SEC) on Form 10-K will be
available in April 2013 and can be obtained by any stockholder at no charge upon written request to the address below.
The Company’s filings with the SEC can be viewed via the link to the SEC’s EDGAR system on the Company’s web site.
California Water Ser vice Group (NYSE: CWT) is the third largest investor-owned water utility in
the United States, providing high- quality utility ser vices to approximately two million people in more
than 100 communities through six subsidiaries: California Water Service Company (Cal Water),
Hawaii Water Service Company, Inc. (Hawaii Water), New Mexico Water Service Company (New Mexico
Water), Washington Water Ser vice Company (Washington Water), CWS Utility Ser vices (CWSUS), and
HWS Utility Ser vices (HWSUS). Cal Water, Hawaii Water, New Mexico Water, and Washington Water
provide regulated water and wastewater utility ser vices, while CWSUS and HWSUS conduct the
Company’s non-regulated business, which includes providing billing, water quality testing, and
water and wastewater system operations and management services to cities and other companies.
Executive Office and Stockholder Information
California Water Service Group
Attn: Stockholder Relations
1720 North First Street
San Jose, CA 95112-4598
(408) 367-8200 or (800) 750-8200
http://www.calwatergroup.com
3
1
2
5
4
6
By the Numbers.
CWT 2012 AR 1
8
9
7
+
20 .6
87%
31420-Year
66,90094
7$2,453
2012
%
10
1.18
math teacher may have
told you, numbers are
significant. They speak
volumes, really.
Think about it… we could publish a
94 As your sixth grade
The way we see it, if a picture paints
employee turnover rate is just 5%.
can too.
efficient operations, or we could tell you that
our 20-year total return is 412%. We could fill
hundreds of pages describing our encounters
with customers, or we could tell you that 95%
of them rate us as “excellent,” “very good,”
or “good.” We could go on at length about our
commitment to being the employer of choice
and our pride in having the best people in
the industr y, or we could tell you that our
20-pound report about our strong balance
sheet, disciplined approach to growth, and
a thousand words, then the right number
CWT 2012 AR 3
3
8
0
,
0
0
0
+
The number of tests
we conduct annually to
ensure that our water
meets increasingly stringent
state and federal quality
standards. Most of these
tests are conducted in
our state-certified water
quality laboratory by a team
of scientists and chemists
with a combined 192 years
of analytical experience
and 52 years of advanced
education.
Our customers rely on us to
provide excellent service and
high-quality water, 24 hours
per day, 7 days per week.
And boy, do we deliver.
The number of gallons of water that will be saved annually by our 2012 conservation
programs. That’s enough water to meet the annual water needs of 8,800 people.
362
million
%
98
Percentage of time we responded
to after -hours emergencies within
one hour in 2012. After-hours
response times are just one of the
key performance measures we track
to ensure that we are providing
excellent service. We also achieved
a first-call satisfaction rate of 92%,
which means that 92 out of 100
times, customers were satisfied by
the first employee they contacted
for ser vice.
CWT 2012 AR 5
When it comes to our
customers, the numbers tell
the story. The bottom line:
We provide a life-sustaining,
life-enhancing service to our
customers, and we continually
seek their feedback to ensure
that we are surpassing
their expectations.
If you are new to our Company, you
may be wondering why stockholders
would care about such things as
first- call customer satisfaction.
Here’s why: Well-satisfied, well-in-
formed customers understand the
value of the service we provide. They
welcome us and appreciate all we do
in their communities. They support
our efforts to maintain and upgrade
our infrastructure. And that’s good for
customers and stockholders alike.
Above all, our stockholders
value consistency. They want
to know that they can count
on us to deliver steady results.
Did we succeed in 2012? Let
us count the ways…
The total return earned by stockholders
over the last 20 - year period, assuming
reinvestment of dividends. This beats
the S & P 100’s 20-year total return
of 385%.
412
%
In 2013, it was raised for the 46th consecutive year.4
5
Through 2012, the number of consecutive years that the dividend has increased.
$
1
2
8
M
The amount of capital invested
in water system infrastructure in
2012. Infrastructure investment
benefits customers, because it
enables us to meet their needs
for an uninterrupted supply of
good, clean water. It also bene-
fits shareholders, who earn a
return on capital invested in
infrastructure.
CWT 2012 AR 9
Let’s face it, we’re not that
exciting; we certainly don’t
offer investors a roller coaster
ride. What we do offer them is
the opportunity to be a part of
providing an essential resource
to our communities. And the
opportunity to earn steady,
predictable returns.
The final and most important
part of the equation is employees.
If we didn’t have the best people
in the industry, we couldn’t provide
excellent service to customers or
reliable returns to stockholders.
That’s why we are committed to
providing a healthy, rewarding
work environment for all 1,131
of our employees.
5%
Our employee turnover rate.
A low turnover rate is a reflec-
tion of our efforts to recruit and
retain talented professionals
who want to spend their
careers with us. Our average
employee tenure in 2012 was
12.4 years, and our longest-
tenured employee currently
has 43 years of service.
What does it take to be the
employer of choice – competitive
salaries, good benefits, and
advancement opportunities?
Sure. But it also takes an
environment that fosters team-
work and individual achievement
while enabling every single
employee to contribute to the
Company’s success.
1
7
2
The number of Continuous Improvement teams we have throughout the
Company, all of which are focused on improving customer ser vice and
increasing efficiency. And they deliver results. Recent examples include a
team that developed a standardized process for testing flow rates at fire
hydrants that will provide more accurate results; another that discovered
and tested a new type of chlorination equipment that will reduce main-
tenance costs at water treatment facilities; and another that invented a
tool that increases the safety of employees who investigate the condition
of water tank interiors. The Continuous Improvement approach to the
business also hones our employees’ analytical, public speaking, and
collaboration skills.
Where the Bay Area News Group ranked us in its “2012 Top Workplaces” program
(among the 4,000 companies considered). The selection of winning companies was
based upon sur veys about the workplace completed by employees. The sur veys
were designed to assess “the fundamentals of the company: values, executive
leadership, and culture.”
75Top
CWT 2012 AR 13
Customers, stockholders,
and employees all want things
that can’t be quantified. A kind
word along with a receipt.
A feeling of calm in the midst
of Wall Street chaos. A sense
of being a valued member
of the team.
Granted, certain things can’t be
counted, tallied, or totaled up.
But there are numbers that tell
us if we’re on the right track.
It is these numbers we use to
measure our success.
Financial Highlights
Year ended December 31 2012 2011 2010 2009 2008
Market price at year-end $ 18.35 $ 18.26 $ 18.64 $ 18.41 $ 23.22
Book value per share 11.30 10.76 10.45 10.13 9.72
Earnings per share (diluted) 1.17 0.90 0.90 0.98 0.95
Dividend per share 0.630 0.615 0.595 0.590 0.585
Revenue* 559,966 501,814 460,399 449,372 410,312
Net income* 48,828 37,712 37,656 40,554 39,805
*Dollars in thousands
559,966 • 2012
501,814 • 2011
460,399 • 2010
449,372 • 2009
410,312 • 2008
Five-Year Operating Revenue
(Dollars in thousands)
Five-Year Dividend Growth
1,457 • 2012
1,381 • 2011
1,294 • 2010
1,198 • 2009
1,112 • 2008
Five-Year Net Utility Plant
(Dollars in millions)
Five-Year Book Value
0.630 • 2012
0.615 • 2011
0.595 • 2010
0.590 • 2009
0.585 • 2008
11.30 • 2012
10.76 • 2011
10.45 • 2010
10.13 • 2009
9.72 • 2008
CWT 2012 AR 17
To Our Stockholders
The Numbers
By all measures, 2012 was a success for
our stockholders.
• Net income increased 29.5% to $48.8 million.
• Diluted earnings per share increased
29.1% to $1.17.
• Revenues increased 11.6% to $560.0 million.
• Net utility plant increased 5.5% to $1.46 billion.
• The annual dividend increased 2.4% to $0.63
per share in 2012. This was the 45th consecutive
annual increase.
These results were better than we expected,
given the fact that 2012 was the second year in
our largest subsidiary’s three-year rate case cycle.
They were positively impacted by our prudent finan-
cial management, as increases in wages, health
care costs, and post-retirement benefits (other
than pensions) were partially offset by decreases
in maintenance costs, interest expense, and costs
Peter C. Nelson
Chairman of the Board and Chief Executive Officer
Martin A. Kropelnicki
President and Chief Operating Officer
(right)
CWT 2012 AR 19
for outside services. We also benefitted from
a nonrecurring income tax benefit resulting from
a change in federal tax rules. (The change required
us to deduct for tax purposes significant costs that
had previously been capitalized.) And other income
was boosted by a mark-to-market accounting
adjustment to reflect an increase in the value of
long-term assets held by the Company’s non-
qualified retirement plans.
The California Public Utilities Commission
issued two key decisions in 2012. First, in April,
the Commission revised its policy that required
Water Revenue Adjustment Mechanism (WRAM)
balances to be recovered in rates over an extended
period of time. This delay in recovery impacted
our results in 2011. Going forward, in most
cases, we will be able to recover the balances
within 18 months. Second, in July, in its “cost of
capital” decision, the Commission authorized a
return on equity of 9.99%, a cost of debt of 6.24%,
and a capital structure of 46.60% long-term debt
and 53.40% common equity. The decision also
adopted a two-way index mechanism that will
further reduce the authorized return on equity
to 9.43% for 2013, due to the decline in
interest rates.
Also in 2012, Washington Water Service Company
(Washington Water) received authorization for a rate
increase that adds $1.6 million to annual revenue,
and Hawaii Water Service Company (Hawaii Water)
received approval for a rate increase in its
Ka’anapali service area that adds a total of $1.2
million to annual revenue. And California Water
Service Company (Cal Water) received second-
year, inflation-type increases in 2012, which
added $8.7 million to annual revenue. Looking
ahead, a rate increase in the Pukalani service
area that will add nearly $600,000 to revenue
over the next three years is expected to become
effective in mid-2013, and three separate rate
case filings requesting $6.3 million in annual
revenue increases in the Waikoloa ser vice
areas are pending, with decisions expected
by the end of 2013.
Even more significantly, Cal Water filed a General
Rate Case in July 2012, requesting additional
revenue of $92.7 million in 2014, $17.2 million in
2015, and $16.9 million in 2016. After a thorough
review, the Commission will determine how much
of a revenue increase it deems necessary in order
for Cal Water to continue to deliver a reliable supply
of high-quality water. New rates are scheduled to
become effective in January 2014.
In the General Rate Case filing, Cal Water included
projects to mitigate high-priority engineering and
operational risks to the business as identified in
an in-depth risk-assessment study completed in
mid-2012 as part of the Company’s Enterprise
Risk Management Program. To complete the
CWT 2012 AR 21
assessment, our cross-functional team conducted
extensive research; catalogued and categorized
all major identified risks; rated risks based upon
likelihood, scope, and intensity; and developed plans
to mitigate top-rated risks. We expect to make
significant progress on this effort in 2013.
Also included in the General Rate Case filing
was a total of $480 million for capital improvement
projects, including 20 new storage tanks, 33 tank
upgrades, 14 wells, 8 new treatment plants, 5
treatment plant upgrades, and 348,000 feet of
new water main.
What the Numbers Mean for Customers
As we developed the 2012 General Rate Case,
we were extremely cognizant of the importance
of affordability. In addition to proposing only those
capital projects we believed to be absolutely
necessar y, we requested approval to increase
discounts provided to qualified customers through
our Low-Income Rate Assistance (LIRA) program.
We also requested approval to increase discounts
to customers in high-cost areas through our Rate
Support Fund (RSF) and add Oroville, Lake Hughes,
Lancaster, and Leona Valley customers to the RSF
program. In 2012, we provided $5.2 million in water
bill discounts through LIRA, and we worked with
electric and gas utilities to share customer data to
ensure that qualified customers are participating
LIRA. We provided $1.1 million in discounts
through the RSF.
Many factors affect the costs of providing water
service, including the source of the water, the number
of customers who share the costs of operating the
system, the natural quality of the water and treat-
ment that is required, and the age of the water
system infrastructure. Most of Cal Water’s customers
pay less than one penny per gallon; in our lowest-
cost district, customers pay just $1 for every 3
tons of high-quality water delivered to their taps.
(A large truck weighs more than 3 tons.) In the areas
where water costs are high, we continue to seek
ways to mitigate the impact of water costs on our
communities. In the end, concerns about affordability
must always be weighed against concerns about
supply reliability and water quality.
Water is essential for health and safety, and our
customers expect an uninterrupted supply. Our water
system upgrade and maintenance initiatives are
critical to ensuring that they get it. In 2012, we
added 5 storage tanks with a combined capacity of
5 million gallons, 7 emergency power generators,
and 52,000 feet of water main, all of which increase
reliability. Two examples of our local efforts to
increase water supplies in our communities: We
reached an agreement with the City of Stockton and
San Joaquin County to increase our surface water
supply by 14%, and we acquired additional property
in our Rancho Dominguez District for groundwater
wells that will lessen our dependence on expensive,
imported surface water supplies.
CWT 2012 AR 23
Our Rancho Dominguez District, Engineering, and
Water Quality teams also worked together to add
additional water quality treatment processes at the
City of Hawthorne treatment plant. The more robust
treatment plant increases both reliability and afford-
ability by enabling us to use lower-cost, local
groundwater supplies.
CWT 20-Year Total Return on Investment
(On a $100 stock purchase on December 31, 1992, with dividends reinvested through 2012)
$800
$700
$600
$500
$400
$300
$200
$100
$0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Our industr y-leading conser vation program also
increases water supply reliability. In 2012, we offered
customers a range of programs, rebates, and services
to help them reduce their water usage and increase
sustainability of this finite natural resource.
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
CWT 2012 AR 25
A few highlights:
• We provided 10,300 high-efficiency toilets
through our direct installation program, which are
expected to save 93,000,000 gallons per year.
This innovative program is particularly valuable
to customers who cannot afford to purchase the
toilet and wait for a rebate.
• We distributed 7,800 conser vation kits,
which include high-efficiency showerheads and
shut-off hose nozzles, for an annual savings of
34,000,000 gallons.
• We gave out 98,500 sprinkler nozzles, which
will save approximately 103,000,000 gallons
per year.
• And we provided $400,000 in rebates
for high-efficiency clothes washers, which will
conserve 14,000,000 gallons per year.
Water quality is equally important to customers,
and we have a rigorous monitoring, testing, and
treatment program in place to ensure that we meet
every standard, every day, in every system. Our water
quality team conducts more than 300,000 tests
per year for more than 140 contaminants, using
equipment sensitive enough to detect levels as
low as one part per trillion. To put that into per-
spective, one part per trillion is equivalent to three
seconds in 100,000 years or one square inch in
250 square miles.
Our approach to water treatment is yet another
example of our focus on affordability. For every
source that requires treatment, we work diligently
to identify the best, most cost-effective treatment
methodology. And, to efficiently track water quality
trends in our 61 permitted water systems and
1,700 water quality sample points, we enter all
data into a software system that enables us to
react quickly to water quality changes and plan
effectively to meet future requirements.
As outlined in our 2012 Corporate Citizenship
Report (www.calwatergroup.com/corporatecitizenship),
we are one of two water organizations chosen to
collaborate with the American Water Works Asso-
ciation’s Water Research Foundation on a study to
identify the best approaches and associated costs
for removing Chromium 6 from water supplies.
This research is helping us get ahead of the curve
in meeting an anticipated new standard for the
constituent, which the State of California is
expected to establish in mid-2013.
Another efficiency-related project we described in
our Corporate Citizenship Report is the 100-kilo-
watt wind-turbine project on the Big Island of Hawaii
that we began in 2012. The environmentally friendly
plant will provide energy for a wastewater treatment
plant in Waikoloa Village, which is particularly
important given the fact that Hawaii has the highest
energy costs in the nation.
CWT 2012 AR 27
Along with reliability and quality, our customers
expect excellent service. We have several key
customer service performance measures that we
track on an ongoing basis to ensure that we are
surpassing customer expectations. It was our
assessment of some of these key per formance
measures that prompted us to undertake an ambi-
tious service enhancement project, which we began
piloting in our Bakersfield District in 2012.
The goal of the project is to provide “a new customer
experience” through a more transactional web site
that posts payments in real time and allows the
customer to start and stop service, request due
date extensions, make payment arrangements, set
notification preferences, and sign up for automatic
payment service, 24/7, 365 days per year. We
also added automated phone services, allowing
customers to call anytime, day or night, to make
real-time payments and retrieve their current bal-
ance and last payment. And finally, we added 71
new pay stations in Bakersfield to make in-person
bill paying more convenient.
Are customers taking advantage of this “new
experience”? The numbers speak for themselves:
In the first two months that the services were
offered, 5,395 Bakersfield customers made a
one-time payment on the web site, 8,496 made
payments through the automated phone system,
and 4,159 used the web site or the automated
phone system to make payment arrangements.
These numbers are significant because they
make us more efficient and reduce wait times on
the phone and in the Customer Center. More impor-
tantly, they tell us that customers are getting the
service they need when they need it, as evidenced
by the growing number of customers who are
accessing the web site and the phone system after
regular business hours. We will roll these new
services out to more California districts in 2013.
Speaking of automated phone services, the
Emergency Notification application we implemented
in 2011 won first place in the Management
Innovation Awards of the National Association of
Water Companies (NAWC) in 2012. According to
NAWC, the award recognizes “groundbreaking
advances in customer education programs,
management plans, technological advancements,
and community support efforts.” In 2013, we plan
to expand the capabilities of the system to allow
us to send email and text messages as well as
automated phone messages to customers, based
upon the communications preferences they have
set on our new web site.
Making it Add Up for Employees
We would not have our well-earned reputation
for service without the dedication of our employees,
and we are committed to being the recognized
employer of choice in our industr y. In addition to
providing competitive pay and benefits, including
CWT 2012 AR 29
insurance, pension, and 401(k) savings matching,
we have a positive, cooperative relationship with
our unions, and in fact have partnered with them
on a joint healthy workforce initiative. We also en-
courage our employees to stay at the top of their
profession, and we provide tuition reimbursement
and professional development programs to help
them do it. We are pleased to report that many
of our employees have earned state-certification;
623 are certified in water distribution, 413 are
certified in water treatment, and 38 are certified
in wastewater treatment.
In 2012, of 4,000 companies considered,
Cal Water was named one of the top 75 places
to work in the Bay Area. One of the business
attributes assessed in the Top Workplace program
is “executive leadership,” and we have a uniquely
qualified, diverse team of officers at the helm.
In September, Pete assumed the role of Chairman
and Chief Executive Officer, and Marty was named
President and Chief Operating Officer. Thomas F.
Smegal III, our Vice President of Regulatory Matters
and Corporate Relations, became Vice President,
Chief Financial Officer and Treasurer. Earlier in
2012, Helen R. Del Grosso, David R. Karraker, and
David B. Healey joined the officer team as Vice
President of Human Resources, Vice President of
Customer Service and Information Technology,
and Corporate Controller, Assistant Secretary and
Assistant Treasurer, respectively. And most recently,
in February 2013, Paul G. Townsley was named
Vice President, Regulatory Matters and Corporate
Relations. Together, our officers have almost 400
years of experience in their respective professions.
On a final note, Lead Director Douglas M. Brown will
be retiring after 12 years of distinguished service
on our Board. The Dean of the University of New
Mexico’s Anderson School of Business and former
Treasurer for the State of New Mexico brought
an abundance of exper tise and experience to the
Company, and we will miss him. We wish Doug and
his family all the best as he embarks on a well-
deser ved retirement from California Water
Ser vice Group.
We thank you for your continued investment
in the Company, and wish you the best in the
coming year.
Peter C. Nelson
Chairman of the Board and
Chief Executive Officer
Martin A. Kropelnicki
President and Chief Operating Officer
CWT 2012 AR 31
In 2012, we delivered
more than 116 billion
gallons of water weighing
nearly 1 trillion pounds to
2 million people through
500,700 service connec-
tions in more than 100
communities in 4 states.
But these numbers don’t tell the whole story.
They don’t tell the story of the three employees
who provided professional and helpful service to
the self-described “old lady” who had difficulties
having drip irrigation installed at her home. Or
the employee who went out of his way to help
a customer whose dog was hit by a car. Or the
employees who showed compassion to a cust-
omer who struggled to pay water bills because
her husband was out of work. Or the employees
who worked hard to keep an entire community’s
water flowing after a lengthy storm that caused
a six-day power outage. And these are just a few
of the many stories we heard from customers
in 2012.
Numbers matter, because they enable us to
measure how we’re doing. But the people we
serve will always be more than just a number
to us… all 2 million of them.
Hawaii Operations/ Customer Centers
(Maui) Ka’anapali • (Hawaii) Waikoloa
Ser ving the communities of Ka’anapali, Pukalani,
Waikoloa, Nor th Kona Coast, and Kohala Coast
on the islands of Maui and Hawaii.
Regulated Customer Connections
4,200* • 2011
4,200* • 2012
* Includes several large resor ts
and condominium complexes
Washington Operations/ Customer Centers
Olympia (S.W. Regional Office) •
Gig Harbor (N.W. Regional Office and
Customer Center) • Sequim • Issaquah •
Orcas Island (Field Offices)
Ser ving more than 425 neighborhoods in the counties
of Clallam, Jefferson, Kitsap, Mason, Pierce, King,
San Juan, and Thurston.
Regulated Customer Connections
15,700 • 2011
15,800 • 2012
CWT 2012 AR 33
California Districts
Antelope Valley • Bakersfield • Bayshore • Bear Gulch •
Chico • Commerce • Dixon • Dominguez • East Los
Angeles • Hawthorne • Hermosa-Redondo • Kern River
Valley • King City • Livermore • Los Altos • Mar ysville •
Oroville • Palos Verdes • Redwood Valley • Salinas •
Selma • Stockton • Visalia • Westlake • Willows
Customer Connections*
471,900 • 2011
473,100 • 2012
* Numbers include Hawthorne
and Commerce lease agreements
New Mexico Operations / Customer Centers
Elephant Butte • Belen • Cedar Crest
Ser ving the communitites of Meadow Lake, Cypress
Gardens, Rio Communities, Rio Del Oro, Elephant Butte,
and Sandia Knolls in the counties of Valencia, Sierra,
and Bernalillo.
Regulated Customer Connections
7,700 • 2011
7,600 • 2012
California Districts & Communities
2012 2011
Antelope Valley • Fremont Valley, Lake Hughes, Lancaster & Leona Valley 1,400 1,400
Bakersfield 69,100 68,500
Bayshore • South San Francisco, Colma, Broadmoor, San Mateo & San Carlos 53,200 53,300
Bear Gulch • Ather ton, Woodside, Por tola Valley & a por tion of Menlo Park 18,800 18,800
Chico • Hamilton City 28,100 28,000
Commerce (lease agreement) 1,200 1,200
Dixon 2,900 2,900
Dominguez • Carson & por tions of Compton, Harbor City, Long Beach,
Los Angeles County & Torrance 33,900 33,800
East Los Angeles • Por tions of Montebello, Commerce, Monterey Park & Vernon 26,700 26,700
Hawthorne (lease agreement) 6,200 6,200
Hermosa-Redondo • Hermosa Beach, Redondo Beach & a por tion of Torrance 26,700 26,600
Kern River Valley • Bodfish, Kernville, Lakeland, Mountain Shadows, Onyx,
Squirrel Valley, South Lake & Wofford Heights 4,200 4,200
King City 2,500 2,600
Livermore 18,800 18,300
Los Altos • Por tions of Cuper tino, Los Altos Hills, Mountain View & Sunnyvale 18,400 18,800
Mar ysville 3,700 3,700
Oroville 3,500 3,600
Palos Verdes • Palos Verdes Estates, Rancho Palos Verdes, Rolling Hills
& Rolling Hills Estates 24,100 24,100
Redwood Valley • Lucerne & por tions of Duncans Mills, Guerneville,
Dillon Beach, Noel Heights & Santa Rosa 1,900 1,900
Salinas 28,300 28,200
Selma 6,200 6,100
Stockton 42,700 42,800
Visalia 41,200 40,700
Westlake • Westlake Village & a por tion of Thousand Oaks 7,000 7,100
Willows 2,400 2,400
CWT 2012 AR 35
Eight-Year Financial Review
(Dollars in thousands, except common share and other data) 2012
2011
2010
2009
2008 2007 2006
2005
Summar y of Operations
Operating revenue
$559,966 $501,814 $460,399 $449,372 $410,312 $367,082 $334,717 $320,728
Operating expenses
486,123 434,647 398,586 391,253 352,843 322,912 294,411 278,903
Interest expense, other income and expenses, net
25,015 29,455 24,157
17,565 17,664
13,011 14,726 14,602
Net income
$48,828 $37,712 $37,656 $40,554 $39,805 $31,159 $25,580 $27,223
Common Share Data
Earnings per share - diluted
$1.17 $0.90 $0.90
$0.98 $0.95
$0.75 $0.67 $0.74
Dividend declared
0.630
0.615
0.595
0.590 0.585 0.580 0.575
0.570
Dividend payout ratio
54%
68%
66%
61%
62% 77% 86%
78%
Book value
$11.30 $10.76 $10.45
$ 10.13 $ 9.72
$ 9.33 $ 9.16 $ 7.99
Market price at year-end
18.35
18.26
18.64
18.41 23.22 18.51 20.20 19.11
Common shares outstanding at year-end (in thousands)
41,908 41,817 41,667
41,531 41,446
41,332 41,314 36,780
Return on average common stockholders’ equity
10.6% 8.5%
9.0%
9.8%
10.2% 8.1% 8.2%
9.3%
Long-term debt interest coverage
3.45 3.11 3.59
4.04
4.72
3.70 3.17
3.61
Balance Sheet Data
Net utility plant
$1,457,056 $1,381,119 $1,294,297 $1,198,077 $1,112,367 $1,010,196 $941,475 $862,731
Total assets
1,995,924 1,854,587 1,692,066 1,525,581 1,418,107 1,184,499 1,165,019 996,945
Long-term debt, including current portion
481,250 488,165 481,561 387,222 290,316 291,921 293,592 275,275
Capitalization ratios:
Common stockholders’ equity
49.6%
48.0%
47.5%
52.1%
58.1% 56.9% 56.0%
51.4%
Preferred stock 0 .0%
0.0 %
0.0%
0.0%
0.0% 0.5% 0.5%
0.6%
Long-term debt 50.4%
52.0%
52.5%
47.9%
41.9% 42.6% 43.5%
48.0%
Other Data
Water production (million gallons) 125,892 120,353 121,942 131,558 137,757 141,238 132,414 129,453
Customers at year-end, including Hawthorne and Commerce 500,700 499,500 497,900 494,700 490,493 487,555 483,893 479,001
New customers added
1,200 1,600 3,200
4,207 2,938
3,662 4,892 5,846
Revenue per customer
$1,118 $1,005 $925
$908 $837
$753 $692 $670
Utility plant per customer 4,187 3,925 3,706
3,455 3,228
2,968 2,778 2,578
Employees at year-end
1,131 1,132 1,127
1,013
929
891 869
840
(Dollars in thousands, except common share and other data) 2012
2011
2010
2009
2008 2007 2006
2005
Operating revenue
$559,966 $501,814 $460,399 $449,372 $410,312 $367,082 $334,717 $320,728
Operating expenses
486,123 434,647 398,586 391,253 352,843 322,912 294,411 278,903
Interest expense, other income and expenses, net
25,015 29,455 24,157
17,565 17,664
13,011 14,726 14,602
Net income
$48,828 $37,712 $37,656 $40,554 $39,805 $31,159 $25,580 $27,223
Earnings per share - diluted
$1.17 $0.90 $0.90
$0.98 $0.95
$0.75 $0.67 $0.74
Dividend declared
0.630
0.615
0.595
0.590 0.585 0.580 0.575
0.570
Dividend payout ratio
54%
68%
66%
61%
62% 77% 86%
78%
Book value
$11.30 $10.76 $10.45
$ 10.13 $ 9.72
$ 9.33 $ 9.16 $ 7.99
Market price at year-end
18.35
18.26
18.64
18.41 23.22 18.51 20.20 19.11
Common shares outstanding at year-end (in thousands)
41,908 41,817 41,667
41,531 41,446
41,332 41,314 36,780
Return on average common stockholders’ equity
10.6% 8.5%
9.0%
9.8%
10.2% 8.1% 8.2%
9.3%
Long-term debt interest coverage
3.45 3.11 3.59
4.04
4.72
3.70 3.17
3.61
Net utility plant
$1,457,056 $1,381,119 $1,294,297 $1,198,077 $1,112,367 $1,010,196 $941,475 $862,731
Total assets
1,995,924 1,854,587 1,692,066 1,525,581 1,418,107 1,184,499 1,165,019 996,945
Long-term debt, including current portion
481,250 488,165 481,561 387,222 290,316 291,921 293,592 275,275
Common stockholders’ equity
49.6%
48.0%
47.5%
52.1%
58.1% 56.9% 56.0%
51.4%
Preferred stock 0 .0%
0.0 %
0.0%
0.0%
0.0% 0.5% 0.5%
0.6%
Long-term debt 50.4%
52.0%
52.5%
47.9%
41.9% 42.6% 43.5%
48.0%
Summar y of Operations
Common Share Data
Balance Sheet Data
Capitalization ratios:
Other Data
Water production (million gallons) 125,892 120,353 121,942 131,558 137,757 141,238 132,414 129,453
Customers at year-end, including Hawthorne and Commerce 500,700 499,500 497,900 494,700 490,493 487,555 483,893 479,001
New customers added
1,200 1,600 3,200
4,207 2,938
3,662 4,892 5,846
Revenue per customer
$1,118 $1,005 $925
$908 $837
$753 $692 $670
Utility plant per customer 4,187 3,925 3,706
3,455 3,228
2,968 2,778 2,578
Employees at year-end
1,131 1,132 1,127
1,013
929
891 869
840
CWT 2012 AR 37
Board of Directors
Peter C. Nelson
Chairman of the Board
and Chief Executive Officer
Douglas M. Brown
Dean, Anderson School of
Management, University
of New Mexico
Linda R. Meier
Member of the National Board
of the Institute of International
Education
17 years served as a Board
Member. Member of the
Executive Committee.
12 years served as a Board
Member. Member of the
following Committees:
Organization/Compensation,
Audit, Executive,
Finance/Risk Management.
19 years served as a Board
Member. Member of the following
Committees: Audit, Executive,
Organization/Compensation,
and Nominating/Corporate
Governance.
Bonnie G. Hill
President of
B. Hill Enterprises, L.L.C.
Richard P. Magnuson
Private Venture
Capital Investor
Lester A. Snow
Former Director of the
California Depar tment of
Water Resources
10 years served as a Board
Member. Member of the following
Committees: Organization/
Compensation and Nominating/
Corporate Governance.
17 years served as a Board
Member. Member of the following
Committees: Audit, Organization/
Compensation, Executive,
Finance/Risk Management,
and Nominating/Corporate
Governance.
2 years served as a Board
Member. Member of the following
Committees: Finance/Risk
Management and Nominating/
Corporate Governance.
George A. Vera
Former Vice President and
Chief Financial Officer,
the David and Lucile Packard
Foundation
Thomas M. Krummel, M.D.
Professor and Chair, Surger y
Depar tment, Stanford University
School of Medicine
Edwin A. Guiles
Former Executive Vice President
of Corporate Development,
Sempra Energy
15 years served as a Board
Member. Member of the following
Committees: Audit, Finance/Risk
Management, and Nominating/
Corporate Governance.
3 years served as a Board
Member. Member of the
following Committees:
Nominating/Corporate
Governance and Organization/
Compensation.
5 years served as a Board
Member. Member of the following
Committees: Organization/
Compensation, Finance/Risk
Management, and Audit.
CWT 2012 AR 39
Officers
California Water Service Company
Peter C. Nelson 1, 2, 3
Chairman of the Board
and Chief Executive Officer
Helen R. Del Grosso
Vice President, Human Resources
Martin A. Kropelnicki 1, 2, 3
President and Chief Operating Officer
Christine L. McFarlane 3
Vice President,
Chief Administrative Officer
Francis S. Ferraro 2, 4
Vice President, Corporate Development
Lynne P. McGhee 1, 2, 3
Corporate Secretary
Robert R. Guzzetta 2
Vice President, Operations
David B. Healey 1, 2, 3
Controller, Assistant Secretary
and Assistant Treasurer
David R. Karraker
Vice President, Customer Service
and Information Technology
Michael J. Rossi 2, 3
Vice President, Engineering
and Water Quality
Thomas F. Smegal III 1, 2, 3
Vice President, Chief Financial Officer
and Treasurer
Paul G. Townsley 4
Vice President, Regulatory Matters
and Corporate Relations
Washington Water
Service Company
Michael P. Ireland
President
1 Holds the same position with
California Water Service Group.
2 Also an officer of CWS Utility
Services.
3 Also an officer of Washington Water
Service Company, New Mexico Water
Service Company, and Hawaii Water
Service Company, Inc.
4 Holds the same position with New
Mexico Water Service Company and
Hawaii Water Service Company, Inc.
Table of Contents
2
By the Numbers
19
Letter to Stockholders
32
Ser vice Area Maps
36
Eight-Year Financial Review
38
Board of Directors
40
Corporate Officers
Stock Transfer, Dividend Disbursing, and Reinvestment Agent
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
(800) 937-5449
To Transfer Stock
A change of ownership of shares (such as when stock is sold or gifted or when owners are deleted from or added to
stock certificates) requires a transfer of stock. To transfer stock, the owner must complete the assignment on the back
of the certificate and sign it exactly as his or her name appears on the front. This signature must be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings and loan associations, and credit unions with membership in
approved signature medallion programs) pursuant to SEC Rule 17Ad -15. A notary’s acknowledgement is not acceptable.
This certificate should then be sent to American Stock Transfer & Trust Company, by registered or certified mail with
complete transfer instructions. Alternatively, the Direct Registration System can be utilized, which allows electronic share
transactions between your broker or dealer and American Stock Transfer & Trust Company.
Bond Registrar
US Bank Trust, N.A.
One California Street
San Francisco, CA 94111-5402
(415) 273-4580
Annual Meeting
The Annual Meeting of Stockholders will be held on Tuesday, May 21, 2013, at 9:30 a.m. at the Company’s Executive Office,
located at 1720 North First Street in San Jose, California. Details of the business to be transacted during the meeting will
be contained in the proxy material, which will be mailed to stockholders on or about April 12, 2013.
Anticipated Dividend Dates For 2013
Quarter Declaration Record Date Payment Date
First January 30 February 11 February 22
Second April 24 May 6 May 17
Third July 31 August 12 August 23
Fourth October 30 November 12 November 25
Annual Report For 2012 On Form 10-K
A copy of the Company’s report for 2012 filed with the Securities and Exchange Commission (SEC) on Form 10-K will be
available in April 2013 and can be obtained by any stockholder at no charge upon written request to the address below.
The Company’s filings with the SEC can be viewed via the link to the SEC’s EDGAR system on the Company’s web site.
California Water Ser vice Group (NYSE: CWT) is the third largest investor-owned water utility in
the United States, providing high- quality utility ser vices to approximately two million people in more
than 100 communities through six subsidiaries: California Water Service Company (Cal Water),
Hawaii Water Service Company, Inc. (Hawaii Water), New Mexico Water Service Company (New Mexico
Water), Washington Water Ser vice Company (Washington Water), CWS Utility Ser vices (CWSUS), and
HWS Utility Ser vices (HWSUS). Cal Water, Hawaii Water, New Mexico Water, and Washington Water
provide regulated water and wastewater utility ser vices, while CWSUS and HWSUS conduct the
Company’s non-regulated business, which includes providing billing, water quality testing, and
water and wastewater system operations and management services to cities and other companies.
Executive Office and Stockholder Information
California Water Service Group
Attn: Stockholder Relations
1720 North First Street
San Jose, CA 95112-4598
(408) 367-8200 or (800) 750-8200
http://www.calwatergroup.com
How do we measure
Success?
California Water Service Group 2012 Annual Report
California Water Ser vice Group
1720 North First Street
San Jose, California 95112-4598
(408) 367-8200
www.calwatergroup.com
NYSE: CWT