California Water Service Group 10-Q for FY2025 Q2

California Water Service Group (CWT)

10-Q 2025-07-31 For: 2025-06-30

Added on April 08, 2026

About this 10-Q

California Water Service Group filed this 10-Q on July 31, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).

Headline figures

Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $256.22M; up 13.0% from $226.67M a year earlier
Net income: $42.17M; up 4.0% from net income of $40.55M a year earlier
Diluted EPS: $0.71; up 1.4% from $0.70 a year earlier

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Delaware						77-0448994
(State or other jurisdiction						(I.R.S. Employer Identification No.)
of incorporation or organization)


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


		Page
PART I	Financial Information	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (unaudited) as of June 30 , 2025 and December 31, 2024	3
	Condensed Consolidated Statements of Operations (unaudited) For the Three and Six Months Ended June 30 , 2025 and 2024	5
	Condensed Consolidated Statements of Comprehensive Income (unaudited) For the Three and Six Months Ended June 30 , 2025 and 2024	6
	Condensed Consolidated Statements of Cash Flows (unaudited) For the Six Months Ended June 30 , 2025 and 2024	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	32
Item 4.	Controls and Procedures	32

PART II	Other Information	33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
	Signature	35


	June 30, 2025		December 31, 2024
ASSETS
Utility plant:
Utility plant	$	5,627,888	$	5,400,489
Less accumulated depreciation and amortization	(1,293,277)		(1,241,785)
Net utility plant	4,334,611		4,158,704
Current assets:
Cash and cash equivalents	50,539		50,121
Restricted cash	45,617		45,566
Receivables:
Customers, net	75,437		58,585
Regulatory balancing accounts	63,169		55,917
Other, net	28,109		33,976
Accrued and unbilled revenue, net	52,802		39,718
Materials and supplies	19,879		20,511
Taxes, prepaid expenses, and other assets	26,029		19,742
Total current assets	361,581		324,136
Other assets:
Regulatory assets	359,919		357,406
Goodwill	37,063		37,063
Other	306,755		302,974
Total other assets	703,737		697,443
TOTAL ASSETS	$	5,399,929	$	5,180,283


	June 30, 2025		December 31, 2024
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $0.01 par value; 136,000 shares authorized, 59,581 and 59,484 outstanding on June 30, 2025 and December 31, 2024, respectively	$	596	$	595
Additional paid-in capital	968,820		966,975
Retained earnings	692,319		674,918
Accumulated other comprehensive loss	(6,909)		(7,217)
Noncontrolling interest	2,443		3,015
Total equity	1,657,269		1,638,286
Long-term debt, net	1,104,046		1,104,571
Total capitalization	2,761,315		2,742,857
Current liabilities:
Current maturities of long-term debt, net	72,467		72,422
Short-term borrowings	360,000		205,000
Accounts payable	166,958		167,533
Regulatory balancing accounts	17,641		22,648
Accrued other taxes	3,065		6,084
Accrued interest	8,980		8,406
Other accrued liabilities	56,969		56,271
Total current liabilities	686,080		538,364
Deferred income taxes	422,779		411,083
Regulatory liabilities	845,657		814,551
Pension	82,166		81,665
Advances for construction	207,730		202,614
Contributions in aid of construction	294,867		294,970
Other	99,335		94,179
Commitments and contingencies (Note 9)
TOTAL CAPITALIZATION AND LIABILITIES	$	5,399,929	$	5,180,283


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Operating revenue	$	264,954	$	244,299	$	468,927	$	515,048
Operating expenses:
Operations:
Water production costs	85,503		77,644		148,494		141,829
Administrative and general	33,317		32,042		67,491		67,638
Other operations	31,695		25,626		60,531		52,551
Maintenance	9,043		8,790		16,711		16,800
Depreciation and amortization	36,029		32,978		71,985		65,822
Income taxes	6,915		8,689		7,950		24,227
Property and other taxes	10,643		10,364		21,611		20,121
Total operating expenses	213,145		196,133		394,773		388,988
Net operating income	51,809		48,166		74,154		126,060
Other income and expenses:
Non-regulated revenue	4,911		5,513		9,992		10,611
Non-regulated expenses	(2,868)		(4,125)		(6,334)		(6,079)
Other components of net periodic benefit credit	4,589		4,338		9,389		7,611
Allowance for equity funds used during construction	1,898		1,819		3,695		3,561
Income taxes on other income and expenses	(1,752)		(1,306)		(3,455)		(2,627)
Net other income	6,778		6,239		13,287		13,077
Interest expense:
Interest expense	17,464		14,840		33,973		30,640
Allowance for borrowed funds used during construction	(927)		(812)		(1,784)		(1,570)
Net interest expense	16,537		14,028		32,189		29,070
Net income	42,050		40,377		55,252		110,067
Net loss attributable to noncontrolling interest	(118)		(174)		(247)		(401)
Net income attributable to California Water Service Group	$	42,168	$	40,551	$	55,499	$	110,468
Earnings per share:
Basic	$	0.71	$	0.70	$	0.93	$	1.90
Diluted	$	0.71	$	0.70	$	0.93	$	1.90
Weighted average shares outstanding:
Basic	59,574		58,292		59,542		58,013
Diluted	59,629		58,325		59,590		58,046


	June 30, 2025		December 31, 2024
Beginning balance	$	4,128	$	2,854
Provision for credit loss expense	1,663		5,890
Write-offs	(2,498)		(5,054)
Recoveries	290		438
Total ending allowance balance	$	3,583	$	4,128


	Number of RSA Shares	Weighted-Average Grant-Date Fair Value
RSAs at January 1, 2025	70,349	$	50.63
Granted	60,956	46.57
Vested	(44,717)	46.56

RSAs at June 30, 2025	86,588	$	47.88


	Number of RSU Shares	Weighted-Average Grant-Date Fair Value
RSUs at January 1, 2025	133,666	$	52.75
Granted	84,039	46.57
Performance criteria adjustment	4,352	45.45
Vested	(31,313)	45.45
Forfeited	(4,593)	52.34
RSUs at June 30, 2025	186,151	$	49.43


	Three Months Ended June 30, 2025
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Equity

	Shares	Amount
	(In thousands)








Balance at March 31, 2025	59,570	$	596	$	967,689	$	668,023	$	(7,063)	$	2,744	$	1,631,989
Net income (loss)	—	—		—		42,168		—		(118)		42,050
Issuance of common stock	14	—		1,392		—		—		—		1,392
Repurchase of common stock	(3)	—		(105)		—		—		—		(105)
Dividends paid on common stock ($0.30 per share)	—	—		—		(17,872)		—		—		(17,872)
Other comprehensive income, net of tax (a)	—	—		—		—		154		—		154
Investment in business with noncontrolling interest	—	—		(156)		—		—		156		—
Distribution to noncontrolling interest	—	—		—		—		—		(339)		(339)
Balance at June 30, 2025	59,581	$	596	$	968,820	$	692,319	$	(6,909)	$	2,443	$	1,657,269



	Six Months Ended June 30, 2025
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Equity

	Shares	Amount
	(In thousands)
Balance at January 1, 2025	59,484	$	595	$	966,975	$	674,918	$	(7,217)	$	3,015	$	1,638,286
Net income (loss)	—	—		—		55,499		—		(247)		55,252
Issuance of common stock	124	1		3,525		—		—		—		3,526
Repurchase of common stock	(27)	—		(1,214)		—		—		—		(1,214)
Dividends paid on common stock ($0.64 per share)	—	—		—		(38,098)		—		—		(38,098)
Other comprehensive income, net of tax (a)	—	—		—		—		308		—		308
Investment in business with noncontrolling interest	—	—		(466)		—		—		466		—
Distribution to noncontrolling interest	—	—		—		—		—		(791)		(791)
Balance at June 30, 2025	59,581	$	596	$	968,820	$	692,319	$	(6,909)	$	2,443	$	1,657,269


	Three Months Ended June 30, 2024
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Equity

	Shares	Amount
	(In thousands)








Balance at March 31, 2024	57,754	$	578	$	876,894	$	603,326	$	(13,366)	$	3,405	$	1,470,837
Net income (loss)	—	—		—		40,551		—		(174)		40,377
Issuance of common stock	1,073	10		52,923		—		—		—		52,933
Repurchase of common stock	(2)	—		(93)		—		—		—		(93)
Dividends paid on common stock ($0.28 per share)	—	—		—		(16,172)		—		—		(16,172)
Amounts reclassified to earnings (a)	—	—		—		—		298		—		298
Investment in business with noncontrolling interest	—	—		(348)		—		—		348		—
Distribution to noncontrolling interest	—	—		—		—		—		(489)		(489)
Balance at June 30, 2024	58,825	$	588	$	929,376	$	627,705	$	(13,068)	$	3,090	$	1,547,691



	Six Months Ended June 30, 2024
	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total Equity

	Shares	Amount
	(In thousands)
Balance at January 1, 2024	57,724	$	577	$	876,583	$	549,573	$	—	$	3,579	$	1,430,312
Net income (loss)	—	—		—		110,468		—		(401)		110,067
Issuance of common stock	1,128	11		54,429		—		—		—		54,440
Repurchase of common stock	(27)	—		(1,235)		—		—		—		(1,235)
Dividends paid on common stock ($0.56 per share)	—	—		—		(32,336)		—		—		(32,336)
Adjustment for unrecoverable pension benefit plan costs	—	—		—		—		(13,663)		—		(13,663)
Amounts reclassified to earnings (a)	—	—		—		—		595		—		595
Investment in business with noncontrolling interest	—	—		(401)		—		—		401		—
Distribution to noncontrolling interest	—	—		—		—		—		(489)		(489)
Balance at June 30, 2024	58,825	$	588	$	929,376	$	627,705	$	(13,068)	$	3,090	$	1,547,691


	Six Months Ended June 30,
	2025		2024
Operating activities:
Net income	$	55,252	$	110,067
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	73,066		66,929
Change in value of life insurance contracts	(1,257)		(1,811)
Allowance for equity funds used during construction	(3,695)		(3,561)
Changes in operating assets and liabilities:
Receivables and accrued and unbilled revenue	(40,542)		(16,859)
Water Arrearages Payment Program cash received	—		83,039

Accounts payable	(9,027)		(10,545)
Other current assets	(5,532)		(6,680)
Other current liabilities	(3,656)		7,314
Other changes in noncurrent assets and liabilities	22,758		(106,954)
Net cash provided by operating activities	87,367		120,939
Investing activities:
Utility plant expenditures	(229,520)		(214,414)
Life insurance proceeds	—		1,426
Purchase of life insurance contracts	—		(1,426)

Other	207		48
Net cash used in investing activities	(229,313)		(214,366)
Financing activities:
Short-term borrowings	410,000		295,000
Repayment of short-term borrowings	(255,000)		(230,000)
Repayment of long-term debt	(430)		(416)
Advances and contributions in aid of construction	20,542		10,936
Refunds of advances for construction	(4,543)		(4,865)
Per- and polyfluoroalkyl substances (PFAS) settlement proceeds	10,605		—
Repurchase of common stock	(1,214)		(1,235)
Issuance of common stock	1,343		53,381
Dividends paid	(38,098)		(32,336)
Distribution to noncontrolling interest	(790)		(489)
Other	—		1,160
Net cash provided by financing activities	142,415		91,136
Change in cash, cash equivalents, and restricted cash	469		(2,291)
Cash, cash equivalents, and restricted cash at beginning of period	95,687		84,966


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Residential	$	141,929	$	122,251	$	247,362	$	214,744
Business	48,094		41,906		88,642		76,455
Multiple residential	20,723		18,043		39,926		34,912
Industrial	6,529		7,119		12,934		13,759
Public authorities	13,011		10,918		22,256		17,880
Other (a)	25,930		26,428		27,797		23,816
Total revenue from contracts with customers	$	256,216	$	226,665	$	438,917	$	381,566



	Pension Plan				Other Benefits
	Three Months Ended June 30,
	2025		2024		2025		2024
Service cost	$	5,207	$	5,648	$	1,408	$	1,520
Interest cost	9,553		8,881		1,773		1,684
Expected return on plan assets	(12,793)		(13,236)		(3,197)		(2,987)
Amortization of prior service cost	131		131		39		39
Recognized net actuarial loss (gain)	194		189		(522)		(198)
Net periodic benefit cost (credit)	$	2,292	$	1,613	$	(499)	$	58


	Pension Plan				Other Benefits
	Six Months Ended June 30,
	2025		2024		2025		2024
Service cost	$	10,414	$	11,296	$	2,816	$	3,040
Interest cost	19,106		17,762		3,546		3,368
Expected return on plan assets	(25,586)		(26,472)		(6,394)		(5,974)
Amortization of prior service cost	262		262		78		78
Recognized net actuarial loss (gain)	388		378		(1,044)		(396)
Net periodic benefit cost (credit)	$	4,584	$	3,226	$	(998)	$	116


	Recovery Period	June 30, 2025		December 31, 2024
Regulatory Assets
Property-related temporary differences (tax benefits flowed through to customers)	Indefinite	$	178,279	$	178,279
IRMA long-term accounts receivable	Various	35,084		46,278
MWRAM long-term regulatory asset	1 - 2 years	31,308		16,353
Asset retirement obligations, net	Indefinite	30,322		28,883
Other accrued benefits	Indefinite	26,702		25,439
Tank coating	Various	19,753		21,477
General District Balancing Account receivable	Various	9,609		9,393
Customer Assistance Program and Rate Support Fund accounts receivable	1 year	8,767		9,910
Incremental Cost Balancing Accounts (ICBA)	1 year	6,708		8,251
Net WRAM and Modified Cost Balancing Account (MCBA) long-term accounts receivable	Various	3,657		3,633
Recoverable property losses	Various	2,297		2,633
Other regulatory assets	Various	7,433		6,877
Total Regulatory Assets		$	359,919	$	357,406
Regulatory Liabilities
Cost of removal		$	503,820	$	483,108
Pension and retiree group health		173,964		174,708
Future tax benefits due to customers		104,861		106,184
Other components of net periodic benefit cost		21,194		18,287
Pension Cost Balancing Account		16,048		14,143
PFAS settlement proceeds		8,458		—
ICBA		4,884		6,003
Health Cost Balancing Account		4,341		3,630
Net WRAM and MCBA long-term payable		3,089		3,064
Conservation Expense Balancing Account		2,889		3,294
Other regulatory liabilities		2,109		2,130
Total Regulatory Liabilities		$	845,657	$	814,551


	June 30, 2025
			Fair Value
	Cost		Level 1		Level 2		Level 3		Total
Long-term debt, including current maturities, net	$	1,176,513	$	—	$	1,007,711	$	—	$	1,007,711


	Amount Reclassified from AOCL
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Amortization of defined benefit pension items (1)
Prior service cost	$	(21)	$	(20)	$	(41)	$	(40)
Net actuarial loss	235		318		469		635
Total before tax	214		298		428		595
Tax benefit (2)	(60)		—		(120)		—
Total reclassification for the period, net of tax	$	154	$	298	$	308	$	595


	Three Months Ended June 30,		Six Months Ended June 30,
	2025 vs. 2024		2025 vs. 2024
Net change due to rate changes, usage, and other (1)	$	30,312	$	58,612
Interim Rates Memorandum Account (IRMA) revenue (2)	(7,932)		(88,596)
Monterey-Style Water Revenue Adjustment Mechanism (MWRAM) revenue (3)	(1,535)		(17,791)
Deferred revenue (4)	(190)		1,654
Net operating revenue change	$	20,655	$	(46,121)


Summarized Statement of Operations
(in thousands)	Six Months Ended June 30, 2025				Twelve Months Ended December 31, 2024
	Issuer		Guarantor		Issuer		Guarantor
Net sales	$	429,457	$	—	$	956,447	$	—
Gross profit	$	290,351	$	—	$	663,270	$	—
Income from operations	$	77,649	$	385	$	228,066	$	(2,120)
Equity in earnings of guarantor	$	—	$	52,126	$	—	$	174,979
Net income	$	58,365	$	55,195	$	193,485	$	179,022


Summarized Balance Sheet Information
(in thousands)	As of June 30, 2025				As of December 31, 2024
	Issuer		Guarantor		Issuer		Guarantor
Current assets	$	277,165	$	7,792	$	239,632	$	7,146
Intercompany receivable from Non-guarantors	5,999		65,640		6,031		53,969
Other assets	656,845		1,358,554		650,395		1,337,468
Long-term intercompany receivable from Non-issuers	—		124,056		—		110,802
Net utility plant	3,966,582		—		3,816,513		—
Total assets	$	4,906,591	$	1,556,042	$	4,712,571	$	1,509,385

Current liabilities	$	590,969	$	66,373	$	471,432	$	42,987
Intercompany payable to Non-guarantors and Guarantor	3,869		2,605		1,001		—
Long-term debt	1,103,928		—		1,104,454		—
Other liabilities	1,850,719		3,146		1,799,854		3,146
Total liabilities	$	3,549,485	$	72,124	$	3,376,741	$	46,133


Exhibit Number						Description
1.1						Equity Distribution Agreement, dated as of May 14, 2025, between California Water Service Group and Robert W. Baird & Co. Incorporated, BofA Securities, Inc, Morgan Stanley & Co. LLC, Wells Fargo Securities, LLC, Janney Montgomery Scott LLC, RBC Capital Markets, LLC, Blaylock Van, LLC and Samuel A. Ramirez & Company, Inc., et al. (Exhibit 1.1 to the Current Report on Form 8-K filed May 15, 2025)

3.1						Certificate of Incorporation of California Water Service Group (Exhibit 3.1 to the Quarterly Report on Form 10-Q filed August 9, 2006)

3.2						Certificate of Amendment to Certificate of Incorporation of California Water Service Group (Exhibit 3.1 to the Current Report on Form 8-K filed June 10, 2011)

3.3						Certificate of Amendment to Amended Certificate of Incorporation of California Water Service Group (Exhibit 3.3 to the Quarterly Report on Form 10-Q filed July 28, 2022)

3.4						Certificate of Amendment to Amended Certificate of Incorporation of California Water Service Group (Exhibit 3.4 to the Quarterly Report on Form 10-Q filed July 27, 2023)

3.5						Amended and Restated Bylaws of California Water Service Group, as amended on February 28, 2024 (Exhibit 3.5 to the Annual Report on Form 10-K filed February 29, 2024)

4.0						The Company agrees to furnish upon request to the Securities and Exchange Commission a copy of each instrument defining the rights of holders of long-term debt of the Company.

31.1						Chief Executive Officer certification of financial statements pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Chief Financial Officer certification of financial statements pursuant to Section 302 of the Sarbanes- Oxley Act of 2002

32						Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101						The following materials from this Quarterly Report on Form 10-Q formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Cash Flows, (v) the Notes to the Condensed Consolidated Financial Statements, and (vi) Part II, Item 5(c).

104						The cover page from this Quarterly Report on Form 10-Q formatted in iXBRL (included as Exhibit 101)


	CALIFORNIA WATER SERVICE GROUP
	Registrant

July 31, 2025	By:	/s/ James P. Lynch
		James P. Lynch
		Senior Vice President, Chief Financial Officer and Treasurer
		(Principal Financial Officer)


Date: July 31, 2025	By:	/s/ Martin A. Kropelnicki
		MARTIN A. KROPELNICKI
		Chairman, President and Chief Executive Officer