17 QUARTERLY FINANCIAL DATA ( UNAUDITED) We have audited the accompanying consolidated balance sheet of California Water Service Group and subsidiaries as of December 31, 2002 and 2001, and the related consolidated statements of income, common stockholders’ equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2002.These consolidated financial statements are the responsibility of the Company’s  management. Our responsibility is to express an opinion on these consolidated financial statements based on  our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assess- ing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of California Water Service Group and subsidiaries as of December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. Mountain View, California January 29, 2003, except as to Note 16, which is as of February 28,2003 CALIFORNIA WATER SERVICE GROUP 55 THE BOARD OF DIRECTORS CALIFORNIA WATER SERVICE GROUP: Independent Auditors’ Report 2002 – in thousands except per share amounts First Second Third Fourth Operating revenue $51,611 $69,183 $81,440 $60,917 Net operating income  5,281 8,300 11,515 5,201 Net income 1,928 6,619 7,675 2,852 Diluted earnings per share 0.12 0.43 0.50  0.19  Common stock market price range: High 26.25 26.69 26.45 25.95 Low 23.20 23.40 21.60 23.65 Dividends paid .2800 .2800 .2800 .2800 2001 – in thousands except per share amounts Operating revenue $47,008 $66,958 $76,310 $56,544 Net operating income  3,792 8,050 9,517 3,792 Net income 221 5,764 5,920 3,060 Diluted earnings per share 0.01 0.37 0.39 0.20 Common stock market price range: High 28.60 27.70 27.00 27.50 Low 23.38 24.10 23.77 24.00 Dividends paid .27875 .27875 .27875 .27875 The Company’s common stock is traded on the New York Stock Exchange under the symbol “CWT.” Through 2002, quarterly dividends have been paid on common stock for 232 consecutive quarters and the quarterly rate has been increased each year since 1968.