The Company has a Dividend Reinvestment and Stock Purchase Plan (Plan). Under the Plan, stockholders may reinvest dividends to purchase additional Company common stock.The Plan also allows existing stockholders and other interested investors to purchase Company common stock through the transfer agent.The Plan provides that shares required for the Plan may be purchased on the open market or be newly issued shares. During 2002 and 2001, shares were purchased on the open market. At this time, the Company intends to continue purchasing shares required for the Plan on the open market. However, if new shares were issued to satisfy future Plan requirements, the impact on earnings per share could be dilutive. Also, stockhold- ers may experience dilution of their ownership percentage unless they participate in an offering at the same level of current ownership. 2003 Financing Plan. The Company’s 2003 financing plan includes raising approximately $60 million of new capital.The plan includes issuance of $20 million in senior notes to institutional investors.The senior note financing was completed on February 28, 2003, when Series K 4.58% and Series L 5.48% notes were issued, each for $10 million. Additionally, a global shelf registration statement is being prepared. From the global shelf registration, the Company expects to issue approximately $40 million of common stock. As currently contemplated, the common stock issue will be accomplished with an initial issue during the second quarter and a second issue late in the third quarter. However, the Company does not plan to issue common stock until after the CPUC has issued a decision for the 2001 GRC applications.Therefore, if the CPUC deci- sion is delayed, the common stock issues are also likely to be delayed. Beyond 2003, future issues from the shelf registration could include common stock, preferred stock or debt instruments sold to individual investors. Contractual Obligations. The Company’s contractual obligations are summarized in the table below. Long-term debt payments include annual sinking fund payments on first mortgage bonds, maturities of long-term debt and annual payments on other long-term obligations. Advances for Construction represent annual contract refunds to developers for the cost of water systems paid for by the developers. The contracts are non-interest bearing and refunds are generally on a straight-line basis over a 40-year period. Operating leases are generally rents for office space.The total amount presented for operating leases is for a 20-year period. 31 The Company has water supply contracts with wholesale suppliers in 16 of its operating dis- tricts. For each contract, the cost of water is established by the wholesale supplier and is generally beyond  the Company’s control.The amount paid annually to the wholesale suppliers is charged to purchased water expense on the Company’s statement of income.Three contracts noted below require minimum payments. The other contracts do not require minimum annual payments.The amount paid under the contracts, except for the contract with Stockton East Water District (SEWD), varies with the volume of water purchased from the wholesalers.The contract with SEWD requires payments totaling $3,779,000 for 2003, a 27% increase over 2002.The amount paid under this contract is fixed annually and generally does not vary with the quantity of water delivered by the district during the year. Because of the fixed price arrangement, the Company oper- ates to receive as much water as possible from SEWD in order to minimize the cost of operating wells to supplement SEWD deliveries.Two contracts require the Company to purchase minimum quantities of water at the contractors’ current wholesale rate for purchased water. Under both contracts, the Company operates so that purchases exceed the contractual minimum amount.The Company plans to continue to purchase at least the minimum water requirement under both contracts in the future. Capital Requirements. Capital requirements consist primarily of new construction expendi- tures for expanding and replacing the Company’s utility plant facilities and the acquisition of new water properties.They also include refunds of advances for construction and retirement of first mortgage bonds. CALIFORNIA WATER SERVICE GROUP Less Than After Contractual Obligations (In thousands) Total 1 Year 2-3 Years 4-5 Years 5 Years Long-Term Debt $251,365 $1,000 $ 1,896 $ 1,776 $246,693 Advances for Construction 115,459 4,605 15,243 11,146 84,465 Operating leases 21,000 833 1,834 1,834 16,499