65 years.The provision for depreciation expressed as a percentage of the aggregate depreciable asset balances was 2.4% in 2002, 2001 and 2000. For income tax purposes, as applicable, the Company computes deprecia- tion using the accelerated methods allowed by the respective taxing authorities. Plant additions since June 1996 are depreciated on a straight-line basis for tax purposes in accordance with tax regulations. Cash Equivalents Cash equivalents include highly liquid investments, primarily U.S.Treasury and U.S. Government agency interest bearing securities, with original maturities of three months or less. Restricted Cash Restricted cash primarily represents proceeds collected through a surcharge  on certain customers’ bills plus interest earned on the proceeds and is used to service California Safe Drinking Water Bond obligations. In addition, there are compensating balances at a bank in support of bor- rowings. All restricted cash is classified in other prepaid expenses. At December 31, 2002 and 2001, the amounts restricted were $1,131,000 and $887,000, respectively. Regulatory Assets The Company records regulatory assets for future revenues expected to be realized as the tax effects of certain temporary differences previously passed through to customers reverse. The temporary differences relate primarily to the difference between book and income tax depreciation on utility plant that was placed in service before the regulatory Commissions adopted normalization for ratemak- ing purposes.The regulatory assets are net of revenue related to deferred income taxes that were provided at prior tax rates and the amount that would be provided at current tax rates.The differences will reverse over the remaining book lives of the related assets. In addition, regulatory assets include items that are recognized as liabilities for financial state- ment purposes, which will be recovered in future customer rates.The liabilities relate to postretirement benefits, vacation and self-insured workers’ compensation accruals. Long-lived Assets The Company regularly reviews its long-lived assets for impairment, annually or when events or changes in business circumstances have occurred, which indicate the carrying amount of such assets may not be fully realizable. Potential impairment of assets held for use is determined by comparing the carrying amount of an asset to the future undiscounted cash flows expected to be generated by that asset. If assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets.There have been no such impairments as of December 31, 2002. Long-term Debt Premium, Discount and Expense The discount and issuance expense on long-term debt is amortized over the original lives of the related debt issues. Premiums paid on the early redemption of certain debt issues and unamortized original issue discount and expense of such issues are amortized over the life of new debt issued in conjunction with the early redemption. Accumulated Other Comprehensive Loss The Company has an unfunded Supplemental Executive Retirement Plan.The unfunded accumulated benefit obligation of the plan, less the accrued benefit, exceeds the unrecognized prior service cost. Accumulated other comprehensive loss has been recorded as a separate component of Stockholders’ Equity. Advances for Construction Advances for Construction consist of payments received from developers for installation of water production and distribution facilities to serve new developments. Advances are excluded from rate base for rate setting purposes. Annual refunds are made to developers  without interest over a 20-year or 40-year period. Refund amounts under the 20-year contracts are based  on annual revenues from the extensions. Unrefunded balances at the end of the contract period are credited  to Contributions in Aid of Construction and are no longer refundable. Refunds on contracts entered into since 1982 are made in equal annual amounts over 40 years. At December 31, 2002 and 2001, the amounts refundable under the 20-year contracts were $3,248,000 and $4,320,000, respectively, and under 40-year contracts were $111,136,000 and $102,337,000, respectively. In addition, other Advances for Construction totaling $1,075,000 at December 31, 2002, are refundable based upon customer connections. Estimated refunds for 2003 for all water main extension contracts are $4,600,000. 42 Contributions in Aid of Construction Contributions in Aid of Construction represent pay- ments received from developers, primarily for fire protection purposes, which are not subject to refunds. Facilities funded by contributions are included in utility plant, but excluded from rate base. Depreciation related to contributions is charged to Contributions in Aid of Construction. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax CALIFORNIA WATER SERVICE GROUP