CALIFORNIA WATER SERVICE GROUP (COMPANY) PROVIDES HIGH-QUALITY WATER UTILITY SERVICES TO 2 MILLION PEOPLE BY MEANS OF FOUR SUBSIDIARIES: CALIFORNIA WATER SERVICE COMPANY (CAL WATER),WASHINGTON WATER SERVICE COMPANY (WASHINGTON WATER), NEW MEXICO WATER SERVICE COMPANY (NEW MEXICO WATER), AND CWS UTILITY SERVICES. REGULATED BY STATE UTILITY  COMMISSIONS, CAL WATER,WASHINGTON WATER, AND NEW MEXICO WATER  PROVIDE WATER UTILITY SERVICES TO CUSTOMERS IN 98 COMMUNITIES  THROUGHOUT CALIFORNIA,WASHINGTON, AND NEW MEXICO.THE COMPANY EXPECTS TO BEGIN PROVIDING REGULATED WATER SERVICES IN HAWAII BY  MID-2003 UPON COMPLETION OF ITS ACQUISITION OF THE KAANAPALI WATER CORPORATION. CWS UTILITY SERVICES CONDUCTS THE COMPANY’S NON-REGU- LATED BUSINESS,WHICH INCLUDES PERFORMING BILLING AND METER READING SERVICES AND FULL-SYSTEM WATER OPERATIONS FOR CITIES AND COMPANIES IN CALIFORNIA,WASHINGTON, AND NEW MEXICO. Letter to Stockholders  2 Financial Section  18 Independent Auditor's Report  55 Corporate Information  56 Board of Directors  57 CONTENTS