For the years ended December 31, 2001, 2000 and 1999 2001 2000 1999 Operating revenue $246,820 $244,806 $234,937 Operating expenses: Operations: Purchased water 73,174 73,768 69,351 Purchased power 21,130 15,136 14,355 Pump taxes 5,910 6,275 6,856 Administrative and general 36,521 32,974 32,266 Other 34,109 32,308 28,963 Maintenance 12,131 11,592 10,200 Depreciation and amortization 19,226 18,368 17,246 Income taxes 9,728 11,571 13,515 Property and other taxes 9,740 9,618 9,138 Total operating expenses 221,669 211,610 201,890 Net operating income 25,151 33,196 33,047 Other income and expenses, net 5,843 1,413 3,089 Income before interest expense 30,994 34,609 36,136 Interest expense: Long-term debt interest 14,187 12,901 13,084 Other interest 1,842 1,745 1,081 Total interest expense 16,029 14,646 14,165 Net income $ 14,965 $ 19,963 $ 21,971 Earnings per share: Basic $ 0.98 $ 1.31 $ 1.45 Diluted $ 0.97 $ 1.31 $ 1.44 Weighted average number of common shares outstanding: Basic 15,182 15,126 15,090 Diluted 15,285 15,173 15,142 In thousands, except per share data Consolidated Statement of Income See accompanying notes to consolidated financial statements. 28 CALIFORNIA WATER SERVICE GROUP 29 CALIFORNIA WATER SERVICE GROUP See accompanying notes to consolidated financial statements. Accumulated In thousands Additional Other Total Total Common Paid-in Retained Comprehensive Stockholders’ Comprehensive For the years ended December 31, 2001, 2000 and 1999 Stock Capital Earnings Income (Loss) Equity Income Balance at December 31, 1998 $150 $48,372 $139,054 $ — $187,576 $  — Issuance of common stock 1 968 — — 969 — Net income — — 21,971 — 21,971 21,971 Dividends paid: Preferred stock — — 153 — 153 — Common stock — — 15,262 — 15,262 — Total dividends paid — — 15,415 — 15,415 — Other comprehensive loss — — — (517) (517) (517) Balance at December 31, 1999 151 49,340 145,610 (517) 194,584 21,454 Issuance of common stock — 644 — — 644 — Net income — — 19,963 — 19,963 19,963 Dividends paid: Preferred stock — — 152 — 152 — Common stock — — 16,236 — 16,236 — Total dividends paid — — 16,388 — 16,388 — Other comprehensive income — — — 31 31 31 Balance at December 31, 2000 151 49,984 149,185 (486) 198,834 19,994 Acquisition 1 — 220 — 221 — Net income — — 14,965 — 14,965 14,965 Dividends paid: Preferred stock — — 153 — 153 — Common stock — — 16,918 — 16,918 — Total dividends paid — — 17,071  — 17,071 — Other comprehensive loss — — — (330) (330) (330) Balance at December 31, 2001  $152 $49,984 $147,299 $(816) $196,619 $14,635 Consolidated Statement of Common Stockholders’ Equity  and Comprehensive Income