|
Delaware
|
|
77-0066628
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
110 West Taylor Street, San Jose, CA
|
|
95110
|
(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer
☐
|
|
Accelerated filer
☒
|
|
Non-accelerated filer
☐
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|
Smaller reporting company
☐
|
|
|
|
|
(Do not check if a smaller reporting company)
|
||
|
|
|
|
Emerging growth company ☐
|
||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
OPERATING REVENUE
|
$
|
124,578
|
|
|
112,344
|
|
|
$
|
295,696
|
|
|
260,400
|
|
OPERATING EXPENSE:
|
|
|
|
|
|
|
|
||||||
Production Expenses:
|
|
|
|
|
|
|
|
||||||
Purchased water
|
30,833
|
|
|
28,681
|
|
|
66,938
|
|
|
52,863
|
|
||
Power
|
2,500
|
|
|
2,141
|
|
|
5,491
|
|
|
4,992
|
|
||
Groundwater extraction charges
|
15,756
|
|
|
10,867
|
|
|
34,098
|
|
|
25,627
|
|
||
Other production expenses
|
3,874
|
|
|
3,311
|
|
|
11,040
|
|
|
9,815
|
|
||
Total production expenses
|
52,963
|
|
|
45,000
|
|
|
117,567
|
|
|
93,297
|
|
||
Administrative and general
|
13,477
|
|
|
12,449
|
|
|
39,494
|
|
|
35,690
|
|
||
Maintenance
|
4,374
|
|
|
4,217
|
|
|
12,293
|
|
|
12,082
|
|
||
Property taxes and other non-income taxes
|
3,454
|
|
|
3,213
|
|
|
10,260
|
|
|
9,115
|
|
||
Depreciation and amortization
|
12,065
|
|
|
11,119
|
|
|
36,217
|
|
|
33,489
|
|
||
Total operating expense
|
86,333
|
|
|
75,998
|
|
|
215,831
|
|
|
183,673
|
|
||
OPERATING INCOME
|
38,245
|
|
|
36,346
|
|
|
79,865
|
|
|
76,727
|
|
||
OTHER (EXPENSE) INCOME:
|
|
|
|
|
|
|
|
||||||
Interest on long-term debt
|
(5,487
|
)
|
|
(4,993
|
)
|
|
(17,146
|
)
|
|
(15,039
|
)
|
||
Mortgage and other interest expense
|
(54
|
)
|
|
(433
|
)
|
|
(208
|
)
|
|
(1,291
|
)
|
||
Gain on sale of California Water Service Group stock
|
—
|
|
|
—
|
|
|
—
|
|
|
3,197
|
|
||
Gain on sale of real estate investments
|
—
|
|
|
124
|
|
|
6,903
|
|
|
124
|
|
||
Dividend income
|
18
|
|
|
17
|
|
|
54
|
|
|
70
|
|
||
Other, net
|
341
|
|
|
410
|
|
|
1,382
|
|
|
869
|
|
||
Income before income taxes
|
33,063
|
|
|
31,471
|
|
|
70,850
|
|
|
64,657
|
|
||
Provision for income taxes
|
13,523
|
|
|
12,512
|
|
|
27,055
|
|
|
25,545
|
|
||
NET INCOME BEFORE NONCONTROLLING INTEREST
|
19,540
|
|
|
18,959
|
|
|
43,795
|
|
|
39,112
|
|
||
Less net income attributable to the noncontrolling interest
|
—
|
|
|
—
|
|
|
1,896
|
|
|
—
|
|
||
SJW GROUP NET INCOME
|
19,540
|
|
|
18,959
|
|
|
41,899
|
|
|
39,112
|
|
||
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||
Unrealized gain on investment
|
80
|
|
|
(169
|
)
|
|
252
|
|
|
848
|
|
||
Reclassification adjustment for gain realized on sale of investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,742
|
)
|
||
SJW GROUP COMPREHENSIVE INCOME
|
$
|
19,620
|
|
|
18,790
|
|
|
$
|
42,151
|
|
|
38,218
|
|
SJW GROUP EARNINGS PER SHARE
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.95
|
|
|
0.93
|
|
|
$
|
2.04
|
|
|
1.91
|
|
Diluted
|
$
|
0.94
|
|
|
0.92
|
|
|
$
|
2.03
|
|
|
1.90
|
|
DIVIDENDS PER SHARE
|
$
|
0.22
|
|
|
0.20
|
|
|
$
|
0.65
|
|
|
0.61
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
|
|
|
|
||||||
Basic
|
20,516,172
|
|
|
20,451,930
|
|
|
20,502,274
|
|
|
20,434,494
|
|
||
Diluted
|
20,697,097
|
|
|
20,602,410
|
|
|
20,675,479
|
|
|
20,580,728
|
|
|
September 30,
2017 |
|
December 31,
2016 |
|||
ASSETS
|
|
|
|
|||
Utility plant:
|
|
|
|
|||
Land
|
$
|
18,237
|
|
|
17,923
|
|
Depreciable plant and equipment
|
1,614,139
|
|
|
1,554,016
|
|
|
Construction in progress
|
111,935
|
|
|
70,453
|
|
|
Intangible assets
|
25,164
|
|
|
23,989
|
|
|
|
1,769,475
|
|
|
1,666,381
|
|
|
Less accumulated depreciation and amortization
|
542,890
|
|
|
520,018
|
|
|
|
1,226,585
|
|
|
1,146,363
|
|
|
Real estate investments
|
56,224
|
|
|
62,193
|
|
|
Less accumulated depreciation and amortization
|
10,844
|
|
|
11,734
|
|
|
|
45,380
|
|
|
50,459
|
|
|
CURRENT ASSETS:
|
|
|
|
|||
Cash and cash equivalents
|
7,569
|
|
|
6,349
|
|
|
Restricted cash
|
—
|
|
|
19,001
|
|
|
Accounts receivable:
|
|
|
|
|||
Customers, net of allowances for uncollectible accounts
|
23,297
|
|
|
16,361
|
|
|
Income tax
|
—
|
|
|
9,796
|
|
|
Other
|
1,609
|
|
|
3,383
|
|
|
Accrued unbilled utility revenue
|
38,055
|
|
|
24,255
|
|
|
Current regulatory assets, net
|
11,368
|
|
|
16,064
|
|
|
Other current assets
|
5,223
|
|
|
4,402
|
|
|
|
87,121
|
|
|
99,611
|
|
|
OTHER ASSETS:
|
|
|
|
|||
Investment in California Water Service Group
|
3,815
|
|
|
3,390
|
|
|
Net regulatory assets, less current portion
|
140,911
|
|
|
135,709
|
|
|
Other
|
7,758
|
|
|
7,844
|
|
|
|
152,484
|
|
|
146,943
|
|
|
|
$
|
1,511,570
|
|
|
1,443,376
|
|
|
September 30,
2017 |
|
December 31,
2016 |
|||
CAPITALIZATION AND LIABILITIES
|
|
|
|
|||
CAPITALIZATION:
|
|
|
|
|||
Stockholders’ equity:
|
|
|
|
|||
Common stock, $0.001 par value; authorized 36,000,000 shares; issued and outstanding shares 20,520,856 on September 30, 2017 and 20,456,225 on December 31, 2016
|
$
|
21
|
|
|
21
|
|
Additional paid-in capital
|
83,856
|
|
|
81,715
|
|
|
Retained earnings
|
366,818
|
|
|
338,386
|
|
|
Accumulated other comprehensive income
|
1,776
|
|
|
1,524
|
|
|
Total stockholders’ equity
|
452,471
|
|
|
421,646
|
|
|
Long-term debt, less current portion
|
431,009
|
|
|
433,335
|
|
|
|
883,480
|
|
|
854,981
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|||
Line of credit
|
13,000
|
|
|
14,200
|
|
|
Current portion of long-term debt
|
—
|
|
|
125
|
|
|
Accrued groundwater extraction charges, purchased water and power
|
21,696
|
|
|
10,846
|
|
|
Accounts payable
|
30,658
|
|
|
18,739
|
|
|
Accrued interest
|
7,247
|
|
|
6,309
|
|
|
Accrued property taxes and other non-income taxes
|
3,635
|
|
|
1,681
|
|
|
Accrued payroll
|
3,695
|
|
|
4,696
|
|
|
Non-refundable deposit
|
3,000
|
|
|
—
|
|
|
Income tax payable
|
1,917
|
|
|
—
|
|
|
Other current liabilities
|
8,570
|
|
|
6,977
|
|
|
|
93,418
|
|
|
63,573
|
|
|
DEFERRED INCOME TAXES
|
206,343
|
|
|
205,203
|
|
|
ADVANCES FOR CONSTRUCTION
|
84,496
|
|
|
84,815
|
|
|
CONTRIBUTIONS IN AID OF CONSTRUCTION
|
157,448
|
|
|
151,576
|
|
|
POSTRETIREMENT BENEFIT PLANS
|
73,532
|
|
|
70,177
|
|
|
OTHER NONCURRENT LIABILITIES
|
12,853
|
|
|
13,051
|
|
|
COMMITMENTS AND CONTINGENCIES
|
—
|
|
|
—
|
|
|
|
$
|
1,511,570
|
|
|
1,443,376
|
|
|
Nine months ended September 30,
|
|||||
|
2017
|
|
2016
|
|||
OPERATING ACTIVITIES:
|
|
|
|
|||
Net income before noncontrolling interest
|
$
|
43,795
|
|
|
39,112
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
37,877
|
|
|
34,740
|
|
|
Deferred income taxes
|
1,283
|
|
|
16,755
|
|
|
Share-based compensation
|
1,633
|
|
|
1,316
|
|
|
Gain on sale of real estate investments
|
(6,903
|
)
|
|
(124
|
)
|
|
Gain on sale of California Water Service Group stock
|
—
|
|
|
(3,197
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|||
Accounts receivable and accrued unbilled utility revenue
|
(18,335
|
)
|
|
(19,298
|
)
|
|
Accounts payable and other current liabilities
|
2,215
|
|
|
(3,496
|
)
|
|
Accrued groundwater extraction charges, purchased water and power
|
10,850
|
|
|
6,534
|
|
|
Tax payable and receivable, and other accrued taxes
|
14,228
|
|
|
(6,972
|
)
|
|
Postretirement benefits
|
3,355
|
|
|
2,838
|
|
|
Regulatory assets and liability related to balancing and memorandum accounts
|
(503
|
)
|
|
9,239
|
|
|
Other changes, net
|
(1,528
|
)
|
|
(518
|
)
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
87,967
|
|
|
76,929
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|||
Additions to utility plant:
|
|
|
|
|||
Company-funded
|
(103,417
|
)
|
|
(102,813
|
)
|
|
Contributions in aid of construction
|
(2,631
|
)
|
|
(5,759
|
)
|
|
Additions to real estate investments
|
(116
|
)
|
|
(254
|
)
|
|
Payments for business/asset acquisition and water rights
|
(1,149
|
)
|
|
(1,063
|
)
|
|
Payments to retire utility plant, net of salvage
|
(2,323
|
)
|
|
(1,418
|
)
|
|
Proceeds from sale of real estate investments
|
11,180
|
|
|
124
|
|
|
Proceeds from non-refundable deposit
|
3,000
|
|
|
—
|
|
|
Proceeds from sale of California Water Service Group stock
|
—
|
|
|
4,510
|
|
|
Deposit for long-lived asset held-for-sale
|
—
|
|
|
20,000
|
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
(95,456
|
)
|
|
(86,673
|
)
|
|
FINANCING ACTIVITIES:
|
|
|
|
|||
Borrowings on line of credit
|
28,500
|
|
|
53,875
|
|
|
Repayments of line of credit
|
(29,700
|
)
|
|
(24,575
|
)
|
|
Repayments of long-term borrowings
|
(2,717
|
)
|
|
(5,143
|
)
|
|
Payment to noncontrolling interest
|
(1,896
|
)
|
|
—
|
|
|
Dividends paid
|
(13,380
|
)
|
|
(12,419
|
)
|
|
Receipts of advances and contributions in aid of construction
|
10,486
|
|
|
12,032
|
|
|
Refunds of advances for construction
|
(1,982
|
)
|
|
(1,924
|
)
|
|
Other changes, net
|
397
|
|
|
322
|
|
|
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
|
(10,292
|
)
|
|
22,168
|
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(17,781
|
)
|
|
12,424
|
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD
|
25,350
|
|
|
5,239
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
7,569
|
|
|
17,663
|
|
Cash paid during the period for:
|
|
|
|
|||
Interest
|
$
|
18,383
|
|
|
18,324
|
|
Income taxes
|
14,552
|
|
|
18,072
|
|
|
Supplemental disclosure of non-cash activities:
|
|
|
|
|||
Increase in accrued payables for construction costs capitalized
|
11,241
|
|
|
10,349
|
|
|
Utility property installed by developers
|
874
|
|
|
5,063
|
|
Note 1.
|
General
|
Note 2.
|
Equity Plans
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Adjustments to additional paid-in capital and common stock for:
|
|
|
|
|
|
|
|
||||||
Compensation costs charged to income:
|
|
|
|
|
|
|
|
||||||
ESPP
|
$
|
114
|
|
|
89
|
|
|
$
|
214
|
|
|
168
|
|
Restricted stock and deferred restricted stock
|
475
|
|
|
375
|
|
|
1,419
|
|
|
1,148
|
|
||
Total compensation costs charged to income
|
$
|
589
|
|
|
464
|
|
|
$
|
1,633
|
|
|
1,316
|
|
Excess tax benefits realized from stock issuance:
|
|
|
|
|
|
|
|
||||||
Restricted stock and deferred restricted stock
|
$
|
—
|
|
|
1
|
|
|
$
|
—
|
|
|
203
|
|
Total excess tax benefits realized from stock issuance
|
$
|
—
|
|
|
1
|
|
|
$
|
—
|
|
|
203
|
|
Proceeds from ESPP and similar instruments:
|
|
|
|
|
|
|
|
||||||
ESPP
|
$
|
645
|
|
|
503
|
|
|
$
|
1,215
|
|
|
954
|
|
Total proceeds from the ESPP and similar instruments
|
$
|
645
|
|
|
503
|
|
|
$
|
1,215
|
|
|
954
|
|
Note 3.
|
Real Estate Investments
|
|
September 30,
2017 |
|
December 31,
2016 |
|||
Land
|
$
|
13,262
|
|
|
15,218
|
|
Buildings and improvements
|
42,962
|
|
|
46,826
|
|
|
Intangibles
|
—
|
|
|
149
|
|
|
Subtotal
|
56,224
|
|
|
62,193
|
|
|
Less: accumulated depreciation and amortization
|
10,844
|
|
|
11,734
|
|
|
Total
|
$
|
45,380
|
|
|
50,459
|
|
Note 4.
|
Defined Benefit Plan
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Service cost
|
$
|
1,307
|
|
|
1,244
|
|
|
$
|
3,922
|
|
|
3,731
|
|
Interest cost
|
1,912
|
|
|
1,871
|
|
|
5,735
|
|
|
5,613
|
|
||
Other cost
|
1,101
|
|
|
1,104
|
|
|
3,304
|
|
|
3,313
|
|
||
Expected return on assets
|
(2,060
|
)
|
|
(1,894
|
)
|
|
(6,179
|
)
|
|
(5,683
|
)
|
||
|
$
|
2,260
|
|
|
2,325
|
|
|
$
|
6,782
|
|
|
6,974
|
|
|
|
|
Fair Value Measurements at September 30, 2017
|
||||||||||||||
|
|
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
|
|
Significant
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
Asset Category
|
Benchmark
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Cash and cash equivalents
|
|
|
$
|
5,573
|
|
|
$
|
5,573
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actively Managed (a):
|
|
|
|
|
|
|
|
|
|
||||||||
All Cap Equity
|
Russell 3000 Value
|
|
6,189
|
|
|
6,151
|
|
|
38
|
|
|
—
|
|
||||
U.S. Large Cap Equity
|
Russell 1000, Russell 1000 Growth, Russell 1000 Value
|
|
48,102
|
|
|
48,102
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid Cap Equity
|
Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value
|
|
8,893
|
|
|
8,893
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small Cap Equity
|
Russell 2000, Russell 2000 Growth, Russell 2000 Value
|
|
8,403
|
|
|
8,403
|
|
|
—
|
|
|
—
|
|
||||
Non-U.S. Large Cap Equity
|
MSCI EAFE
|
|
5,764
|
|
|
5,764
|
|
|
—
|
|
|
—
|
|
||||
REIT
|
NAREIT - Equity REIT’S
|
|
5,953
|
|
|
—
|
|
|
5,953
|
|
|
—
|
|
||||
Fixed Income (b)
|
(b)
|
|
41,953
|
|
|
—
|
|
|
41,953
|
|
|
—
|
|
||||
Total
|
|
|
$
|
130,830
|
|
|
$
|
82,886
|
|
|
$
|
47,944
|
|
|
$
|
—
|
|
(a)
|
Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.
|
(b)
|
Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.
|
|
|
|
Fair Value Measurements at December 31, 2016
|
||||||||||||||
|
|
|
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
|
|
Significant
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
||||||||
Asset Category
|
Benchmark
|
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Cash and cash equivalents
|
|
|
$
|
10,050
|
|
|
$
|
10,050
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actively Managed (a):
|
|
|
|
|
|
|
|
|
|
||||||||
All Cap Equity
|
Russell 3000 Value
|
|
5,290
|
|
|
5,266
|
|
|
24
|
|
|
—
|
|
||||
U.S. Large Cap Equity
|
Russell 1000, Russell 1000 Growth, Russell 1000 Value
|
|
39,534
|
|
|
39,534
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid Cap Equity
|
Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value
|
|
7,021
|
|
|
7,021
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small Cap Equity
|
Russell 2000, Russell 2000 Growth, Russell 2000 Value
|
|
6,357
|
|
|
6,357
|
|
|
—
|
|
|
—
|
|
||||
Non-U.S. Large Cap Equity
|
MSCI EAFE
|
|
4,832
|
|
|
4,832
|
|
|
—
|
|
|
—
|
|
||||
REIT
|
NAREIT - Equity REIT’S
|
|
5,663
|
|
|
—
|
|
|
5,663
|
|
|
—
|
|
||||
Fixed Income (b)
|
(b)
|
|
40,514
|
|
|
—
|
|
|
40,514
|
|
|
—
|
|
||||
Total
|
|
|
$
|
119,261
|
|
|
$
|
73,060
|
|
|
$
|
46,201
|
|
|
$
|
—
|
|
(a)
|
Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.
|
(b)
|
Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.
|
Note 5.
|
Segment and Non-Tariffed Business Reporting
|
|
For Three Months Ended September 30, 2017
|
||||||||||||||||||||
|
Water Utility Services
|
|
Real Estate Services
|
|
All Other*
|
|
SJW Group
|
||||||||||||||
|
Regulated
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Regulated
|
|
Non-tariffed
|
|
Total
|
||||||||
Operating revenue
|
$
|
120,727
|
|
|
2,460
|
|
|
1,391
|
|
|
—
|
|
|
120,727
|
|
|
3,851
|
|
|
124,578
|
|
Operating expense
|
83,088
|
|
|
1,511
|
|
|
875
|
|
|
859
|
|
|
83,088
|
|
|
3,245
|
|
|
86,333
|
|
|
Operating income (loss)
|
37,639
|
|
|
949
|
|
|
516
|
|
|
(859
|
)
|
|
37,639
|
|
|
606
|
|
|
38,245
|
|
|
Net income (loss) before noncontrolling interest
|
19,866
|
|
|
473
|
|
|
305
|
|
|
(1,104
|
)
|
|
19,866
|
|
|
(326
|
)
|
|
19,540
|
|
|
Depreciation and amortization
|
11,623
|
|
|
143
|
|
|
299
|
|
|
—
|
|
|
11,623
|
|
|
442
|
|
|
12,065
|
|
|
Senior note, mortgage and other interest expense
|
4,999
|
|
|
—
|
|
|
(2
|
)
|
|
544
|
|
|
4,999
|
|
|
542
|
|
|
5,541
|
|
|
Income tax expense (benefit) in net income
|
13,242
|
|
|
340
|
|
|
178
|
|
|
(237
|
)
|
|
13,242
|
|
|
281
|
|
|
13,523
|
|
|
Assets
|
$
|
1,438,433
|
|
|
20,239
|
|
|
48,917
|
|
|
3,981
|
|
|
1,438,433
|
|
|
73,137
|
|
|
1,511,570
|
|
|
For Three Months Ended September 30, 2016
|
||||||||||||||||||||
|
Water Utility Services
|
|
Real Estate Services
|
|
All Other*
|
|
SJW Group
|
||||||||||||||
|
Regulated
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Regulated
|
|
Non-tariffed
|
|
Total
|
||||||||
Operating revenue
|
$
|
108,502
|
|
|
2,056
|
|
|
1,786
|
|
|
—
|
|
|
108,502
|
|
|
3,842
|
|
|
112,344
|
|
Operating expense
|
73,179
|
|
|
1,355
|
|
|
1,108
|
|
|
356
|
|
|
73,179
|
|
|
2,819
|
|
|
75,998
|
|
|
Operating income (loss)
|
35,323
|
|
|
701
|
|
|
678
|
|
|
(356
|
)
|
|
35,323
|
|
|
1,023
|
|
|
36,346
|
|
|
Net income (loss) before noncontrolling interest
|
19,216
|
|
|
330
|
|
|
239
|
|
|
(826
|
)
|
|
19,216
|
|
|
(257
|
)
|
|
18,959
|
|
|
Depreciation and amortization
|
10,678
|
|
|
116
|
|
|
325
|
|
|
—
|
|
|
10,678
|
|
|
441
|
|
|
11,119
|
|
|
Senior note, mortgage and other interest expense
|
4,648
|
|
|
—
|
|
|
216
|
|
|
562
|
|
|
4,648
|
|
|
778
|
|
|
5,426
|
|
|
Income tax expense (benefit) in net income
|
12,145
|
|
|
247
|
|
|
106
|
|
|
14
|
|
|
12,145
|
|
|
367
|
|
|
12,512
|
|
|
Assets
|
$
|
1,359,419
|
|
|
18,092
|
|
|
75,909
|
|
|
921
|
|
|
1,359,419
|
|
|
94,922
|
|
|
1,454,341
|
|
|
For Nine Months Ended September 30, 2017
|
||||||||||||||||||||
|
Water Utility Services
|
|
Real Estate Services
|
|
All Other*
|
|
SJW Group
|
||||||||||||||
|
Regulated
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Regulated
|
|
Non-tariffed
|
|
Total
|
||||||||
Operating revenue
|
$
|
285,781
|
|
|
5,634
|
|
|
4,281
|
|
|
—
|
|
|
285,781
|
|
|
9,915
|
|
|
295,696
|
|
Operating expense
|
207,026
|
|
|
3,565
|
|
|
2,765
|
|
|
2,475
|
|
|
207,026
|
|
|
8,805
|
|
|
215,831
|
|
|
Operating income (loss)
|
78,755
|
|
|
2,069
|
|
|
1,516
|
|
|
(2,475
|
)
|
|
78,755
|
|
|
1,110
|
|
|
79,865
|
|
|
Net income (loss) before noncontrolling interest
|
39,895
|
|
|
965
|
|
|
5,986
|
|
|
(3,051
|
)
|
|
39,895
|
|
|
3,900
|
|
|
43,795
|
|
|
Depreciation and amortization
|
34,875
|
|
|
421
|
|
|
921
|
|
|
—
|
|
|
34,875
|
|
|
1,342
|
|
|
36,217
|
|
|
Senior note, mortgage and other interest expense
|
15,639
|
|
|
—
|
|
|
60
|
|
|
1,655
|
|
|
15,639
|
|
|
1,715
|
|
|
17,354
|
|
|
Income tax expense (benefit) in net income
|
24,943
|
|
|
713
|
|
|
2,294
|
|
|
(895
|
)
|
|
24,943
|
|
|
2,112
|
|
|
27,055
|
|
|
Assets
|
$
|
1,438,433
|
|
|
20,239
|
|
|
48,917
|
|
|
3,981
|
|
|
1,438,433
|
|
|
73,137
|
|
|
1,511,570
|
|
|
For Nine Months Ended September 30, 2016
|
||||||||||||||||||||
|
Water Utility Services
|
|
Real Estate Services
|
|
All Other*
|
|
SJW Group
|
||||||||||||||
|
Regulated
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Regulated
|
|
Non-tariffed
|
|
Total
|
||||||||
Operating revenue
|
$
|
250,389
|
|
|
4,802
|
|
|
5,209
|
|
|
—
|
|
|
250,389
|
|
|
10,011
|
|
|
260,400
|
|
Operating expense
|
175,967
|
|
|
3,275
|
|
|
3,161
|
|
|
1,270
|
|
|
175,967
|
|
|
7,706
|
|
|
183,673
|
|
|
Operating income (loss)
|
74,422
|
|
|
1,527
|
|
|
2,048
|
|
|
(1,270
|
)
|
|
74,422
|
|
|
2,305
|
|
|
76,727
|
|
|
Net income (loss) before noncontrolling interest
|
37,810
|
|
|
649
|
|
|
670
|
|
|
(17
|
)
|
|
37,810
|
|
|
1,302
|
|
|
39,112
|
|
|
Depreciation and amortization
|
32,027
|
|
|
350
|
|
|
1,112
|
|
|
—
|
|
|
32,027
|
|
|
1,462
|
|
|
33,489
|
|
|
Senior note, mortgage and other interest expense
|
13,929
|
|
|
—
|
|
|
706
|
|
|
1,695
|
|
|
13,929
|
|
|
2,401
|
|
|
16,330
|
|
|
Income tax expense (benefit) in net income
|
24,122
|
|
|
521
|
|
|
354
|
|
|
548
|
|
|
24,122
|
|
|
1,423
|
|
|
25,545
|
|
|
Assets
|
$
|
1,359,419
|
|
|
18,092
|
|
|
75,909
|
|
|
921
|
|
|
1,359,419
|
|
|
94,922
|
|
|
1,454,341
|
|
Note 6.
|
Long-Term Liabilities and Bank Borrowings
|
Note 7.
|
Fair Value Measurement
|
Note 8.
|
Regulatory Rate Filings
|
Note 9.
|
Balancing and Memorandum Account Recovery Procedures
|
|
Three months ended September 30, 2017
|
|
Three months ended September 30, 2016
|
||||||||||||||||||||||||||||
Beginning Balance
|
|
Revenue Increase (Reduction)
|
|
Refunds (Collections)
|
|
Surcharge Offset
|
|
Ending Balance
|
|
Beginning Balance
|
|
Revenue Increase (Reduction)
|
|
Refunds (Collections)
|
|
Surcharge Offset
|
|
Ending Balance
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Memorandum accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2014 WCMA*
|
$
|
908
|
|
|
—
|
|
|
(866
|
)
|
|
—
|
|
|
42
|
|
|
$
|
1,563
|
|
|
164
|
|
|
(1,044
|
)
|
|
—
|
|
|
683
|
|
2015 WCMA*
|
2,095
|
|
|
(11
|
)
|
|
(1,799
|
)
|
|
—
|
|
|
285
|
|
|
4,747
|
|
|
528
|
|
|
(1,883
|
)
|
|
—
|
|
|
3,392
|
|
||
2016 WCMA
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|
—
|
|
|
5,863
|
|
|
—
|
|
|
(5,863
|
)
|
|
—
|
|
||
2017 WCMA*
|
1,001
|
|
|
3,954
|
|
|
—
|
|
|
6
|
|
|
4,961
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
All others
|
4,550
|
|
|
144
|
|
|
—
|
|
|
—
|
|
|
4,694
|
|
|
1,661
|
|
|
232
|
|
|
176
|
|
|
—
|
|
|
2,069
|
|
||
Total memorandum accounts
|
8,554
|
|
|
4,142
|
|
|
(2,665
|
)
|
|
6
|
|
|
10,037
|
|
|
7,971
|
|
|
6,787
|
|
|
(2,751
|
)
|
|
(5,863
|
)
|
|
6,144
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balancing accounts, net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Water supply costs
|
7,314
|
|
|
2,278
|
|
|
—
|
|
|
—
|
|
|
9,592
|
|
|
2,641
|
|
|
2,420
|
|
|
452
|
|
|
—
|
|
|
5,513
|
|
||
Drought surcharges
|
(961
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(961
|
)
|
|
(1,716
|
)
|
|
—
|
|
|
(10,467
|
)
|
|
5,863
|
|
|
(6,320
|
)
|
||
Pension
|
(2,907
|
)
|
|
224
|
|
|
—
|
|
|
—
|
|
|
(2,683
|
)
|
|
(520
|
)
|
|
280
|
|
|
(1,055
|
)
|
|
—
|
|
|
(1,295
|
)
|
||
2012 General Rate Case true-up
|
15,765
|
|
|
—
|
|
|
(4,123
|
)
|
|
—
|
|
|
11,642
|
|
|
27,740
|
|
|
—
|
|
|
(3,850
|
)
|
|
—
|
|
|
23,890
|
|
||
2015 General Rate Case true-up
|
2,411
|
|
|
—
|
|
|
(2,297
|
)
|
|
—
|
|
|
114
|
|
|
8,767
|
|
|
—
|
|
|
(1,204
|
)
|
|
—
|
|
|
7,563
|
|
||
All others
|
(1,160
|
)
|
|
(94
|
)
|
|
—
|
|
|
—
|
|
|
(1,254
|
)
|
|
1,101
|
|
|
(106
|
)
|
|
(523
|
)
|
|
—
|
|
|
472
|
|
||
Total balancing accounts
|
$
|
20,462
|
|
|
2,408
|
|
|
(6,420
|
)
|
|
—
|
|
|
16,450
|
|
|
$
|
38,013
|
|
|
2,594
|
|
|
(16,647
|
)
|
|
5,863
|
|
|
29,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
29,016
|
|
|
6,550
|
|
|
(9,085
|
)
|
|
6
|
|
|
26,487
|
|
|
$
|
45,984
|
|
|
9,381
|
|
|
(19,398
|
)
|
|
—
|
|
|
35,967
|
|
|
Nine months ended September 30, 2017
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||||||||||||
Beginning Balance
|
|
Revenue Increase (Reduction)
|
|
Refunds (Collections)
|
|
Surcharge Offset
|
|
Ending Balance
|
|
Beginning Balance
|
|
Revenue Increase (Reduction)
|
|
Refunds (Collections)
|
|
Surcharge Offset
|
|
Ending Balance
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Memorandum accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2014 WCMA*
|
$
|
—
|
|
|
1,089
|
|
|
(1,047
|
)
|
|
—
|
|
|
42
|
|
|
$
|
2,944
|
|
|
11
|
|
|
(2,272
|
)
|
|
—
|
|
|
683
|
|
2015 WCMA*
|
1,589
|
|
|
2,101
|
|
|
(3,405
|
)
|
|
—
|
|
|
285
|
|
|
5,372
|
|
|
431
|
|
|
(2,411
|
)
|
|
—
|
|
|
3,392
|
|
||
2016 WCMA
|
—
|
|
|
1,507
|
|
|
—
|
|
|
(1,452
|
)
|
|
55
|
|
|
—
|
|
|
12,624
|
|
|
—
|
|
|
(12,624
|
)
|
|
—
|
|
||
2017 WCMA*
|
—
|
|
|
11,003
|
|
|
—
|
|
|
(6,042
|
)
|
|
4,961
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
All others
|
2,768
|
|
|
1,473
|
|
|
453
|
|
|
—
|
|
|
4,694
|
|
|
594
|
|
|
1,298
|
|
|
177
|
|
|
—
|
|
|
2,069
|
|
||
Total memorandum accounts
|
4,357
|
|
|
17,173
|
|
|
(3,999
|
)
|
|
(7,494
|
)
|
|
10,037
|
|
|
8,910
|
|
|
14,364
|
|
|
(4,506
|
)
|
|
(12,624
|
)
|
|
6,144
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balancing accounts, net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Water supply costs
|
5,190
|
|
|
3,833
|
|
|
569
|
|
|
—
|
|
|
9,592
|
|
|
2,771
|
|
|
2,364
|
|
|
378
|
|
|
—
|
|
|
5,513
|
|
||
Drought surcharges
|
(7,688
|
)
|
|
—
|
|
|
(767
|
)
|
|
7,494
|
|
|
(961
|
)
|
|
(359
|
)
|
|
—
|
|
|
(18,585
|
)
|
|
12,624
|
|
|
(6,320
|
)
|
||
Pension
|
(2,009
|
)
|
|
670
|
|
|
(1,344
|
)
|
|
—
|
|
|
(2,683
|
)
|
|
(552
|
)
|
|
840
|
|
|
(1,583
|
)
|
|
—
|
|
|
(1,295
|
)
|
||
2012 General Rate Case true-up
|
20,682
|
|
|
—
|
|
|
(9,040
|
)
|
|
—
|
|
|
11,642
|
|
|
33,070
|
|
|
—
|
|
|
(9,180
|
)
|
|
—
|
|
|
23,890
|
|
||
2015 General Rate Case true-up
|
5,528
|
|
|
—
|
|
|
(5,414
|
)
|
|
—
|
|
|
114
|
|
|
—
|
|
|
8,767
|
|
|
(1,204
|
)
|
|
—
|
|
|
7,563
|
|
||
All others
|
(151
|
)
|
|
(540
|
)
|
|
(639
|
)
|
|
76
|
|
|
(1,254
|
)
|
|
1,366
|
|
|
(332
|
)
|
|
(562
|
)
|
|
—
|
|
|
472
|
|
||
Total balancing accounts
|
$
|
21,552
|
|
|
3,963
|
|
|
(16,635
|
)
|
|
7,570
|
|
|
16,450
|
|
|
$
|
36,296
|
|
|
11,639
|
|
|
(30,736
|
)
|
|
12,624
|
|
|
29,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
25,909
|
|
|
21,136
|
|
|
(20,634
|
)
|
|
76
|
|
|
26,487
|
|
|
$
|
45,206
|
|
|
26,003
|
|
|
(35,242
|
)
|
|
—
|
|
|
35,967
|
|
Note 10.
|
Regulatory Assets and Liabilities
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|||
Regulatory assets:
|
|
|
|
|
|||
Income tax temporary differences, net
|
|
$
|
10,139
|
|
|
10,139
|
|
Postretirement pensions and other medical benefits
|
|
109,795
|
|
|
109,795
|
|
|
Balancing and memorandum accounts, net
|
|
26,487
|
|
|
25,909
|
|
|
Other, net
|
|
5,858
|
|
|
5,930
|
|
|
Total regulatory assets, net in Consolidated Balance Sheets
|
|
$
|
152,279
|
|
|
151,773
|
|
Less: current regulatory asset, net
|
|
11,368
|
|
|
16,064
|
|
|
Total regulatory assets, net, less current portion
|
|
$
|
140,911
|
|
|
135,709
|
|
Note 11.
|
Texas Water Alliance Limited
|
Note 12.
|
Legal Proceedings
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
% for Nine months ended
September 30, 2017
of SJW Land Company
|
||||
Description
|
|
Location
|
|
Acreage
|
|
Square Footage
|
|
Revenue
|
|
Expense
|
||
Commercial building*
|
|
San Jose, California
|
|
2
|
|
28,000
|
|
4
|
%
|
|
6
|
%
|
Warehouse building
|
|
Knoxville, Tennessee
|
|
30
|
|
361,500
|
|
41
|
%
|
|
38
|
%
|
Commercial building
|
|
Knoxville, Tennessee
|
|
15
|
|
135,000
|
|
55
|
%
|
|
56
|
%
|
Undeveloped land and parking lot
|
|
Knoxville, Tennessee
|
|
10
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|
Undeveloped land*
|
|
San Jose, California
|
|
5
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|
*
|
See Note 3 of Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of the sale of 444 West Santa Clara’s, L.P.’s property as well as a San Jose, California undeveloped land property on April 6, 2017.
|
(1)
|
Regional regulated water utility operations;
|
(2)
|
Regional non-tariffed water utility related services provided in accordance with the guidelines established by the CPUC in California and the PUCT in Texas; and
|
(3)
|
Out-of-region water and utility related services.
|
|
Operating Revenue by Segment
|
||||||||||||
Three months ended September 30,
|
|
Nine months ended September 30,
|
|||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Water Utility Services
|
$
|
123,187
|
|
|
110,558
|
|
|
$
|
291,415
|
|
|
255,191
|
|
Real Estate Services
|
1,391
|
|
|
1,786
|
|
|
4,281
|
|
|
5,209
|
|
||
|
$
|
124,578
|
|
|
112,344
|
|
|
$
|
295,696
|
|
|
260,400
|
|
|
Three months ended
September 30,
2017 vs. 2016
|
|
Nine months ended
September 30,
2017 vs. 2016
|
||||||||||
Increase/(decrease)
|
|
Increase/(decrease)
|
|||||||||||
Water Utility Services:
|
|
|
|
|
|
|
|
||||||
Consumption changes
|
$
|
4,543
|
|
|
4
|
%
|
|
$
|
6,136
|
|
|
2
|
%
|
Increase in customers
|
329
|
|
|
—
|
%
|
|
792
|
|
|
—
|
%
|
||
Rate increases
|
10,588
|
|
|
9
|
%
|
|
34,162
|
|
|
13
|
%
|
||
Balancing and memorandum accounts:
|
|
|
|
|
|
|
|
|
|
||||
WCMA
|
(2,557
|
)
|
|
(2
|
)%
|
|
2,634
|
|
|
2
|
%
|
||
2015 General Rate Case true-up
|
—
|
|
|
—
|
%
|
|
(8,767
|
)
|
|
(4
|
)%
|
||
All other
|
(274
|
)
|
|
—
|
%
|
|
1,267
|
|
|
1
|
%
|
||
Real Estate Services
|
(395
|
)
|
|
—
|
%
|
|
(928
|
)
|
|
—
|
%
|
||
|
$
|
12,234
|
|
|
11
|
%
|
|
$
|
35,296
|
|
|
14
|
%
|
|
Operating Expense by Segment
|
||||||||||||
Three months ended September 30,
|
|
Nine months ended September 30,
|
|||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
Water Utility Services
|
$
|
84,599
|
|
|
74,534
|
|
|
$
|
210,591
|
|
|
179,242
|
|
Real Estate Services
|
875
|
|
|
1,108
|
|
|
2,765
|
|
|
3,161
|
|
||
All Other
|
859
|
|
|
356
|
|
|
2,475
|
|
|
1,270
|
|
||
|
$
|
86,333
|
|
|
75,998
|
|
|
$
|
215,831
|
|
|
183,673
|
|
|
Three months ended
September 30,
2017 vs. 2016
|
|
Nine months ended
September 30,
2017 vs. 2016
|
||||||||||
Increase/(decrease)
|
|
Increase/(decrease)
|
|||||||||||
Water production expenses:
|
|
|
|
|
|
|
|
||||||
Change in surface water use
|
$
|
(339
|
)
|
|
—
|
%
|
|
$
|
6,023
|
|
|
3
|
%
|
Change in usage and new customers
|
4,030
|
|
|
5
|
%
|
|
4,833
|
|
|
2
|
%
|
||
Purchased water and groundwater extraction charge and energy price increase
|
4,272
|
|
|
6
|
%
|
|
13,414
|
|
|
8
|
%
|
||
Total water production expenses
|
7,963
|
|
|
11
|
%
|
|
24,270
|
|
|
13
|
%
|
||
Administrative and general
|
1,028
|
|
|
2
|
%
|
|
3,804
|
|
|
2
|
%
|
||
Maintenance
|
157
|
|
|
—
|
%
|
|
211
|
|
|
—
|
%
|
||
Property taxes and other non-income taxes
|
241
|
|
|
—
|
%
|
|
1,145
|
|
|
1
|
%
|
||
Depreciation and amortization
|
946
|
|
|
1
|
%
|
|
2,728
|
|
|
2
|
%
|
||
|
$
|
10,335
|
|
|
14
|
%
|
|
$
|
32,158
|
|
|
18
|
%
|
|
Three months ended September 30,
|
|
Increase/
(decrease)
|
|
% of Total Change
|
|
Nine months ended September 30,
|
|
Increase/
(decrease)
|
|
% of Total Change
|
||||||||||||
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|||||||||||||||
Purchased water
|
7,911
|
|
|
7,978
|
|
|
(67
|
)
|
|
—
|
%
|
|
17,941
|
|
|
15,844
|
|
|
2,097
|
|
|
7
|
%
|
Groundwater
|
4,582
|
|
|
3,495
|
|
|
1,087
|
|
|
9
|
%
|
|
10,479
|
|
|
9,172
|
|
|
1,307
|
|
|
5
|
%
|
Surface water
|
87
|
|
|
1
|
|
|
86
|
|
|
—
|
%
|
|
563
|
|
|
2,445
|
|
|
(1,882
|
)
|
|
(7
|
)%
|
Reclaimed water
|
233
|
|
|
253
|
|
|
(20
|
)
|
|
—
|
%
|
|
454
|
|
|
475
|
|
|
(21
|
)
|
|
—
|
%
|
|
12,813
|
|
|
11,727
|
|
|
1,086
|
|
|
9
|
%
|
|
29,437
|
|
|
27,936
|
|
|
1,501
|
|
|
5
|
%
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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(1)
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Filed currently herewith.
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SJW GROUP
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DATE:
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October 30, 2017
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By:
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/s/ JAMES P. LYNCH
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James P. Lynch
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Chief Financial Officer and Treasurer
(Principal financial officer)
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By: /s/ W. Richard Roth
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W. Richard Roth, President and
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Chief Executive Officer and
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Chairman of Board of Directors
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(1)
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A cash amount determined in accordance with the formula provisions set forth below shall be paid (less any customary taxes and withholdings) in a series of successive equal annual installments over the period of years equal to the Applicable Multiple. Unless otherwise specified in attached Exhibit A, the Applicable Multiple for each Officer shall be three (3). The first such annual installment shall be paid on the last day of the sixty (60)-day period measured from the date of the Officer’s Separation from Service, provided that the release required of the Officer under Section 2(b) is delivered within the applicable time period set forth in such Section 2(b) and such release is
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(2)
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A cash amount for the Company’s Chief Executive Officer equal to the annual bonus for the year of such cessation of Employee status based on actual performance, pro-rated for the number of days of employment during the year of termination, which shall be paid in a lump sum payment at the same time annual bonuses for such year are paid to other executives of the Company (but in any event no later than March 15 of the year following the year of the cessation of Employee status).
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(3)
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If the Officer elects to continue medical care coverage under the Company’s group health care plans pursuant to COBRA, the Employer will reimburse the Officer for the costs such Officer incurs to obtain such continued coverage for himself or herself and his or her spouse and eligible dependents (collectively, the “Coverage Costs”) until the earlier of (x) the date of the last annual installment payable under Section 2(a)(1) above or (y) the first date on which the Officer is covered under another employer’s health benefit program without exclusion for any pre-existing medical condition. During the period for which the Officer’s COBRA coverage rights are in effect, such coverage shall be obtained under the Company’s group health care plans. For the period (if any) following the completion of such COBRA coverage and continuing through the completion of the limited period for which medical care coverage is to be provided hereunder, such coverage shall continue under the Company’s group health plans or pursuant to one or more other plans or insurance policies providing equivalent coverage. In order to obtain reimbursement for the Officer’s Coverage Costs under each applicable plan or policy, the Officer must submit appropriate evidence to the Employer
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(4)
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The Company will make provisions in its Executive Supplemental Retirement Plan (SERP) so that the Officer will, upon a Separation from Service under the circumstances set forth in Section 2(a), be credited for purposes of computing such Officer's benefits under the SERP with an additional number of Years of Service and years of age equal to the number of years for which such Officer is, upon his or her Separation from Service, to receive continued Salary by reason of the Applicable Multiple in effect for him or her pursuant to Section 2(a)(1) above. In no event, however, shall any benefit be payable under the SERP earlier than it otherwise would have been paid in the absence of such additional Years of Service and age credits.
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(5)
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All outstanding stock options held by the Officer will immediately vest and become exercisable in full and may be exercised for any or all of the underlying shares until the expiration or sooner termination of the option term. Except as otherwise expressly provided in the agreement evidencing such award, each restricted stock unit or other stock award held by the Officer will also immediately vest, and the underlying shares will become issuable, in accordance with the terms of the applicable award agreement. All outstanding Dividend Equivalent Rights held by the Officer at such time will
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(6)
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The Officer (other than the Company’s Chief Executive Officer) shall, to the extent applicable, also be entitled to the special Tax Gross-Up under Section 14 of this Plan as part of his or her Change in Control Benefit.”
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By: /s/ W. Richard Roth
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W. Richard Roth, President and
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Chief Executive Officer and
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Chairman of Board of Directors
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Name
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Office
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Eric W. Thornburg
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President and Chief Executive Officer of SJW Group and SJW Land Company; Chief Executive Officer of San Jose Water Company and SJWTX, Inc.
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W. Richard Roth
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Chief Executive Emeritus of SJW Group and San Jose Water Company; President and Chief Executive Officer of Texas Water Alliance Limited
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Wendy Avila-Walker
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Controller and Assistant Treasurer of San Jose Water Company; Controller of SJW Group
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Dana R. Drysdale
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Vice President of Information Systems of San Jose Water Company
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Andrew R. Gere
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President and Chief Operating Officer of San Jose Water Company
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Craig S. Giordano
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Vice President of Engineering of San Jose Water Company
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Palle Jensen
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Executive Vice President of San Jose Water Company; Senior Vice President of Regulatory Affairs of SJWTX, Inc.
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Denia Leal
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Vice President of Human Resources of San Jose Water Company
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James P. Lynch
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Chief Financial Officer and Treasurer of SJW Group, San Jose Water Company, SJW Land Company, SJWTX, Inc. and Texas Water Alliance Limited
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Suzy Papazian
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General Counsel and Corporate Secretary of SJW Group and San Jose Water Company; Corporate Secretary of SJW Land Company, SJWTX, Inc. and Texas Water Alliance Limited
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Curtis A. Rayer, Jr.
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Vice President of Operations of San Jose Water Company
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John Tang
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Vice President of Regulatory Affairs and
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Andrew F. Walters
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Chief Administrative Officer of San Jose Water Company
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Thomas Hodge
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President of SJWTX, Inc.; Vice President of Texas Water Alliance Limited
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1.
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Employment
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SJW GROUP
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/s/ Daniel B. More
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Name: Daniel B. More
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Title: Chair, Executive Compensation Committee
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Date: September 26, 2017
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EXECUTIVE
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/s/ Eric W. Thornburg
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Name: Eric W. Thornburg
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Participant
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__________________________
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Award Date
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___________________
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Number of Shares
Subject to Award
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________ shares of Common Stock (the “Shares”)
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Vesting Schedule
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The Shares shall vest in a series of three (3) successive equal annual installments upon Participant’s completion of each year of Service over the three (3)-year period measured from the Award Date (the “Normal Vesting Schedule”). However, the Shares may be subject to accelerated vesting in accordance with the provisions of Paragraphs 4 and 6 below.
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Issuance Schedule
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The Shares in which the Participant vests on an annual basis in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporation’s collection of all applicable Withholding Taxes, on the applicable annual vesting date (the “Issuance Date”) or as soon thereafter as administratively practicable, but in no event later than the close of the calendar year in which such annual vesting date occurs or (if later) the fifteenth day of the third calendar month following such vesting date. The Shares which vest pursuant to Paragraph 4 or Paragraph 6 of this Agreement shall be issued in accordance with the provisions of the applicable Paragraph. The applicable Withholding Taxes are to be collected pursuant to the procedure set forth in Paragraph 8 of this Agreement.
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SJW GROUP
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By:
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Dated:
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[NAME OF PARTICIPANT]
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Signature:
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Address:
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Dated:
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Participant
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__________________________
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Award Date
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___________________
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Number of Shares
Subject to Award
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________ shares of Common Stock (the “Shares”)
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Vesting Schedule
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The Shares shall vest in a series of three (3) successive equal annual installments upon Participant’s completion of each year of Service over the three (3)-year period measured from the Award Date (the “Normal Vesting Schedule”). However, the Shares may be subject to accelerated vesting in accordance with the provisions of Paragraphs 4 and 6 below.
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Issuance Schedule
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The Shares in which the Participant vests on an annual basis in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporation’s collection of all applicable Withholding Taxes, on the applicable annual vesting date (the “Issuance Date”) or as soon thereafter as administratively practicable, but in no event later than the close of the calendar year in which such annual vesting date occurs or (if later) the fifteenth day of the third calendar month following such vesting date. The Shares which vest pursuant to Paragraph 4 or Paragraph 6 of this Agreement shall be issued in accordance with the provisions of the applicable Paragraph. The applicable Withholding Taxes are to be collected pursuant to the procedure set forth in Paragraph 8 of this Agreement.
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SJW GROUP
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By:
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Dated:
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[NAME OF PARTICIPANT]
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Signature:
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Address:
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Dated:
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(a)
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Has a full twenty-one (21) days (or forty-five (45) days if such longer period is required under applicable law) after receipt of this Agreement within which to review and consider the Agreement;
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(b)
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Is advised to consult with an attorney which he may freely choose prior to executing this Agreement;
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(c)
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Has carefully read and fully understands the provisions of this Agreement;
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(d)
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Is, through and in accordance with the terms set forth in this Agreement, releasing Releasees from any and all claims he has or may come to have against the Releasees;
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(e)
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Is knowingly and voluntarily agreeing to all the terms set forth in this Agreement;
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(f)
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Has seven (7) days after the execution of this Agreement within which he may revoke this Agreement. In order to revoke this Agreement, Executive must deliver to the Company’s General Counsel, a letter stating that he is revoking this Agreement no later than seven (7) days after he executes it;
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(g)
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That, because of this revocation period, this Agreement shall not become effective or enforceable until the eighth (8
th
) day following the date Executive executes this Agreement (the “Effective Date”);
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(h)
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Is not waiving any rights or claims under the Age Discrimination in Employment Act of 1967 (29 U.S.C. § 621 et seq.) that may arise after the date this Agreement is executed; and
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(i)
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Is, by reason of this Agreement and the release of claims herein, receiving from Company good and sufficient consideration in addition to anything of value to which he is already entitled.
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DATED:
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Eric W. Thornburg
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DATED:
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SJW Group.
By:
Its:
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/s/ Daniel B. More
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Daniel B. More
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Chair, Executive Compensation Committee
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/s/ W. Richard Roth
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W. Richard Roth
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Dated: September 26, 2017
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1.
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Section 6.2 is amended in its entirety to read as follows:
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Years of Credited Service
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Percent of Compensation
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Less than 20
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15%
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20 or more
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16%
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Percent of Compensation
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39%
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Years of Service Completed
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Vested Percentage
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Less than 3
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None
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3 or More
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100%
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SAN JOSE WATER COMPANY
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By: /s/ W. Richard Roth
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W. Richard Roth, President,
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Chief Executive Officer and
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Chairman of Board of Directors
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1.
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I have reviewed this Quarterly Report on Form 10-Q of SJW Group (the “registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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October 30, 2017
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/s/ W. RICHARD ROTH
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W. Richard Roth
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Chairman, President and Chief Executive Officer
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(Principal executive officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of SJW Group (the “registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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October 30, 2017
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/s/ JAMES P. LYNCH
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James P. Lynch
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Chief Financial Officer and Treasurer
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(Principal financial officer)
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(1)
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ W. RICHARD ROTH
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W. Richard Roth
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Chairman, President and Chief Executive Officer
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(Principal executive officer)
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October 30, 2017
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(1)
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the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ JAMES P. LYNCH
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James P. Lynch
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Chief Financial Officer and Treasurer
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(Principal financial officer)
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October 30, 2017
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