|
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)
|
|
(Zip Code)
|
Large accelerated filer
☒
|
|
Accelerated filer
☐
|
|
Non-accelerated filer
☐
|
|
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 March 31,
|
|||||
|
2018
|
|
2017
|
|||
REVENUE
|
$
|
75,042
|
|
|
69,045
|
|
OPERATING EXPENSE:
|
|
|
|
|||
Production Expenses:
|
|
|
|
|||
Purchased water
|
15,416
|
|
|
13,924
|
|
|
Power
|
1,268
|
|
|
1,287
|
|
|
Groundwater extraction charges
|
9,532
|
|
|
7,410
|
|
|
Other production expenses
|
4,212
|
|
|
3,859
|
|
|
Total production expenses
|
30,428
|
|
|
26,480
|
|
|
Administrative and general
|
11,568
|
|
|
11,149
|
|
|
Maintenance
|
4,460
|
|
|
3,898
|
|
|
Property taxes and other non-income taxes
|
3,866
|
|
|
3,695
|
|
|
Depreciation and amortization
|
13,583
|
|
|
12,119
|
|
|
Merger related expenses
|
3,806
|
|
|
—
|
|
|
Total operating expense
|
67,711
|
|
|
57,341
|
|
|
OPERATING INCOME
|
7,331
|
|
|
11,704
|
|
|
OTHER (EXPENSE) INCOME:
|
|
|
|
|||
Interest on long-term debt and other interest expense
|
(6,052
|
)
|
|
(6,057
|
)
|
|
Pension non-service cost
|
(583
|
)
|
|
(871
|
)
|
|
Unrealized loss on California Water Service Group stock
|
(667
|
)
|
|
—
|
|
|
Other, net
|
676
|
|
|
463
|
|
|
Income before income taxes
|
705
|
|
|
5,239
|
|
|
Provision for income taxes
|
(580
|
)
|
|
1,568
|
|
|
SJW GROUP NET INCOME
|
1,285
|
|
|
3,671
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|||
Unrealized gain on investment
|
—
|
|
|
116
|
|
|
SJW GROUP COMPREHENSIVE INCOME
|
$
|
1,285
|
|
|
3,787
|
|
SJW GROUP EARNINGS PER SHARE
|
|
|
|
|||
Basic
|
$
|
0.06
|
|
|
0.18
|
|
Diluted
|
$
|
0.06
|
|
|
0.18
|
|
DIVIDENDS PER SHARE
|
$
|
0.28
|
|
|
0.22
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
|||
Basic
|
20,561,329
|
|
|
20,485,968
|
|
|
Diluted
|
20,701,031
|
|
|
20,655,239
|
|
|
March 31,
2018 |
|
December 31,
2017 |
|||
ASSETS
|
|
|
|
|||
Utility plant:
|
|
|
|
|||
Land
|
$
|
17,831
|
|
|
17,831
|
|
Depreciable plant and equipment
|
1,733,449
|
|
|
1,714,228
|
|
|
Construction in progress
|
54,933
|
|
|
45,851
|
|
|
Intangible assets
|
15,567
|
|
|
14,413
|
|
|
|
1,821,780
|
|
|
1,792,323
|
|
|
Less accumulated depreciation and amortization
|
566,844
|
|
|
553,059
|
|
|
|
1,254,936
|
|
|
1,239,264
|
|
|
Real estate investments
|
56,213
|
|
|
56,213
|
|
|
Less accumulated depreciation and amortization
|
11,431
|
|
|
11,132
|
|
|
|
44,782
|
|
|
45,081
|
|
|
CURRENT ASSETS:
|
|
|
|
|||
Cash and cash equivalents
|
6,954
|
|
|
7,799
|
|
|
Accounts receivable:
|
|
|
|
|||
Customers, net of allowances for uncollectible accounts
|
18,326
|
|
|
17,305
|
|
|
Income tax
|
7,072
|
|
|
7,981
|
|
|
Other
|
1,578
|
|
|
1,118
|
|
|
Accrued unbilled utility revenue
|
22,608
|
|
|
27,905
|
|
|
Other current assets
|
4,522
|
|
|
4,750
|
|
|
|
61,060
|
|
|
66,858
|
|
|
OTHER ASSETS:
|
|
|
|
|||
Investment in California Water Service Group
|
3,067
|
|
|
4,535
|
|
|
Net regulatory assets, less current portion
|
97,293
|
|
|
99,554
|
|
|
Other
|
2,736
|
|
|
2,709
|
|
|
|
103,096
|
|
|
106,798
|
|
|
|
$
|
1,463,874
|
|
|
1,458,001
|
|
|
March 31,
2018 |
|
December 31,
2017 |
|||
CAPITALIZATION AND LIABILITIES
|
|
|
|
|||
CAPITALIZATION:
|
|
|
|
|||
Stockholders’ equity:
|
|
|
|
|||
Common stock, $0.001 par value; authorized 36,000,000 shares; issued and outstanding shares 20,585,136 on March 31, 2018 and 20,520,856 on December 31, 2017
|
$
|
21
|
|
|
21
|
|
Additional paid-in capital
|
83,986
|
|
|
84,866
|
|
|
Retained earnings
|
373,823
|
|
|
376,119
|
|
|
Accumulated other comprehensive income
|
—
|
|
|
2,203
|
|
|
Total stockholders’ equity
|
457,830
|
|
|
463,209
|
|
|
Long-term debt, less current portion
|
431,175
|
|
|
431,092
|
|
|
|
889,005
|
|
|
894,301
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|||
Line of credit
|
39,000
|
|
|
25,000
|
|
|
Accrued groundwater extraction charges, purchased water and power
|
11,692
|
|
|
14,382
|
|
|
Accounts payable
|
22,482
|
|
|
22,960
|
|
|
Accrued interest
|
7,400
|
|
|
6,869
|
|
|
Accrued property taxes and other non-income taxes
|
2,780
|
|
|
1,904
|
|
|
Accrued payroll
|
3,620
|
|
|
6,011
|
|
|
Other current liabilities
|
8,386
|
|
|
7,926
|
|
|
|
95,360
|
|
|
85,052
|
|
|
DEFERRED INCOME TAXES
|
84,442
|
|
|
85,795
|
|
|
ADVANCES FOR CONSTRUCTION
|
82,611
|
|
|
83,695
|
|
|
CONTRIBUTIONS IN AID OF CONSTRUCTION
|
162,443
|
|
|
160,830
|
|
|
POSTRETIREMENT BENEFIT PLANS
|
74,735
|
|
|
72,841
|
|
|
REGULATORY LIABILITY
|
62,205
|
|
|
62,476
|
|
|
OTHER NONCURRENT LIABILITIES
|
13,073
|
|
|
13,011
|
|
|
COMMITMENTS AND CONTINGENCIES
|
—
|
|
|
—
|
|
|
|
$
|
1,463,874
|
|
|
1,458,001
|
|
|
Three months ended March 31,
|
|||||
|
2018
|
|
2017
|
|||
OPERATING ACTIVITIES:
|
|
|
|
|||
Net income
|
$
|
1,285
|
|
|
3,671
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|||
Depreciation and amortization
|
14,160
|
|
|
12,646
|
|
|
Deferred income taxes
|
(1,383
|
)
|
|
1,595
|
|
|
Share-based compensation
|
487
|
|
|
586
|
|
|
Unrealized loss on California Water Service Group stock
|
667
|
|
|
—
|
|
|
Loss on sale of California Water Service Group stock
|
87
|
|
|
—
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|||
Accounts receivable and accrued unbilled utility revenue
|
4,530
|
|
|
6,015
|
|
|
Accounts payable and other current liabilities
|
784
|
|
|
557
|
|
|
Accrued groundwater extraction charges, purchased water and power
|
(2,690
|
)
|
|
(454
|
)
|
|
Tax payable and receivable, and other accrued taxes
|
2,465
|
|
|
1,090
|
|
|
Postretirement benefits
|
1,894
|
|
|
1,915
|
|
|
Regulatory assets and liability related to balancing and memorandum accounts
|
2,350
|
|
|
1,917
|
|
|
Other changes, net
|
(2,054
|
)
|
|
(1,296
|
)
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
22,582
|
|
|
28,242
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|||
Additions to utility plant:
|
|
|
|
|||
Company-funded
|
(28,961
|
)
|
|
(27,745
|
)
|
|
Contributions in aid of construction
|
(1,468
|
)
|
|
(1,646
|
)
|
|
Additions to real estate investments
|
—
|
|
|
(62
|
)
|
|
Payments to retire utility plant, net of salvage
|
(1,134
|
)
|
|
(397
|
)
|
|
Payments for business/asset acquisition and water rights
|
—
|
|
|
(1,101
|
)
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
(31,563
|
)
|
|
(30,951
|
)
|
|
FINANCING ACTIVITIES:
|
|
|
|
|||
Borrowings on line of credit
|
14,000
|
|
|
—
|
|
|
Repayments of line of credit
|
—
|
|
|
(14,200
|
)
|
|
Repayments of long-term borrowings
|
—
|
|
|
(32
|
)
|
|
Dividends paid
|
(5,754
|
)
|
|
(4,456
|
)
|
|
Receipts of advances and contributions in aid of construction
|
2,148
|
|
|
3,924
|
|
|
Refunds of advances for construction
|
(537
|
)
|
|
(532
|
)
|
|
Other changes, net
|
(1,721
|
)
|
|
(245
|
)
|
|
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
8,136
|
|
|
(15,541
|
)
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(845
|
)
|
|
(18,250
|
)
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD
|
7,799
|
|
|
25,350
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
6,954
|
|
|
7,100
|
|
Cash paid during the period for:
|
|
|
|
|||
Interest
|
$
|
6,042
|
|
|
6,044
|
|
Income taxes
|
85
|
|
|
—
|
|
|
Supplemental disclosure of non-cash activities:
|
|
|
|
|||
Change in accrued payables for construction costs capitalized
|
(790
|
)
|
|
1,634
|
|
|
Utility property installed by developers
|
590
|
|
|
243
|
|
|
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS:
|
|
|
|
|||
Cash and cash equivalents
|
6,954
|
|
|
7,092
|
|
|
Restricted cash
|
—
|
|
|
8
|
|
|
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD
|
$
|
6,954
|
|
|
7,100
|
|
Note 1.
|
General
|
|
Three months ended March 31,
|
|||||
|
2018
|
|
2017
|
|||
Revenue from contracts with customers
|
$
|
75,869
|
|
|
68,567
|
|
Alternative revenue programs, net - WCMA
|
(332
|
)
|
|
2,276
|
|
|
Other balancing and memorandum accounts revenue, net *
|
(1,836
|
)
|
|
(3,361
|
)
|
|
Rental income
|
1,341
|
|
|
1,563
|
|
|
|
$
|
75,042
|
|
|
69,045
|
|
Note 2.
|
Equity Plans
|
|
Three months ended March 31,
|
|||||
|
2018
|
|
2017
|
|||
Adjustments to additional paid-in capital and common stock for:
|
|
|
|
|||
Compensation costs charged to income:
|
|
|
|
|||
ESPP
|
$
|
115
|
|
|
100
|
|
Restricted stock and deferred restricted stock
|
372
|
|
|
486
|
|
|
Total compensation costs charged to income
|
$
|
487
|
|
|
586
|
|
Proceeds from ESPP
|
$
|
653
|
|
|
570
|
|
Note 3.
|
Real Estate Investments
|
|
March 31,
2018 |
|
December 31,
2017 |
|||
Land
|
$
|
13,262
|
|
|
13,262
|
|
Buildings and improvements
|
42,951
|
|
|
42,951
|
|
|
Subtotal
|
56,213
|
|
|
56,213
|
|
|
Less: accumulated depreciation and amortization
|
11,431
|
|
|
11,132
|
|
|
Total
|
$
|
44,782
|
|
|
45,081
|
|
Note 4.
|
Defined Benefit Plan
|
|
Three months ended March 31,
|
|||||
|
2018
|
|
2017
|
|||
Service cost
|
$
|
1,596
|
|
|
1,330
|
|
Interest cost
|
1,877
|
|
|
1,903
|
|
|
Other cost
|
1,133
|
|
|
1,038
|
|
|
Expected return on assets
|
(2,427
|
)
|
|
(2,070
|
)
|
|
|
$
|
2,179
|
|
|
2,201
|
|
|
Three months ended March 31,
|
|||||
|
2018
|
|
2017
|
|||
Other production expenses
|
$
|
423
|
|
|
348
|
|
Administrative and general expense
|
895
|
|
|
745
|
|
|
Maintenance expense
|
278
|
|
|
237
|
|
|
Pension non-service costs
|
583
|
|
|
871
|
|
|
|
$
|
2,179
|
|
|
2,201
|
|
|
|
|
Fair Value Measurements at March 31, 2018
|
||||||||||||||
|
|
|
|
|
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
|
|
|
$
|
5,928
|
|
|
$
|
5,928
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actively Managed (a):
|
|
|
|
|
|
|
|
|
|
||||||||
All Cap Equity
|
Russell 3000 Value
|
|
6,190
|
|
|
6,151
|
|
|
39
|
|
|
—
|
|
||||
U.S. Large Cap Equity
|
Russell 1000, Russell 1000 Growth, Russell 1000 Value
|
|
50,495
|
|
|
50,495
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid Cap Equity
|
Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value
|
|
9,376
|
|
|
9,376
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small Cap Equity
|
Russell 2000, Russell 2000 Growth, Russell 2000 Value
|
|
9,306
|
|
|
9,306
|
|
|
—
|
|
|
—
|
|
||||
Non-U.S. Large Cap Equity
|
MSCI EAFE
|
|
5,949
|
|
|
5,949
|
|
|
—
|
|
|
—
|
|
||||
REIT
|
NAREIT - Equity REIT’S
|
|
5,864
|
|
|
—
|
|
|
5,864
|
|
|
—
|
|
||||
Fixed Income (b)
|
(b)
|
|
44,873
|
|
|
—
|
|
|
44,873
|
|
|
—
|
|
||||
Total
|
|
|
$
|
137,981
|
|
|
$
|
87,205
|
|
|
$
|
50,776
|
|
|
$
|
—
|
|
(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, 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
|
|
|
$
|
8,207
|
|
|
$
|
8,207
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actively Managed (a):
|
|
|
|
|
|
|
|
|
|
||||||||
All Cap Equity
|
Russell 3000 Value
|
|
6,413
|
|
|
6,376
|
|
|
37
|
|
|
—
|
|
||||
U.S. Large Cap Equity
|
Russell 1000, Russell 1000 Growth, Russell 1000 Value
|
|
50,351
|
|
|
50,351
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid Cap Equity
|
Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value
|
|
9,358
|
|
|
9,358
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small Cap Equity
|
Russell 2000, Russell 2000 Growth, Russell 2000 Value
|
|
8,725
|
|
|
8,725
|
|
|
—
|
|
|
—
|
|
||||
Non-U.S. Large Cap Equity
|
MSCI EAFE
|
|
5,973
|
|
|
5,973
|
|
|
—
|
|
|
—
|
|
||||
REIT
|
NAREIT - Equity REIT’S
|
|
6,143
|
|
|
—
|
|
|
6,143
|
|
|
—
|
|
||||
Fixed Income (b)
|
(b)
|
|
44,994
|
|
|
—
|
|
|
44,994
|
|
|
—
|
|
||||
Total
|
|
|
$
|
140,164
|
|
|
$
|
88,990
|
|
|
$
|
51,174
|
|
|
$
|
—
|
|
(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 March 31, 2018
|
||||||||||||||||||||
|
Water Utility Services
|
|
Real Estate Services
|
|
All Other*
|
|
SJW Group
|
||||||||||||||
|
Regulated
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Regulated
|
|
Non-tariffed
|
|
Total
|
||||||||
Operating revenue
|
$
|
72,353
|
|
|
1,348
|
|
|
1,341
|
|
|
—
|
|
|
72,353
|
|
|
2,689
|
|
|
75,042
|
|
Operating expense
|
61,701
|
|
|
888
|
|
|
849
|
|
|
4,273
|
|
|
61,701
|
|
|
6,010
|
|
|
67,711
|
|
|
Operating income (loss)
|
10,652
|
|
|
460
|
|
|
492
|
|
|
(4,273
|
)
|
|
10,652
|
|
|
(3,321
|
)
|
|
7,331
|
|
|
Net income (loss)
|
4,795
|
|
|
331
|
|
|
356
|
|
|
(4,197
|
)
|
|
4,795
|
|
|
(3,510
|
)
|
|
1,285
|
|
|
Depreciation and amortization
|
13,201
|
|
|
83
|
|
|
299
|
|
|
—
|
|
|
13,201
|
|
|
382
|
|
|
13,583
|
|
|
Senior note, mortgage and other interest expense
|
5,508
|
|
|
—
|
|
|
—
|
|
|
544
|
|
|
5,508
|
|
|
544
|
|
|
6,052
|
|
|
Income tax expense (benefit) in net income
|
492
|
|
|
129
|
|
|
94
|
|
|
(1,295
|
)
|
|
492
|
|
|
(1,072
|
)
|
|
(580
|
)
|
|
Assets
|
$
|
1,413,300
|
|
|
3,690
|
|
|
47,380
|
|
|
(496
|
)
|
|
1,413,300
|
|
|
50,574
|
|
|
1,463,874
|
|
|
For Three Months Ended March 31, 2017
|
||||||||||||||||||||
|
Water Utility Services
|
|
Real Estate Services
|
|
All Other*
|
|
SJW Group
|
||||||||||||||
|
Regulated
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Non-tariffed
|
|
Regulated
|
|
Non-tariffed
|
|
Total
|
||||||||
Operating revenue
|
$
|
66,218
|
|
|
1,264
|
|
|
1,563
|
|
|
—
|
|
|
66,218
|
|
|
2,827
|
|
|
69,045
|
|
Operating expense
|
54,750
|
|
|
831
|
|
|
948
|
|
|
812
|
|
|
54,750
|
|
|
2,591
|
|
|
57,341
|
|
|
Operating income (loss)
|
11,468
|
|
|
433
|
|
|
615
|
|
|
(812
|
)
|
|
11,468
|
|
|
236
|
|
|
11,704
|
|
|
Net income (loss)
|
3,949
|
|
|
172
|
|
|
360
|
|
|
(810
|
)
|
|
3,949
|
|
|
(278
|
)
|
|
3,671
|
|
|
Depreciation and amortization
|
11,660
|
|
|
136
|
|
|
323
|
|
|
—
|
|
|
11,660
|
|
|
459
|
|
|
12,119
|
|
|
Senior note, mortgage and other interest expense
|
5,425
|
|
|
—
|
|
|
65
|
|
|
567
|
|
|
5,425
|
|
|
632
|
|
|
6,057
|
|
|
Income tax expense (benefit) in net income
|
1,793
|
|
|
137
|
|
|
128
|
|
|
(490
|
)
|
|
1,793
|
|
|
(225
|
)
|
|
1,568
|
|
|
Assets
|
$
|
1,360,599
|
|
|
18,247
|
|
|
54,269
|
|
|
2,662
|
|
|
1,360,599
|
|
|
75,178
|
|
|
1,435,777
|
|
Note 6.
|
Long-Term Liabilities and Bank Borrowings
|
Note 7.
|
Fair Value Measurement
|
Note 8.
|
Regulatory Rate Filings
|
Note 9.
|
Balancing and Memorandum Accounts
|
|
Three months ended March 31, 2018
|
|
Three months ended March 31, 2017
|
||||||||||||||||||||||||||||
Beginning Balance
|
|
Regulatory Asset Increase (Decrease)
|
|
Refunds (Collections)
|
|
Surcharge Offset
|
|
Ending Balance
|
|
Beginning Balance
|
|
Regulatory Asset Increase (Decrease)
|
|
Refunds (Collections)
|
|
Surcharge Offset
|
|
Ending Balance
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2014-2016 WCMA
|
$
|
190
|
|
|
79
|
|
|
1
|
|
|
—
|
|
|
270
|
|
|
$
|
1,589
|
|
|
1,448
|
|
|
(1,232
|
)
|
|
(1,407
|
)
|
|
398
|
|
2017 WCMA*
|
6,489
|
|
|
296
|
|
|
—
|
|
|
—
|
|
|
6,785
|
|
|
—
|
|
|
2,060
|
|
|
—
|
|
|
(2,060
|
)
|
|
—
|
|
||
2018 WCMA
|
—
|
|
|
(708
|
)
|
|
—
|
|
|
—
|
|
|
(708
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
2012 General Rate Case true-up
|
11,319
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
11,320
|
|
|
20,682
|
|
|
—
|
|
|
(2,258
|
)
|
|
—
|
|
|
18,424
|
|
||
2015 General Rate Case true-up
|
115
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115
|
|
|
5,528
|
|
|
—
|
|
|
(1,431
|
)
|
|
—
|
|
|
4,097
|
|
||
Cost of capital memorandum account
|
(144
|
)
|
|
(1,165
|
)
|
|
—
|
|
|
—
|
|
|
(1,309
|
)
|
|
(817
|
)
|
|
—
|
|
|
358
|
|
|
—
|
|
|
(459
|
)
|
||
Tax memorandum account
|
—
|
|
|
(933
|
)
|
|
—
|
|
|
—
|
|
|
(933
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Drought surcharges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,688
|
)
|
|
—
|
|
|
(833
|
)
|
|
3,467
|
|
|
(5,054
|
)
|
||
Water supply costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,190
|
|
|
197
|
|
|
297
|
|
|
—
|
|
|
5,684
|
|
||
Pension
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,009
|
)
|
|
173
|
|
|
(703
|
)
|
|
—
|
|
|
(2,539
|
)
|
||
All others
|
3,736
|
|
|
400
|
|
|
—
|
|
|
—
|
|
|
4,136
|
|
|
3,434
|
|
|
457
|
|
|
(451
|
)
|
|
76
|
|
|
3,516
|
|
||
Total revenue accounts:
|
$
|
21,705
|
|
|
(2,031
|
)
|
|
2
|
|
|
—
|
|
|
19,676
|
|
|
$
|
25,909
|
|
|
4,335
|
|
|
(6,253
|
)
|
|
76
|
|
|
24,067
|
|
Cost-recovery accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Water supply costs
|
8,679
|
|
|
(482
|
)
|
|
—
|
|
|
—
|
|
|
8,197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Pension
|
(2,459
|
)
|
|
161
|
|
|
—
|
|
|
—
|
|
|
(2,298
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total cost-recovery accounts
|
$
|
6,220
|
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
5,899
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
27,925
|
|
|
(2,352
|
)
|
|
2
|
|
|
—
|
|
|
25,575
|
|
|
$
|
25,909
|
|
|
4,335
|
|
|
(6,253
|
)
|
|
76
|
|
|
24,067
|
|
Note 10.
|
Regulatory Assets and Liabilities
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|||
Regulatory assets:
|
|
|
|
|
|||
Postretirement pensions and other medical benefits
|
|
$
|
68,556
|
|
|
68,556
|
|
Balancing and memorandum accounts, net
|
|
25,575
|
|
|
27,925
|
|
|
Other, net
|
|
3,162
|
|
|
3,073
|
|
|
Total regulatory assets, net in Consolidated Balance Sheets
|
|
$
|
97,293
|
|
|
99,554
|
|
|
|
|
|
|
|||
Regulatory liability:
|
|
|
|
|
|||
Income tax temporary differences, net
|
|
$
|
62,205
|
|
|
62,476
|
|
Total regulatory liability in Consolidated Balance Sheets
|
|
$
|
62,205
|
|
|
62,476
|
|
Note 11.
|
California Water Service Group Stock
|
Note 12.
|
SJW Group and CTWS Merger Agreement
|
Note 13.
|
Legal Proceedings
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
% for Three months ended
March 31, 2018
of SJW Land Company
|
||||
Description
|
|
Location
|
|
Acreage
|
|
Square Footage
|
|
Revenue
|
|
Expense
|
||
Warehouse building
|
|
Knoxville, Tennessee
|
|
30
|
|
361,500
|
|
43
|
%
|
|
42
|
%
|
Commercial building
|
|
Knoxville, Tennessee
|
|
15
|
|
135,000
|
|
57
|
%
|
|
58
|
%
|
Undeveloped land and parking lot
|
|
Knoxville, Tennessee
|
|
10
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|
(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 Public Utilities Commission of Texas (“PUCT”) in Texas; and
|
(3)
|
Out-of-region water and utility related services.
|
|
Operating Revenue by Segment
|
|||||
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
|||
Water Utility Services
|
$
|
73,701
|
|
|
67,482
|
|
Real Estate Services
|
1,341
|
|
|
1,563
|
|
|
|
$
|
75,042
|
|
|
69,045
|
|
|
Three months ended
March 31,
2018 vs. 2017
|
|||||
Increase/(decrease)
|
||||||
Water Utility Services:
|
|
|
|
|||
Consumption changes
|
$
|
6,273
|
|
|
9
|
%
|
Increase in customers
|
377
|
|
|
1
|
%
|
|
Rate increases
|
6,074
|
|
|
9
|
%
|
|
Balancing and memorandum accounts:
|
|
|
|
|
||
WCMA
|
(2,470
|
)
|
|
(4
|
)%
|
|
Cost recovery recorded prior year
|
(41
|
)
|
|
—
|
%
|
|
2016 WCMA revision to new customer classification
|
(1,371
|
)
|
|
(2
|
)%
|
|
All other
|
(2,624
|
)
|
|
(4
|
)%
|
|
Real Estate Services
|
(221
|
)
|
|
—
|
%
|
|
|
$
|
5,997
|
|
|
9
|
%
|
|
Operating Expense by Segment
|
|||||
Three months ended March 31,
|
||||||
|
2018
|
|
2017
|
|||
Water Utility Services
|
$
|
62,589
|
|
|
55,581
|
|
Real Estate Services
|
849
|
|
|
948
|
|
|
All Other
|
4,273
|
|
|
812
|
|
|
|
$
|
67,711
|
|
|
57,341
|
|
|
Three months ended
March 31,
2018 vs. 2017
|
|||||
Increase/(decrease)
|
||||||
Water production expenses:
|
|
|
|
|||
Change in surface water use
|
$
|
(1,355
|
)
|
|
(3
|
)%
|
Change in usage and new customers
|
2,549
|
|
|
4
|
%
|
|
Purchased water and groundwater extraction charge and energy price increase
|
2,272
|
|
|
4
|
%
|
|
Balancing and memorandum accounts cost recovery
|
482
|
|
|
1
|
%
|
|
Total water production expenses
|
3,948
|
|
|
6
|
%
|
|
Administrative and general
|
580
|
|
|
1
|
%
|
|
Balance and memorandum account cost recovery
|
(161
|
)
|
|
—
|
%
|
|
Maintenance
|
562
|
|
|
1
|
%
|
|
Property taxes and other non-income taxes
|
171
|
|
|
—
|
%
|
|
Depreciation and amortization
|
1,464
|
|
|
3
|
%
|
|
Merger related expenses
|
3,806
|
|
|
7
|
%
|
|
|
$
|
10,370
|
|
|
18
|
%
|
|
Three months ended March 31,
|
|
Increase/
(decrease)
|
|
% of Total Change
|
||||||
2018
|
|
2017
|
|
||||||||
Purchased water
|
3,856
|
|
|
3,909
|
|
|
(53
|
)
|
|
—
|
%
|
Groundwater
|
2,778
|
|
|
2,398
|
|
|
380
|
|
|
6
|
%
|
Surface water
|
537
|
|
|
181
|
|
|
356
|
|
|
5
|
%
|
Reclaimed water
|
70
|
|
|
47
|
|
|
23
|
|
|
—
|
%
|
|
7,241
|
|
|
6,535
|
|
|
706
|
|
|
11
|
%
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
having to pay certain significant costs relating to the proposed merger without receiving the benefits of the proposed merger, including, in certain circumstances, payment of a termination fee and an expense reimbursement;
|
•
|
the potential loss of key personnel during the pendency of the proposed merger as employees may experience uncertainty about their future roles with the combined company;
|
•
|
reputational harm due to the adverse public perception of any failure to successfully complete the proposed merger;
|
•
|
having been subject to certain restrictions on the conduct of its businesses, in the case of SJW Group, which may have prevented SJW Group from making certain acquisitions or dispositions or pursuing certain business opportunities while the proposed merger was pending; and
|
•
|
SJW Group’s management having focused on the proposed merger instead of on conducting its day-to-day business and operational matters and pursuing other opportunities that could have been beneficial to the companies.
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
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
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
(1)
|
Filed currently herewith.
|
|
|
|
|
SJW GROUP
|
|
|
|
|
|
DATE:
|
May 8, 2018
|
By:
|
|
/s/ JAMES P. LYNCH
|
|
|
|
|
James P. Lynch
|
|
|
|
|
Chief Financial Officer and Treasurer
(Principal financial officer)
|
|
SAN JOSE WATER COMPANY
By: /s/ James P. Lynch
Name: James P. Lynch
Title: CFO and Treasurer
|
|
JPMORGAN CHASE BANK, N.A.
By: /s/ Kathryn M. McAndrew
Name: Kathryn M. McAndrew
Title: Vice President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of SJW Group (the “registrant”);
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a)
|
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;
|
b)
|
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;
|
c)
|
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
|
d)
|
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
|
5.
|
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):
|
a)
|
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
|
b)
|
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.
|
Date:
|
May 8, 2018
|
/s/ ERIC W. THORNBURG
|
|
|
Eric W. Thornburg
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
(Principal executive officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of SJW Group (the “registrant”);
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a)
|
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;
|
b)
|
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;
|
c)
|
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
|
d)
|
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
|
5.
|
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):
|
a)
|
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
|
b)
|
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.
|
Date:
|
May 8, 2018
|
/s/ JAMES P. LYNCH
|
|
|
James P. Lynch
|
|
|
Chief Financial Officer and Treasurer
|
|
|
(Principal financial officer)
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ ERIC W. THORNBURG
|
|
Eric W. Thornburg
|
|
Chairman, President and Chief Executive Officer
|
|
(Principal executive officer)
|
|
May 8, 2018
|
|
(1)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ JAMES P. LYNCH
|
|
James P. Lynch
|
|
Chief Financial Officer and Treasurer
|
|
(Principal financial officer)
|
|
May 8, 2018
|
|