ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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77-0066628
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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110 West Taylor Street, San Jose, California
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95110
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.001 par value per share
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New York Stock Exchange
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Class
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Outstanding at February 19, 2019
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Common Stock, $0.001 par value per share
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28,427,145
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 1.
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Business
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•
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San Jose Water Company with its headquarters located at 110 West Taylor Street in San Jose, California 95110, was originally incorporated under the laws of the State of California in 1866. As part of a reorganization on February 8, 1985, San Jose Water Company became a wholly owned subsidiary of SJW Group. San Jose Water Company is a public utility in the business of providing water service to approximately
231,000
connections that serve a population of approximately
one million
people in an area comprising approximately
139
square miles in the metropolitan San Jose, California area.
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•
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SJWTX, Inc. was incorporated in the state of Texas in 2005. SJWTX, Inc. is doing business as Canyon Lake Water Service Company (“CLWSC”). CLWSC is a public utility in the business of providing water service to approximately
16,000
connections that serve approximately
49,000
people. CLWSC’s service area comprises more than
246
square miles in the southern region of the Texas Hill Country in Blanco, Comal, Hays and Travis counties, the growing region between San Antonio and Austin, Texas. SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation (“Acequia”). The water supply corporation has been determined to be a variable interest entity within the scope of Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 810, “Consolidation” with SJWTX, Inc. as the primary beneficiary. As a result, Acequia has been consolidated with SJWTX, Inc.
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•
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SJW Land Company was incorporated in 1985. SJW Land Company owns undeveloped land and operates commercial buildings in Tennessee. SJW Land also has a 70% limited partnership interest in 444 West Santa Clara Street, L.P. The partnership owned a commercial building in California which was sold by the partnership on April 6, 2017. See Note 1 of “Notes to Consolidated Financial Statements” for discussion of the sales transaction.
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•
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Hydro Sub, Inc., a wholly-owned subsidiary of SJW Group, is a Connecticut corporation that was formed on March 9, 2018, for the sole purpose of effecting the proposed merger of SJW Group and Connecticut Water Service, Inc. (“CTWS”). See below for discussion of the SJW Group and CTWS Merger Agreement.
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•
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On December 3, 2018, the Connecticut Public Utilities Regulatory Authority (“PURA”) issued a proposed final decision denying the application by SJW Group and CTWS for approval of the proposed merger (“Proposed Final Decision”). On December 5, 2018, PURA conditionally granted SJW Group’s and CTWS’s motion to suspend the schedule permitting SJW Group and CTWS to file new evidence that was unavailable before the close of the record in the proceeding for PURA’s consideration. On December 14, 2018, SJW Group and CTWS filed a motion to reopen the record and extend the procedural schedule to admit new evidence that was submitted concurrent with the motion (“Motion to Reopen”). On January 4, 2019, PURA denied the Motion to Reopen concluding that the concessions and offers of commitments did not constitute new evidence and to the extent that some of the filed material contains “new” evidence, the material was insufficient to warrant reopening. On January 9, 2019, SJW Group and CTWS withdrew their application before PURA and issued a joint press release announcing that they are continuing to evaluate their regulatory approach in connection with the proposed merger, including the possibility of submitting a new application to PURA. PURA closed the docket without issuing a final decision on January 11, 2019. After a thorough review conducted by the management and boards of both companies with the support of their respective local Connecticut regulatory counsel SJW Group and CTWS announced on February 20, 2019 that they intend to file a new merger approval application with PURA. The new application is expected to be filed during the second quarter of 2019.
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•
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On December 20, 2018, the Maine Public Utilities Commission (“MPUC”) staff issued a stay in the reorganization proceeding pending resolution of the regulatory filing with PURA. On January 10, 2019, following the withdrawal of the PURA application, the Maine Water Company notified the MPUC of such withdrawal in a status report. On January 23, 2019, the Maine Water Company filed notice of its intent to voluntarily withdraw its application without prejudice, reserving the right to refile at a later date. Later that day, the MPUC acknowledged receipt of the Maine Water Company’s notice and issued notice closing the docket.
After a thorough review conducted by the management and boards of both companies with the support of their respective local Maine regulatory counsel SJW Group and CTWS announced on February 20, 2019 that they intend to file a new merger approval application with MPUC. The new application is expected to be filed during the second quarter of 2019.
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•
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While SJW Group believes that no prior authorization of the California Public Utilities Commission (“CPUC”) is required for the Merger, the CPUC previously issued an order to investigate the proposed merger, such as whether it is subject to CPUC approval and its likely impacts within California. The assigned commissioner’s Scoping Memo issued September 7, 2018 adopted a schedule providing for the CPUC to vote on a proposed decision in December 2018. However, as a result of unexpected delays in the CPUC’s scheduling of a planned public participation hearing, which was held January 31, 2019, the CPUC is now expected to complete its investigation in the second quarter of 2019.
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Name
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Age
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Offices and Experience
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Andrew R. Gere
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52
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San Jose Water Company—President and Chief Operating Officer.
Mr. Gere has served as President since April 2016 and as Chief Operating Officer since April 2015. From 2013 to April 2015, Mr. Gere was Vice President of Operations. From 2008 to 2013, Mr. Gere was Chief of Operations. From 2006 to 2008, Mr. Gere was Director of Maintenance. From 2005 to 2006, Mr. Gere was Director of Operations and Water Quality. From 2003 to 2005, Mr. Gere was Manager of Operations and Water Quality.
Mr. Gere has been with San Jose Water Company since 1995.
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Palle L. Jensen
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59
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San Jose Water Company—Executive Vice President.
Mr. Jensen has served as Executive Vice President for San Jose Water Company since April 2017 and as Senior Vice President of Regulatory Affairs for SJWTX, Inc. since September 2015. Mr. Jensen served as Senior Vice President of Regulatory Affairs of San Jose Water Company from October 2011 to April 2017. From July 2007 to October 2011, Mr. Jensen was Vice President of Regulatory Affairs. From 1995 to July 2007, Mr. Jensen was Director of Regulatory Affairs. Mr. Jensen has been with San Jose Water Company since 1995.
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James P. Lynch
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59
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SJW Group—Chief Financial Officer and Treasurer.
Mr. Lynch has served as Chief Financial Officer and Treasurer since October 2010. He is also Chief Financial Officer and Treasurer of San Jose Water Company, SJW Land Company, and SJWTX, Inc. Mr. Lynch served as Chief Financial Officer and Treasurer of Texas Water Alliance Limited from October 2010 until November 16, 2017. Prior to joining the SJW Group, Mr. Lynch was an Audit Partner with KPMG LLP. Mr. Lynch was with KPMG LLP for 26 years. Mr. Lynch is a certified public accountant.
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Suzy Papazian
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43
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SJW Group—General Counsel and Corporate Secretary.
Ms. Papazian has served as General Counsel and Corporate Secretary for SJW Group and San Jose Water Company since April 2014. From February 2005 to April 2014, Ms. Papazian was Corporate Secretary and Attorney. She is also Corporate Secretary of SJW Land Company and SJWTX, Inc. From 2009 until 2017, Ms. Papazian served as Secretary of Texas Water Alliance Limited. She was admitted to the California State Bar in January 2000 and thereafter was an Associate Attorney at The Corporate Law Group from March 2000 until February 2005.
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Eric W. Thornburg
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58
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SJW Group—President, Chief Executive Officer and Chairman of the Board.
Mr. Thornburg has served as President and Chief Executive Officer of SJW Group and SJW Land Company and Chief Executive Officer of San Jose Water Company and SJWTX, Inc. since November 6, 2017. He has served as the Chairman of the Board of Directors of SJW Group, San Jose Water Company, SJW Land Company and SJWTX, Inc. since April 25, 2018. Prior to joining SJW Group, Mr. Thornburg served as President and Chief Executive Officer of CTWS since 2006, and Chairman of the Board of CTWS since 2007. Mr. Thornburg served as President of Missouri-American Water, a subsidiary of American Water Works Corporation from 2000 to 2004. From July 2004 to January 2006, he served as Central Region Vice President-External Affairs for American Water Works Corporation.
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Andrew F. Walters
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48
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San Jose Water Company—Chief Administrative Officer.
Mr. Walters has served as Chief Administrative Officer since January 31, 2014. Prior to joining San Jose Water Company, Mr. Walters was a managing director and a senior acquisitions officer in the Infrastructure Investments Group of JP Morgan Asset Management from January 2009 to June 2013.
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Name
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Age
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Offices and Experience
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Wendy L. Avila-Walker
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55
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SJW Group—Vice President of Finance, Controller and Assistant Treasurer.
Ms. Avila-Walker has served as Vice President of Finance, Controller and Assistant Treasurer of San Jose Water Company and SJW Group since April 2018. From September 2009 to April 2018, Ms. Avila-Walker served as Controller of San Jose Water Company and from October 2014 to April 2018, Ms. Avila-Walker was Controller of SJW Group. From August 2008 to September 2009, Ms. Avila-Walker served as Director of Compliance of San Jose Water Company. From May 2005 to May 2008, Ms. Avila-Walker served as Director of Reporting and Finance of San Jose Water Company.
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Item 1A.
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Risk Factors
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•
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Liquidity risk—real estate investments are illiquid. The lag time to build or reduce the real estate portfolio is long.
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•
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Obsolescence risk—real estate property is location specific. Location obsolescence can occur due to a decline of a particular sub-market or neighborhood. Functional obsolescence can also occur from physical depreciation, wear and tear, and other architectural and physical features which could be curable or incurable.
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•
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Market and general economic risks—real estate investment is tied to overall domestic economic growth and, therefore, carries market risk which cannot be eliminated by diversification. Generally, all property types benefit from national economic growth, though the benefits range according to local factors, such as local supply and demand and job creation. Because real estate leases are typically staggered and last for multiple years, there is generally a delayed effect in the performance of real estate in relation to the overall economy. This delayed effect can insulate or deteriorate the financial impact to SJW Land Company in a downturn or an improved economic environment.
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•
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Concentration/Credit risk—the risk of a tenant declaring bankruptcy and seeking relief from its contractual rental obligation could affect the income and the financial results of SJW Land Company. This risk is most prevalent in a recessionary environment.
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(1)
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Regional regulated water utility operations;
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(2)
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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
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(3)
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Out-of-region water and utility related services.
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•
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Authorizing Board of Directors to issue “blank check” preferred stock;
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•
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Prohibiting cumulative voting in the election of directors;
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•
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Limiting the ability of stockholders to call a special meeting of stockholders to only stockholders holding not less than 20% of outstanding voting power; and
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•
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Requiring advance notification of stockholder nomination of directors and proposals.
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▪
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having to pay certain significant costs relating to the Merger without receiving the benefits of the Merger, including, in certain circumstances, payment of a termination fee and an expense reimbursement;
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▪
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the potential loss of key personnel during the pendency of the Merger as employees may experience uncertainty about their future roles with the combined company;
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▪
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reputational harm due to the adverse public perception of any failure to successfully complete the Merger;
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▪
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having been subject to certain restrictions on the conduct of our business, which may have prevented us from soliciting or making certain dispositions while the Merger was pending;
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▪
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our management having focused on the Merger instead of on conducting its day-to-day business and operational matters and pursuing other opportunities that could have been beneficial to us; and
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▪
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if the Merger is not completed, we are not obligated to repurchase any or all of the shares issued in our recent equity offering and such shares may remain outstanding, which could negatively impact our stock price.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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% for Year Ended
December 31, 2018
of SJW Land Company
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Description
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Location
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Acreage
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Square Footage
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Revenue
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Expense
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Warehouse building
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Knoxville, Tennessee
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30
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361,500
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44
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%
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41
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%
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Commercial building
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Knoxville, Tennessee
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15
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135,000
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56
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%
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59
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%
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Undeveloped land and parking lot
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Knoxville, Tennessee
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10
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N/A
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N/A
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N/A
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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2013
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2014
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2015
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2016
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2017
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2018
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||||||
SJW Group
|
100
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111
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105
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202
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|
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235
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209
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Water Utility Index
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100
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|
|
123
|
|
|
139
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|
|
170
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|
|
217
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|
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223
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S&P 500 Index
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100
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|
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114
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|
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115
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|
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129
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157
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150
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Item 6.
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Selected Financial Data
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2018
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2017
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2016
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2015
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2014
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CONSOLIDATED RESULTS OF OPERATIONS
(in thousands)
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Operating revenue
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$
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397,699
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389,225
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339,706
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305,082
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319,668
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Operating expense:
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Purchased water
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97,378
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86,456
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72,971
|
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61,089
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47,280
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Power
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6,180
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|
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7,295
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|
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6,102
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6,121
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|
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9,865
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|
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Groundwater extraction charges
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46,770
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|
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47,817
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|
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32,088
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|
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31,240
|
|
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53,678
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Other production expenses
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18,398
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|
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16,571
|
|
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14,470
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|
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13,606
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|
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13,035
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Administrative and general
|
48,933
|
|
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48,940
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41,529
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|
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40,388
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|
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36,280
|
|
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Maintenance
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18,414
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|
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18,361
|
|
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18,361
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|
|
15,926
|
|
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15,226
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Property taxes and other non-income taxes
|
14,975
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|
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13,642
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|
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12,123
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11,667
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|
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11,086
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Depreciation and amortization
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54,601
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48,292
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|
|
44,625
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|
|
40,740
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|
|
37,905
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|
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Merger related expenses
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18,610
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|
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—
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|
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—
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—
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—
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Total operating expense
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324,259
|
|
|
287,374
|
|
|
242,269
|
|
|
220,777
|
|
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224,355
|
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Operating income
|
73,440
|
|
|
101,851
|
|
|
97,437
|
|
|
84,305
|
|
|
95,313
|
|
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Interest expense, other income and expense
|
(24,608
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)
|
|
(5,358
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)
|
|
(11,056
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)
|
|
(23,151
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)
|
|
(18,536
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)
|
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Income before income taxes
|
48,832
|
|
|
96,493
|
|
|
86,381
|
|
|
61,154
|
|
|
76,777
|
|
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Provision for income taxes
|
10,065
|
|
|
35,393
|
|
|
33,542
|
|
|
23,272
|
|
|
24,971
|
|
|
Net income before noncontrolling interest
|
38,767
|
|
|
61,100
|
|
|
52,839
|
|
|
37,882
|
|
|
51,806
|
|
|
Less net income attributable to the noncontrolling interest
|
—
|
|
|
1,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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SJW Group net income
|
$
|
38,767
|
|
|
59,204
|
|
|
52,839
|
|
|
37,882
|
|
|
51,806
|
|
Dividends paid
|
$
|
23,074
|
|
|
21,332
|
|
|
16,559
|
|
|
15,885
|
|
|
15,177
|
|
CONSOLIDATED PER SHARE DATA
|
|
|
|
|
|
|
|
|
|
||||||
Earnings per share - diluted
|
1.82
|
|
|
2.86
|
|
|
2.57
|
|
|
1.85
|
|
|
2.54
|
|
|
Dividends paid
|
1.12
|
|
|
1.04
|
|
|
0.81
|
|
|
0.78
|
|
|
0.75
|
|
|
Book value per common share
|
31.31
|
|
|
22.57
|
|
|
20.61
|
|
|
18.83
|
|
|
17.75
|
|
|
CONSOLIDATED BALANCE SHEET
(in thousands)
|
|
|
|
|
|
|
|
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|
||||||
Utility plant and intangible assets
|
$
|
1,935,911
|
|
|
1,792,323
|
|
|
1,666,381
|
|
|
1,524,422
|
|
|
1,413,151
|
|
Less accumulated depreciation and amortization
|
607,090
|
|
|
553,059
|
|
|
520,018
|
|
|
487,659
|
|
|
450,137
|
|
|
Net utility plant
|
1,328,821
|
|
|
1,239,264
|
|
|
1,146,363
|
|
|
1,036,763
|
|
|
963,014
|
|
|
Net real estate investment
|
44,009
|
|
|
45,081
|
|
|
50,459
|
|
|
61,434
|
|
|
62,201
|
|
|
Total assets
|
1,956,389
|
|
|
1,458,001
|
|
|
1,443,376
|
|
|
1,337,325
|
|
|
1,269,304
|
|
|
Capitalization:
|
|
|
|
|
|
|
|
|
|
||||||
Stockholders’ equity
|
889,312
|
|
|
463,209
|
|
|
421,646
|
|
|
383,783
|
|
|
360,155
|
|
|
Long-term debt, less current portion
|
431,424
|
|
|
431,092
|
|
|
433,335
|
|
|
377,187
|
|
|
384,365
|
|
|
Total capitalization
|
$
|
1,320,736
|
|
|
894,301
|
|
|
854,981
|
|
|
760,970
|
|
|
744,520
|
|
OTHER STATISTICS—WATER UTILITY SERVICES
|
|
|
|
|
|
|
|
|
|
||||||
Average revenue per connection (in thousands)
|
$
|
1,609
|
|
|
1,594
|
|
|
1,402
|
|
|
1,263
|
|
|
1,328
|
|
Investment in gross utility plant per connection (in thousands)
|
$
|
7,832
|
|
|
7,340
|
|
|
6,874
|
|
|
6,311
|
|
|
5,869
|
|
Connections at year-end
|
247,267
|
|
|
244,133
|
|
|
242,421
|
|
|
241,555
|
|
|
240,773
|
|
|
Miles of main at year-end
|
3,091
|
|
|
3,082
|
|
|
3,069
|
|
|
3,031
|
|
|
2,939
|
|
|
Water production (million gallons)
|
40,053
|
|
|
38,584
|
|
|
35,847
|
|
|
36,535
|
|
|
44,649
|
|
|
Maximum daily production (million gallons)
|
149
|
|
|
148
|
|
|
136
|
|
|
130
|
|
|
173
|
|
|
Population served (estimate)
|
1,114,200
|
|
|
1,100,200
|
|
|
1,092,600
|
|
|
1,089,000
|
|
|
1,085,000
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
(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.
|
•
|
Potential profitability;
|
•
|
Regulatory environment;
|
•
|
Additional growth opportunities within the region;
|
•
|
Water supply, water quality and environmental issues;
|
•
|
Capital requirements;
|
•
|
General economic conditions; and
|
•
|
Synergy potential.
|
•
|
Economic utility regulation;
|
•
|
Infrastructure investment;
|
•
|
Compliance with environmental, health and safety standards;
|
•
|
Production expenses;
|
•
|
Customer growth;
|
•
|
Water usage per customer;
|
•
|
Weather conditions, seasonality and sources of water supply; and
|
•
|
Merger and acquisition activities, if any.
|
|
2018
|
|
2017
|
|
2016
|
||||
Water Utility Services
|
$
|
392,217
|
|
|
383,523
|
|
|
332,989
|
|
Real Estate Services
|
5,482
|
|
|
5,702
|
|
|
6,717
|
|
|
|
$
|
397,699
|
|
|
389,225
|
|
|
339,706
|
|
|
2018 vs. 2017
Increase/(decrease)
|
|
2017 vs. 2016
Increase/(decrease) |
||||||||||
Water Utility Services:
|
|
|
|
|
|
|
|
||||||
Consumption changes
|
$
|
7,376
|
|
|
2
|
%
|
|
$
|
15,416
|
|
|
5
|
%
|
Increase in customers
|
2,298
|
|
|
—
|
%
|
|
1,169
|
|
|
—
|
%
|
||
Rate increases
|
17,516
|
|
|
4
|
%
|
|
41,137
|
|
|
13
|
%
|
||
Recycled
|
789
|
|
|
—
|
%
|
|
515
|
|
|
—
|
%
|
||
Balancing and memorandum accounts:
|
|
|
|
|
|
|
|
||||||
Cost recovery recorded prior year
|
(3,864
|
)
|
|
(1
|
)%
|
|
—
|
|
|
—
|
%
|
||
2016 WCMA revision to new customer classification
|
(1,371
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
2015 General Rate Case true-up
|
—
|
|
|
—
|
%
|
|
(8,767
|
)
|
|
(3
|
)%
|
||
Water Conservation Memorandum Account
|
(5,462
|
)
|
|
(1
|
)%
|
|
179
|
|
|
—
|
%
|
||
Tax Act
|
(7,431
|
)
|
|
(2
|
)%
|
|
—
|
|
|
—
|
%
|
||
All other
|
(1,157
|
)
|
|
—
|
%
|
|
885
|
|
|
—
|
%
|
||
Real Estate Services
|
(220
|
)
|
|
—
|
%
|
|
(1,015
|
)
|
|
—
|
%
|
||
|
$
|
8,474
|
|
|
2
|
%
|
|
$
|
49,519
|
|
|
15
|
%
|
|
2018
|
|
2017
|
|
2016
|
||||
Residential and business
|
$
|
356,535
|
|
|
331,835
|
|
|
278,943
|
|
Industrial
|
2,215
|
|
|
1,987
|
|
|
1,519
|
|
|
Public authorities
|
18,049
|
|
|
16,448
|
|
|
13,422
|
|
|
Others
|
12,519
|
|
|
11,066
|
|
|
9,218
|
|
|
Balancing and memorandum accounts
|
2,899
|
|
|
22,187
|
|
|
29,887
|
|
|
|
$
|
392,217
|
|
|
383,523
|
|
|
332,989
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Residential and business
|
241,253
|
|
|
238,231
|
|
|
236,689
|
|
Industrial
|
76
|
|
|
75
|
|
|
76
|
|
Public authorities
|
1,343
|
|
|
1,349
|
|
|
1,360
|
|
Others
|
4,595
|
|
|
4,478
|
|
|
4,296
|
|
|
247,267
|
|
|
244,133
|
|
|
242,421
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Water Utility Services
|
$
|
299,548
|
|
|
280,916
|
|
|
236,395
|
|
Real Estate Services
|
3,539
|
|
|
3,688
|
|
|
4,074
|
|
|
All Other
|
21,172
|
|
|
2,770
|
|
|
1,800
|
|
|
|
$
|
324,259
|
|
|
287,374
|
|
|
242,269
|
|
|
2018 vs. 2017
Increase/(decrease)
|
|
2017 vs. 2016
Increase/(decrease) |
||||||||||
Water production expenses:
|
|
|
|
|
|
|
|
||||||
Change in surface water supply
|
$
|
(7,998
|
)
|
|
(3
|
)%
|
|
$
|
5,880
|
|
|
2
|
%
|
Change in usage and new customers
|
5,077
|
|
|
2
|
%
|
|
9,618
|
|
|
4
|
%
|
||
Purchased water and groundwater extraction charge and energy price increase
|
14,931
|
|
|
6
|
%
|
|
17,010
|
|
|
7
|
%
|
||
Balance and memorandum account cost recovery
|
(1,423
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Total water production expenses
|
10,587
|
|
|
5
|
%
|
|
32,508
|
|
|
13
|
%
|
||
Administrative and general
|
1,215
|
|
|
—
|
%
|
|
7,411
|
|
|
3
|
%
|
||
Balance and memorandum account cost recovery
|
(1,222
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Maintenance
|
53
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||
Property taxes and other non-income taxes
|
1,333
|
|
|
—
|
%
|
|
1,519
|
|
|
1
|
%
|
||
Depreciation and amortization
|
6,309
|
|
|
2
|
%
|
|
3,667
|
|
|
2
|
%
|
||
Merger related expenses
|
18,610
|
|
|
6
|
%
|
|
—
|
|
|
—
|
%
|
||
|
$
|
36,885
|
|
|
13
|
%
|
|
$
|
45,105
|
|
|
19
|
%
|
|
Source of Water Supply
|
||||||||
|
2018
|
|
2017
|
|
2016
|
||||
|
(million gallons) (MG)
|
||||||||
Purchased water
|
24,110
|
|
|
22,913
|
|
|
21,474
|
|
|
Groundwater
|
12,507
|
|
|
14,444
|
|
|
11,271
|
|
|
Surface water
|
2,674
|
|
|
620
|
|
|
2,465
|
|
|
Reclaimed water
|
762
|
|
|
607
|
|
|
637
|
|
|
|
40,053
|
|
|
38,584
|
|
|
35,847
|
|
|
Average water production expense per MG
|
$
|
4,213
|
|
|
4,063
|
|
|
3,468
|
|
|
Budgeted Capital
Expenditures
2019
|
|||||
Water treatment
|
$
|
2,145
|
|
|
2
|
%
|
Source of supply
|
8,147
|
|
|
7
|
%
|
|
Reservoirs and tanks
|
17,501
|
|
|
16
|
%
|
|
Pump stations and equipment
|
2,056
|
|
|
2
|
%
|
|
Equipment and other
|
14,010
|
|
|
13
|
%
|
|
Distribution system
|
66,035
|
|
|
60
|
%
|
|
|
$
|
109,894
|
|
|
100
|
%
|
|
Total
|
|
Contractual Obligations Due in
|
||||||||||||
|
Less than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
After
5 Years
|
||||||||
Senior notes, Water Utility Services
|
$
|
265,000
|
|
|
—
|
|
|
10,000
|
|
|
20,000
|
|
|
235,000
|
|
Advances for construction, San Jose Water Company (1)
|
65,335
|
|
|
2,818
|
|
|
5,636
|
|
|
5,624
|
|
|
51,257
|
|
|
California Pollution Control Financing Authority Revenue Bonds, San Jose Water Company
|
120,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,000
|
|
|
Senior note, SJW Group
|
50,000
|
|
|
—
|
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
Total contractual cash obligation
|
$
|
500,335
|
|
|
2,818
|
|
|
65,636
|
|
|
25,624
|
|
|
406,257
|
|
Total interest on contractual obligations
|
$
|
382,547
|
|
|
25,485
|
|
|
48,779
|
|
|
42,155
|
|
|
266,128
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
December 31,
|
|||||
|
2018
|
|
2017
|
|||
Assets
|
|
|
|
|||
Utility plant:
|
|
|
|
|||
Land
|
$
|
18,296
|
|
|
17,831
|
|
Depreciable plant and equipment
|
1,833,051
|
|
|
1,714,228
|
|
|
Construction in progress
|
68,765
|
|
|
45,851
|
|
|
Intangible assets
|
15,799
|
|
|
14,413
|
|
|
|
1,935,911
|
|
|
1,792,323
|
|
|
Less accumulated depreciation and amortization
|
607,090
|
|
|
553,059
|
|
|
|
1,328,821
|
|
|
1,239,264
|
|
|
Real estate investments
|
56,336
|
|
|
56,213
|
|
|
Less accumulated depreciation and amortization
|
12,327
|
|
|
11,132
|
|
|
|
44,009
|
|
|
45,081
|
|
|
Current assets:
|
|
|
|
|||
Cash and cash equivalents:
|
|
|
|
|||
Cash
|
8,722
|
|
|
7,799
|
|
|
Money market fund
|
412,000
|
|
|
—
|
|
|
Accounts receivable:
|
|
|
|
|||
Customers, net of allowances for uncollectible accounts of $272 and $190 in 2018 and 2017, respectively
|
19,154
|
|
|
17,305
|
|
|
Income tax
|
1,888
|
|
|
7,981
|
|
|
Other
|
1,203
|
|
|
1,118
|
|
|
Accrued unbilled utility revenue
|
27,974
|
|
|
27,905
|
|
|
Current regulatory assets, net
|
26,910
|
|
|
—
|
|
|
Other current assets
|
4,871
|
|
|
4,750
|
|
|
|
502,722
|
|
|
66,858
|
|
|
Other assets:
|
|
|
|
|||
Investment in California Water Service Group
|
—
|
|
|
4,535
|
|
|
Net regulatory assets, less current portion
|
76,715
|
|
|
99,554
|
|
|
Other
|
4,122
|
|
|
2,709
|
|
|
|
80,837
|
|
|
106,798
|
|
|
|
$
|
1,956,389
|
|
|
1,458,001
|
|
|
December 31,
|
|||||
|
2018
|
|
2017
|
|||
Capitalization and Liabilities
|
|
|
|
|||
Capitalization:
|
|
|
|
|||
Stockholders’ equity:
|
|
|
|
|||
Common stock, $0.001 par value; authorized 36,000,000 shares; issued and outstanding 28,404,316 shares in 2018 and 20,520,856 shares in 2017
|
$
|
28
|
|
|
21
|
|
Additional paid-in capital
|
495,366
|
|
|
84,866
|
|
|
Retained earnings
|
393,918
|
|
|
376,119
|
|
|
Accumulated other comprehensive income
|
—
|
|
|
2,203
|
|
|
Total stockholders’ equity
|
889,312
|
|
|
463,209
|
|
|
Long-term debt, less current portion
|
431,424
|
|
|
431,092
|
|
|
|
1,320,736
|
|
|
894,301
|
|
|
Current liabilities:
|
|
|
|
|||
Lines of credit
|
100,000
|
|
|
25,000
|
|
|
Accrued groundwater extraction charges, purchased water and power
|
13,694
|
|
|
14,382
|
|
|
Accounts payable
|
24,937
|
|
|
22,960
|
|
|
Accrued interest
|
7,132
|
|
|
6,869
|
|
|
Accrued property taxes and other non-income taxes
|
1,926
|
|
|
1,904
|
|
|
Accrued payroll
|
7,181
|
|
|
6,011
|
|
|
Other current liabilities
|
9,115
|
|
|
7,926
|
|
|
|
163,985
|
|
|
85,052
|
|
|
Deferred income taxes
|
79,651
|
|
|
85,795
|
|
|
Advances for construction
|
80,610
|
|
|
83,695
|
|
|
Contributions in aid of construction
|
168,243
|
|
|
160,830
|
|
|
Postretirement benefit plans
|
70,490
|
|
|
72,841
|
|
|
Regulatory liability
|
59,149
|
|
|
62,476
|
|
|
Other noncurrent liabilities
|
13,525
|
|
|
13,011
|
|
|
Commitments and contingencies
|
—
|
|
|
—
|
|
|
|
$
|
1,956,389
|
|
|
1,458,001
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Operating revenue
|
$
|
397,699
|
|
|
389,225
|
|
|
339,706
|
|
Operating expense:
|
|
|
|
|
|
||||
Production Expenses:
|
|
|
|
|
|
||||
Purchased water
|
97,378
|
|
|
86,456
|
|
|
72,971
|
|
|
Power
|
6,180
|
|
|
7,295
|
|
|
6,102
|
|
|
Groundwater extraction charges
|
46,770
|
|
|
47,817
|
|
|
32,088
|
|
|
Other production expenses
|
18,398
|
|
|
16,571
|
|
|
14,470
|
|
|
Total production expenses
|
168,726
|
|
|
158,139
|
|
|
125,631
|
|
|
Administrative and general
|
48,933
|
|
|
48,940
|
|
|
41,529
|
|
|
Maintenance
|
18,414
|
|
|
18,361
|
|
|
18,361
|
|
|
Property taxes and other non-income taxes
|
14,975
|
|
|
13,642
|
|
|
12,123
|
|
|
Depreciation and amortization
|
54,601
|
|
|
48,292
|
|
|
44,625
|
|
|
Merger related expenses
|
18,610
|
|
|
—
|
|
|
—
|
|
|
Total operating expense
|
324,259
|
|
|
287,374
|
|
|
242,269
|
|
|
Operating income
|
73,440
|
|
|
101,851
|
|
|
97,437
|
|
|
Other (expense) income:
|
|
|
|
|
|
||||
Interest on long-term debt, mortgage and other interest expense
|
(24,332
|
)
|
|
(22,929
|
)
|
|
(21,838
|
)
|
|
Pension non-service cost
|
(2,356
|
)
|
|
(3,772
|
)
|
|
(4,321
|
)
|
|
Unrealized loss on California Water Service Group stock
|
(527
|
)
|
|
—
|
|
|
—
|
|
|
Gain on sale of California Water Service Group stock
|
104
|
|
|
—
|
|
|
3,197
|
|
|
Gain on sale of equity interests in Texas Water Alliance Limited and utility property
|
9
|
|
|
12,499
|
|
|
—
|
|
|
Gain on sale of real estate investments
|
—
|
|
|
6,903
|
|
|
10,419
|
|
|
Other, net
|
2,494
|
|
|
1,941
|
|
|
1,487
|
|
|
Income before income taxes
|
48,832
|
|
|
96,493
|
|
|
86,381
|
|
|
Provision for income taxes
|
10,065
|
|
|
35,393
|
|
|
33,542
|
|
|
Net income before noncontrolling interest
|
38,767
|
|
|
61,100
|
|
|
52,839
|
|
|
Less net income attributable to the noncontrolling interest
|
—
|
|
|
1,896
|
|
|
—
|
|
|
SJW Group net income
|
$
|
38,767
|
|
|
59,204
|
|
|
52,839
|
|
Other comprehensive income:
|
|
|
|
|
|
||||
Unrealized income on investment, net of taxes of $466 in 2017 and $657 in 2016
|
—
|
|
|
679
|
|
|
955
|
|
|
Reclassification adjustment for gain realized on investment, net of taxes of $1,198 in 2016
|
—
|
|
|
—
|
|
|
(1,742
|
)
|
|
SJW Group comprehensive income
|
$
|
38,767
|
|
|
59,883
|
|
|
52,052
|
|
SJW Group earnings per share
|
|
|
|
|
|
||||
—Basic
|
$
|
1.83
|
|
|
2.89
|
|
|
2.59
|
|
—Diluted
|
$
|
1.82
|
|
|
2.86
|
|
|
2.57
|
|
Weighted average shares outstanding
|
|
|
|
|
|
||||
—Basic
|
21,214,277
|
|
|
20,506,960
|
|
|
20,439,957
|
|
|
—Diluted
|
21,332,387
|
|
|
20,685,118
|
|
|
20,588,973
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Noncontrolling Interest
|
|
Total
Stockholders’ Equity |
|||||||||
Number of
Shares
|
|
Amount
|
|
|||||||||||||||||
Balances, December 31, 2015
|
20,381,949
|
|
|
21
|
|
|
79,231
|
|
|
302,220
|
|
|
2,311
|
|
|
—
|
|
|
383,783
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
52,839
|
|
|
—
|
|
|
—
|
|
|
52,839
|
|
Unrealized income on investment, net of tax effect of $657
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
955
|
|
|
—
|
|
|
955
|
|
Reclassification adjustment for gain realized on investment, net of tax effect of $1,198
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,742
|
)
|
|
—
|
|
|
(1,742
|
)
|
Share-based compensation
|
—
|
|
|
—
|
|
|
1,691
|
|
|
(114
|
)
|
|
—
|
|
|
—
|
|
|
1,577
|
|
Issuance of restricted and deferred stock units
|
44,062
|
|
|
—
|
|
|
(161
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
Employee stock purchase plan
|
30,214
|
|
|
—
|
|
|
954
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
954
|
|
Dividends paid ($0.81 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,559
|
)
|
|
—
|
|
|
—
|
|
|
(16,559
|
)
|
Balances, December 31, 2016
|
20,456,225
|
|
|
21
|
|
|
81,715
|
|
|
338,386
|
|
|
1,524
|
|
|
—
|
|
|
421,646
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
59,204
|
|
|
—
|
|
|
1,896
|
|
|
61,100
|
|
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,896
|
)
|
|
(1,896
|
)
|
Unrealized income on investment, net of tax effect of $466
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
679
|
|
|
—
|
|
|
679
|
|
Share-based compensation
|
—
|
|
|
—
|
|
|
2,643
|
|
|
(139
|
)
|
|
—
|
|
|
—
|
|
|
2,504
|
|
Issuance of restricted and deferred stock units
|
36,888
|
|
|
—
|
|
|
(707
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(707
|
)
|
Employee stock purchase plan
|
27,743
|
|
|
—
|
|
|
1,215
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,215
|
|
Dividends paid ($1.04 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,332
|
)
|
|
—
|
|
|
—
|
|
|
(21,332
|
)
|
Balances, December 31, 2017
|
20,520,856
|
|
|
21
|
|
|
84,866
|
|
|
376,119
|
|
|
2,203
|
|
|
—
|
|
|
463,209
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
38,767
|
|
|
—
|
|
|
—
|
|
|
38,767
|
|
Cumulative effect of change in accounting principle, net of tax effect of $1,507
|
—
|
|
|
—
|
|
|
—
|
|
|
2,203
|
|
|
(2,203
|
)
|
|
—
|
|
|
—
|
|
Share-based compensation
|
—
|
|
|
—
|
|
|
2,117
|
|
|
(97
|
)
|
|
—
|
|
|
—
|
|
|
2,020
|
|
Issuance of restricted and deferred stock units
|
95,053
|
|
|
—
|
|
|
(4,057
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,057
|
)
|
Employee stock purchase plan
|
25,907
|
|
|
—
|
|
|
1,371
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,371
|
|
Common stock issued
|
7,762,500
|
|
|
7
|
|
|
411,069
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
411,076
|
|
Dividends paid ($1.12 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,074
|
)
|
|
—
|
|
|
—
|
|
|
(23,074
|
)
|
Balances, December 31, 2018
|
28,404,316
|
|
|
28
|
|
|
495,366
|
|
|
393,918
|
|
|
—
|
|
|
—
|
|
|
889,312
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
|
|
||||
Net income before noncontrolling interest
|
$
|
38,767
|
|
|
61,100
|
|
|
52,839
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||
Depreciation and amortization
|
56,907
|
|
|
50,501
|
|
|
46,295
|
|
|
Deferred income taxes
|
(9,486
|
)
|
|
(436
|
)
|
|
4,803
|
|
|
Share-based compensation
|
2,117
|
|
|
2,643
|
|
|
1,691
|
|
|
Unrealized loss on California Water Service Group stock
|
527
|
|
|
—
|
|
|
—
|
|
|
Gain on sale of California Water Service Group stock
|
(104
|
)
|
|
—
|
|
|
(3,197
|
)
|
|
Gain on sale of real estate investments
|
—
|
|
|
(6,903
|
)
|
|
(10,419
|
)
|
|
Gain on sale of Texas Water Alliance Limited and utility property
|
—
|
|
|
(12,499
|
)
|
|
—
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||
Accounts receivable and accrued unbilled utility revenue
|
(2,003
|
)
|
|
(1,702
|
)
|
|
(5,377
|
)
|
|
Accounts payable and other current liabilities
|
2,130
|
|
|
2,888
|
|
|
(337
|
)
|
|
Accrued groundwater extraction charges, purchased water and power
|
(688
|
)
|
|
3,536
|
|
|
3,683
|
|
|
Tax receivable and accrued taxes
|
5,841
|
|
|
2,164
|
|
|
(680
|
)
|
|
Postretirement benefits
|
203
|
|
|
(769
|
)
|
|
(349
|
)
|
|
Regulatory asset related to balancing and memorandum accounts
|
(6,488
|
)
|
|
(979
|
)
|
|
19,297
|
|
|
Other noncurrent assets and noncurrent liabilities
|
1,923
|
|
|
741
|
|
|
5,468
|
|
|
Other changes, net
|
1,697
|
|
|
827
|
|
|
854
|
|
|
Net cash provided by operating activities
|
91,343
|
|
|
101,112
|
|
|
114,571
|
|
|
Investing activities:
|
|
|
|
|
|
||||
Additions to utility plant:
|
|
|
|
|
|
||||
Company-funded
|
(135,973
|
)
|
|
(141,213
|
)
|
|
(129,134
|
)
|
|
Contributions in aid of construction
|
(8,454
|
)
|
|
(7,842
|
)
|
|
(13,086
|
)
|
|
Additions to real estate investment
|
(123
|
)
|
|
(116
|
)
|
|
(328
|
)
|
|
Payments for business/asset acquisition and water rights
|
(2,496
|
)
|
|
(1,149
|
)
|
|
(1,070
|
)
|
|
Cost to retire utility plant, net of salvage
|
(3,909
|
)
|
|
(3,356
|
)
|
|
(3,361
|
)
|
|
Proceeds from sale of California Water Service Group stock
|
4,112
|
|
|
—
|
|
|
4,509
|
|
|
Proceeds from sale of Texas Water Alliance Limited and utility property
|
—
|
|
|
28,623
|
|
|
—
|
|
|
Proceeds from sale of real estate investments
|
—
|
|
|
11,179
|
|
|
20,341
|
|
|
Net cash used in investing activities
|
(146,843
|
)
|
|
(113,874
|
)
|
|
(122,129
|
)
|
|
Financing activities:
|
|
|
|
|
|
||||
Borrowings from lines of credit
|
76,000
|
|
|
56,500
|
|
|
62,075
|
|
|
Repayments of lines of credit
|
(1,000
|
)
|
|
(45,700
|
)
|
|
(82,475
|
)
|
|
Long-term borrowings
|
—
|
|
|
—
|
|
|
50,999
|
|
|
Long-term borrowings held as restricted cash
|
—
|
|
|
—
|
|
|
19,001
|
|
|
Repayments of long-term borrowings
|
—
|
|
|
(2,717
|
)
|
|
(16,599
|
)
|
|
Dividends paid
|
(23,074
|
)
|
|
(21,332
|
)
|
|
(16,559
|
)
|
|
Receipts of advances and contributions in aid of construction
|
10,890
|
|
|
12,581
|
|
|
14,366
|
|
|
Refunds of advances for construction
|
(2,700
|
)
|
|
(2,622
|
)
|
|
(2,522
|
)
|
|
Issuance of common stock, net of issuance costs
|
411,385
|
|
|
—
|
|
|
—
|
|
|
Other changes, net
|
(3,078
|
)
|
|
(1,499
|
)
|
|
(617
|
)
|
|
Net cash provided by (used in) financing activities
|
468,423
|
|
|
(4,789
|
)
|
|
27,669
|
|
|
Net change in cash, cash equivalents and restricted cash
|
412,923
|
|
|
(17,551
|
)
|
|
20,111
|
|
|
Cash and cash equivalents, beginning of year
|
7,799
|
|
|
25,350
|
|
|
5,239
|
|
|
Cash, cash equivalents and restricted cash, end of year
|
$
|
420,722
|
|
|
7,799
|
|
|
25,350
|
|
Cash paid during the year for:
|
|
|
|
|
|
||||
Interest
|
$
|
27,038
|
|
|
25,254
|
|
|
23,962
|
|
Income taxes
|
$
|
13,750
|
|
|
34,052
|
|
|
27,517
|
|
Supplemental disclosure of non-cash activities:
|
|
|
|
|
|
||||
Increase in accrued payables for construction costs capitalized
|
$
|
340
|
|
|
2,700
|
|
|
3,696
|
|
Utility property installed by developers
|
$
|
1,747
|
|
|
3,723
|
|
|
9,614
|
|
|
|
|
|
|
|
||||
Reconciliation to Consolidated Balance Sheets:
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
420,722
|
|
|
7,799
|
|
|
6,349
|
|
Restricted cash
|
$
|
—
|
|
|
—
|
|
|
19,001
|
|
Cash, cash equivalents and restricted cash, end of year
|
$
|
420,722
|
|
|
7,799
|
|
|
25,350
|
|
Note 1.
|
Summary of Significant Accounting Policies
|
|
2018
|
|
2017
|
|||
Equipment
|
$
|
335,358
|
|
|
307,938
|
|
Transmission and distribution
|
1,375,821
|
|
|
1,295,690
|
|
|
Office buildings and other structures
|
121,872
|
|
|
110,600
|
|
|
Total depreciable plant and equipment
|
$
|
1,833,051
|
|
|
1,714,228
|
|
|
Useful Lives
|
Equipment
|
5 to 35 years
|
Transmission and distribution plant
|
35 to 75 years
|
Office buildings and other structures
|
7 to 50 years
|
|
2018
|
|
2017
|
|||
Land
|
$
|
13,262
|
|
|
13,262
|
|
Buildings and improvements
|
43,074
|
|
|
42,951
|
|
|
Total real estate investment
|
$
|
56,336
|
|
|
56,213
|
|
|
For the year ended December 31, 2018
|
||||||||||||||
Beginning Balance
|
|
Regulatory Asset
Increase (Decrease)
|
|
Refunds (Collections)
Adjustments
|
|
Surcharge Offset and Other
|
|
Ending
Balance
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||
Revenue accounts:
|
|
|
|
|
|
|
|
|
|
||||||
2014 - 2016 WCMA
|
191
|
|
|
(116
|
)
|
|
4
|
|
|
—
|
|
|
79
|
|
|
2017 WCMA
|
6,489
|
|
|
1,182
|
|
|
—
|
|
|
—
|
|
|
7,671
|
|
|
2018 WCMA
|
—
|
|
|
9,386
|
|
|
—
|
|
|
—
|
|
|
9,386
|
|
|
2012 General Rate Case true-up
|
11,319
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
11,328
|
|
|
2015 General Rate Case true-up
|
115
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
118
|
|
|
Cost of capital memorandum accounts
|
(144
|
)
|
|
(1,379
|
)
|
|
—
|
|
|
—
|
|
|
(1,523
|
)
|
|
Tax memorandum account
|
—
|
|
|
(6,504
|
)
|
|
—
|
|
|
—
|
|
|
(6,504
|
)
|
|
All others
|
3,735
|
|
|
1,258
|
|
|
1
|
|
|
—
|
|
|
4,994
|
|
|
Total revenue accounts
|
$
|
21,705
|
|
|
3,827
|
|
|
17
|
|
|
—
|
|
|
25,549
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost-recovery accounts:
|
|
|
|
|
|
|
|
|
|
||||||
Water supply costs
|
8,679
|
|
|
939
|
|
|
(1
|
)
|
|
—
|
|
|
9,617
|
|
|
Pension
|
(2,459
|
)
|
|
614
|
|
|
2
|
|
|
—
|
|
|
(1,843
|
)
|
|
All others
|
—
|
|
|
1,090
|
|
|
—
|
|
|
—
|
|
|
1,090
|
|
|
Total cost-recovery accounts
|
$
|
6,220
|
|
|
2,643
|
|
|
1
|
|
|
—
|
|
|
8,864
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
27,925
|
|
|
6,470
|
|
|
18
|
|
|
—
|
|
|
34,413
|
|
|
For the year ended December 31, 2017
|
||||||||||||||
Beginning Balance
|
|
Regulatory Asset
Increase (Decrease)
|
|
Refunds (Collections)
Adjustments
|
|
Surcharge Offset and Other
|
|
Ending
Balance
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||
Revenue accounts:
|
|
|
|
|
|
|
|
|
|
||||||
2014 - 2016 WCMA
|
1,589
|
|
|
4,758
|
|
|
(4,704
|
)
|
|
(1,452
|
)
|
|
191
|
|
|
2017 WCMA
|
—
|
|
|
12,530
|
|
|
—
|
|
|
(6,041
|
)
|
|
6,489
|
|
|
2012 General Rate Case true-up
|
20,682
|
|
|
—
|
|
|
(9,363
|
)
|
|
—
|
|
|
11,319
|
|
|
2015 General Rate Case true-up
|
5,528
|
|
|
—
|
|
|
(5,413
|
)
|
|
—
|
|
|
115
|
|
|
Cost of capital memorandum accounts
|
(817
|
)
|
|
—
|
|
|
673
|
|
|
—
|
|
|
(144
|
)
|
|
Drought surcharges
|
(7,688
|
)
|
|
—
|
|
|
(765
|
)
|
|
8,453
|
|
|
—
|
|
|
Cost-recovery accounts
|
3,181
|
|
|
3,815
|
|
|
(776
|
)
|
|
—
|
|
|
6,220
|
|
|
All others
|
3,434
|
|
|
1,084
|
|
|
(858
|
)
|
|
75
|
|
|
3,735
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
25,909
|
|
|
22,187
|
|
|
(21,206
|
)
|
|
1,035
|
|
|
27,925
|
|
|
For the year ended December 31, 2016
|
||||||||||||||
Beginning Balance
|
|
Regulatory Asset
Increase (Decrease)
|
|
Refunds (Collections)
Adjustments
|
|
Surcharge Offset and Other
|
|
Ending
Balance
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||
Revenue accounts:
|
|
|
|
|
|
|
|
|
|
||||||
2014 - 2016 WCMA
|
8,316
|
|
|
17,107
|
|
|
(7,126
|
)
|
|
(16,708
|
)
|
|
1,589
|
|
|
2012 General Rate Case true-up
|
33,070
|
|
|
—
|
|
|
(12,388
|
)
|
|
—
|
|
|
20,682
|
|
|
2015 General Rate Case true-up
|
—
|
|
|
8,767
|
|
|
(3,239
|
)
|
|
—
|
|
|
5,528
|
|
|
Cost of capital memorandum accounts
|
(1,440
|
)
|
|
3
|
|
|
620
|
|
|
—
|
|
|
(817
|
)
|
|
Drought surcharges
|
(359
|
)
|
|
—
|
|
|
(24,037
|
)
|
|
16,708
|
|
|
(7,688
|
)
|
|
Cost-recovery accounts
|
2,219
|
|
|
2,740
|
|
|
(1,778
|
)
|
|
—
|
|
|
3,181
|
|
|
All others
|
3,400
|
|
|
1,270
|
|
|
(1,236
|
)
|
|
—
|
|
|
3,434
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
45,206
|
|
|
29,887
|
|
|
(49,184
|
)
|
|
—
|
|
|
25,909
|
|
|
2018
|
|
2017
|
||||
Regulatory assets:
|
|
|
|
||||
Postretirement pensions and other medical benefits
|
$
|
66,233
|
|
|
$
|
68,556
|
|
Balancing and memorandum accounts, net
|
34,413
|
|
|
27,925
|
|
||
Other, net
|
2,979
|
|
|
3,073
|
|
||
Total regulatory assets, net in Consolidated Balance Sheets
|
$
|
103,625
|
|
|
99,554
|
|
|
Less: current regulatory asset, net
|
26,910
|
|
|
—
|
|
||
Total regulatory assets, net, less current portion
|
$
|
76,715
|
|
|
99,554
|
|
|
|
|
|
|
||||
Regulatory liability:
|
|
|
|
||||
Income tax temporary differences, net
|
$
|
59,149
|
|
|
62,476
|
|
|
Total regulatory liability in Consolidated Balance Sheets
|
$
|
59,149
|
|
|
62,476
|
|
|
Estimated Refunds
|
||
2019
|
$
|
2,818
|
|
2020
|
2,818
|
|
|
2021
|
2,818
|
|
|
2022
|
2,818
|
|
|
2023
|
2,806
|
|
|
Thereafter
|
51,257
|
|
|
2018
|
|
2017
|
|||
Retirement obligation
|
$
|
4,803
|
|
|
5,231
|
|
Discount rate
|
6
|
%
|
|
6
|
%
|
|
Regulatory asset, present value, recorded as a liability
|
$
|
942
|
|
|
1,184
|
|
|
2018
|
|
2017
|
|
2016
|
||||
Revenue from contracts with customers
|
389,302
|
|
|
$
|
381,777
|
|
|
328,249
|
|
Alternative revenue programs, net - WCMA
|
10,456
|
|
|
12,584
|
|
|
9,981
|
|
|
Other balancing and memorandum accounts revenue, net (1)
|
(7,541
|
)
|
|
(10,838
|
)
|
|
(5,241
|
)
|
|
Rental income
|
5,482
|
|
|
5,702
|
|
|
6,717
|
|
|
|
397,699
|
|
|
$
|
389,225
|
|
|
339,706
|
|
Note 2.
|
Capitalization
|
Note 3.
|
Lines of Credit
|
Note 4.
|
Long-Term Debt
|
Description
|
Due Date
|
|
2018
|
|
2017
|
|||
Senior notes, San Jose Water Company:
|
|
|
|
|
|
|||
Series A 8.58%
|
2022
|
|
$
|
20,000
|
|
|
20,000
|
|
Series B 7.37%
|
2024
|
|
30,000
|
|
|
30,000
|
|
|
Series C 9.45%
|
2020
|
|
10,000
|
|
|
10,000
|
|
|
Series D 7.15%
|
2026
|
|
15,000
|
|
|
15,000
|
|
|
Series E 6.81%
|
2028
|
|
15,000
|
|
|
15,000
|
|
|
Series F 7.20%
|
2031
|
|
20,000
|
|
|
20,000
|
|
|
Series G 5.93%
|
2033
|
|
20,000
|
|
|
20,000
|
|
|
Series H 5.71%
|
2037
|
|
20,000
|
|
|
20,000
|
|
|
Series I 5.93%
|
2037
|
|
20,000
|
|
|
20,000
|
|
|
Series J 6.54%
|
2024
|
|
10,000
|
|
|
10,000
|
|
|
Series K 6.75%
|
2039
|
|
20,000
|
|
|
20,000
|
|
|
Series L 5.14%
|
2044
|
|
50,000
|
|
|
50,000
|
|
|
SJWTX, Inc. Series A 6.27%
|
2036
|
|
15,000
|
|
|
15,000
|
|
|
SJW Group Series A 4.35%
|
2021
|
|
50,000
|
|
|
50,000
|
|
|
Total senior notes
|
|
|
$
|
315,000
|
|
|
315,000
|
|
California Pollution Control Financing Authority Revenue Bonds 5.10%, San Jose Water Company
|
2040
|
|
50,000
|
|
|
50,000
|
|
|
California Pollution Control Financing Authority Revenue Bonds 4.75%, San Jose Water Company
|
2046
|
|
70,000
|
|
|
70,000
|
|
|
Total debt
|
|
|
$
|
435,000
|
|
|
435,000
|
|
Less:
|
|
|
|
|
|
|||
Unamortized debt issuance costs related to debt above
|
|
|
3,576
|
|
|
3,908
|
|
|
Current portion
|
|
|
—
|
|
|
—
|
|
|
Total long-term debt, less current portion
|
|
|
$
|
431,424
|
|
|
431,092
|
|
Note 5.
|
Income Taxes
|
|
2018
|
|
2017
|
|
2016
|
||||
Current:
|
|
|
|
|
|
||||
Federal
|
$
|
14,485
|
|
|
29,377
|
|
|
21,651
|
|
State
|
5,066
|
|
|
6,452
|
|
|
7,088
|
|
|
Deferred:
|
|
|
|
|
|
||||
Federal
|
(7,702
|
)
|
|
(1,174
|
)
|
|
6,119
|
|
|
State
|
(1,784
|
)
|
|
738
|
|
|
(1,316
|
)
|
|
|
$
|
10,065
|
|
|
35,393
|
|
|
33,542
|
|
|
2018
|
|
2017
|
|||
Deferred tax assets:
|
|
|
|
|||
Advances and contributions
|
$
|
14,592
|
|
|
12,036
|
|
Unamortized investment tax credit
|
418
|
|
|
441
|
|
|
Pensions and postretirement benefits
|
20,439
|
|
|
21,807
|
|
|
California franchise tax
|
981
|
|
|
1,278
|
|
|
Merger related expenses
|
4,527
|
|
|
—
|
|
|
Tax related net regulatory liability
|
16,212
|
|
|
17,166
|
|
|
Other
|
3,336
|
|
|
3,440
|
|
|
Total deferred tax assets
|
$
|
60,505
|
|
|
56,168
|
|
Deferred tax liabilities:
|
|
|
|
|||
Utility plant
|
$
|
114,731
|
|
|
114,695
|
|
Pension and postretirement benefits
|
18,534
|
|
|
19,184
|
|
|
Investment in California Water Service Group stock
|
—
|
|
|
1,199
|
|
|
Deferred gain and other-property related
|
5,753
|
|
|
5,640
|
|
|
Debt reacquisition costs
|
170
|
|
|
204
|
|
|
Other
|
968
|
|
|
1,041
|
|
|
Total deferred tax liabilities
|
$
|
140,156
|
|
|
141,963
|
|
Net deferred tax liabilities
|
$
|
79,651
|
|
|
85,795
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of year
|
$
|
1,307
|
|
|
$
|
1,132
|
|
|
$
|
755
|
|
Increase related to tax positions taken during a prior year, including interest
|
75
|
|
|
185
|
|
|
397
|
|
|||
Reductions related to tax positions taken in a prior year, including interest
|
—
|
|
|
(10
|
)
|
|
(20
|
)
|
|||
Balance at end of year
|
$
|
1,382
|
|
|
$
|
1,307
|
|
|
$
|
1,132
|
|
Note 6.
|
Intangible Assets
|
|
2018
|
|
2017
|
|||
Concession fees
|
$
|
6,800
|
|
|
6,800
|
|
Other intangibles
|
8,999
|
|
|
7,613
|
|
|
Intangible assets
|
15,799
|
|
|
14,413
|
|
|
Less: Accumulated amortization
|
|
|
|
|||
Concession fees
|
5,780
|
|
|
5,508
|
|
|
Other intangibles
|
2,960
|
|
|
2,585
|
|
|
Net intangible assets
|
$
|
7,059
|
|
|
6,320
|
|
Note 7.
|
Commitments
|
Note 8.
|
Contingencies
|
Note 9.
|
Benefit Plans
|
|
Pension Benefits
|
|
Other Benefits
|
||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
%
|
|
%
|
|
%
|
|
%
|
Discount rate
|
4.16
|
|
3.52
|
|
4.09
|
|
3.45
|
Rate of compensation increase
|
4.00
|
|
4.00
|
|
N/A
|
|
N/A
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
5,790
|
|
|
4,699
|
|
|
4,447
|
|
|
$
|
616
|
|
|
529
|
|
|
527
|
|
Interest cost
|
6,879
|
|
|
6,993
|
|
|
6,830
|
|
|
627
|
|
|
634
|
|
|
655
|
|
||
Expected return on assets
|
(9,255
|
)
|
|
(7,888
|
)
|
|
(7,288
|
)
|
|
(450
|
)
|
|
(376
|
)
|
|
(292
|
)
|
||
Amortization of prior service cost
|
51
|
|
|
94
|
|
|
376
|
|
|
197
|
|
|
198
|
|
|
197
|
|
||
Recognized actuarial loss
|
3,986
|
|
|
3,844
|
|
|
3,527
|
|
|
321
|
|
|
273
|
|
|
316
|
|
||
Net periodic benefit cost
|
$
|
7,451
|
|
|
7,742
|
|
|
7,892
|
|
|
$
|
1,311
|
|
|
1,258
|
|
|
1,403
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||
Net periodic benefit cost recorded on income statement
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other production expenses
|
1,534
|
|
|
1,231
|
|
|
1,165
|
|
|
163
|
|
|
139
|
|
|
138
|
|
||
Administrative and general expense
|
3,249
|
|
|
2,632
|
|
|
2,490
|
|
|
346
|
|
|
296
|
|
|
295
|
|
||
Maintenance expense
|
1,007
|
|
|
836
|
|
|
792
|
|
|
107
|
|
|
94
|
|
|
94
|
|
||
Pension non-service costs
|
1,661
|
|
|
3,043
|
|
|
3,445
|
|
|
695
|
|
|
729
|
|
|
876
|
|
||
|
$
|
7,451
|
|
|
7,742
|
|
|
7,892
|
|
|
$
|
1,311
|
|
|
1,258
|
|
|
1,403
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||
Benefit obligation at beginning of year
|
$
|
196,207
|
|
|
174,097
|
|
|
$
|
18,003
|
|
|
16,461
|
|
Service cost
|
5,790
|
|
|
4,699
|
|
|
616
|
|
|
529
|
|
||
Interest cost
|
6,879
|
|
|
6,993
|
|
|
627
|
|
|
634
|
|
||
Actuarial (gain)/loss
|
(14,447
|
)
|
|
16,552
|
|
|
(988
|
)
|
|
1,124
|
|
||
Implicit rate subsidy
|
—
|
|
|
—
|
|
|
(207
|
)
|
|
(196
|
)
|
||
Benefits paid
|
(6,552
|
)
|
|
(6,134
|
)
|
|
(562
|
)
|
|
(549
|
)
|
||
Benefit obligation at end of year
|
$
|
187,877
|
|
|
196,207
|
|
|
$
|
17,489
|
|
|
18,003
|
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||
Fair value of assets at beginning of year
|
$
|
133,360
|
|
|
113,895
|
|
|
$
|
6,804
|
|
|
5,366
|
|
Actual return on plan assets
|
(7,700
|
)
|
|
17,298
|
|
|
(262
|
)
|
|
736
|
|
||
Employer contributions
|
8,502
|
|
|
8,301
|
|
|
629
|
|
|
702
|
|
||
Benefits paid
|
(6,552
|
)
|
|
(6,134
|
)
|
|
(1,322
|
)
|
|
—
|
|
||
Fair value of plan assets at end of year
|
127,610
|
|
|
133,360
|
|
|
5,849
|
|
|
6,804
|
|
||
Funded status at end of year
|
$
|
(60,267
|
)
|
|
(62,847
|
)
|
|
$
|
(11,640
|
)
|
|
(11,199
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Current liabilities
|
$
|
1,323
|
|
|
1,099
|
|
|
$
|
94
|
|
|
86
|
|
Noncurrent liabilities
|
58,944
|
|
|
61,748
|
|
|
11,546
|
|
|
11,113
|
|
||
|
$
|
60,267
|
|
|
62,847
|
|
|
$
|
11,640
|
|
|
11,199
|
|
|
2018
|
|
2017
|
|||
Funded status of obligation
|
$
|
71,907
|
|
|
74,046
|
|
Accrued benefit cost
|
(5,674
|
)
|
|
(5,490
|
)
|
|
Regulatory asset, amount to be recovered in future rates
|
$
|
66,233
|
|
|
68,556
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Fair value of assets at end of year:
|
|
|
|
|
|
|
|
||||||
Debt securities
|
$
|
42,654
|
|
|
42,784
|
|
|
$
|
2,200
|
|
|
1,710
|
|
|
33
|
%
|
|
32
|
%
|
|
38
|
%
|
|
25
|
%
|
||
Equity securities
|
77,053
|
|
|
83,352
|
|
|
3,416
|
|
|
4,111
|
|
||
|
60
|
%
|
|
63
|
%
|
|
58
|
%
|
|
60
|
%
|
||
Cash and equivalents
|
7,903
|
|
|
7,224
|
|
|
233
|
|
|
983
|
|
||
|
6
|
%
|
|
5
|
%
|
|
4
|
%
|
|
14
|
%
|
||
Total
|
$
|
127,610
|
|
|
133,360
|
|
|
$
|
5,849
|
|
|
6,804
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||
Asset Category
|
Benchmark
|
|
Total
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Cash and cash equivalents
|
|
|
$
|
8,136
|
|
|
$
|
8,136
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actively Managed (a):
|
|
|
|
|
|
|
|
|
|
||||||||
All Cap Equity
|
Russell 3000 Value
|
|
5,670
|
|
|
5,632
|
|
|
38
|
|
|
—
|
|
||||
U.S. Large Cap Equity
|
Russell 1000, Russell 1000 Growth, Russell 1000 Value
|
|
47,040
|
|
|
47,040
|
|
|
—
|
|
|
—
|
|
||||
U.S. Mid Cap Equity
|
Russell Mid Cap,
Russell Mid Cap Growth, Russell Mid Cap Value
|
|
8,372
|
|
|
8,372
|
|
|
—
|
|
|
—
|
|
||||
U.S. Small Cap Equity
|
Russell 2000, Russell 2000 Growth, Russell 2000 Value, Russell 2500
|
|
8,528
|
|
|
8,528
|
|
|
—
|
|
|
—
|
|
||||
Non-U.S. Large Cap Equity
|
MSCI EAFE
|
|
4,969
|
|
|
4,969
|
|
|
—
|
|
|
—
|
|
||||
REIT
|
NAREIT—Equity REIT’s
|
|
5,889
|
|
|
—
|
|
|
5,889
|
|
|
—
|
|
||||
Fixed Income (b)
|
(b)
|
|
44,855
|
|
|
—
|
|
|
44,855
|
|
|
—
|
|
||||
Total
|
|
|
$
|
133,459
|
|
|
$
|
82,677
|
|
|
$
|
50,782
|
|
|
$
|
—
|
|
(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
|
||||||||||||
Asset Category
|
Benchmark
|
|
Total
|
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(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.
|
|
Pension Plan
|
|
Other Postretirement
Benefit Plan
|
||||
2019
|
$
|
7,235
|
|
|
$
|
851
|
|
2020
|
7,550
|
|
|
852
|
|
||
2021
|
8,013
|
|
|
903
|
|
||
2022
|
8,419
|
|
|
951
|
|
||
2023
|
8,886
|
|
|
992
|
|
||
2024 - 2027
|
50,695
|
|
|
5,366
|
|
Note 10.
|
Equity Plans
|
|
2018
|
|
2017
|
|
2016
|
||||
Compensation costs charged to income:
|
|
|
|
|
|
||||
ESPP
|
$
|
242
|
|
|
214
|
|
|
168
|
|
Restricted stock and deferred restricted stock
|
1,875
|
|
|
2,429
|
|
|
1,523
|
|
|
Total compensation costs charged to income
|
$
|
2,117
|
|
|
2,643
|
|
|
1,691
|
|
Proceeds from the exercise of stock options and similar instruments:
|
|
|
|
|
|
||||
ESPP
|
1,371
|
|
|
1,215
|
|
|
954
|
|
|
Total proceeds from the exercise of stock options and similar instruments
|
$
|
1,371
|
|
|
1,215
|
|
|
954
|
|
Excess tax benefits realized from share options exercised and stock issuance:
|
|
|
|
|
|
||||
Restricted stock and deferred restricted stock
|
—
|
|
|
—
|
|
|
203
|
|
|
Total excess tax benefits realized from share options exercised and stock issuance
|
$
|
—
|
|
|
—
|
|
|
203
|
|
|
Units
|
|
Weighted-
Average Grant-
Date Fair Value
|
|||
Outstanding as of January 1, 2018
|
190,496
|
|
|
$
|
27.81
|
|
Issued
|
58,211
|
|
|
$
|
50.29
|
|
Exercised
|
(143,614
|
)
|
|
$
|
28.41
|
|
Forfeited or expired
|
—
|
|
|
$
|
—
|
|
Outstanding as of December 31, 2018
|
105,093
|
|
|
$
|
37.73
|
|
Shares vested as of December 31, 2018
|
45,912
|
|
|
$
|
16.46
|
|
|
Units
|
|
Weighted- Average Grant-
Date Fair Value
|
|||
Nonvested as of January 1, 2018
|
87,483
|
|
|
$
|
40.89
|
|
Granted
|
58,211
|
|
|
$
|
50.29
|
|
Vested
|
(86,513
|
)
|
|
$
|
35.99
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Nonvested as of December 31, 2018
|
59,181
|
|
|
$
|
54.67
|
|
Note 11.
|
Segment and Non-Tariffed Businesses Reporting
|
|
For year ended December 31, 2018
|
|||||||||||||||||||
|
Water Utility Services
|
|
Real
Estate
Services
|
|
All Other (1)
|
|
SJW Group
|
|||||||||||||
|
Regulated
|
|
Non-
tariffed
|
|
Non-
tariffed
|
|
Non-
tariffed
|
|
Regulated
|
|
Non-
tariffed
|
|
Total
|
|||||||
Operating revenue
|
384,639
|
|
|
7,578
|
|
|
5,482
|
|
|
—
|
|
|
384,639
|
|
|
13,060
|
|
|
397,699
|
|
Operating expense
|
294,536
|
|
|
5,012
|
|
|
3,539
|
|
|
21,172
|
|
|
294,536
|
|
|
29,723
|
|
|
324,259
|
|
Operating income (loss)
|
90,103
|
|
|
2,566
|
|
|
1,943
|
|
|
(21,172
|
)
|
|
90,103
|
|
|
(16,663
|
)
|
|
73,440
|
|
Net income (loss)
|
53,181
|
|
|
1,848
|
|
|
885
|
|
|
(17,147
|
)
|
|
53,181
|
|
|
(14,414
|
)
|
|
38,767
|
|
Depreciation and amortization
|
53,067
|
|
|
338
|
|
|
1,196
|
|
|
—
|
|
|
53,067
|
|
|
1,534
|
|
|
54,601
|
|
Senior note and other interest expense
|
22,157
|
|
|
—
|
|
|
—
|
|
|
2,175
|
|
|
22,157
|
|
|
2,175
|
|
|
24,332
|
|
Income tax expense (benefit) in net income
|
14,826
|
|
|
719
|
|
|
903
|
|
|
(6,383
|
)
|
|
14,826
|
|
|
(4,761
|
)
|
|
10,065
|
|
Assets
|
1,492,954
|
|
|
4,489
|
|
|
46,517
|
|
|
412,429
|
|
|
1,492,954
|
|
|
463,435
|
|
|
1,956,389
|
|
|
For year ended December 31, 2017
|
|||||||||||||||||||
|
Water Utility Services
|
|
Real
Estate
Services
|
|
All Other (1)
|
|
SJW Group
|
|||||||||||||
|
Regulated
|
|
Non-
tariffed
|
|
Non-
tariffed
|
|
Non-
tariffed
|
|
Regulated
|
|
Non-
tariffed
|
|
Total
|
|||||||
Operating revenue
|
376,104
|
|
|
7,419
|
|
|
5,702
|
|
|
—
|
|
|
376,104
|
|
|
13,121
|
|
|
389,225
|
|
Operating expense
|
276,061
|
|
|
4,855
|
|
|
3,688
|
|
|
2,770
|
|
|
276,061
|
|
|
11,313
|
|
|
287,374
|
|
Operating income (loss)
|
100,043
|
|
|
2,564
|
|
|
2,014
|
|
|
(2,770
|
)
|
|
100,043
|
|
|
1,808
|
|
|
101,851
|
|
Net income before noncontrolling interest
|
47,736
|
|
|
1,137
|
|
|
8,089
|
|
|
4,138
|
|
|
47,736
|
|
|
13,364
|
|
|
61,100
|
|
Depreciation and amortization
|
46,500
|
|
|
572
|
|
|
1,220
|
|
|
—
|
|
|
46,500
|
|
|
1,792
|
|
|
48,292
|
|
Senior note, mortgage and other interest expense
|
20,670
|
|
|
—
|
|
|
60
|
|
|
2,199
|
|
|
20,670
|
|
|
2,259
|
|
|
22,929
|
|
Income tax expense in net income
|
30,127
|
|
|
993
|
|
|
644
|
|
|
3,629
|
|
|
30,127
|
|
|
5,266
|
|
|
35,393
|
|
Assets
|
1,406,221
|
|
|
4,471
|
|
|
47,668
|
|
|
(359
|
)
|
|
1,406,221
|
|
|
51,780
|
|
|
1,458,001
|
|
|
For year ended December 31, 2016
|
|||||||||||||||||||
|
Water Utility Services
|
|
Real
Estate
Services
|
|
All Other (1)
|
|
SJW Group
|
|||||||||||||
|
Regulated
|
|
Non-
tariffed
|
|
Non-
tariffed
|
|
Non-
tariffed
|
|
Regulated
|
|
Non-
tariffed
|
|
Total
|
|||||||
Operating revenue
|
326,547
|
|
|
6,442
|
|
|
6,717
|
|
|
—
|
|
|
326,547
|
|
|
13,159
|
|
|
339,706
|
|
Operating expense
|
232,138
|
|
|
4,257
|
|
|
4,074
|
|
|
1,800
|
|
|
232,138
|
|
|
10,131
|
|
|
242,269
|
|
Operating income (loss)
|
94,409
|
|
|
2,185
|
|
|
2,643
|
|
|
(1,800
|
)
|
|
94,409
|
|
|
3,028
|
|
|
97,437
|
|
Net income (loss)
|
45,594
|
|
|
954
|
|
|
7,406
|
|
|
(1,115
|
)
|
|
45,594
|
|
|
7,245
|
|
|
52,839
|
|
Depreciation and amortization
|
42,709
|
|
|
480
|
|
|
1,436
|
|
|
—
|
|
|
42,709
|
|
|
1,916
|
|
|
44,625
|
|
Senior note, mortgage and other interest expense
|
18,667
|
|
|
—
|
|
|
912
|
|
|
2,259
|
|
|
18,667
|
|
|
3,171
|
|
|
21,838
|
|
Income tax expense in net income
|
27,902
|
|
|
750
|
|
|
4,235
|
|
|
655
|
|
|
27,902
|
|
|
5,640
|
|
|
33,542
|
|
Assets
|
1,368,886
|
|
|
17,794
|
|
|
54,818
|
|
|
1,878
|
|
|
1,368,886
|
|
|
74,490
|
|
|
1,443,376
|
|
Note 12.
|
SJW Group and CTWS Merger (the
“
Merger
”)
|
Note 13.
|
Unaudited Quarterly Financial Data
|
|
2018 Quarter Ended
|
|||||||||||
|
March
|
|
June
|
|
September
|
|
December
|
|||||
Operating revenue
|
$
|
75,042
|
|
|
99,086
|
|
|
124,853
|
|
|
98,718
|
|
Operating income
|
7,331
|
|
|
22,799
|
|
|
25,828
|
|
|
17,482
|
|
|
SJW Group net income
|
1,285
|
|
|
12,871
|
|
|
15,788
|
|
|
8,823
|
|
|
Comprehensive income
|
1,285
|
|
|
12,871
|
|
|
15,788
|
|
|
8,823
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|||||
—Basic
|
0.06
|
|
|
0.63
|
|
|
0.77
|
|
|
0.38
|
|
|
—Diluted
|
0.06
|
|
|
0.62
|
|
|
0.76
|
|
|
0.38
|
|
|
Market price range of stock:
|
|
|
|
|
|
|
|
|||||
—High
|
63.47
|
|
|
68.15
|
|
|
67.29
|
|
|
65.31
|
|
|
—Low
|
51.96
|
|
|
51.68
|
|
|
56.12
|
|
|
52.63
|
|
|
Dividend per share
|
0.28
|
|
|
0.28
|
|
|
0.28
|
|
|
0.28
|
|
|
2017 Quarter Ended
|
|||||||||||
|
March
|
|
June
|
|
September
|
|
December
|
|||||
Operating revenue
|
$
|
69,045
|
|
|
102,073
|
|
|
124,578
|
|
|
93,529
|
|
Operating income
|
10,833
|
|
|
30,787
|
|
|
38,245
|
|
|
18,214
|
|
|
SJW Group net income
|
3,671
|
|
|
18,688
|
|
|
19,540
|
|
|
17,305
|
|
|
Comprehensive income
|
3,787
|
|
|
18,744
|
|
|
19,620
|
|
|
17,732
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|||||
—Basic
|
0.18
|
|
|
0.91
|
|
|
0.95
|
|
|
0.84
|
|
|
—Diluted
|
0.18
|
|
|
0.90
|
|
|
0.94
|
|
|
0.84
|
|
|
Market price range of stock:
|
|
|
|
|
|
|
|
|||||
—High
|
55.30
|
|
|
53.00
|
|
|
57.43
|
|
|
68.13
|
|
|
—Low
|
46.13
|
|
|
45.74
|
|
|
48.46
|
|
|
57.60
|
|
|
Dividend per share
|
0.22
|
|
|
0.22
|
|
|
0.22
|
|
|
0.38
|
|
Description
|
2018
|
|
2017
|
|
2016
|
||||
Allowance for doubtful accounts:
|
|
|
|
|
|
||||
Balance, beginning of period
|
$
|
190
|
|
|
200
|
|
|
200
|
|
Charged to expense
|
430
|
|
|
399
|
|
|
504
|
|
|
Accounts written off
|
(650
|
)
|
|
(675
|
)
|
|
(681
|
)
|
|
Recoveries of accounts written off
|
302
|
|
|
266
|
|
|
177
|
|
|
Balance, end of period
|
$
|
272
|
|
|
190
|
|
|
200
|
|
Reserve for litigation and claims:
|
|
|
|
|
|
||||
Balance, beginning of period
|
$
|
1,892
|
|
|
2,105
|
|
|
263
|
|
Charged to expense
|
480
|
|
|
528
|
|
|
2,186
|
|
|
Revision to accrual, due to settlements
|
1
|
|
|
(245
|
)
|
|
(19
|
)
|
|
Payments
|
(192
|
)
|
|
(496
|
)
|
|
(325
|
)
|
|
Balance, end of period
|
$
|
2,181
|
|
|
1,892
|
|
|
2,105
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
Page
|
(a)(1) Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)(2) Financial Statement Schedule
|
|
|
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
1.1
|
|
|
|
|
|
2.1
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.3
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
4.1
|
|
Instruments Defining the Rights of Security Holders, including Indentures: No current issue of the registrant’s long-term debt exceeds 10 percent of its total assets. SJW Group hereby agrees to furnish upon request to the Commission a copy of each instrument defining the rights of holders of unregistered senior and subordinated debt of the Company.
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
Indenture dated as of December 1, 2016, by and between California Pollution Control Financing Authority and The Bank of New York Mellon Trust Company, N.A. relating to the Bond. SJW Group agrees to furnish to the Commission upon request a copy of such agreement which it has elected not to file under the provisions of Regulation S-K 601(b)(4)(iii).
|
|
|
|
4.5
|
|
4.35% Senior Notes due June 30, 2021. SJW Group agrees to furnish a copy of such Senior Notes to the Commission upon request.
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
10.36
|
|
|
|
|
|
10.37
|
|
|
|
|
|
10.38
|
|
|
|
|
|
10.39
|
|
|
|
|
|
10.40
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42
|
|
|
|
|
|
10.43
|
|
|
|
|
|
10.44
|
|
|
|
|
|
10.45
|
|
|
|
|
|
10.46
|
|
|
|
|
|
10.47
|
|
|
|
|
|
10.48
|
|
|
|
|
|
10.49
|
|
|
|
|
|
10.50
|
|
|
|
|
|
10.51
|
|
|
|
|
|
10.52
|
|
|
|
|
|
10.53
|
|
|
|
|
|
10.54
|
|
|
|
|
|
10.55
|
|
|
|
|
|
10.56
|
|
|
|
|
|
10.57
|
|
|
|
|
|
10.58
|
|
|
|
|
|
10.59
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
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.
|
|
|
|
|
|
(2) Management contract or compensatory plan or agreement.
|
|
|
|
|
|
(3) Pursuant to Item 601(b)(2) of Regulation S-K, certain exhibits and schedules have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.
|
|
|
|
|
|
|
|
SJW Group
|
|
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Eric W. Thornburg
|
|
|
|
|
ERIC W. THORNBURG,
President, Chief Executive Officer and
Chairman of the Board
(Principal executive officer)
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Eric W. Thornburg
|
|
|
|
|
ERIC W. THORNBURG,
President, Chief Executive Officer and Chairman of the Board (Principal executive officer) |
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ James P. Lynch
|
|
|
|
|
JAMES P. LYNCH,
Chief Financial Officer and Treasurer
(Principal financial officer)
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Wendy Avila-Walker
|
|
|
|
|
WENDY AVILA-WALKER,
Vice President of Finance, Controller
and Assistant Treasurer
(Principal accounting officer)
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Katharine Armstrong
|
|
|
|
|
KATHARINE ARMSTRONG,
Member, Board of Directors
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Walter J. Bishop
|
|
|
|
|
WALTER J. BISHOP,
Member, Board of Directors
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Douglas R. King
|
|
|
|
|
DOUGLAS R. KING,
Member, Board of Directors
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Gregory P. Landis
|
|
|
|
|
GREGORY P. LANDIS,
Member, Board of Directors
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Debra C. Man
|
|
|
|
|
DEBRA C. MAN,
Member, Board of Directors
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Daniel B. More
|
|
|
|
|
DANIEL B. MORE,
Member, Board of Directors
|
|
||||
|
|
|
|
|
Date:
|
February 27, 2019
|
|
By
|
/s/ Robert A. Van Valer
|
|
|
|
|
ROBERT A. VAN VALER,
Member, Board of Directors
|
|
1.
|
Section 3.2(a) is amended by adding the following sentence at the end thereof:
|
Date:
|
February 27, 2019
|
/s/ Eric W. Thornburg
|
|
|
ERIC W. THORNBURG
|
|
|
Chairman, President and Chief Executive Officer
|
|
|
(Principal executive officer)
|
Date:
|
February 27, 2019
|
/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)
|
February 27, 2019
|
(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)
|
February 27, 2019
|