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, | ||||||
2017 | 2016 | |||||
OPERATING REVENUE | $ | 69,045 | 61,112 | |||
OPERATING EXPENSE: | ||||||
Production Expenses: | ||||||
Purchased water | 13,924 | 9,697 | ||||
Power | 1,287 | 1,237 | ||||
Groundwater extraction charges | 7,410 | 6,448 | ||||
Other production expenses | 3,511 | 3,232 | ||||
Total production expenses | 26,132 | 20,614 | ||||
Administrative and general | 12,605 | 11,705 | ||||
Maintenance | 3,661 | 3,811 | ||||
Property taxes and other non-income taxes | 3,695 | 3,218 | ||||
Depreciation and amortization | 12,119 | 11,183 | ||||
Total operating expense | 58,212 | 50,531 | ||||
OPERATING INCOME | 10,833 | 10,581 | ||||
OTHER (EXPENSE) INCOME: | ||||||
Interest on long-term debt | (5,963 | ) | (5,039 | ) | ||
Mortgage and other interest expense | (94 | ) | (396 | ) | ||
Dividend income | 18 | 45 | ||||
Other, net | 445 | 309 | ||||
Income before income taxes | 5,239 | 5,500 | ||||
Provision for income taxes | 1,568 | 2,122 | ||||
NET INCOME | 3,671 | 3,378 | ||||
Other comprehensive income, net of tax: | ||||||
Unrealized gain on investment | 116 | 530 | ||||
COMPREHENSIVE INCOME | $ | 3,787 | 3,908 | |||
EARNINGS PER SHARE | ||||||
Basic | $ | 0.18 | 0.17 | |||
Diluted | $ | 0.18 | 0.16 | |||
DIVIDENDS PER SHARE | $ | 0.22 | 0.20 | |||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||
Basic | 20,485,968 | 20,413,745 | ||||
Diluted | 20,655,239 | 20,560,995 |
March 31, 2017 | December 31, 2016 | |||||
ASSETS | ||||||
Utility plant: | ||||||
Land | $ | 18,078 | 17,923 | |||
Depreciable plant and equipment | 1,566,643 | 1,554,016 | ||||
Construction in progress | 88,369 | 70,453 | ||||
Intangible assets | 25,090 | 23,989 | ||||
1,698,180 | 1,666,381 | |||||
Less accumulated depreciation and amortization | 532,841 | 520,018 | ||||
1,165,339 | 1,146,363 | |||||
Real estate investments | 56,170 | 62,193 | ||||
Less accumulated depreciation and amortization | 10,246 | 11,734 | ||||
45,924 | 50,459 | |||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | 7,092 | 6,349 | ||||
Restricted cash | 8 | 19,001 | ||||
Accounts receivable: | ||||||
Customers, net of allowances for uncollectible accounts | 15,288 | 16,361 | ||||
Income tax | 10,032 | 9,796 | ||||
Other | 3,170 | 3,383 | ||||
Accrued unbilled utility revenue | 19,526 | 24,255 | ||||
Long-lived asset held-for-sale | 4,276 | — | ||||
Current regulatory assets, net | 10,469 | 16,064 | ||||
Other current assets | 3,875 | 4,402 | ||||
73,736 | 99,611 | |||||
OTHER ASSETS: | ||||||
Investment in California Water Service Group | 3,585 | 3,390 | ||||
Net regulatory assets, less current portion | 139,387 | 135,709 | ||||
Other | 7,806 | 7,844 | ||||
150,778 | 146,943 | |||||
$ | 1,435,777 | 1,443,376 |
March 31, 2017 | December 31, 2016 | |||||
CAPITALIZATION AND LIABILITIES | ||||||
CAPITALIZATION: | ||||||
Stockholders’ equity: | ||||||
Common stock, $0.001 par value; authorized 36,000,000 shares; issued and outstanding 20,498,733 shares on March 31, 2017 and 20,456,225 on December 31, 2016 | $ | 21 | 21 | |||
Additional paid-in capital | 82,167 | 81,715 | ||||
Retained earnings | 337,572 | 338,386 | ||||
Accumulated other comprehensive income | 1,640 | 1,524 | ||||
Total stockholders’ equity | 421,400 | 421,646 | ||||
Long-term debt, less current portion | 433,388 | 433,335 | ||||
854,788 | 854,981 | |||||
CURRENT LIABILITIES: | ||||||
Line of credit | — | 14,200 | ||||
Current portion of long-term debt | 127 | 125 | ||||
Accrued groundwater extraction charges, purchased water and power | 10,392 | 10,846 | ||||
Accounts payable | 20,723 | 18,739 | ||||
Accrued interest | 6,729 | 6,309 | ||||
Accrued property taxes and other non-income taxes | 2,559 | 1,681 | ||||
Accrued payroll | 3,047 | 4,696 | ||||
Other current liabilities | 7,203 | 6,977 | ||||
50,780 | 63,573 | |||||
DEFERRED INCOME TAXES | 207,016 | 205,203 | ||||
ADVANCES FOR CONSTRUCTION | 85,328 | 84,815 | ||||
CONTRIBUTIONS IN AID OF CONSTRUCTION | 153,233 | 151,576 | ||||
POSTRETIREMENT BENEFIT PLANS | 72,092 | 70,177 | ||||
OTHER NONCURRENT LIABILITIES | 12,540 | 13,051 | ||||
COMMITMENTS AND CONTINGENCIES | — | — | ||||
$ | 1,435,777 | 1,443,376 |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
OPERATING ACTIVITIES: | ||||||
Net income | $ | 3,671 | 3,378 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 12,646 | 11,597 | ||||
Deferred income taxes | 1,595 | 999 | ||||
Share-based compensation | 586 | 473 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable and accrued unbilled utility revenue | 6,015 | 3,724 | ||||
Accounts payable and other current liabilities | 557 | (1,704 | ) | |||
Accrued groundwater extraction charges, purchased water and power | (454 | ) | (1,392 | ) | ||
Tax receivable and accrued taxes | 1,090 | 10,049 | ||||
Postretirement benefits | 1,915 | 2,169 | ||||
Regulatory assets and liability related to balancing and memorandum accounts | 1,917 | 3,021 | ||||
Other changes, net | (1,296 | ) | 259 | |||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 28,242 | 32,573 | ||||
INVESTING ACTIVITIES: | ||||||
Additions to utility plant: | ||||||
Company-funded | (27,745 | ) | (31,560 | ) | ||
Contributions in aid of construction | (1,646 | ) | (1,470 | ) | ||
Additions to real estate investments | (62 | ) | — | |||
Payments for business/asset acquisition and water rights | (1,101 | ) | (1,061 | ) | ||
Payments to retire utility plant, net of salvage | (397 | ) | (395 | ) | ||
NET CASH USED IN INVESTING ACTIVITIES | (30,951 | ) | (34,486 | ) | ||
FINANCING ACTIVITIES: | ||||||
Borrowings on line of credit | — | 14,950 | ||||
Repayments of line of credit | (14,200 | ) | (10,050 | ) | ||
Repayments of long-term borrowings | (32 | ) | (152 | ) | ||
Dividends paid | (4,456 | ) | (4,135 | ) | ||
Employee stock purchase plan proceeds | 570 | 451 | ||||
Taxes paid related to net share settlement of restricted and deferred stock units | (815 | ) | (486 | ) | ||
Tax benefits realized from restricted and deferred stock units | — | 108 | ||||
Receipts of advances and contributions in aid of construction | 3,924 | 5,155 | ||||
Refunds of advances for construction | (532 | ) | (475 | ) | ||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (15,541 | ) | 5,366 | |||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (18,250 | ) | 3,453 | |||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 25,350 | 5,239 | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 7,100 | 8,692 | |||
Cash paid (received) during the period for: | ||||||
Interest | $ | 6,044 | 6,370 | |||
Income taxes | — | (7,950 | ) | |||
Supplemental disclosure of non-cash activities: | ||||||
Increase in accrued payables for construction costs capitalized | 1,634 | 3,975 | ||||
Utility property installed by developers | 243 | 3,797 | ||||
RECONCILIATION TO CONSOLIDATED BALANCE SHEETS: | ||||||
Cash and cash equivalents | 7,092 | 8,692 | ||||
Restricted cash | 8 | — | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 7,100 | 8,692 |
Note 1. | General |
Note 2. | Equity Plans |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Adjustments to additional paid-in capital and common stock for: | ||||||
Compensation costs charged to income: | ||||||
ESPP | $ | 100 | 79 | |||
Restricted stock and deferred restricted stock | 486 | 394 | ||||
Total compensation costs charged to income | $ | 586 | 473 | |||
Excess tax benefits realized from stock issuance: | ||||||
Restricted stock and deferred restricted stock | $ | — | 108 | |||
Total excess tax benefits realized from stock issuance | $ | — | 108 | |||
Proceeds from ESPP and similar instruments: | ||||||
ESPP | $ | 570 | 451 | |||
Total proceeds from the ESPP and similar instruments | $ | 570 | 451 |
Note 3. | Real Estate Investments |
March 31, 2017 | December 31, 2016 | |||||
Land | $ | 13,262 | 15,218 | |||
Buildings and improvements | 42,908 | 46,826 | ||||
Intangibles | — | 149 | ||||
Subtotal | 56,170 | 62,193 | ||||
Less: accumulated depreciation and amortization | 10,246 | 11,734 | ||||
Total | $ | 45,924 | 50,459 |
March 31, 2017 | |||
Land | $ | 1,956 | |
Buildings and improvements | 3,980 | ||
Intangibles | 149 | ||
Subtotal | 6,085 | ||
Less: accumulated depreciation and amortization | 1,809 | ||
Total | $ | 4,276 |
Note 4. | Defined Benefit Plan |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Service cost | $ | 1,326 | 1,240 | |||
Interest cost | 1,903 | 1,878 | ||||
Other cost | 1,038 | 1,111 | ||||
Expected return on assets | (2,066 | ) | (1,895 | ) | ||
$ | 2,201 | 2,334 |
Fair Value Measurements at March 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 | $ | 5,725 | $ | 5,725 | $ | — | $ | — | |||||||||
Actively Managed (a): | |||||||||||||||||
All Cap Equity | Russell 3000 Value | 5,955 | 5,926 | 29 | — | ||||||||||||
U.S. Large Cap Equity | Russell 1000, Russell 1000 Growth, Russell 1000 Value | 43,579 | 43,579 | — | — | ||||||||||||
U.S. Mid Cap Equity | Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value | 8,634 | 8,634 | — | — | ||||||||||||
U.S. Small Cap Equity | Russell 2000, Russell 2000 Growth, Russell 2000 Value | 7,256 | 7,256 | — | — | ||||||||||||
Non-U.S. Large Cap Equity | MSCI EAFE | 5,113 | 5,113 | ||||||||||||||
REIT | NAREIT - Equity REIT’S | 5,702 | — | 5,702 | — | ||||||||||||
Fixed Income (b) | (b) | 41,002 | — | 41,002 | — | ||||||||||||
Total | $ | 122,966 | $ | 76,233 | $ | 46,733 | $ | — |
(a) | Actively managed portfolio of securities with the goal to exceed the stated benchmark performance. |
(b) | Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate. |
Fair Value Measurements at December 31, 2016 | |||||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Observable Inputs | Significant Unobservable Inputs | |||||||||||||||
Asset Category | Benchmark | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Cash and cash equivalents | $ | 10,050 | $ | 10,050 | $ | — | $ | — | |||||||||
Actively Managed (a): | |||||||||||||||||
All Cap Equity | Russell 3000 Value | 5,290 | 5,266 | 24 | — | ||||||||||||
U.S. Large Cap Equity | Russell 1000, Russell 1000 Growth, Russell 1000 Value | 39,534 | 39,534 | — | — | ||||||||||||
U.S. Mid Cap Equity | Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value | 7,021 | 7,021 | — | — | ||||||||||||
U.S. Small Cap Equity | Russell 2000, Russell 2000 Growth, Russell 2000 Value | 6,357 | 6,357 | — | — | ||||||||||||
Non-U.S. Large Cap Equity | MSCI EAFE | 4,832 | 4,832 | — | — | ||||||||||||
REIT | NAREIT - Equity REIT’S | 5,663 | — | 5,663 | — | ||||||||||||
Fixed Income (b) | (b) | 40,514 | — | 40,514 | — | ||||||||||||
Total | $ | 119,261 | $ | 73,060 | $ | 46,201 | $ | — |
(a) | Actively managed portfolio of securities with the goal to exceed the stated benchmark performance. |
(b) | Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate. |
Note 5. | Segment and Non-Tariffed Business Reporting |
For Three Months Ended 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 | 55,621 | 831 | 948 | 812 | 55,621 | 2,591 | 58,212 | ||||||||||||||
Operating income (loss) | 10,597 | 433 | 615 | (812 | ) | 10,597 | 236 | 10,833 | |||||||||||||
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 |
For Three Months Ended March 31, 2016 | |||||||||||||||||||||
Water Utility Services | Real Estate Services | All Other* | SJW Group | ||||||||||||||||||
Regulated | Non-tariffed | Non-tariffed | Non-tariffed | Regulated | Non-tariffed | Total | |||||||||||||||
Operating revenue | $ | 58,141 | 1,204 | 1,767 | — | 58,141 | 2,971 | 61,112 | |||||||||||||
Operating expense | 48,121 | 882 | 1,032 | 496 | 48,121 | 2,410 | 50,531 | ||||||||||||||
Operating income (loss) | 10,020 | 322 | 735 | (496 | ) | 10,020 | 561 | 10,581 | |||||||||||||
Net income (loss) | 3,571 | 105 | 253 | (551 | ) | 3,571 | (193 | ) | 3,378 | ||||||||||||
Depreciation and amortization | 10,673 | 116 | 394 | — | 10,673 | 510 | 11,183 | ||||||||||||||
Senior note, mortgage and other interest expense | 4,626 | — | 250 | 559 | 4,626 | 809 | 5,435 | ||||||||||||||
Income tax expense (benefit) in net income | 2,272 | 106 | 141 | (397 | ) | 2,272 | (150 | ) | 2,122 | ||||||||||||
Assets | $ | 1,265,848 | 18,566 | 65,536 | 5,626 | 1,265,848 | 89,728 | 1,355,576 |
Note 6. | Long-Term Liabilities and Bank Borrowings |
Note 7. | Fair Value Measurement |
Note 8. | Regulatory Rate Filings |
Note 9. | Balancing and Memorandum Account Recovery Procedures |
Three months ended March 31, 2017 | Three months ended March 31, 2016 | ||||||||||||||||||||||||||||||
Beginning Balance | Revenue Increase (Reduction) | Refunds (Collections) | Surcharge Offset | Ending Balance | Beginning Balance | Revenue Increase (Reduction) | Refunds (Collections) | Surcharge Offset | Ending Balance | ||||||||||||||||||||||
Memorandum accounts: | |||||||||||||||||||||||||||||||
2014 WCMA* | $ | — | 112 | (112 | ) | — | — | $ | 2,944 | — | (517 | ) | — | 2,427 | |||||||||||||||||
2015 WCMA* | 1,589 | (71 | ) | (1,120 | ) | — | 398 | 5,372 | (20 | ) | — | — | 5,352 | ||||||||||||||||||
2016 WCMA | — | 1,407 | — | (1,407 | ) | — | — | 3,014 | — | (3,014 | ) | — | |||||||||||||||||||
2017 WCMA | — | 2,060 | — | (2,060 | ) | — | — | — | — | — | — | ||||||||||||||||||||
All others | 2,768 | 671 | 241 | — | 3,680 | 594 | 517 | (1 | ) | — | 1,110 | ||||||||||||||||||||
Total memorandum accounts | 4,357 | 4,179 | (991 | ) | (3,467 | ) | 4,078 | 8,910 | 3,511 | (518 | ) | (3,014 | ) | 8,889 | |||||||||||||||||
Balancing accounts, net assets: | |||||||||||||||||||||||||||||||
Water supply costs | 5,190 | 197 | 297 | — | 5,684 | 2,771 | (313 | ) | (22 | ) | — | 2,436 | |||||||||||||||||||
Drought surcharges | (7,688 | ) | — | (833 | ) | 3,467 | (5,054 | ) | (359 | ) | — | (3,167 | ) | 3,014 | (512 | ) | |||||||||||||||
Pension | (2,009 | ) | 173 | (703 | ) | — | (2,539 | ) | (552 | ) | 280 | (155 | ) | — | (427 | ) | |||||||||||||||
2012 General Rate Case true-up | 20,682 | — | (2,258 | ) | — | 18,424 | 33,070 | — | (2,498 | ) | — | 30,572 | |||||||||||||||||||
2015 General Rate Case true-up | 5,528 | — | (1,431 | ) | — | 4,097 | — | — | — | — | — | ||||||||||||||||||||
All others | (151 | ) | (214 | ) | (334 | ) | 76 | (623 | ) | 1,366 | (130 | ) | (11 | ) | — | 1,225 | |||||||||||||||
Total balancing accounts | $ | 21,552 | 156 | (5,262 | ) | 3,543 | 19,989 | $ | 36,296 | (163 | ) | (5,853 | ) | 3,014 | 33,294 | ||||||||||||||||
Total | $ | 25,909 | 4,335 | (6,253 | ) | 76 | 24,067 | $ | 45,206 | 3,348 | (6,371 | ) | — | 42,183 |
Note 10. | Regulatory Assets and Liabilities |
Description | March 31, 2017 | December 31, 2016 | |||||
Regulatory assets: | |||||||
Income tax temporary differences, net | $ | 10,139 | 10,139 | ||||
Postretirement pensions and other medical benefits | 109,795 | 109,795 | |||||
Balancing and memorandum accounts, net | 24,067 | 25,909 | |||||
Other, net | 5,855 | 5,930 | |||||
Total regulatory assets, net in Consolidated Balance Sheets | $ | 149,856 | 151,773 | ||||
Less: current regulatory asset, net | 10,469 | 16,064 | |||||
Total regulatory assets, net, less current portion | $ | 139,387 | 135,709 |
Note 11. | Texas Water Alliance Limited |
Note 12. | Legal Proceedings |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
% for Three months ended March 31, 2017 of SJW Land Company | ||||||||||||
Description | Location | Acreage | Square Footage | Revenue | Expense | |||||||
Commercial building | San Jose, California | 2 | 28,000 | 12 | % | 11 | % | |||||
Warehouse building | Knoxville, Tennessee | 30 | 361,500 | 39 | % | 35 | % | |||||
Commercial building | Knoxville, Tennessee | 15 | 135,000 | 49 | % | 54 | % | |||||
Undeveloped land and parking lot | Knoxville, Tennessee | 10 | N/A | N/A | N/A | |||||||
Undeveloped land | San Jose, California | 5 | N/A | N/A | N/A |
(1) | Regional regulated water utility operations; |
(2) | Regional non-tariffed water utility related services provided in accordance with the guidelines established by the CPUC in California and the PUCT in Texas; and |
(3) | Out-of-region water and utility related services. |
Operating Revenue by Segment | ||||||
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Water Utility Services | $ | 67,482 | 59,345 | |||
Real Estate Services | 1,563 | 1,767 | ||||
$ | 69,045 | 61,112 |
Three months ended March 31, 2017 vs. 2016 | ||||||
Increase/(decrease) | ||||||
Water Utility Services: | ||||||
Consumption changes | $ | (1,589 | ) | (3 | )% | |
Increase in customers | 119 | — | % | |||
Rate increases | 8,619 | 14 | % | |||
Balancing and memorandum accounts: | ||||||
2016 WCMA revision to new customer classification | 1,371 | 2 | % | |||
WCMA | (857 | ) | (1 | )% | ||
All other | 475 | 1 | % | |||
Real Estate Services | (205 | ) | — | % | ||
$ | 7,933 | 13 | % |
Operating Expense by Segment | ||||||
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Water Utility Services | $ | 56,452 | 49,003 | |||
Real Estate Services | 948 | 1,032 | ||||
All Other | 812 | 496 | ||||
$ | 58,212 | 50,531 |
Three months ended March 31, 2017 vs. 2016 | ||||||
Increase/(decrease) | ||||||
Water production expenses: | ||||||
Change in surface water use | $ | 2,275 | 5 | % | ||
Change in usage and new customers | (361 | ) | (1 | )% | ||
Purchased water and groundwater extraction charge and energy price increase | 3,604 | 7 | % | |||
Total water production expenses | 5,518 | 11 | % | |||
Administrative and general | 900 | 2 | % | |||
Maintenance | (150 | ) | — | % | ||
Property taxes and other non-income taxes | 477 | — | % | |||
Depreciation and amortization | 936 | 2 | % | |||
$ | 7,681 | 15 | % |
Three months ended March 31, | Increase/ (decrease) | % of Total Change | |||||||||
2017 | 2016 | ||||||||||
Purchased water | 3,909 | 3,179 | 730 | 11 | % | ||||||
Groundwater | 2,398 | 2,498 | (100 | ) | (1 | )% | |||||
Surface water | 181 | 887 | (706 | ) | (11 | )% | |||||
Reclaimed water | 47 | 46 | 1 | — | % | ||||||
6,535 | 6,610 | (75 | ) | (1 | )% |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
SJW GROUP | ||||
DATE: | May 1, 2017 | By: | /s/ JAMES P. LYNCH | |
James P. Lynch | ||||
Chief Financial Officer and Treasurer (Principal financial officer) |
EXHIBIT INDEX | ||
Exhibit Number | Description | |
3.1 | Amended and Restated Bylaws of SJW Group effective as of January 25, 2017. Incorporated by reference to Exhibit 3.1 to the Form 8-K filed on January 26, 2017. | |
10.1 | Form of SJW Group Restricted Stock Unit Issuance Agreement. Incorporated by reference as Exhibit 10.52 to the Form 10-K filed for the year ended December 31, 2016. | |
10.2 | Form of SJW Group Restricted Stock Unit Issuance Agreement (ROE Goal). Incorporated by reference as Exhibit 10.54 to the Form 10-K filed for the year ended December 31, 2016. | |
10.3 | Form of SJW Group Restricted Stock Unit Issuance Agreement (EPS Goal). Incorporated by reference as Exhibit 10.55 to the Form 10-K filed for the year ended December 31, 2016. | |
10.4 | Performance Goals for the Chief Executive Officer 2017 Fiscal Year Bonus. Incorporated by reference as Exhibit 10.59 to the Form 10-K filed for the year ended December 31, 2016. | |
31.1 | Certification Pursuant to Rule 13a-14(a)/15d-14(a) by Chairman, President and Chief Executive Officer. (1) | |
31.2 | Certification Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial Officer and Treasurer. (1) | |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350 by Chairman, President and Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1) | |
32.2 | Certification Pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer and Treasurer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1) | |
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. |
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 1, 2017 | /s/ W. RICHARD ROTH |
W. Richard Roth | ||
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 1, 2017 | /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/ W. RICHARD ROTH | |
W. Richard Roth | |
Chairman, President and Chief Executive Officer | |
(Principal executive officer) | |
May 1, 2017 |
(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 1, 2017 |
Document and Entity Information Document - shares |
3 Months Ended | |
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Mar. 31, 2017 |
Apr. 24, 2017 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | SJW GROUP | |
Entity Central Index Key | 0000766829 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 20,498,733 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (shares) | 36,000,000 | 36,000,000 |
Common stock, shares issued (shares) | 20,498,733 | 20,456,225 |
Common stock, shares outstanding (shares) | 20,498,733 | 20,456,225 |
General |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | General In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the results for the interim periods. The unaudited interim financial information has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”). The Notes to Consolidated Financial Statements in SJW Group’s 2016 Annual Report on Form 10-K should be read with the accompanying unaudited condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” This ASU affects entities that issue share-based payment awards to their employees. ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, classifications on the statement of cash flows and forfeiture rate calculations. SJW Group adopted this standard as of the first quarter of 2017. ASU 2016-09 requires recognition of excess tax benefits and deficiencies in the income statement, which resulted in the recognition of $500 in income tax benefit for the three months ended March 31, 2017. Prior to adoption, these amounts were recognized as additional paid-in capital. SJW Group did not have any unrecognized excess tax benefits to reclassify upon adoption of this standard. The ASU also requires excess tax benefits and deficiencies to be prospectively excluded from assumed future proceeds in the calculation of diluted shares when calculating diluted earnings per shares using the treasury stock method. The effect of this change on diluted earnings per share was immaterial. In addition, excess income tax benefits from share-based compensation are now classified as cash flows from operating activities on the consolidated statements of cash flows, prospectively. Further, ASU 2016-09 requires, on a retrospective basis, that employee taxes paid for withheld shares be classified as cash flows from financing activities rather than cash flows from operating activities. As such, the consolidated statements of cash flows for SJW Group for the periods presented have been reclassified to reflect this change. This change resulted in an increase to cash flows from operating activities and a decrease to cash flows from financing activities of $815 and $486 for the three months ended March 31, 2017 and 2016, respectively. SJW Group has elected to account for actual forfeitures as they occur upon adoption of the new guidance. Management determined that the cumulative effect adjustment required under the new guidance was immaterial and therefore SJW Group did not record an adjustment. Water sales are seasonal in nature and influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Due to the seasonal nature of the water business, the operating results for interim periods are not indicative of the operating results for a 12-month period. Revenue is generally higher in the warm, dry summer months when water usage and sales are greater, and lower in the winter months when cooler temperatures and increased rainfall curtail water usage and sales. In response to drought conditions in California, on November 13, 2015, Governor Edmund Brown, Jr. issued Executive Order B-36-15 to bolster the state’s drought response. On May 9, 2016, Governor Brown issued Executive Order B-37-16 to build on temporary statewide emergency water restrictions and to establish longer term water conservation measures, including permanent monthly water use reporting, new permanent water use standards in California communities and bans on clearly wasteful practices. On May 18, 2016, the State Water Board adopted a new approach to water conservation regulation and replaced its prior percentage reduction-based water conservation standard with a new approach designed to ensure at least a three year supply of available water based on local conditions. On June 14, 2016, the Santa Clara Valley Water District (“SCVWD”) reduced its conservation target from 30% to 20% and also increased the number of allowable outdoor watering days from two to three effective July 1, 2016 through January 31, 2017. On January 24, 2017, the SCVWD reaffirmed their call for 20% conservation and restrictions on outdoor watering for ornamental landscapes to no more than three days a week effective February 1, 2017. On April 7, 2017, Governor Brown issued Executive Order B-40-17 which lifted the drought emergency in all California counties except Fresno, Kings, Tulare, and Tuolumne while maintaining water reporting requirements and prohibitions on wasteful practices. Executive Order B-40-17 also rescinded two emergency proclamations from January and April 2014 and four drought-related executive orders issued in 2014 and 2015. Restrictions imposed by SCVWD remain in effect. Effective June 15, 2015, San Jose Water Company was authorized by the CPUC to activate Stage 3 of Tariff Rule 14.1 which is a water shortage contingency plan with mandatory water usage reductions and drought surcharges resulting from usage above customer allocations. Tariff Rule 14.1 focuses primarily on restrictions of outdoor water use which accounts for 50% of a typical customer’s water usage. On June 24, 2016, San Jose Water Company filed with the CPUC to amend its water shortage contingency plan with mandatory water usage reductions and drought surcharges to reflect the SCVWD’s call for 30% conservation. This request was approved by the CPUC with an effective date of July 1, 2016. The drought surcharges are not recorded as revenue. Rather, they are recorded in a regulatory liability account which has been authorized by the CPUC to track lost revenues from conservation. The amount recorded in the surcharge account is being used to offset future rate increases that would otherwise be necessary to recover lost revenue due to drought conservation efforts. As of March 31, 2017, San Jose Water Company has a balance of approximately $5,054 in the drought surcharge account to offset future rate increases related to drought conservation efforts. In light of the improved water supply outlook, San Jose Water Company filed Advice Letter 505 with the CPUC to suspend its allocation program and all drought surcharges provided for in Schedule 14.1, Water Shortage Contingency Plan with Staged Mandatory Reductions and Drought Surcharges. However, all of the water use restrictions provided for in the schedule remain in effect in light of the call for continued restrictions by the SCVWD. San Jose Water Company is continually working to remain in compliance with the various drought rules and regulations and is also working with local governments as well as the SCVWD to communicate consistent messages to the public about use restrictions and related matters associated with the recent drought. Effective March 31, 2014, San Jose Water Company received approval from the CPUC to institute a Mandatory Conservation Revenue Adjustment Memorandum Account. This account was subsequently replaced with a Water Conservation Memorandum Account (“WCMA”). The WCMA allows San Jose Water Company to track lost revenue associated with reduced sales due to drought related water conservation and the associated calls for water use reduction from the SCVWD. San Jose Water Company records the lost revenue captured in the WCMA regulatory accounts once the revenue recognition requirements of FASB ASU Topic 980 - “Regulated Operations,” subtopic 605-25 are met. For further discussion, please see Note 8 and Note 9. Basic earnings per share is calculated using income available to common stockholders, divided by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with deferred restricted common stock awards under SJW Group’s Long-Term Incentive Plan (as amended, the “Incentive Plan”) and shares potentially issuable under the 2014 Employee Stock Purchase Plan (“ESPP”). For the three months ended March 31, 2017 and 2016, 2,006 and 1,617 anti-dilutive restricted common stock units were excluded from the dilutive earnings per share calculation, respectively. A portion of depreciation expense is allocated to administrative and general expense. For the three months ended March 31, 2017 and 2016, the amounts allocated to administrative and general expense were $527 and $414, respectively. |
Equity Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY PLANS | Equity Plans SJW Group accounts for share-based compensation based on the grant date fair value of the awards issued to employees in accordance with FASB ASC Topic 718 - “Compensation - Stock Compensation,” which requires the measurement and recognition of compensation expense based on the estimated fair value for all share-based payment awards. See Note 1 for the effect of the SJW Group’s adoption of ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting” in the first quarter of 2017. The Incentive Plan allows SJW Group to provide employees, non-employee board members or the board of directors of any parent or subsidiary, consultants, and other independent advisors who provide services to the company or any parent or subsidiary the opportunity to acquire an equity interest in SJW Group. The types of awards included in the Incentive Plan are restricted stock awards, restricted stock units, performance shares, or other share-based awards. As of March 31, 2017, the remaining number of shares available under the Incentive Plan was 966,361, and an additional 212,916 shares were issuable under outstanding restricted stock units and deferred restricted stock units. In addition, shares are issued to employees under the company’s ESPP. Stock compensation costs charged to income are recognized on a straight-line basis over the requisite service period. A summary of compensation costs charged to income, proceeds from the exercise of stock options and similar instruments, and the tax benefit realized from stock options and similar instruments exercised, that were recorded to additional paid-in capital and common stock, by award type, are presented below for the three months ended March 31, 2017 and 2016.
Stock, Restricted Stock and Deferred Restricted Stock On January 3, 2017, service based restricted stock units covering an aggregate of 8,564 shares of common stock of SJW Group were granted to certain officers of SJW Group and its subsidiaries. The units vest in three equal successive installments upon completion of each year of service with no dividend equivalent rights. Share-based compensation expense of $52.59 per unit which was based on the award grant date fair value is being recognized over the service period beginning in 2017. On January 24, 2017, certain officers of SJW Group were granted performance-based restricted stock units covering an aggregate target number of SJW Group’s shares of common stock equal to 10,744 that will vest based on the actual attainment of specified performance goals measured for the 2017 calendar year and continued service through December 31, 2017. Of such performance-based restricted stock units, units covering 6,639 shares of common stock were granted to a key officer which will only vest on the actual attainment of a specified performance goal, the number of shares issuable under this award is either 0% or 100%. The number of shares issuable under the remaining units, ranging between 0% to 150% of the target number of shares, is based on the level of actual attainment of specified performance goals. The units do not include dividend equivalent rights. The awards have no market conditions and the share-based compensation expense of $50.24 per unit which was based on the award grant date fair value is being recognized assuming the performance goals will be attained. As of March 31, 2017, management believes that the performance goals will be met. On January 24, 2017, certain officers of SJW Group were granted performance-based restricted stock units covering an aggregate target number of SJW Group’s shares of common stock equal to 2,737 that will vest based on the actual attainment of specified performance goals for the 2019 calendar year and continued service through December 31, 2019. The number of shares issuable under the awards, ranging between 0% to 150% of the target number of shares, is based on the level of actual attainment of specified performance goals. The units do not include dividend equivalent rights. The awards have no market conditions and the share-based compensation expense of $48.53 per unit which is based on the award grant date fair value is being recognized assuming the performance goals will be attained. As of March 31, 2017, management believes that the performance goals will be met. As of March 31, 2017, the total unrecognized compensation costs related to restricted and deferred restricted stock plans was $1,642. This cost is expected to be recognized over a remaining weighted average period of 0.97 years. Employee Stock Purchase Plan The ESPP allows eligible employees to purchase shares of SJW Group’s common stock at 85% of the fair value of shares on the purchase date. Under the ESPP, employees can designate up to a maximum of 10% of their base compensation for the purchase of shares of common stock, subject to certain restrictions. A total of 400,000 shares of common stock have been reserved for issuance under the ESPP. After considering estimated employee terminations or withdrawals from the plan before the purchase date, SJW Group’s recorded expenses were $63 for the three months ended March 31, 2017 and $40 for the three months ended March 31, 2016 related to the ESPP. The total unrecognized compensation costs related to the semi-annual offering period that ends July 31, 2017 for the ESPP is approximately $93. This cost is expected to be recognized during the second and third quarters of 2017. |
Real Estate Investments |
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Real Estate Investments, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REAL ESTATE INVESTMENTS | Real Estate Investments The major components of real estate investments as of March 31, 2017 and December 31, 2016 are as follows:
Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, ranging from 7 to 39 years. On April 6, 2017, 444 West Santa Clara Street, L.P. sold all of its interests in the commercial building and land the partnership owns and operates for $11,000. 444 West Santa Clara Street, L.P. will record a gain, net of tax and expenses, on the sale of real estate investments of approximately $6,200, including a hold back of $750 for remediation of a creek bank adjacent to the property, in the second quarter 2017. SJW Land Company holds a 70% limited interest in 444 West Santa Clara Street, L.P. In addition to the partnership property, SJW Land Company sold undeveloped land located in San Jose, California for $1,350. SJW Group will record a gain, net of tax and expenses, on the sale of real estate investments of approximately $586 in the second quarter 2017. The company has reclassified the partnership property and the undeveloped land property as long-lived assets held-for-sale in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2017. The partnership property and the undeveloped land property is included in SJW Group’s “Real Estate Services” reportable segment as disclosed in Note 5. Prior to the reclassification of the properties as held-for-sale, depreciation expense on the properties was $26 for the three months ended March 31, 2017. The following represents the major components of the 444 West Santa Clara Street, L.P. property and the undeveloped land property recorded in long-lived assets held-for-sale on SJW Group’s condensed consolidated balance sheets as of March 31, 2017:
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Defined Benefit Plan |
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DEFINED BENEFIT PLAN | Defined Benefit Plan San Jose Water Company sponsors a noncontributory defined benefit pension plan for its eligible employees. Employees hired before March 31, 2008 are entitled to receive retirement benefits using a formula based on the employee’s three highest years of compensation (whether or not consecutive). For employees hired on or after March 31, 2008, benefits are determined using a cash balance formula based on compensation credits and interest credits for each employee. Officers hired before March 31, 2008 are eligible to receive additional retirement benefits under the Executive Supplemental Retirement Plan, and officers hired on or after March 31, 2008 are eligible to receive additional retirement benefits under the Cash Balance Executive Supplemental Retirement Plan. Both plans are non-qualified plans in which only officers and other designated members of management may participate. San Jose Water Company also provides health care and life insurance benefits for retired employees under the San Jose Water Company Social Welfare Plan. The components of net periodic benefit costs for San Jose Water Company’s pension plan, its Executive Supplemental Retirement Plan, Cash Balance Executive Supplemental Retirement Plan and Social Welfare Plan for the three months ended March 31, 2017 and 2016 are as follows:
The following tables summarize the fair values of plan assets by major categories as of March 31, 2017 and December 31, 2016:
The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in a diversified array of fixed income securities and cash to provide preservation of capital plus generation of income.
The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in a diversified array of fixed income securities and cash to provide preservation of capital plus generation of income.
In 2017, San Jose Water Company expects to make required and discretionary cash contributions of up to $7,500 to the pension plans and Social Welfare Plan. There have been no contributions to the pension plans and Social Welfare Plan for the three months ended March 31, 2017. |
Segment and Non-Tariffed Business Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND NONREGULATED BUSINESS REPORTING | Segment and Non-Tariffed Business Reporting SJW Group is a holding company with four subsidiaries: (i) San Jose Water Company, a water utility which operates both regulated and non-tariffed businesses, (ii) SJWTX, Inc. which is doing business as Canyon Lake Water Service Company (“CLWSC”), a regulated water utility located in Canyon Lake, Texas, and its consolidated non-tariffed variable interest entity, Acequia Water Supply Corporation, (iii) SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P., which operated a commercial building rental (See Note 3), (iv) Texas Water Alliance Limited, a non-tariffed water utility operation which has acquired permits and leases necessary to develop a water supply project in Texas. In accordance with FASB ASC Topic 280 – “Segment Reporting,” SJW Group has determined that it has two reportable business segments. The first segment is that of providing water utility and utility-related services to its customers through SJW Group’s subsidiaries, San Jose Water Company, CLWSC, and Texas Water Alliance Limited, together referred to as “Water Utility Services.” The second segment is property management and investment activity conducted by SJW Land Company, referred to as “Real Estate Services.” SJW Group’s reportable segments have been determined based on information used by the chief operating decision maker. SJW Group’s chief operating decision maker includes the Chairman, President and Chief Executive Officer, and his senior staff. The senior staff reviews financial information presented on a consolidated basis that is accompanied by disaggregated information about operating revenue, net income and total assets, by subsidiaries. The following tables set forth information relating to SJW Group’s reportable segments and distribution of regulated and non-tariffed business activities within the reportable segments. Certain allocated assets, revenue and expenses have been included in the reportable segment amounts. Other business activity of SJW Group not included in the reportable segments is included in the “All Other” category.
* The “All Other” category includes the accounts of SJW Group on a stand-alone basis. |
Long-Term Liabilities and Bank Borrowings |
3 Months Ended |
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Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Liabilities and Bank Borrowings | Long-Term Liabilities and Bank Borrowings SJW Group’s contractual obligations and commitments include senior notes, mortgages and other obligations. San Jose Water Company, a subsidiary of SJW Group, has received advance deposit payments from its customers on certain construction projects. Refunds of the advance deposit payments constitute an obligation of San Jose Water Company solely. |
Fair Value Measurement |
3 Months Ended |
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Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | Fair Value Measurement The following instruments are not measured at fair value on the SJW Group’s condensed consolidated balance sheets as of March 31, 2017, but require disclosure of their fair values: cash and cash equivalents, accounts receivable and accounts payable. The estimated fair value of such instruments as of March 31, 2017 approximates their carrying value as reported on the condensed consolidated balance sheets. The fair value of such financial instruments are determined using the income approach based on the present value of estimated future cash flows. There have been no changes in valuation technique during the three months ended March 31, 2017. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1. The fair value of pension plan assets is discussed in Note 4. The fair value of SJW Group’s long-term debt was approximately $506,455 and $502,446 as of March 31, 2017 and December 31, 2016, respectively, and was determined using a discounted cash flow analysis, based on the current rates for similar financial instruments of the same duration and creditworthiness of the company. The book value of the long-term debt was $433,515 and $433,460 as of March 31, 2017 and December 31, 2016, respectively. The fair value of long-term debt would be categorized as Level 2 in the fair value hierarchy. As of March 31, 2017 and December 31, 2016, the fair value of the company’s investment in California Water Service Group was $3,585 and $3,390, respectively, and would be categorized as Level 1 of the fair value hierarchy. |
Regulatory Rate Filings |
3 Months Ended |
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Mar. 31, 2017 | |
Regulated Operations [Abstract] | |
Regulatory Rate Filings | Regulatory Rate Filings On November 15, 2016, San Jose Water Company filed Advice Letter No. 498 with the CPUC requesting a revenue increase of $13,205, or 3.8%, for the 2017 escalation year. This request was approved and the new rates became effective on January 1, 2017. On January 6, 2017, San Jose Water Company filed Advice Letter No. 501 with the CPUC requesting authorization to implement a sales reconciliation mechanism to better conform with water forecasts authorized in the last general rate case to recorded consumption for the period of October 2015 through September 2016. The CPUC has ordered all Class A and B water utilities that have a five percent or greater divergence between authorized and actual sales during declared drought years to request a sales reconciliation mechanism to better conform with water forecasts authorized in the last general rate case to recorded consumption. The Company expects to receive a decision on the filing in the second quarter of 2017. San Jose Water Company filed Advice Letter No. 505 on January 27, 2017 with the CPUC to suspend its allocation program and all drought surcharges previously authorized in Schedule 14.1, Water Shortage Contingency Plan with Staged Mandatory Reductions and Drought Surcharges. The allocations and drought surcharges were suspended effective February 1, 2017. However, Schedule 14.1, and all of the water use restrictions defined therein, will remain in effect in light of the call for continued conservation by the SCVWD. The allocations and drought surcharges were suspended effective February 1, 2017. On February 17, 2017, San Jose Water Company filed Advice Letter No. 506 with the CPUC requesting authorization to increase its revenue requirement by $5,339 or 1.5% via a rate base offset for calendar year 2016 plant additions related to the Montevina Water Treatment Plant upgrade project. This request was approved and the new rates became effective on March 20, 2017. As required by the CPUC, on April 3, 2017 San Jose Water Company filed an application with the CPUC requesting authority to increase its authorized Cost of Capital for the period from January 1, 2018 through December 31, 2020. If approved by the CPUC, San Jose Water Company’s annual revenues would increase by approximately $7,550 or about 2.1% in 2018. In compliance with the most recent order in Public Utilities Commission of Texas (“PUCT”) Docket No. 42858 effective January 1, 2017, CLWSC was authorized a rate increase of 2.3%. Subsequently, the annual adjustment of the water cost pass-through gallonage charge resulted in a decrease in the gallonage charge from $1.34 to $1.15 effective on February 1, 2017. |
Balancing and Memorandum Account Recovery Procedures |
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Regulated Operations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCING AND MEMORANDUM ACCOUNT RECOVERY PROCEDURES | Balancing and Memorandum Account Recovery Procedures San Jose Water Company established balancing accounts for the purpose of tracking the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. San Jose Water Company also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, WCMA, drought surcharges, Monterey Water Revenue Adjustment Mechanism, and other approved activities or as directed by the CPUC. Balancing and memorandum accounts are recognized by San Jose Water Company when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process. In addition, in the case of special revenue programs such as the WCMA, San Jose Water Company follows the requirements of ASC Topic 980-605-25—“Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded. A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period. This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges. In assessing the probability criteria for balancing and memorandum accounts between general rate cases, San Jose Water Company considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria. Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable. When such evidence provides sufficient support, the balances are recorded in SJW Group’s financial statements. Based on ASC Topic 980-605-25, San Jose Water Company recognized regulatory assets of $2,060 due to lost revenues accumulated in the 2017 WCMA account for three months ended March 31, 2017. These regulatory assets were offset by a regulatory liability in the amount of $2,060 for three months ended March 31, 2017 created by Tariff Rule 14.1 drought surcharges collected as allowed for in Advice Letter 473A which was approved by the CPUC and became effective June 15, 2015. These amounts have been recorded in the 2017 WCMA row shown in the table below. In the first quarter of 2017, San Jose Water Company updated the allocation of new customer accounts between residential and business customers to align closer to the current residential and business statistics for the year ended December 31, 2016. The reallocation resulted in a recalculation of the 2016 WCMA account and a recognition of additional regulatory assets of $1,371 for the three months ended March 31, 2017. Based on quantitative as well as qualitative factors, the Company determined that this amount was not material to quarterly or annual net income and earnings per share in 2016, quarterly net income and earnings per share in the first fiscal quarter of 2017, and is not expected to be material to 2017 annual financial results. As such, the Company corrected the error in the current period. In addition, recorded interest related to the 2016 WCMA balance as of March 31, 2017 was $36. The amount recorded as a regulatory asset was offset by a regulatory liability in the amount of $1,407 for three months ended March 31, 2017 created by Tariff Rule 14.1 drought surcharges. These amounts have been recorded in the 2016 WCMA row shown in the table below.
* As of March 31, 2017, the reserve balance for the 2014 WCMA and 2015 WCMA was $978 and $2,183, respectively, which has been netted from the balances above. As of March 31, 2016, the reserve balance for the 2014 WCMA and 2015 WCMA was $1,278 and $2,343, respectively, which has been netted from the balances above. As of March 31, 2017, the total balance in San Jose Water Company’s balancing and memorandum accounts combined, including interest, that has not been recorded into the financial statements was a net under-collection of $3,361. All balancing accounts and memorandum-type accounts not included for recovery or refund in the current general rate case will be reviewed by the CPUC in San Jose Water Company’s next general rate case or at the time an individual account reaches a threshold of 2% of authorized revenue, whichever occurs first. |
Regulatory Assets and Liabilities |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities Regulatory assets and liabilities are comprised of the following as of March 31, 2017 and December 31, 2016:
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Texas Water Alliance Limited |
3 Months Ended |
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Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Texas Water Alliance Limited | Texas Water Alliance Limited On February 22, 2016, SJW Group entered into a purchase and sale agreement with the Guadalupe-Blanco River Authority (“GBRA”), pursuant to which SJW Group agreed to sell all of its equity interests in its wholly owned subsidiary Texas Water Alliance Limited to GBRA for $31,000 in cash. Pursuant to the purchase and sale agreement, (i) upon closing of the transaction, GBRA will hold back $3,000 in the payment of the total purchase price and (ii) such holdback amount, subject to reductions under certain circumstances, shall be paid to SJW Group four years following the closing. The purchase and sale agreement is subject to specified closing conditions, including without limitation the completion of a financing by GBRA to fund the purchase price. There is no assurance that all of the closing conditions will be satisfied in a timely manner, or at all. |
Legal Proceedings |
3 Months Ended |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | Legal Proceedings SJW Group is subject to ordinary routine litigation incidental to its business. There are no pending legal proceedings to which SJW Group or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a material effect on SJW Group’s business, financial position, results of operations or cash flows. |
General (Policies) |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting, Policy | The unaudited interim financial information has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”). The Notes to Consolidated Financial Statements in SJW Group’s 2016 Annual Report on Form 10-K should be read with the accompanying unaudited condensed consolidated financial statements. |
New Accounting Pronouncements, Policy | In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” This ASU affects entities that issue share-based payment awards to their employees. ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, classifications on the statement of cash flows and forfeiture rate calculations. SJW Group adopted this standard as of the first quarter of 2017. ASU 2016-09 requires recognition of excess tax benefits and deficiencies in the income statement, which resulted in the recognition of $500 in income tax benefit for the three months ended March 31, 2017. Prior to adoption, these amounts were recognized as additional paid-in capital. SJW Group did not have any unrecognized excess tax benefits to reclassify upon adoption of this standard. The ASU also requires excess tax benefits and deficiencies to be prospectively excluded from assumed future proceeds in the calculation of diluted shares when calculating diluted earnings per shares using the treasury stock method. The effect of this change on diluted earnings per share was immaterial. In addition, excess income tax benefits from share-based compensation are now classified as cash flows from operating activities on the consolidated statements of cash flows, prospectively. Further, ASU 2016-09 requires, on a retrospective basis, that employee taxes paid for withheld shares be classified as cash flows from financing activities rather than cash flows from operating activities. As such, the consolidated statements of cash flows for SJW Group for the periods presented have been reclassified to reflect this change. This change resulted in an increase to cash flows from operating activities and a decrease to cash flows from financing activities of $815 and $486 for the three months ended March 31, 2017 and 2016, respectively. SJW Group has elected to account for actual forfeitures as they occur upon adoption of the new guidance. Management determined that the cumulative effect adjustment required under the new guidance was immaterial and therefore SJW Group did not record an adjustment. |
Earnings Per Share, Policy | Basic earnings per share is calculated using income available to common stockholders, divided by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with deferred restricted common stock awards under SJW Group’s Long-Term Incentive Plan (as amended, the “Incentive Plan”) and shares potentially issuable under the 2014 Employee Stock Purchase Plan (“ESPP”). |
Equity Plans (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | A summary of compensation costs charged to income, proceeds from the exercise of stock options and similar instruments, and the tax benefit realized from stock options and similar instruments exercised, that were recorded to additional paid-in capital and common stock, by award type, are presented below for the three months ended March 31, 2017 and 2016.
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Real Estate Investments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investments, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Investments | The major components of real estate investments as of March 31, 2017 and December 31, 2016 are as follows:
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Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | The following represents the major components of the 444 West Santa Clara Street, L.P. property and the undeveloped land property recorded in long-lived assets held-for-sale on SJW Group’s condensed consolidated balance sheets as of March 31, 2017:
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Defined Benfit Plan (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic benefit costs for San Jose Water Company’s pension plan, its Executive Supplemental Retirement Plan, Cash Balance Executive Supplemental Retirement Plan and Social Welfare Plan for the three months ended March 31, 2017 and 2016 are as follows:
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Schedule of Allocation of Plan Assets | The following tables summarize the fair values of plan assets by major categories as of March 31, 2017 and December 31, 2016:
The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in a diversified array of fixed income securities and cash to provide preservation of capital plus generation of income.
The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in a diversified array of fixed income securities and cash to provide preservation of capital plus generation of income.
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Segment and Non-Tariffed Business Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables set forth information relating to SJW Group’s reportable segments and distribution of regulated and non-tariffed business activities within the reportable segments. Certain allocated assets, revenue and expenses have been included in the reportable segment amounts. Other business activity of SJW Group not included in the reportable segments is included in the “All Other” category.
* The “All Other” category includes the accounts of SJW Group on a stand-alone basis. |
Balancing and Memorandum Account Recovery Procedures (Tables) |
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Regulated Operations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Public Utilities General Disclosures |
* As of March 31, 2017, the reserve balance for the 2014 WCMA and 2015 WCMA was $978 and $2,183, respectively, which has been netted from the balances above. |
Regulatory Assets and Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Regulatory Assets | Regulatory assets and liabilities are comprised of the following as of March 31, 2017 and December 31, 2016:
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General - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 14, 2016 |
Nov. 24, 2015 |
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Regulatory Assets [Line Items] | ||||||
Increase to cash flows from operating activities | $ 28,242 | $ 32,573 | ||||
Decrease to cash flows from financing activities | 15,541 | (5,366) | ||||
Water reduction target goal (percent) | 20.00% | 30.00% | ||||
Balancing Account, Net | 19,989 | 33,294 | $ 21,552 | $ 36,296 | ||
Drought surcharges | ||||||
Regulatory Assets [Line Items] | ||||||
Balancing Account, Net | (5,054) | (512) | $ (7,688) | $ (359) | ||
Accounting Standards Update 2016-09, Statutory Tax Withholding Component | ||||||
Regulatory Assets [Line Items] | ||||||
Excess tax benefit | 500 | |||||
Increase to cash flows from operating activities | 815 | 486 | ||||
Decrease to cash flows from financing activities | $ 815 | $ 486 |
General - Earnings Per Share (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Restricted Stock and Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted common stock units excluded from computation of earnings per share (shares) | 2,006 | 1,617 |
General - Depreciation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
General and Administrative Expense | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 527 | $ 414 |
Real Estate Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Schedule of Investments [Line Items] | ||
Land | $ 13,262 | $ 15,218 |
Buildings and improvements | 42,908 | 46,826 |
Intangibles | 0 | 149 |
Subtotal | 56,170 | 62,193 |
Less accumulated depreciation and amortization | 10,246 | 11,734 |
Total | $ 45,924 | $ 50,459 |
Minimum | ||
Schedule of Investments [Line Items] | ||
Estimated useful life | 7 years | |
Maximum | ||
Schedule of Investments [Line Items] | ||
Estimated useful life | 39 years |
Segment and Non-Tariffed Business Reporting (Details) $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2017
USD ($)
subsidiaries
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
||||
Segment Reporting Information [Line Items] | ||||||
Number of Subsidiaries | subsidiaries | 4 | |||||
Operating revenue | $ 69,045 | $ 61,112 | ||||
Operating expense | 58,212 | 50,531 | ||||
Operating income (loss) | 10,833 | 10,581 | ||||
Net income (loss) | 3,671 | 3,378 | ||||
Depreciation and amortization | 12,119 | 11,183 | ||||
Senior note, mortgage and other interest expense | 6,057 | 5,435 | ||||
Income tax expense (benefit) in net income | 1,568 | 2,122 | ||||
Assets | 1,435,777 | 1,355,576 | $ 1,443,376 | |||
Water Utility Services | Regulated | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating revenue | 66,218 | 58,141 | ||||
Operating expense | 55,621 | 48,121 | ||||
Operating income (loss) | 10,597 | 10,020 | ||||
Net income (loss) | 3,949 | 3,571 | ||||
Depreciation and amortization | 11,660 | 10,673 | ||||
Senior note, mortgage and other interest expense | 5,425 | 4,626 | ||||
Income tax expense (benefit) in net income | 1,793 | 2,272 | ||||
Assets | 1,360,599 | 1,265,848 | ||||
Water Utility Services | Non-tariffed | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating revenue | 1,264 | 1,204 | ||||
Operating expense | 831 | 882 | ||||
Operating income (loss) | 433 | 322 | ||||
Net income (loss) | 172 | 105 | ||||
Depreciation and amortization | 136 | 116 | ||||
Senior note, mortgage and other interest expense | 0 | 0 | ||||
Income tax expense (benefit) in net income | 137 | 106 | ||||
Assets | 18,247 | 18,566 | ||||
Real Estate Services | Non-tariffed | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating revenue | 1,563 | 1,767 | ||||
Operating expense | 948 | 1,032 | ||||
Operating income (loss) | 615 | 735 | ||||
Net income (loss) | 360 | 253 | ||||
Depreciation and amortization | 323 | 394 | ||||
Senior note, mortgage and other interest expense | 65 | 250 | ||||
Income tax expense (benefit) in net income | 128 | 141 | ||||
Assets | 54,269 | 65,536 | ||||
All Other | Non-tariffed | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating revenue | [1] | 0 | 0 | |||
Operating expense | [1] | 812 | 496 | |||
Operating income (loss) | [1] | (812) | (496) | |||
Net income (loss) | [1] | (810) | (551) | |||
Depreciation and amortization | [1] | 0 | 0 | |||
Senior note, mortgage and other interest expense | [1] | 567 | 559 | |||
Income tax expense (benefit) in net income | [1] | (490) | (397) | |||
Assets | [1] | 2,662 | 5,626 | |||
SJW Corp. | Regulated | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating revenue | 66,218 | 58,141 | ||||
Operating expense | 55,621 | 48,121 | ||||
Operating income (loss) | 10,597 | 10,020 | ||||
Net income (loss) | 3,949 | 3,571 | ||||
Depreciation and amortization | 11,660 | 10,673 | ||||
Senior note, mortgage and other interest expense | 5,425 | 4,626 | ||||
Income tax expense (benefit) in net income | 1,793 | 2,272 | ||||
Assets | 1,360,599 | 1,265,848 | ||||
SJW Corp. | Non-tariffed | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating revenue | 2,827 | 2,971 | ||||
Operating expense | 2,591 | 2,410 | ||||
Operating income (loss) | 236 | 561 | ||||
Net income (loss) | (278) | (193) | ||||
Depreciation and amortization | 459 | 510 | ||||
Senior note, mortgage and other interest expense | 632 | 809 | ||||
Income tax expense (benefit) in net income | (225) | (150) | ||||
Assets | $ 75,178 | $ 89,728 | ||||
|
Fair Value Measurement (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 433,515 | $ 433,460 |
Significant Observable Inputs | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 506,455 | 502,446 |
Quoted Prices in Active Markets for Identical Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investment in California Water Service Group | $ 3,585 | $ 3,390 |
Regulatory Rate Filings (Details) $ in Thousands |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Apr. 03, 2017
USD ($)
|
Feb. 17, 2017
USD ($)
|
Feb. 01, 2017
$ / gal
|
Jan. 01, 2017 |
Nov. 15, 2016
USD ($)
|
Dec. 31, 2016
$ / gal
|
|
Public Utilities, General Disclosures [Line Items] | ||||||
Public Utilities, Requested Rate Increase (Decrease), Amount | $ 5,339 | $ 13,205 | ||||
Public Utilities, Requested Rate Increase (Decrease), Percentage | 1.50% | 3.80% | ||||
SJWTX, Inc. | ||||||
Public Utilities, General Disclosures [Line Items] | ||||||
Public Utilities, Requested Rate Increase (Decrease), Percentage | 2.30% | |||||
Authorized Regulatory Surcharge, Per Gallon | $ / gal | 1.15 | 1.34 | ||||
Subsequent event | ||||||
Public Utilities, General Disclosures [Line Items] | ||||||
Public Utilities, Requested Rate Increase (Decrease), Amount | $ 7,550 | |||||
Public Utilities, Requested Rate Increase (Decrease), Percentage | 2.10% |
Balancing and Memorandum Account Recovery Procedures (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Memorandum Accounts [Roll Forward] | ||
Beginning Balance | $ 4,357 | $ 8,910 |
Revenue Increase(Reduction) | 4,179 | 3,511 |
Refunds (Collections) | (991) | (518) |
Surcharge Offset | (3,467) | (3,014) |
Ending Balance | 4,078 | 8,889 |
Balancing Accounts [Roll Forward] | ||
Beginning Balance | 21,552 | 36,296 |
Revenue Increase(Reduction) | 156 | (163) |
Refunds (Collections) | (5,262) | (5,853) |
Surcharge Offset | 3,543 | 3,014 |
Ending Balance | 19,989 | 33,294 |
Balancing and Memorandum Account [Roll Forward] | ||
Beginning Balance | 25,909 | 45,206 |
Revenue Increase (Reduction) | 4,335 | 3,348 |
Refunds (Collections) | (6,253) | (6,371) |
Surcharge Offset | 76 | 0 |
Ending Balance | 24,067 | 42,183 |
Net under-collected balancing and memorandum accounts | 3,361 | |
2014 WCMA | ||
Memorandum Accounts [Roll Forward] | ||
Beginning Balance | 0 | 2,944 |
Revenue Increase(Reduction) | 112 | 0 |
Refunds (Collections) | (112) | (517) |
Surcharge Offset | 0 | 0 |
Ending Balance | 0 | 2,427 |
Balancing and Memorandum Account [Roll Forward] | ||
WCMA Reserve | 978 | 1,278 |
2015 WCMA | ||
Memorandum Accounts [Roll Forward] | ||
Beginning Balance | 1,589 | 5,372 |
Revenue Increase(Reduction) | (71) | (20) |
Refunds (Collections) | (1,120) | 0 |
Surcharge Offset | 0 | 0 |
Ending Balance | 398 | 5,352 |
Balancing and Memorandum Account [Roll Forward] | ||
WCMA Reserve | 2,183 | 2,343 |
2016 WCMA | ||
Memorandum Accounts [Roll Forward] | ||
Beginning Balance | 0 | 0 |
Revenue Increase(Reduction) | 1,407 | 3,014 |
Refunds (Collections) | 0 | 0 |
Surcharge Offset | (1,407) | (3,014) |
Ending Balance | 0 | 0 |
Balancing and Memorandum Account [Roll Forward] | ||
Interest | 36 | |
2016 WCMA Asset | ||
Memorandum Accounts [Roll Forward] | ||
Revenue Increase(Reduction) | 1,371 | |
2017 WCMA | ||
Memorandum Accounts [Roll Forward] | ||
Beginning Balance | 0 | 0 |
Revenue Increase(Reduction) | 2,060 | 0 |
Refunds (Collections) | 0 | 0 |
Surcharge Offset | (2,060) | 0 |
Ending Balance | 0 | 0 |
Water supply costs | ||
Balancing Accounts [Roll Forward] | ||
Beginning Balance | 5,190 | 2,771 |
Revenue Increase(Reduction) | 197 | (313) |
Refunds (Collections) | 297 | (22) |
Surcharge Offset | 0 | 0 |
Ending Balance | 5,684 | 2,436 |
Drought surcharges | ||
Balancing Accounts [Roll Forward] | ||
Beginning Balance | (7,688) | (359) |
Revenue Increase(Reduction) | 0 | 0 |
Refunds (Collections) | (833) | (3,167) |
Surcharge Offset | 3,467 | 3,014 |
Ending Balance | (5,054) | (512) |
Pension | ||
Balancing Accounts [Roll Forward] | ||
Beginning Balance | (2,009) | (552) |
Revenue Increase(Reduction) | 173 | 280 |
Refunds (Collections) | (703) | (155) |
Surcharge Offset | 0 | 0 |
Ending Balance | (2,539) | (427) |
2012 General Rate Case true-up | ||
Balancing Accounts [Roll Forward] | ||
Beginning Balance | 20,682 | 33,070 |
Revenue Increase(Reduction) | 0 | 0 |
Refunds (Collections) | (2,258) | (2,498) |
Surcharge Offset | 0 | 0 |
Ending Balance | 18,424 | 30,572 |
2015 General Rate Case true-up | ||
Balancing Accounts [Roll Forward] | ||
Beginning Balance | 5,528 | 0 |
Revenue Increase(Reduction) | 0 | 0 |
Refunds (Collections) | (1,431) | 0 |
Surcharge Offset | 0 | 0 |
Ending Balance | 4,097 | 0 |
All others | ||
Memorandum Accounts [Roll Forward] | ||
Beginning Balance | 2,768 | 594 |
Revenue Increase(Reduction) | 671 | 517 |
Refunds (Collections) | 241 | (1) |
Surcharge Offset | 0 | 0 |
Ending Balance | 3,680 | 1,110 |
Balancing Accounts [Roll Forward] | ||
Beginning Balance | (151) | 1,366 |
Revenue Increase(Reduction) | (214) | (130) |
Refunds (Collections) | (334) | (11) |
Surcharge Offset | 76 | 0 |
Ending Balance | $ (623) | $ 1,225 |
Regulatory Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Regulatory Assets [Line Items] | ||
Net Regulatory Assets | $ 149,856 | $ 151,773 |
Less: current regulatory asset, net | 10,469 | 16,064 |
Net regulatory assets, less current portion | 139,387 | 135,709 |
Income tax temporary differences, net | ||
Regulatory Assets [Line Items] | ||
Regulatory assets: | 10,139 | 10,139 |
Postretirement pensions and other medical benefits | ||
Regulatory Assets [Line Items] | ||
Regulatory assets: | 109,795 | 109,795 |
Balancing and memorandum accounts, net | ||
Regulatory Assets [Line Items] | ||
Regulatory assets: | 24,067 | 25,909 |
Other, net | ||
Regulatory Assets [Line Items] | ||
Regulatory assets: | $ 5,855 | $ 5,930 |
Texas Water Alliance Limited (Details) $ in Thousands |
Feb. 22, 2016
USD ($)
|
---|---|
Equity Method Investments and Joint Ventures [Abstract] | |
Proceeds from Sales of Business, Affiliate and Productive Assets | $ 31,000 |
Purchase and Sales Agreement, Holdback Amount | $ 3,000 |
Purchase and Sales Agreement, Holdback Term | 4 years |
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