Segment and Non-Tariffed Businesses Reporting

12 Months Ended

Dec. 31, 2019

Segment and Non-Tariffed Businesses Reporting

SJW Group is a holding company with four subsidiaries: (i) SJWC, a water utility operation with both regulated and non-tariffed businesses, (ii) SJWTX, Inc. which is doing business as 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 commercial building rentals, and (iv) as of October 9, 2019, SJWNE LLC a holding company for CTWS and its subsidiaries, Connecticut Water, Maine Water, HVWC, Avon Water, NEWUS and Chester Realty, Inc. (see discussion on the merger at Note 12). In November 2017, SJW Group sold its equity interest in its wholly-owned subsidiary TWA, a non-tariffed water utility operation that was undertaking activities 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, SJWC, Connecticut Water, CLWSC, Maine Water, HVWC, Avon Water, NEWUS and, up to the date of the sale, TWA, together referred to as “Water Utility Services.” The second segment is property management and investment activity conducted by SJW Land Company and Chester Realty, Inc., 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 executive staff. The executive staff reviews financial information presented on a consolidated basis that is accompanied by disaggregated information about operating revenue, net income and total assets, by subsidiary.

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.



	For the year ended December 31, 2019
	Water Utility Services			Real Estate Services	All Other (1)		SJW Group
	Regulated (2)		Non- tariffed	Non- tariffed	Non- tariffed		Regulated	Non- tariffed		Total
Operating revenue	$	407,116	7,969	5,397	—		407,116	13,366		420,482
Operating expense	329,520		5,443	3,751	24,289		329,520	33,483		363,003
Operating income (loss)	77,596		2,526	1,646	(24,289	)	77,596	(20,117	)	57,479
Net income (loss)	42,691		2,019	1,623	(22,930	)	42,691	(19,288	)	23,403
Depreciation and amortization	63,775		420	1,196	201		63,775	1,817		65,592
Senior note and other interest expense	25,073		—	—	6,723		25,073	6,723		31,796
Income tax expense (benefit) in net income	8,382		708	486	(1,122	)	8,382	72		8,454
Assets	3,016,846		5,507	46,778	63,339		3,016,846	115,624		3,132,470



	For the 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 the 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 (loss)	47,736		1,137	6,193	4,138		47,736	11,468	59,204
Depreciation and amortization	46,500		572	1,220	—		46,500	1,792	48,292
Senior note and other interest expense	20,670		—	60	2,199		20,670	2,259	22,929
Income tax expense (benefit) 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

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(1) The “All Other” category for the year ended December 31, 2019, includes the accounts of SJW Group, SJWNE, LLC and CTWS, Inc. on a stand-alone basis. For the years ended December 31, 2018 and 2017, the “All Other” category includes the accounts of SJW Group on a stand-alone basis.

(2) As of December 31, 2019, the Company has performed a preliminary allocation of goodwill associated with the acquisition of CTWS to two reporting units, Connecticut and Maine, which are both aggregated within the Regulated Water Utility Services reportable segment.