SJW GROUP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - SJW GROUP	sjw-8kx3qtr2012.htm

EXHIBIT 99.1

SJW CORP. ANNOUNCES

THIRD QUARTER FINANCIAL RESULTS

Board Declares Quarterly Dividend on Common Stock

SAN JOSE, CA, October 24, 2012 – SJW Corp. (NYSE: SJW) today reported financial results for the third quarter ended September 30, 2012. Operating revenue was $82.4 million in the quarter compared to $73.9 million in 2011. The $8.5 million increase in revenue reflects cumulative rate increases of $6.3 million, $1.8 million in higher customer water usage and $406,000 from new customers compared to a year ago.

Net income was $10.1 million and diluted earnings per common share were $0.53, compared to $8.2 million and $0.44 per share, respectively, in the third quarter of 2011.

Water production costs for the quarter ended September 30, 2012 were $36.6 million compared to $32.0 million in 2011, an increase of $4.6 million. The increase in water production costs is primarily attributable to $2.6 million in higher per unit costs for purchased water and groundwater extraction charges, $1.7 million in higher costs due to a decrease in available surface water supply and $328,000 in higher customer water usage.

Operating expenses, excluding water production costs, for the third quarter were $24.9 million compared to $23.4 million in 2011. The increase of $1.5 million reflects an additional $891,000 of administrative and general expenses primarily due to higher payroll and benefit costs, $485,000 of higher depreciation expense and $80,000 higher maintenance expenses. The effective consolidated income tax rate was 41% and 39% for the three-month periods ended September 30, 2012 and 2011, respectively.

Year-to-date operating revenue increased by $22.5 million to $199.1 million from $176.6 million in the first nine months of 2012. The increase was attributable to $13.6 million in cumulative rate increases, $7.7 million in higher customer water usage and $907,000 in revenue from new customers. In addition, the Company earned $305,000 in higher revenue from real estate operations.

Year-to-date net income was $16.4 million, compared to $14.3 million in 2011. Diluted earnings per share were $0.87 in the first nine months of 2012, compared to $0.76 per diluted share for the same period in 2011.

Year-to-date water production costs increased to $84.1 million from $69.7 million in 2011. The $14.4 million increase was primarily attributable to $5.4 million in higher per unit costs for purchased water and groundwater extraction charges, $5.2 million in higher costs due to a decrease in available surface water supply and $3.8 million in higher customer water usage. Operating expenses, excluding water production costs, increased $4.8 million to $73.8 million from $69 million. The increase was due to an increase in administrative and general expenses of $2.9 million primarily due to higher payroll and benefit costs, $1.5 million of higher depreciation expense, $644,000 in higher taxes other than income taxes, partially offset by a decrease of $322,000 in maintenance expenses. The effective consolidated income tax rate was 41% and 40% for the nine-month periods ended September 30, 2012 and 2011, respectively.

The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.1775 per share. The dividend is payable on December 3, 2012 to shareholders of record on November 5, 2012.

SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp. is the parent company of San Jose Water Company, SJWTX, Inc., Texas Water Alliance Limited, and SJW Land Company. Together, San Jose Water Company and SJWTX, Inc. provide regulated and nonregulated water service to more than one million people in San Jose, California and nearby communities and in Canyon Lake, Texas and nearby communities. SJW Land Company owns and operates commercial real estate investments.

This press release may contain certain forward-looking statements including but not limited to statements relating to SJW Corp.'s plans, strategies, objectives, expectations and intentions, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of SJW Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The results for a quarter are not indicative of results for a full year due to seasonality and other factors. Certain factors that may cause actual results, performance or achievements to materially differ are described in SJW Corp.'s most recent reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. SJW Corp. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

SJW Corp.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands, except per share data)



	Three months ended September 30,					Nine months ended September 30,
	2012			2011		2012			2011
OPERATING REVENUE	$	82,374		73,914		$	199,098		176,617
OPERATING EXPENSE:
Production Costs:
Purchased water	22,768			19,182		54,128			39,279
Power	2,274			1,979		4,442			4,366
Groundwater extraction charges	8,672			7,824		17,057			17,632
Other production costs	2,914			3,030		8,511			8,442
Total production costs	36,628			32,015		84,138			69,719
Administrative and general	10,773			9,882		32,067			29,176
Maintenance	3,411			3,331		9,533			9,855
Property taxes and other non-income taxes	2,397			2,397		7,251			6,607
Depreciation and amortization	8,288			7,803		24,922			23,389
Total operating expense	61,497			55,428		157,911			138,746
OPERATING INCOME	20,877			18,486		41,187			37,871
Interest on long-term debt and other	(3,927		)	(4,911	)	(13,571		)	(13,985	)
Income before income taxes	16,950			13,575		27,616			23,886
Provision for income taxes	6,866			5,360		11,222			9,610
NET INCOME	10,084			8,215		16,394			14,276
Other comprehensive income, net	41			(227	)	89			(210	)
COMPREHENSIVE INCOME	$	10,125		7,988		$	16,483		14,066

EARNINGS PER SHARE
Basic	$	0.54		0.44		$	0.88		0.77
Diluted	$	0.53		0.44		$	0.87		0.76
DIVIDENDS PER SHARE	$	0.18		0.17		$	0.53		0.52
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic	18,648			18,587		18,629			18,578
Diluted	18,854			18,803		18,833			18,788

SJW Corp.

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands)



	September 30, 2012		December 31, 2011
ASSETS
Utility plant:
Land	$	8,993	8,852
Depreciable plant and equipment	1,139,878		1,070,016
Construction in progress	27,013		18,527
Intangible assets	15,561		14,732
Total utility plant	1,191,445		1,112,127
Less accumulated depreciation and amortization	378,960		355,914
Net utility plant	812,485		756,213

Real estate investments	73,604		89,099
Less accumulated depreciation and amortization	8,697		10,557
Net real estate investments	64,907		78,542
CURRENT ASSETS:
Cash and cash equivalents	6,684		26,734
Accounts receivable and accrued unbilled utility revenue	42,973		33,853
Long-lived assets held-for-sale	7,768		—
Prepaid expenses and other	4,650		8,328
Total current assets	62,075		68,915
OTHER ASSETS:
Investment in California Water Service Group	7,182		7,032
Debt issuance costs, net of accumulated amortization	5,015		4,865
Regulatory assets, net	119,248		119,248
Other	4,407		3,995
	135,852		135,140
	$	1,075,319	1,038,810

CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock	$	9,715	9,684
Additional paid-in capital	25,708		24,552
Retained earnings	233,870		227,494
Accumulated other comprehensive income	2,362		2,274
Total shareholders' equity	271,655		264,004
Long-term debt, less current portion	335,779		343,848
Total capitalization	607,434		607,852
CURRENT LIABILITIES:
Current portion of long-term debt	5,410		838
Accrued groundwater extraction charge, purchased water and purchased power	10,710		6,212
Accounts payable	17,566		7,417
Accrued interest	5,534		5,376
Other current liabilities	11,690		8,445
Total current liabilities	50,910		28,288

DEFERRED INCOME TAXES AND CREDITS	143,245		135,036
ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF
CONSTRUCTION	192,231		190,668
POSTRETIREMENT BENEFIT PLANS	72,708		68,855
OTHER NONCURRENT LIABILITIES	8,791		8,111
	$	1,075,319	1,038,810

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