SJW GROUP SAN JOSE, CA, February 18, 2016 - SJW Corp. (NYSE: SJW) today reported operating revenue for the year ended December 31, 2015 of $305.1 million versus $319.7 million for the year ended December 31, 2014, a decrease of $14.6 million. In 2015, we recognized $37.8 million in cumulative rate increases, $20.5 million related to revenue tracked in our Water Conservation Memorandum Account, $1.9 million in additional 2012 General Rate Case (GRC) true-up revenue, and $1.2 million in revenue from new customers. These operating revenue increases were partially offset by $36.3 million in lower customer usage. The remaining decrease was attributable to one- time 2014 activity which included the recognition of $46.5 million recognized in the third quarter of 2014 related to the Company's 2012 GRC decision, offset by a $6.8 million change in the net recognition of certain balancing and memorandum accounts primarily related to the 2014 Pension Balancing Account true-up resulting from the 2012 GRC decision.
Water production expenses for the year ended December 31, 2015 were $110.6 million compared to $122.7 million in 2014, a decrease of $12.1 million. The decrease in water production expenses was attributable to $21.5 million in lower customer water usage and $2.6 million in lower expenses due to an increase in the use of available surface water supplies, offset by $12.0 million in higher per unit costs for purchased water, groundwater extraction and energy charges. Operating expenses, excluding water production costs, increased $10.5 million to $114.5 million from $104.0 million. The increase was due to $6.6 million of higher administrative and general expenses,
$2.8 million of higher depreciation expenses, $581,000 in higher property taxes and other non-income taxes and
$482,000 in higher maintenance expenses. The increase in administrative and general expenses was primarily attributable to higher pension costs, costs related to the California General Rate Case proceeding and other activities.
Other expense and income in 2015 included the sale of multiple real estate properties for a gain of approximately $1.9 million. Other expense and income during the same period of 2014 included a gain on the sale of 125,969 shares of California Water Service Group stock of $2.0 million and sales of real estate property in California and real estate investment property in Texas of approximately $300,000 each.
The effective consolidated income tax rates were 38% and 33% for the years ended December 31, 2015 and 2014, respectively. The change in the effective consolidated income tax rate was primarily due to a state income tax benefit of $5.1 million recognized in 2014 related to the adoption of new Department of Treasury and Internal Revenue Service Tangible Property Regulations.
Net income was $37.9 million for the year ended December 31, 2015, compared to $51.8 million for the same period in 2014. Diluted earnings per share were $1.85 and $2.54 for the years ended December 31, 2015 and 2014, respectively.
Fourth Quarter Financial Results
Operating revenue for the fourth quarter ended December 31, 2015 was $87.6 million versus $69.3 million for the same period in 2014, an increase of $18.3 million. The increase was attributable to recognition of $20.5 million in revenue tracked in the Water Conservation Memorandum Account, $4.7 million in cumulative rate increases, a net increase in the recognition of certain balancing and memorandum accounts of $921,000 and
$166,000 in revenue from new customers, offset by $7.9 million in lower customer usage.
Water production expenses for the fourth quarter of 2015 were $26.9 million compared to $26.7 million in 2014, an increase of $200,000. The increase in water production expenses was attributable to $2.7 million in higher per unit costs for purchased water, groundwater extraction and energy charges and $513,000 in higher expenses due to a decrease in the use of available surface water supply. These increases were partially offset by $3.0 million in lower customer water usage. Operating expenses, excluding water production expenses, increased $2.0 million to
$29.0 million from $27.0 million. The increase was due to $1.2 million in higher administrative and general expenses, $733,000 of higher depreciation expense and $117,000 in higher maintenance expenses. The increase in administrative and general expenses was primarily attributable to higher pension costs.
Other expense and income in the fourth quarter of 2014 included the recognition of income related to contributions in aid of construction in 2014.
The effective consolidated income tax rates were 39% and 50% for the quarters ended December 31, 2015 and 2014, respectively. Income tax expense for the quarter ended December 31, 2014 included a reduction in the state income tax benefit of $500,000 related to the adoption of new Department of Treasury and Internal Revenue Service Tangible Property Regulations and an increase in income tax expense related to an adjustment to true-up deferred tax related to fixed assets of $500,000.
Net income was $16.2 million for the fourth quarter ended December 31, 2015, compared to $5.7 million in 2014. Diluted earnings per share were $0.79 in the quarter ended December 31, 2015, compared to $0.28 per diluted share for the same period in 2014.
SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp. is the parent company of San Jose Water Company, SJWTX, Inc., Texas Water Alliance Limited, SJW Land Company, and SJW Group, Inc. Together, San Jose Water Company and SJWTX, Inc. provide water service to more than one million people in San Jose, California and nearby communities and in Canyon Lake, Texas and nearby communities. SJW Land Company owns and operates commercial real estate investments.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(in thousands, except per share data)
OPERATING REVENUE ........................................................$ 87,613 69,286 $ 305,082 319,668
OPERATING EXPENSE:
Production Expenses:
Purchased water ......................................................... | 13,718 | 9,992 | 61,089 | 47,280 | |||
Power ......................................................................... | 921 | 2,300 | 6,121 | 9,865 | |||
Groundwater extraction charges................................. | 9,187 | 11,428 | 31,240 | 53,678 | |||
Other production expenses ......................................... | 3,083 | 2,993 | 12,178 | 11,929 | |||
Total production expenses ................................................. | 26,909 | 26,713 | 110,628 | 122,752 | |||
Administrative and general ............................................... | 12,270 | 11,039 | 47,131 | 40,573 | |||
Maintenance ...................................................................... | 3,769 | 3,652 | 14,956 | 14,474 | |||
Property taxes and other non-income taxes....................... | 2,789 | 2,835 | 11,667 | 11,086 | |||
Depreciation and amortization .......................................... | 10,191 | 9,458 | 40,740 | 37,905 | |||
Total operating expense .................................... | 55,928 | 53,697 | 225,122 | 226,790 | |||
OPERATING INCOME ........................................................... | 31,685 | 15,589 | 79,960 | 92,878 | |||
OTHER (EXPENSE) INCOME: | |||||||
Interest expense ........................................................................ | (5,400) | (5,567) | (22,186) | (20,788) | |||
Gain on sale of California Water Service Group stock............. | - | - | - | 2,017 | |||
Other, net .................................................................................. | 443 | 1,253 | 3,380 | 2,670 | |||
Income before income taxes..................................................... | 26,728 | 11,275 | 61,154 | 76,777 | |||
Provision for income taxes ....................................................... | 10,536 | 5,587 | 23,272 | 24,971 | |||
NET INCOME ......................................................................... | 16,192 | 5,688 | 37,882 | 51,806 | |||
Other comprehensive income (loss), net .................................. | 176 | 333 | (206) | 301 | |||
Reclassification adjustment for gain realized on sale of investments, net ........................................................................ | - | - | - | (1 ,1 71) | |||
COMPREHENSIVE INCOME................................................$ | 16,368 | 6,021 | $ | 37,676 | 50,936 | ||
EARNINGS PER SHARE | |||||||
Basic..................................................................................$ | 0.79 | 0.28 | $ 1.86 | 2.56 | |||
Diluted...............................................................................$ | 0.79 | 0.28 | $ 1.85 | 2.54 | |||
DIVIDENDS PER SHARE......................................................$ | 0.20 | 0.19 | $ 0.78 | 0.75 | |||
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||
Basic.................................................................................. | 20,382 | 20,268 | 20,361 | 20,227 | |||
Diluted............................................................................... | 20,548 | 20,459 | 20,516 | 20,417 | |||
Condensed Consolidated Balance Sheets (Unaudited) (in thousands) | |||
December 31, | December 31, | ||
2015 | 2014 | ||
ASSETS | |||
Utility plant: | |||
Land ...........................................................................................................................$ | 17,853 | 16,838 | |
Depreciable plant and equipment ................................................................................... | 1,438,321 | 1,353,772 | |
Construction in progress ............................................................................................... | 45,573 | 23,208 | |
Intangible assets........................................................................................................... | 22,675 | 1 9 ,3 33 | |
Total utility plant ..................................................................................................... | 1,524,422 | 1,413,151 | |
Less accumulated depreciation and amortization..................................................................... | 487,659 | 4 5 0,13 7 | |
Net utility plant ....................................................................................................... | 1,036,763 | 9 6 3,01 4 | |
Real estate investments ........................................................................................................ | 74,641 | 73,794 | |
Less accumulated depreciation and amortization..................................................................... | 13,157 | 11 ,5 93 | |
Net real estate investments ....................................................................................... | 61,484 | 6 2 ,2 01 | |
CURRENT ASSETS: | |||
Cash and cash equivalents ............................................................................................. | 5,239 | 2,399 | |
Accounts receivable and accrued unbilled utility revenue ................................................. | 46,851 | 45,327 | |
Current regulatory assets, net......................................................................................... | 16,542 | 16,853 | |
Other current assets ...................................................................................................... | 4,744 | 3 ,51 4 | |
Total current assets .................................................................................................. | 73,376 | 6 8 ,0 93 | |
OTHER ASSETS: | |||
Investment in California Water Service Group................................................................. | 6,030 | 6,378 | |
Debt issuance costs and other, net of accumulated amortization ........................................ | 4,721 | 5,218 | |
Regulatory assets, net ................................................................................................... | 152,021 | 158,010 | |
Other .......................................................................................................................... | 6,568 | 6 ,39 0 | |
1 6 9,34 0 | 1 7 5,99 6 | ||
$ | 1 ,34 0 ,9 63 | 1 ,26 9 ,3 04 |
CAPITALIZATION AND LIABILITIES CAPITALIZATION:
Common stock.............................................................................................................$ | 10,616 | 10,567 | |
Additional paid-in capital.............................................................................................. | 68,636 | 66,298 | |
Retained earnings......................................................................................................... | 302,220 | 280,773 | |
Accumulated other comprehensive income ..................................................................... | 2,311 | 2 ,51 7 | |
Total shareholders' equity ......................................................................................... | 383,783 | 360,155 | |
Long-term debt, less current portion............................................................................... | 380,825 | 3 8 4,36 5 | |
Total capitalization .................................................................................................. | 764,608 | 7 4 4,52 0 | |
CURRENT LIABILITIES: Line of credit ............................................................................................................... | 34,600 | 13,200 | |
Current portion of long-term debt .................................................................................. | 3,491 | 584 | |
Accrued groundwater extraction charge, purchased water and purchased power.................. | 7,163 | 6,030 | |
Accounts payable ......................................................................................................... | 16,196 | 7,001 | |
Accrued interest ........................................................................................................... | 6,193 | 6,361 | |
Other current liabilities ................................................................................................. | 11,980 | 11 ,5 18 | |
Total current liabilities ............................................................................................. | 7 9 ,6 23 | 4 4 ,6 94 | |
DEFERRED INCOME TAXES ............................................................................................ | 198,775 | 185,506 | |
ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF | |||
CONSTRUCTION ......................................................................................................... | 217,766 | 211,805 | |
POSTRETIREMENT BENEFIT PLANS............................................................................... | 70,230 | 74,187 | |
OTHER NONCURRENT LIABILITIES ............................................................................... | 9,961 | 8 ,59 2 | |
$ | 1 ,34 0 ,9 63 | 1 ,26 9 ,3 04 |
SJW Corporation issued this content on 18 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 26 February 2016 17:16:17 UTC
Original Document: https://sjwcorp.s3.amazonaws.com/files/documents/02-18-2016 Press Release 4qtr2015A.pdf
