SJW Corp. Announces 2013 Annual and Fourth Quarter Financial Results

SJW Corp. (NYSE: SJW) today reported operating revenue for the year ended December 31, 2013 of $276.9 million versus $261.5 million for the year ended December 31, 2012, an increase of $15.4 million. The increase in revenue was attributable to $6.1 million in cumulative rate increases, $5.4 million in higher customer water usage, the net recognition of certain balancing and memorandum accounts of $1.4 million, which management has determined are probable of future recovery or refund and $1.3 million in revenue from new customers. In addition, the Company earned $1.2 million in higher revenue from real estate operations.

Water production expenses for the year ended December 31, 2013 were $120.8 million compared to $107.3 million in 2012, an increase of $13.5 million. The increase in water production expenses was attributable to $8.6 million in higher per unit costs for purchased water, groundwater extraction and energy charges and $5.2 million in higher customer water usage. These increases were offset by $275,000 in lower expenses due to an increase in the availability of surface water supply. Operating expenses, excluding water production expenses, increased $3.6 million to $102.6 million from $99 million. The increase was due to $1.9 million of higher depreciation expense, $902,000 in higher administrative and general expenses, $614,000 in higher taxes other than income taxes, and an increase of $198,000 in maintenance expenses.

Other, net includes a pre-tax gain on the sale of a real estate investment property in Connecticut of approximately $1.1 million.

The effective consolidated income tax rates were 39% and 41% for the years ended December 31, 2013 and 2012, respectively.

Net income was $22.4 million for the year ended December 31, 2013, compared to $22.3 million for the same period in 2012. Diluted earnings per share were $1.12 for the year ended December 31, 2013, compared to $1.18 per diluted share for the same period in 2012.

Fourth Quarter Financial Results

Operating revenue for the fourth quarter ended December 31, 2013 was $67.3 million versus $62.4 million for the same period in 2012, an increase of $4.9 million. The increase was attributable to $5.3 million in higher customer water usage, $1.9 million in cumulative rate increases, and $1.2 million in higher revenue from real estate operations and new customers. These increases were offset by a decrease of $3.5 million related to the year-over-year change in the net recognition of certain balancing and memorandum accounts.

Water production expenses for the fourth quarter of 2013 were $29.6 million compared to $23.1 million in 2012, an increase of $6.5 million. The increase in water production expenses was attributable to $3.5 million in higher customer water usage, $2.5 million in higher per unit costs for purchased water, groundwater extraction and energy charges, and $543,000 in higher expenses due to a decrease in the use of available surface water supply. Operating expenses, excluding water production expenses, increased $1.1 million to $26.3 million from $25.2 million. The increase was primarily due to $684,000 in general and administrative expenses, and $517,000 of higher depreciation expense, partially offset by $227,000 in lower maintenance expenses.

The effective consolidated income tax rates were 32% and 42% for the quarter ended December 31, 2013 and 2012, respectively. Income tax expense included the release of a $500,000 tax contingency reserve.

Net income was $4.7 million for the fourth quarter ended December 31, 2013, compared to $5.9 million in 2012. Diluted earnings per share were $0.23 in the quarter ended December 31, 2013, compared to $0.31 per diluted share for the same period in 2012.

Diluted earnings per share for the quarter and year-to-date ended December 31, 2013 includes the weighted average effect of 1,421,000 new shares of common stock issued in April of 2013.

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 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.Results for a quarter are not indicative of results for a full year due to seasonality and other factors. Other 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.