SJW Corp. Announces 2012 Annual and Fourth Quarter Financial Results
by Business Wire
SJW Corp. (NYSE: SJW) today reported operating revenue for the year ended December 31, 2012 of $261.5 million versus $238.9 million for the year ended December 31, 2011, an increase of $22.6 million. The increase in revenue was attributable to cumulative rate increases of $17.6 million, $5.5 million in higher customer water usage, the recognition of certain balancing and memorandum accounts of $3.6 million in December 2012, $1.3 million from new customers and $383,000 from real estate operations. These increases were partially offset by the Mandatory Conservation Revenue Adjustment Memorandum Account ("MCRAM") of $5.7 million that was recognized in December 2011.
Water production costs for the year ended December 31, 2012 were $107.3 million compared to $92.1 million in 2011, an increase of $15.2 million. The increase in water production costs is primarily attributable to $6.7 million in higher per unit costs for purchased water and groundwater extraction charges, $5.3 million in higher costs due to a decrease in available surface water supply and $3.2 million in higher customer water usage.
Operating expenses, excluding water production costs, for the year ended December 31, 2012 were $99.0 million compared to $92.5 million in 2011. The increase of $6.5 million reflects an additional $3.7 million of administrative and general expenses primarily due to higher payroll and benefit costs, $1.9 million of higher depreciation expense, $782,000 in higher property taxes and $89,000 in higher maintenance expenses. The effective consolidated income tax rate was 41% for the years ended December 31, 2012 and 2011.
Net income was $22.3 million and diluted earnings per common share were $1.18, compared to $20.9 million and $1.11 per share, respectively, for the year ended December 31, 2011.
Fourth Quarter Financial Results
Operating revenue for the fourth quarter ended December 31, 2012 was $62.4 million versus $62.3 million for the same period in 2011, an increase of $100,000. The change was primarily attributable to $4.0 million in cumulative rate increases, $3.6 million due to the recognition of balancing and memorandum accounts and $358,000 from new customers. These increases were partially offset by the recognition of the MCRAM of $5.7 million in December 2011 and $2.1 million due to lower customer usage.
Water production costs for the fourth quarter of 2012 were $23.1 million versus $22.3 million for the same period in 2011, an increase of $800,000. The increase in water production costs is primarily attributable to $1.3 million in higher per unit costs for purchased water and groundwater extraction charges, $127,000 in higher costs due to a decrease in available surface water supply, partially offset by $585,000 in lower customer water usage. Operating expenses, excluding water production costs, increased $1.7 million to $25.2 million from $23.5 million. The increase was due to an increase in administrative and general expenses of $785,000, $411,000 in higher maintenance expenses, $372,000 of higher depreciation expense and $138,000 in higher taxes other than income taxes. The effective consolidated income tax rate was 42% and 43% for the quarter ended December 31, 2012 and 2011, respectively.
Net income was $5.9 million for the fourth quarter ended December 31, 2012, compared to $6.7 million for the same period in 2011. Diluted earnings per share were $0.31 for the quarter ended December 31, 2012, compared to $0.35 per diluted share for the same period in 2011.
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.
Condensed Consolidated Statements of Comprehensive Income
|(in thousands, except per share data)|
Three months ended
Twelve months ended
|Groundwater extraction charges||6,883||3,365||23,940||20,997|
|Other production costs||2,934||2,903||11,445||11,345|
|Total production costs||23,149||22,334||107,287||92,053|
|Administrative and general||10,745||9,960||42,812||39,136|
|Property taxes and other non-income taxes||2,452||2,314||9,703||8,921|
|Depreciation and amortization||8,176||7,804||33,098||31,193|
|Total operating expense||48,339||45,818||206,250||184,564|
|Interest on long-term debt and other||(3,866||)||(4,962||)||(17,437||)||(18,947||)|
|Income before income taxes||10,244||11,558||37,860||35,444|
|Provision for income taxes||4,320||4,956||15,542||14,566|
|Other comprehensive income, net||(53||)||125||36||(85||)|
|EARNINGS PER SHARE|
|DIVIDENDS PER SHARE||$||0.18||0.17||$||0.71||0.69|
|WEIGHTED AVERAGE SHARES OUTSTANDING|
|Condensed Consolidated Balance Sheets|
|Depreciable plant and equipment||1,166,220||1,070,016|
|Construction in progress||24,298||18,527|
|Total utility plant||1,216,235||1,112,127|
|Less accumulated depreciation and amortization||384,675||355,914|
|Net utility plant||831,560||756,213|
|Real estate investments||74,232||89,099|
|Less accumulated depreciation and amortization||9,045||10,557|
|Net real estate investments||65,187||78,542|
|Cash and cash equivalents||2,522||26,734|
|Accounts receivable and accrued unbilled utility revenue||29,944||33,853|
|Long-lived assets held-for-sale||7,768||—|
|Prepaid expenses and other||2,677||8,328|
|Total current assets||42,911||68,915|
|Investment in California Water Service Group||7,067||7,032|
|Debt issuance costs, net of accumulated amortization||5,226||4,865|
|Regulatory assets, net||130,488||119,248|
|CAPITALIZATION AND LIABILITIES|
|Additional paid-in capital||26,117||24,552|
|Accumulated other comprehensive income||2,310||2,274|
|Total shareholders' equity||274,604||264,004|
|Long-term debt, less current portion||335,598||343,848|
|Line of credit||15,300||—|
|Current portion of long-term debt||5,392||838|
|Accrued groundwater extraction charge, purchased water and purchased power||5,072||6,212|
|Other current liabilities||9,507||8,445|
|Total current liabilities||49,107||28,288|
|DEFERRED INCOME TAXES AND CREDITS||149,013||135,036|
ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF CONSTRUCTION
|POSTRETIREMENT BENEFIT PLANS||73,425||68,855|
|OTHER NONCURRENT LIABILITIES||9,009||8,111|