Segment and Non-Tariffed Business Reporting

3 Months Ended

Mar. 31, 2020

SEGMENT AND NONTARIFFED BUSINESS REPORTING

Segment and Non-Tariffed Business 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 Canyon Lake Water Service Company (“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, The Connecticut Water Company (“Connecticut Water”), The Maine Water Company (“Maine Water”), The Heritage Village Water Company (“HVWC”), The Avon Water Company (“Avon Water”), New England Water Utility Services (“NEWUS”), Inc. and Chester Realty, Inc. In accordance with FASB ASC Topic 280 - “Segment Reporting,” The chief operating decision maker of 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, and NEWUS 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 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, such as goodwill, and 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 Three Months Ended March 31, 2020
	Water Utility Services			Real Estate Services	All Other*		SJW Group
	Regulated		Non-tariffed	Non-tariffed	Non-tariffed		Regulated	Non-tariffed		Total
Operating revenue	$	111,367	3,017	1,370	—		111,367	4,387		115,754
Operating expense	96,017		1,361	831	2,118		96,017	4,310		100,327
Operating income (loss)	15,350		1,656	539	(2,118	)	15,350	77		15,427
Net income (loss)	5,828		1,470	388	(5,269	)	5,828	(3,411	)	2,417
Depreciation and amortization	20,749		108	302	223		20,749	633		21,382
Senior note and other interest expense	8,174		—	—	5,110		8,174	5,110		13,284
Income tax expense (benefit) in net income	1,202		470	132	(1,366	)	1,202	(764	)	438
Assets	$	3,054,474	9,170	46,436	64,218		3,054,474	119,824		3,174,298



	For Three Months Ended March 31, 2019
	Water Utility Services			Real Estate Services	All Other*		SJW Group
	Regulated		Non-tariffed	Non-tariffed	Non-tariffed		Regulated	Non-tariffed		Total
Operating revenue	$	75,147	1,169	1,366	—		75,147	2,535		77,682
Operating expense	60,585		841	891	2,957		60,585	4,689		65,274
Operating income (loss)	14,562		328	475	(2,957	)	14,562	(2,154	)	12,408
Net income (loss)	6,100		236	318	(781	)	6,100	(227	)	5,873
Depreciation and amortization	14,749		97	299	—		14,749	396		15,145
Senior note and other interest expense	5,220		—	—	571		5,220	571		5,791
Income tax expense (benefit) in net income	2,076		92	130	(253	)	2,076	(31	)	2,045
Assets	$	1,492,643	5,825	46,862	413,477		1,492,643	466,164		1,958,807

* The “All Other” category for the three months ended March 31, 2020, includes the accounts of SJW Group, SJWNE LLC and CTWS on a stand-alone basis. For the three months ended March 31, 2019, the “All Other” category includes the accounts of SJW Group and Hydro Sub, Inc. on a stand-alone basis. For the three months ended March 31, 2019, Hydro Sub, Inc. had no recorded revenue or expenses and as of March 31, 2019 held no assets and has incurred no liabilities. Hydro Sub. Inc. was a subsidiary created solely to facilitate the merger with CTWS and was dissolved following the completion of merger in October 2019.