Exhibit 99.1
SJW CORP. ANNOUNCES DIVIDEND INCREASE AND FOURTH QUARTER FINANCIAL RESULTS
SAN JOSE, CA, January 28, 2007 - SJW Corp. (NYSE:SJW) diluted earnings
per common share for the quarter ended December 31, 2006 were $1.03,
compared to $0.23 per share for the same quarter in 2005 due to the fact
that on December 15, 2006, SJW Corp. sold approximately 6.7 acres of
nonutility properties located in San Jose, California to Adobe Systems
Incorporated for an aggregate purchase price of $32,500,000. SJW Corp.
recognized a gain on the sale of nonutility property of $14,820,000, net of
taxes of $10,192,000, or $0.81 per share.
Operating revenue for the fourth quarter was $44,504,000 versus
$43,531,000 for the same period in 2005, representing an increase of
$973,000 or 2%. Revenues increased $620,000 due to cumulative water rate
increases, $321,000 due to customer growth, and $136,000 from other non-
water sources and was partially offset by $104,000 due to decreased customer
usage.
Water production costs for the fourth quarter of 2006, consisting of
purchased water, power and groundwater extraction charges, were $15,906,000
versus $15,665,000 for the same period in 2005, an increase of $241,000 or
2%. The increase in water production costs was primarily attributable to
$671,000 due to higher purchased water and related groundwater extraction
charges, which was partially offset by $279,000 attributable to a greater
availability of surface water, $134,000 due to decreased customer usage and
$17,000 from other costs.
Quarterly operating expenses for the fourth quarter of 2006, excluding
water production costs and income taxes, increased $447,000 from the fourth
quarter of 2005. The increase consisted principally of $589,000 in
depreciation expense and $82,000 in maintenance and other nonincome taxes,
which was partially offset $224,000 in other operating, general and
administrative costs. Income tax expense for the fourth quarter of 2006
decreased by $411,000 from the fourth quarter of 2005, which was largely
attributable to decreased pre-tax operating earnings.
Other comprehensive income for the fourth quarter of 2006 was
$10,016,000 and was primarily due to an increase in the market value of the
investment in California Water Service Group of approximately $3,817,000 and
the recognition of $6,187,000 transferred from accumulated other
comprehensive loss to regulatory assets due to the implementation of the
Financial Accounting Standards Board Statement No. 158 (Statement 158),
Employer's Accounting for Defined Benefit Pension and Other Postretirement
Plans. The tax impact of the two items was approximately $4,091,000. In
contrast, other comprehensive income decreased $7,121,000 for the fourth
quarter ended December 31, 2005 primarily due to the decrease in market
value of the investment in California Water Service Group and increased
post-retirement obligations.
For the twelve months ended December 31, 2006, diluted earnings per
common share were $2.08 compared to $1.18, for the year ended December 31,
2005. Operating revenue for 2006 was $189,238,000 versus $180,105,000 for
2005, representing an increase of $9,133,000 or 5%. Revenues increased
$3,120,000 due to new customers, $2,609,000 due to cumulative water rate
increases, $2,556,000 due to higher customer usage and other non-water
revenues of $848,000.
The 2006 water production costs increased $2,170,000, which was
primarily attributable to a $2,448,000 increase in purchased water and
groundwater extraction charges, $1,661,000 increase in usage, $270,000 in
other operating costs, which was partially offset by a greater availability
of surface water of $2,209,000. Other non-water production costs increased
$3,902,000 in 2006 and were largely attributable to $1,645,000 increase in
depreciation expense, $912,000 in other operating costs, $714,000 in
maintenance costs, $411,000 in general and administrative costs and $220,000
in other nonincome taxes. The increase in 2006 income taxes was due to
increased pre-tax operating earnings.
The increase in comprehensive earnings in 2006 was primarily due to an
increase in the market value of the investment in California Water Service
Group of approximately $2,387,000 and the recognition of $6,187,000
transferred from accumulated other comprehensive loss to regulatory assets
due to the implementation of Statement 158. The tax impact of the two items
was approximately $3,505,000. In contrast other comprehensive income
decreased $3,216,000 in 2005 primarily due to the decrease in the market
value of the investment in California Water Service Group and increased
post-retirement benefit obligations.
At its meeting on January 25, 2007, the Board of Directors of SJW Corp.
approved a $0.04 per share increase in the annual dividend to $0.605 per
share. A quarterly dividend of $0.15125 per share is payable on March 1,
2007 to shareholders of record on February 5, 2007.
SJW Corp. is a publicly traded holding company headquartered in San
Jose, California. SJW Corp. is the parent company of San Jose Water
Company, Canyon Lake Water Service Company, SJW Land Company and Crystal
Choice Water Service, LLC. Together these companies provide regulated and
nonregulated water service to more than one million people in San Jose,
California and nearby communities and Canyon Lake, Texas. SJW Land Company
owns and operates commercial buildings, undeveloped land, has a majority
interest in a real estate partnership, and has properties in the states of
California, Florida, Connecticut, Texas and Arizona.
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. 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(UNAUDITED)
(In thousands, except share and per share data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31 DECEMBER 31
2006 2005 2006 2005
----------------------------------------------
OPERATING REVENUE $44,504 43,531 $189,238 180,105
OPERATING EXPENSE:
Operation:
Purchased water 10,663 10,522 44,896 44,953
Power 1,033 926 5,170 4,318
Groundwater extraction
charge 4,210 4,217 18,737 17,362
-------------------------------------------------
Total water production
costs 15,906 15,665 68,803 66,633
Administrative and
general 5,438 5,798 21,108 20,697
Other 4,011 3,875 15,095 14,183
Maintenance 2,881 2,843 10,189 9,475
Property taxes and other
nonincome taxes 1,479 1,435 5,893 5,673
Depreciation and amortization
5,315 4,726 21,299 19,654
Income taxes 2,740 3,151 15,298 14,773
-----------------------------------------------
Total operating expense 37,770 37,493 157,685 151,088
------------------------------------------------
OPERATING INCOME 6,734 6,038 31,553 29,017
Sale of nonutility property,
net of taxes of $10,192
and $11,248 in the quarter
and year ended 2006 and
$761 in 2005 14,820 - 16,355 1,095
Interest on long-term debt (2,455) (2,127) (9,292) (9,283)
Dividend income 316 313 1,265 1,254
Other, net (365) (7) (1,300) (243)
-----------------------------------------------
NET INCOME $19,050 4,217 $ 38,581 21,840
===============================================
Other comprehensive income
(loss):
Other comprehensive
income (loss) $ 10,016 (7,121) $ 8,586 (3,216)
Income taxes (4,091) 2,909 (3,505) 1,308
--------------------------------------------------
Other comprehensive income
(loss), net $ 5,925 (4,212) $ 5,081 (1,908)
--------------------------------------------------
COMPREHENSIVE INCOME $ 24,975 5 $ 43,662 19,932
==================================================
Earnings per share
-Basic $ 1.04 0.23 $ 2.11 1.20
-Diluted 1.03 0.23 2.08 1.18
Dividends per share $ 0.14 0.13 $ 0.57 0.53
Weighted average shares outstanding
-Basic 18,281,285 18,270,882 18,275,505 18,271,280
-Diluted 18,497,186 18,512,484 18,528,896 18,480,202
SJW CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
DECEMBER 31 DECEMBER 31
ASSETS 2006 2005
------------------------
UTILITY PLANT:
Land $ 4,837 1,735
Depreciable plant and equipment 716,679 648,931
Construction in progress 10,863 5,611
Intangible assets 8,040 7,840
----------------------
Total utility plan 740,419 664,117
Less accumulated depreciation and amortization 234,173 208,909
----------------------
Net utility plant 506,246 455,208
NONUTILITY PROPERTY: 43,868 38,720
Less accumulated depreciation 3,303 3,870
----------------------
Net nonutility property 40,565 34,850
CURRENT ASSETS:
Cash and equivalents 3,788 9,398
Accounts receivable and accrued unbilled
utility revenue 21,956 19,851
Sale proceeds held in trust account 31,261 -
Prepaid expenses and other 2,470 2,443
----------------------
Total current assets 59,475 31,692
OTHER ASSETS:
Investment in California Water Service Group 44,438 42,051
Unamortized debt issuance and reacquisition costs 3,220 3,131
Regulatory assets 50,483 13,037
Other 1,437 7,740
----------------------
Total other assets 99,578 65,959
----------------------
$705,864 $587,709
======================
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock $ 9,522 $ 9,516
Additional paid-in capital 16,267 15,368
Retained earnings 186,876 160,588
Accumulated other comprehensive income 15,517 10,436
---------------------
Total shareholders' equity 228,182 195,908
Long-term debt, less current portion 163,648 145,279
---------------------
Total capitalization 391,830 341,187
CURRENT LIABILITIES:
Line of credit 15,500 -
Current portion of long-term debt 485 334
Accrued groundwater extraction charge and
purchased water 4,244 3,985
Purchased power 301 804
Accounts payable 7,267 5,120
Accrued interest 3,871 3,618
Accrued taxes - 1,619
Other current liabilities 5,578 5,132
---------------------
Total current liabilities 37,246 20,612
DEFERRED INCOME TAXES 83,347 54,100
ADVANCES FOR AND CONTRIBUTIONS IN AID OF CONSTRUCTION 163,180 154,235
POSTRETIREMENT BENEFITS 26,298 13,978
OTHER NONCURRENT LIABILITIES 3,963 3,597
---------------------
$705,864 $587,709
=====================