SJW - Earnings call transcript Q3 2017

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Operator

Good day ladies and gentlemen, and welcome to the SJW Group's Third Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Ms. Counsel. General Papazian, Suzy begin. may you Ma'am

Suzy Papazian

Executive Thank you, results are quarter financial and the Roth, Financial Lynch, Officer. Welcome call for to Chief President conference Board, today of third and SJW James Chairman Chief XXXX the operator. Officer; Group. Richard Presenting

would follow those available accompanying are along, these who For our website slides remarks on at like to www.sjwgroup.com.

company's contain statements materials would that this Before based you posted current our and conditions, to we by remind on begin differ results from assumptions that under factors are and those These experience, like and the light other materially today's appropriate by implied to expressed trends, forward-looking website on future estimates the expected company may presentation, are the statements. of circumstances. and related well statements. historical that the I actual made as company presentation factors forward-looking believes its as performance the Many in or developments, cause could

description at Commission, are SJW X-K and of with Securities revise from statements. be forward-looking statements or any For such duty XX-Q, of different that to refer Forms presentation, disclaims we made Group most to actual this All the Exchange recent be the may some which obtained as filed of and www.sjwgroup.com. you cause statements copies today, to our update factors a XX-K, release to in and results of and the press could

the have will ask at presentation. You to the questions end the opportunity of

an available January webcast be this reminder, until archive recorded webcast of XXXX. a is the and As being XX, will

turn corporate press on the to Rich. release webcast access our You over website. now I will call the the can and

Richard Roth

you Welcome everyone us. and you, joining for Suzy. Thank thank

capital growth need regulatory Lynch, the base, They reliable structurally detail earnings lower earnings. solid realistic water growth increased on platforms today located operational safe, key consolidated discuss superb quarter and results delivering programs opportunity for the high information outstanding policies strong the third water financial the environment On and regional are regulatory And the quarter one, our more effective investments Jim Financial acknowledge will Group's I Executive a are results, supply, and well engine Jim? our reflect quality filings, company. systems company's foundation for two mechanisms ensure include its usage that and as regulatory our to the and authorized and growth in for Officer; and call now and rate fundamentals third Two, Jim's in will SJW's in provide profitability. in Three, and matters. additional year-to-date Vice President. to sustained earn SJW services. utility sustained a provide provide areas of with Chief other water that robust me plant recognizing After customers a constructive the Jensen, four, company remarks to continued turn and matters. in other enjoying economic water population returns. business of as that Palle the Jim execution growth

James Lynch

Thank you, Rich.

and results quarter service in operating rate authorized third usage Our customer year-to-date the both, Texas areas. California increases an for from and benefited our and in increase

third for income and million $XXX.X year-to-date of was or same the a diluted quarter increase for diluted the was period per increase million, third quarter million, the with $X.XX million of compares a or revenue XX.X% last $XX.X $X.XX over share the share, quarter this Third was over XXXX quarter XX.X% XXXX. per revenue Net $XX $XXX.X year.

partially increased or increase $X.XX in per offset primarily production of per usage For due share was including year-to-date from was and Memorandum cost share, increases share. expenses our increased were $X.XX and per $X.XX Conservation share, $X.XX earnings diluted due to $X.XX $X.XX of an share share $X.XX per Water impact XXXX. share, usage, the increase in $XX.X water was quarterly share. of increase by net and higher year, income and $X.XX diluted $X.XX in per our usage share to customer increased unit was million The account $XX.X higher diluted by compared Account per to The or or memorandum and per our expenses many the rate and earnings The increases income share lower of income $X.X These of in same per rate operating diluted million customer per per per of share. other driven of contributed factors. per increases WCMA, $X.X balancing

gain customer recognized estate due activity, usage. and the These of $X.XX account per less cost, were to of partially by balancing a offset including per surface WCMA expenses water production the a water $X.XX In addition, increased share memorandum $X.XX share share. sale a of higher real we increase per on per and in unit increases

in which XXXX share In General XXXX. revenue of and in the in gain Group California Service reoccurred true-up neither per a $X.XX stock, Case recognized of we Water $X.XX addition, sale on Rate California

experienced result for due expenses year-to-date respectively in of related decision of increase to of share. resulted administrative labor per in increase executive also higher primarily were at Treatment completion the and X.X% million, our California XXXX improvements Montevina of of Rate additional increase XXXX revenue. Rate our $X.XX million the Case the to and $X.XX The an increase higher X.X% an increases escalation related increases Water the share XXXX General planned expenses, $XX.X authorized Plant. and $XX.X and of We and quarter in other and expenses fees, search regulatory in general fees per

respectively. in Valley continue due use authorized water Despite purchased The for instituted district, ongoing X, District's year-to-date these increase revenue to Clara we authorized wholesale lag taxes XX% California, our XXXX. water In X% Santa due increased water additional X.X% recovery contributing addition, activities. increases, cost provider Water cost for the $X.X and water imported of in and million a increase effective for a usage increased $X.X and to California and usage pump water the increase. quarter ground restrictions water rates in conservation the July million Customer X.X% to

California WCMA recover the year-to-date result were in expenses during to a revenue in surface and XXXX cost million such quarter due July the during a $XX.X million million of primarily Water lost increased quarter of mechanism $X and as water. us The production to increases the low Our $X.X and activities. district's rate use hikes allowed $XX.X the cost decrease year-to-date. million

on Regarding the $X.X XXXX, fourth for gain generated Jose. due due to improvements. the is of we in million transactions project Company to second of Water completed labor downtown surface of San regulatory water reported The Retrofit expense Plant source sale search quarter partner. income real $X.X off-line estate gain year-to-date including Plant been for other of Lake and SJW stored to $X includes the water, for time a for related and Land be of million in in pretax expense, from benefit begin related pretax and million quarter operating has which increases year-to-date, executive to during The two a in year Monteria will to Other $X.X properties costs supply fees, final million capital at and phase and Other Treatment $X.X our minority increases the primarily construction quarter taxes partnership's expenses depreciation on project. the increased our we water currently plant. the Elman, this the expected million the our

on additions company we to of funded Montevina Turning the added company XXXX program, in approximately expenditure total Plant spent quarter our the third utility Treatment bringing year-to-date. million included million project. funded to capital $XX.X This plant million Water in $XX $XXX.X

We additional $X of expect to on spend during the remainder Montevina an the XXXX. million project

increase accounts The was period XX% operations over income primarily attributable offset cash non-controlling by items in operating With back of financing $XX.X flows we the a $XX.X on Turning million and other that, net the interest lines in and partially collected on $XXX Rich. million quarter million net will additions accruals, I change taxes XXXX. various and year-to-date payable to and adjustment period increase income regulatory after reduction for utility and net had At to turn over end over our to liquidity, call balancing stop other short-term for changes credit amounts $XX million plant assets. in in of XXXX $X.X the a activities. before memorandum of in of bank non-cash from increased the and million available

Richard Roth

remains Thank for you, Jim. the water positive near-term. supply California's outlook

grapples the on However, state recurring half with San of and solutions to which is the of and cost the change, to State water delivered environmental projects, of depend both Sacramento, Clara climate Delta. as Bay pursuit San the Santa longer droughts, California's Bay certain supply Joaquin, term water and of outlook county's the Nearly is health issues environmental the grow the federal and economy effective address and population less via Joaquin Delta. Sacramento, continue

quality there multiple It then water Nevertheless, supplier, many San been for WCMA. continued Jose not be infrastructure acceptable know, attempts call Clara more its support you track Water of that the the for varied to ecosystem of and and conservation water There accordingly the have continues reliable the most by to Memorandum Bay to to ensure Account is is a the measures solution revenue the secure water conservation lost state of California to that restore their continues due supplies. Santa reliable maintaining or and Delta's high find safe, rigorous yet Water is District Conservation Company and Water Valley As delivery through stakeholders. State our regulatory surprising to wholesale service. investments

project. third systems. reflect a The low SJW ability treatment Retrofit quarter Water the San water to on-track water additions water expect with SJW enhance fourth $XX to And water the million its regulations. Jose engineering, Company's of mentioned, remains and utility the $XXX San Water processing drinking in take ensure totaled million record construction with million $XX.X surface previously plant advantage and and Group invest stringent cost, XXXX. its will company's quarter Jose Group has Plant high of increasingly our Treatment finished Company a As supply plant in Montevina to Water water, begin local in exceptional record we compliance quality nearly capabilities. design new

reported, SJW work quarter of supplies XXXX consummate Guadalupe culminating sale multi-year River to Texas and to best-in-class water effective, customers. the partners secure to Authority business with fourth expects the perspective continues supply long-term reliable ability SJW of the in available Limited for its for to the to residential demonstrate Alliance ensure supplies water previously are cost develop Blanco As Water effort additional solutions a to water public to and region. current

ensure focused in and regulatory SJW growth population has XXXX SJW in securing customer its help executing service to earn return. programs, water its pursuing and of beyond, opportunity through accommodate and use remains realistic California the levels capital economic authorized and on to a technology, and effective improving to Looking efficiency mechanisms supplies policies that Texas,

I as Finally, be November effective will retiring CEO XXXX. X,

change, utility has be For the social environment SJW. the This with privilege innovative shareholders, sheet exist distinct culture XX part thorough is meet to technological of a opportunities issues. serious water success. has organization. regulatory The faced centric customers SJW's a culture stakeholders. strong and that has SJW tenure workforce. characterized challenges anywhere changed characterized and a water application we've trust a prepared at customer the challenges growing by earned years last that continue all in considerations greatly of SJW to is been rapid competing and during balance at with The and growth to infrastructure and technology, business my company balance demands and and employees, by the and that critical dynamic planning, on will level talented these every many is construct it seeks and and proactive reflected and face to remarkably of honor environmental well effective supplies,

for I'm result, turn call come. for questions. to continue SJW. to to investment your the prosper and in a innovate, that grow With confident that, Thank the As you back will years and will SJW I for many operator

Operator

from of Janney. Gaugler the Instructions] line Michael first [Operator with question Our comes

open. is line Your

Michael Gaugler

everyone. morning, Good

perhaps, and at to the and Just online the how maybe that? because expense And think guess could third and now, back EPS guidance about XXXX? the bridge I'm quarter the have fourth Montevina trying here here expenses year-to-date had in question, you ratio give impact looking out water coming production there one me we're in I the might quarter in any change on

James Lynch

of see plant. of the we to we're come December that remainder the So any with production anticipating the end probably the year sometime will meaningful regards in Montevina online year, Michael, out at the of where

It's be be will a Lake we We forward not would soon supplies basis able contribution that too to to additional Elsman in should do as of whether on in supply are or it's to but year 'XX expect some that so take we result starting from benefit be the change going with that. water up tell meaningfully really year we in water historical Elsman, XXXX. into the operational rainfall our a go plant to move

Michael Gaugler

full currently? the reservoir Is

James Lynch

is reservoir full, the I Currently guess.

Michael Gaugler

Okay.

there So you've the supply half for got year? quite the of a first

James Lynch

We have some that again, two but it should billion full processing 'XX. into of gallons a available we of about reservoir is start be in will to -- and most which begin December

Michael Gaugler

pleasure. right, I was that question had quarter. been All Rich, the a only the on it's

Richard Roth

looking to later. you Thank Ditto to talking Michael, that forward you.

Michael Gaugler

Sure.

Operator

to now Roth time. [Operator Richard at for you. questions I'm Instructions] call remarks. showing back to I would this closing Thank the no any further like turn

Richard Roth

you, Thank operator.

the water CEO Eric the as November X. any with a in of feel Many X on about company. And point free joining of him you. announced, business. Again, all Thornburg pleasure he Lynch to that the new or November its previously know a on questions has Jim record CEO and/or comments As Eric; long at to work it's be call retiring will you been for company I as will be and may

So that my remarks. concludes

James Lynch

pleasure terms our our this like shareholder year; XXXX on growth been He Rich growth, audience company our experienced just served SJW our just to mentioned, considerable say the I'd and XXXX. our work since Rich this footprint. and as during has journey. at customers, It's remind XX-year CEO he this retiring truly been has then -- alongside to in a And geographic value of as to is since Rich

and behalf on Rich his best of of him thank Board our and wish and in entire our So staff contributions the to retirement. upcoming wanted his I management personally Directors, many for

with for back to So I'll goodbye. a that, turn final the Rich call

Richard Roth

good everyone call. everybody, that's final the enough And luck that to too. well to goodbye me, Okay, for concludes good

Operator

a today's gentlemen, all disconnect. may participating thank for Everyone, does great the conclude you Ladies and This have in you and conference. program day.

SJW (SJW) 26 Oct 172017 Q3 Earnings call transcript