What changed in this filing

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Item 1. Financial Statements

2020-08-10 compared with 2020-05-11 · 247 added, 160 removed, 418 unchanged (49% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

OPERATING EXPENSE:

14 unchanged sentences

Interest income on money market fund

Gain on sale of real estate investments

Income before income taxes

Provision for income taxes

NET INCOME BEFORE NONCONTROLLING INTEREST

Less net income attributable to the noncontrolling interest

SJW GROUP NET INCOME

Other comprehensive income, net of tax:

Unrealized loss on investment, net of tax benefit of $50 in 2020

Other comprehensive income (loss), net

SJW GROUP COMPREHENSIVE INCOME

32 unchanged sentences

authorized 70,000,000 shares;

issued and outstanding shares 28,497,841 on March 31, 2020 and 28,456,508 on December 31, 2019

issued and outstanding shares 28,516,705 on June 30, 2020 and 28,456,508 on December 31, 2019

Additional paid-in capital

Retained earnings

Accumulated other comprehensive (loss) income

Accumulated other comprehensive income

Total stockholders’ equity

6 unchanged sentences

Accrued interest

Accrued property taxes and other non-income taxes

Accrued payroll

11 unchanged sentences

Comprehensive

Income (Loss)

Noncontrolling Interest

Stockholders’

6 unchanged sentences

BALANCES, March 31, 2020

Unrealized gain on investment, net of tax of $4

Share-based compensation

Issuance of restricted and deferred stock units

Dividends paid ($0.32 per share)

BALANCES, June 30, 2020

Comprehensive

Noncontrolling Interest

Stockholders’

7 unchanged sentences

BALANCES, March 31, 2019

Net income before noncontrolling interest

Distribution to noncontrolling interest

Share-based compensation

Issuance of restricted and deferred stock units

Dividends paid ($0.30 per share)

BALANCES, June 30, 2019

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands)

Three months ended March 31,

Six months ended June 30,

OPERATING ACTIVITIES:

3 unchanged sentences

Stock-based compensation

Gain on sale of real estate investments

Changes in operating assets and liabilities:

4 unchanged sentences

Postretirement benefits

Regulatory assets and liability related to balancing and memorandum accounts

Regulatory assets and liabilities related to balancing and memorandum accounts

Up-front service concession payment

Other noncurrent assets and noncurrent liabilities

Other changes, net

6 unchanged sentences

Payments to retire utility plant, net of salvage

Proceeds from sale of real estate investments

NET CASH USED IN INVESTING ACTIVITIES

1 unchanged sentence

Borrowings on line of credit

Repayments of line of credit

Repayments on line of credit

Long-term borrowings

9 unchanged sentences

CASH AND CASH EQUIVALENTS, END OF PERIOD

Cash paid (received) during the period for:

Cash paid during the period for:

Supplemental disclosure of non-cash activities:

4 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2020

JUNE 30, 2020

(in thousands, except share and per share data)

3 unchanged sentences

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326):

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments,” and subsequent amendments.

Topic 326 requires measurement and recognition of expected credit losses for financial assets held.

This was effective for SJW Group in the first quarter of fiscal 2020.

The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements.

ASU 2016-13 was effective for SJW Group in the first quarter of fiscal 2020.

The adoption of ASU 2016-13 did not have a material impact on the consolidated financial statements.

Water sales are seasonal in nature and influenced by weather conditions.

3 unchanged sentences

The major streams of revenue for SJW Group are as follows:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Revenue from contracts with customers

4 unchanged sentences

Basic earnings per share is calculated using income available to common stockholders, divided by the weighted average number of shares outstanding during the period.

Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with restricted common stock awards under SJW Group’s Long-Term Incentive Plan (as amended, the “Incentive Plan”) and under the performance stock plans assumed through the business combination with Connecticut Water Service, Inc.

Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with restricted common stock awards under SJW Group’s Long-Term Incentive Plan (as amended, the “Incentive Plan”), shares potentially issuable under the performance stock plans assumed through the business combination with Connecticut Water Service, Inc.

(“CTWS”), and shares potentially issuable under the Employee Stock Purchase Plan (“ESPP”).

For the three months ended March 31, 2020 and 2019 , 17,573 and 7,417 anti-dilutive restricted common stock units were excluded from the dilutive earnings per share calculation, respectively.

For the three months ended June 30, 2020 and 2019 , 9,397 and 2,217 anti-dilutive restricted common stock units were excluded from the dilutive earnings per share calculation, respectively.

For the six months ended June 30, 2020 and 2019 , 19,191 and 9,634 anti-dilutive restricted common stock units were excluded from the dilutive earnings per share calculation, respectively.

Utility Plant Depreciation

A portion of depreciation expense is allocated to administrative and general expense.

For the three months ended March 31, 2020 , and 2019 , the amounts allocated to administrative and general expense were $ 1,098 and $ 657 , respectively.

For the three months ended June 30, 2020 and 2019 , the amounts allocated to administrative and general expense were $ 370 and $ 673 , respectively.

For the six months ended June 30, 2020 , and 2019 , the amounts allocated to administrative and general expense were $ 1,469 and $ 1,330 , respectively.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

June 30, 2020

(in thousands, except share and per share data)

2 unchanged sentences

The types of awards included in the Incentive Plan are restricted stock awards, restricted stock units, performance shares, or other share-based awards.

As of March 31, 2020 , 184,130 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units and an additional 759,976 shares are available for award issuances under the Incentive Plan.

As of June 30, 2020 , 179,913 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units and an additional 745,492 shares are available for award issuances under the Incentive Plan.

In addition, shares are issued to employees under the company’s ESPP.

1 unchanged sentence

CTWS 2014 Performance Stock Program, CTWS 2004 Performance Stock Program and CTWS 1994 Performance Stock Program (collectively, the “CTWS Plan”).

As of March 31, 2020 , approximately 101,647 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units under the CTWS Plan.

As of June 30, 2020 , approximately 101,711 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units under the CTWS Plan.

Stock compensation costs charged to income are recognized on a straight-line basis over the requisite service period.

A summary of compensation costs charged to income and proceeds from the exercise of any restricted stock and similar instruments that are recorded to additional paid-in capital and common stock, by award type, are presented below for the three months ended March 31, 2020 , and 2019 .

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Adjustments to additional paid-in capital and common stock for:

4 unchanged sentences

Stock, Restricted Stock and Deferred Restricted Stock

For the three months ended March 31, 2020 and 2019 , SJW Group granted under the Incentive Plan 28,367 and 17,451 , respectively, three year service-based restricted stock awards with a weighted-average grant date fair value of $ 65.89 and $ 51.28 , respectively, per unit.

Performance-based and market-based restricted stock awards granted for the three months ended March 31, 2020 and 2019 were 24,581 and 30,401 target units with a weighted-average grant date fair value of $ 73.85 and $ 60.46 respectively, per unit.

For the three months ended June 30, 2020 , and 2019 , SJW Group granted under the Incentive Plan 14,346 and 9,114 , respectively, one year and three year service-based restricted stock awards with a weighted-average grant date fair value of $ 60.17 and $ 51.69 , respectively, per unit.

For the six months ended June 30, 2020 , and 2019 , SJW Group granted under the Incentive Plan 42,713 and 26,565 , respectively, one year and three year service-based restricted stock awards with a weighted-average grant date fair value of $ 63.97 and $ 51.42 , respectively, per unit.

Performance-based and market-based restricted stock awards granted for the three months ended June 30, 2020 , and 2019 were 138 and 0 target units, respectively, with a weighted-average grant date fair value of $ 66.99 and $ 0 respectively, per unit.

Performance-based and market-based restricted stock awards granted for the six months ended June 30, 2020 , and 2019 were 24,719 and 30,401 target units, respectively, with a weighted-average grant date fair value of $ 72.01 and $ 60.46 , respectively, per unit.

Based upon actual attainment relative to the target performance metric, the number of shares issuable can range between 0 % to 150 % of the target number of shares for performance-based restricted stock awards, or between 0 % and 200 % of the target number of shares for market-based restricted stock awards.

As of March 31, 2020 , the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $ 6,113 .

As of June 30, 2020 , the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $ 6,050 .

This cost is expected to be recognized over a weighted-average period of 2.03 years.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

Employee Stock Purchase Plan

2 unchanged sentences

A total of 400,000 shares of common stock have been reserved for issuance under the ESPP.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

SJW Group’s recorded expenses were $ 86 and $ 76 for the three months ended March 31, 2020 and 2019 , related to the ESPP.

SJW Group’s recorded expenses were $ 74 and $ 160 for the three and six months ended June 30, 2020 , respectively, and $ 65 and $ 141 for the three and six months ended June 30, 2019 , respectively, related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ends July 31, 2020 , for the ESPP is approximately $ 25 .

This cost is expected to be recognized during the second and third quarters of 2020.

This cost is expected to be recognized during the third quarter of 2020.

Real Estate Investments

The major components of real estate investments as of March 31, 2020 , and December 31, 2019 , are as follows:

The major components of real estate investments as of June 30, 2020 , and December 31, 2019 , are as follows:

Buildings and improvements

2 unchanged sentences

Substantially all of the real estate investments relate to assets that are currently subject to operating leases.

On April 6, 2017, 444 West Santa Clara Street, L.P.

sold all of its interest in the commercial building and land the partnership owned and operated.

In connection with this sale, the partnership was required to deposit $750 into an escrow account for estimated repairs to the creek next to the land the partnership sold.

On April 22, 2019, all creek repairs were completed and a reimbursement of $ 745 was provided to the partnership.

SJW Land Company holds a 70% limited partner interest in 444 West Santa Clara Street, L.P.

SJW Land Company and the noncontrolling interest recognized a pre-tax gain on the creek reimbursement of $521 and $224 , respectively, on the transaction.

Defined Benefit Plan

SJW Group maintains noncontributory defined benefit pension plans for its eligible employees.

SJWC and CTWS employees hired before March 31, 2008, and January 1, 2009, respectively, are entitled to benefits under the pension plans based on the employee’s years of service and compensation.

Certain employees hired before March 1, 2012, and covered by a plan merged into the CTWS plan in 2013 are also entitled to benefit based on the employee’s years of service and compensation.

San Jose Water Company (“SJWC”) and CTWS employees hired before March 31, 2008, and January 1, 2009, respectively, are entitled to benefits under the pension plans based on the employee’s years of service and compensation.

Certain employees hired before March 1, 2012, and covered by a plan merged into the CTWS plan in 2013 are also entitled to benefits based on the employee’s years of service and compensation.

For SJWC employees hired on or after March 31, 2008, benefits are determined using a cash balance formula based upon compensation credits and interest credits for each employee.

1 unchanged sentence

SJW Group does not have multi-employer plans.

In addition, senior management hired before March 31, 2008, for SJWC and January 1, 2009, for CTWS are eligible to receive additional retirement benefits under the supplemental executive retirement plans and retirement contracts.

In addition, senior management hired before March 31, 2008, for SJWC and January 1, 2009, for CTWS are eligible to receive additional retirement benefits under supplemental executive retirement plans and retirement contracts.

SJWC’s senior management hired on or after March 31, 2008, are eligible to receive additional retirement benefits under SJWC’s Cash Balance Executive Supplemental Retirement Plan.

Both of the plans are non-qualified plans in which only senior management and other designated members of management may participate.

The supplemental retirement plans and Cash Balance Executive Supplemental Retirement Plan are non-qualified plans in which only senior management and other designated members of management may participate.

SJW Group also provides health care and life insurance benefits for retired employees under employer-sponsored postretirement benefits other than pension plans.

The components of net periodic benefit costs for the defined benefit plans and other postretirement benefits for the three months ended March 31, 2020 , and 2019 are as follows:

Three months ended March 31,

Interest cost

Expected return on assets

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

June 30, 2020

(in thousands, except share and per share data)

The following tables summarize the fair values of plan assets by major categories as of March 31, 2020 , and December 31, 2019 :

Fair Value Measurements at March 31, 2020

The components of net periodic benefit costs for the defined benefit plans and other postretirement benefits for the three and six months ended June 30, 2020 , and 2019 are as follows:

Three months ended June 30,

Six months ended June 30,

Interest cost

Expected return on assets

The following tables summarize the fair values of plan assets by major categories as of June 30, 2020 , and December 31, 2019 :

Fair Value Measurements at June 30, 2020

Asset Category

14 unchanged sentences

In 2020 , SJW Group expects to make required and discretionary cash contributions of up to $ 8,594 to the pension plans and Social Welfare Plan.

For the three months ended March 31, 2020 , SJW Group has made no contributions to such plans.

For the three and six months ended June 30, 2020 , SJW Group has made no contributions to such plans.

Segment and Non-Tariffed Business Reporting

1 unchanged sentence

(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.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

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, Inc.

(“NEWUS”) 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.

2 unchanged sentences

SJW Group’s chief operating decision maker includes the Chairman, President and Chief Executive Officer, and his executive staff.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

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.

1 unchanged sentence

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

For Three Months Ended June 30, 2020

Water Utility Services

7 unchanged sentences

Income tax expense (benefit) in net income

For Three Months Ended March 31, 2019

For Three Months Ended June 30, 2019

Water Utility Services

5 unchanged sentences

Depreciation and amortization

Senior note, mortgage and other interest expense

Income tax expense (benefit) in net income

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

For Six Months Ended June 30, 2020

Water Utility Services

Real Estate Services

Operating revenue

Operating expense

Operating income (loss)

Net income (loss)

Depreciation and amortization

Senior note and other interest expense

Income tax expense (benefit) in net income

* 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.

For Six Months Ended June 30, 2019

Water Utility Services

Real Estate Services

Operating revenue

Operating expense

Operating income (loss)

Net income (loss)

Depreciation and amortization

Senior note and other interest expense

Income tax expense (benefit) in net income

* The “All Other” category for the six months ended June 30, 2020 , includes the accounts of SJW Group, SJWNE LLC and CTWS on a stand-alone basis.

For the three months ended June 30, 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.

For the three months ended June 30, 2019 , Hydro Sub, Inc.

had no recorded revenue or expenses and as of June 30, 2019 held no assets and incurred no liabilities.

was a subsidiary created solely to facilitate the merger with CTWS and was dissolved following the completion of merger in October 2019.

1 unchanged sentence

SJW Group’s contractual obligations and commitments include senior notes, bank term loans, revenue bonds, state revolving fund loans, mortgages, and other obligations.

Water Utility Services have received advance deposit payments from its customers on certain construction projects and the refunds of the advance deposit payments constitute an obligation to the respective subsidiaries.

On March 12, 2020 Connecticut Water entered into a note purchase agreement with the purchasers listed in the agreement, pursuant to which Connecticut Water sold an aggregate principal amount of $ 35,000 of its 3.51 % Senior Notes, due March 12, 2050.

Lines of Credit

On April 24, 2020, SJW Group and SJW Land Company entered into a Termination and Payoff agreement with JPMorgan Chase Bank, N.A.

as the lender (the “Lender”) to terminate the SJW Group and SJW Land Company $ 15,000 credit agreement, effective as of April 29, 2020.

On May 11, 2020, the SJWC entered into a Second Amendment (the “Second Amendment”) to SJWC’s existing $ 125,000 credit agreement, dated as of June 1, 2016, with the Lender, as amended by the First Amendment, dated January 12, 2018, (collectively, the “Existing SJWC Credit Agreement”), with the Lender.

The Second Amendment amends the existing SJWC Credit Agreement to, among other things, increase the total commitment by $ 15,000 , from $ 125,000 to $ 140,000 .

Also on May 11, 2020, SJWC entered into a $ 50,000 credit agreement (the “New SJWC Credit Agreement”) with the Lender.

Proceeds of borrowings under the New SJWC Credit Agreement may be used to refinance existing debt, for working capital, and for general corporate purposes.

The New SJWC Credit Agreement has a maturity date of November 11, 2020.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

Borrowings under the New SJWC Credit Agreement bear interest at either the Alternate Base Rate (“ABR”) or the LIBOR (as defined in the New SJWC Credit Agreement) rate.

ABR borrowings (which are borrowings bearing interest at a rate determined by reference to the ABR) will bear interest at a rate per annum equal to (i) the greatest of (a) the prime rate in effect on such day, (b) the federal funds effective rate on such day plus 0.5 % , and (c) the adjusted LIBOR rate for a one-month interest period on such day plus 1 % plus (ii) the Applicable Rate (as defined in the New SJWC Credit Agreement), which is determined based on a pricing grid that is dependent upon the credit rating of SJWC as determined by either S&P or Moody’s.

Eurodollar borrowings under the New SJWC Credit Agreement will bear interest at a rate per annum equal to (i) the adjusted LIBOR rate for the interest period in effect plus (ii) the Applicable Rate.

The New SJWC Credit Agreement contains customary representations, warranties and events of default, as well as certain restrictive covenants customary for facilities of this type, including restrictions on indebtedness, liens, acquisitions and investments, restricted payments, asset sales, and fundamental changes.

The New SJWC Credit Agreement also includes certain financial covenants that require SJWC to maintain a maximum funded debt to capitalization ratio and a minimum interest coverage ratio and to limit SJWC’s maximum consolidated cash balance.

On May 29, 2020, the CTWS entered into a Second Amendment to the CTWS’s existing $ 15,000 credit agreement, dated as of August 6, 2014, with the CoBank, ACB (“CoBank), as amended by the First Amendment, dated October 28, 2015.

The Second Amendment amends the prior agreement to, among other things, increase the total commitment by $ 25,000 , from $ 15,000 to $ 40,000 and extended the maturity date to May 15, 2025.

Long-Term Debt

On March 12, 2020, Connecticut Water entered into a note purchase agreement with the purchasers listed in the agreement, pursuant to which Connecticut Water sold on the same date an aggregate principal amount of $ 35,000 of its 3.51 % Senior Notes, due March 12, 2050.

The notes are unsecured obligations of Connecticut Water.

2 unchanged sentences

Under the note purchase agreement, Connecticut Water is required to comply with certain customary affirmative and negative covenants for as long as the notes are outstanding.

The notes are also subject to customary events of default, the occurrence of which may

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

result in all of the notes then outstanding becoming immediately due and payable.

The notes are also subject to customary events of default, the occurrence of which may result in all of the notes then outstanding becoming immediately due and payable.

The notes have terms and conditions that restrict Connecticut Water from issuing additional debt or paying a dividend to CTWS if such debt or distribution would trigger an event of default.

The senior note agreement also requires Connecticut Water to maintain a debt to capitalization ratio of not more than 60 % and an interest coverage ratio at each fiscal quarter end of no less than three-to-one.

As of March 31, 2020 , Connecticut Water was in compliance with all financial ratio and operational covenants under this agreement.

The closing occurred simultaneously with the signing of the note purchase agreement.

The note purchase agreement also requires Connecticut Water to maintain a debt to capitalization ratio of not more than 60 % and an interest coverage ratio at each fiscal quarter end of no less than three-to-one.

As of June 30, 2020 , Connecticut Water was in compliance with all financial ratio and operational covenants under this note purchase agreement.

On December 19, 2019, Maine Water issued $ 5,000 of Series S First Mortgage Bonds to the Maine Municipal Bond Bank through the State Safe Drinking Water Revolving Loan Fund.

1 unchanged sentence

The Series S First Mortgage Bond covenants are the same as all other First Mortgage Bonds.

The proceeds were held as restricted cash by a trustee to be used for pre-approved projects primarily related to preliminary engineering and design work of a water treatment plant in Maine’s Biddeford and Saco division.

Proceeds were held by a trustee for the bond and until conditions were met.

2 unchanged sentences

Fair Value Measurement

The following instruments are not measured at fair value on SJW Group’s condensed consolidated balance sheets as of March 31, 2020 , but require disclosure of their fair values:

cash and cash equivalents, a money market fund, accounts receivable and accounts payable.

The estimated fair value of such instruments as of March 31, 2020 , approximates their carrying value as reported on the condensed consolidated balance sheets.

The following instruments are not measured at fair value on SJW Group’s condensed consolidated balance sheets as of June 30, 2020 , but require disclosure of their fair values:

cash and cash equivalents, accounts receivable and accounts payable.

The estimated fair value of such instruments as of June 30, 2020 , approximates their carrying value as reported on the condensed consolidated balance sheets.

The fair value of such financial instruments are determined using the income approach based on the present value of estimated future cash flows.

There have been no changes in valuation techniques during the three months ended March 31, 2020 .

The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1.

There have been no changes in valuation techniques during the three and six months ended June 30, 2020 .

The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy,

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

with the exception of cash and cash equivalents, which would be categorized as Level 1.

The fair value of pension plan assets is discussed in Note 4.

1 unchanged sentence

These contracts are based principally on a referenced pool of investment funds that actively redeem shares, are observable and measurable, and are presented in “Investments” on SJW Group’s consolidated balance sheets.

As of March 31, 2020 , the value of the company owned life insurance was $ 7,207 of which $ 3,650 was related to assets to fund CTWS’s supplemental retirement plan agreements.

As of June 30, 2020 , the value of the company owned life insurance was $ 7,282 of which $ 3,739 was related to assets to fund CTWS’s supplemental retirement plan agreements.

As of December 31, 2019 , the value of the company owned life insurance was $ 7,086 of which $ 3,829 was related to assets to fund CTWS’s supplemental retirement plan agreements.

In addition to life insurance contracts, CTWS’s supplemental retirement plan agreements are also funded with a Rabbi Trust.

The following tables summarize the fair values of the Rabbi Trust investment assets to fund CTWS’s additional retirement benefits under the supplemental executive retirement plans and retirement contracts by major categories as of March 31, 2020 , and December 31, 2019 :

Fair Value Measurements at March 31, 2020

Fair Value Measurements at June 30, 2020

Asset Category

Money market funds

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

Fair Value Measurements at December 31, 2019

1 unchanged sentence

Money market funds

The fair value of SJW Group’s long-term debt was approximately $ 1,417,613 and $ 1,396,205 as of March 31, 2020 , and December 31, 2019 , respectively, and was determined using a discounted cash flow analysis, based on the current rates for similar financial instruments of the same duration and creditworthiness of the company.

The book value of the long-term debt was $ 1,339,307 and $ 1,305,869 as of March 31, 2020 , and December 31, 2019 , respectively.

The fair value of SJW Group’s long-term debt was approximately $ 1,516,139 and $ 1,396,205 as of June 30, 2020 , and December 31, 2019 , respectively, and was determined using a discounted cash flow analysis, based on the current rates for similar financial instruments of the same duration and creditworthiness of the company.

The book value of the long-term debt was $ 1,338,333 and $ 1,305,869 as of June 30, 2020 , and December 31, 2019 , respectively.

The fair value of long-term debt would be categorized as Level 2 in the fair value hierarchy.

1 unchanged sentence

California Regulatory Affairs

On July 20, 2018, the CPUC issued an Order Instituting Investigation (“OII”) No.

On July 20, 2018, the California Public Utilities Commission (“CPUC”) issued an Order Instituting Investigation (“OII”) No.

18-07-007 concerning SJW Group’s then proposed merger with CTWS.

2 unchanged sentences

A Public Participation Hearing was held on January 31, 2019.

On March 4, 2019, the CPUC suspended this proceeding due to SJW Group’s announcement of its intention to file a new merger approval application with the Connecticut Public Utilities Regulatory Authority (“PURA”).

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

March 4, 2019, the CPUC suspended this proceeding due to SJW Group’s announcement of its intention to file a new merger approval application with the Connecticut Public Utilities Regulatory Authority (“PURA”).

On April 3, 2019, SJW Group and CTWS jointly filed a new merger application with PURA.

After securing the required approvals from both PURA and the MPUC, SJW Group announced the close of the merger on October 9, 2019, and notified the CPUC accordingly.

As of March 31, 2020, the OII is still pending with the CPUC.

After securing the required approvals from both PURA and the Maine Public Utilities Commission (“MPUC”), SJW Group announced the close of the merger on October 9, 2019, and notified the CPUC accordingly.

As of June 30, 2020, the OII is still pending with the CPUC.

On September 14, 2018, the CPUC issued OII No.

18-09-003 to which SJWC was named as Respondent.

The OII will determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears.

The OII was to determine whether the company unlawfully overcharged customers over a 30-year period by failing to pro-rate service charges when increases occurred during a billing period, and whether the company double-billed service charges during one billing period when allegedly switching from billing such charges in advance to billing in arrears.

The OII resulted from a report by the CPUC’s Consumer Protection and Enforcement Division (“CPED”), dated August 16, 2018, recommending an investigation into SJWC’s billing practice.

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For a typical residential customer with a 3/4-inch meter, the one-time refund will be $ 5.52 dollars .

This advice letter was approved effective April 12, 2020, and SJWC began issuing refunds shortly thereafter.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

On June 19, 2019, the CPUC issued its final decision resolving the remaining issues in SJWC’s GRC.

Decision 19-06-010 denied the establishment of a WRAM/SRM and authorized the recovery of the Hydro Generation Research, Development and Demonstration Memorandum Account balance of $ 1,243 .

This advice letter was approved effective April 12, 2020, and SJWC completed issuing refunds in mid-June 2020.

On June 19, 2019, the CPUC issued its final decision resolving the remaining issues in SJWC’s general rate case for 2019.

Decision 19-06-010 denied the establishment of a WRAM/SRM and authorized the recovery of the Hydro Generation Research, Development and Demonstration Memorandum Account balance as of September 30, 2016.

SJWC filed Advice Letter No.

534 on August 1, 2019, to recover this amount via a surcharge over a three-year period.

The CPUC rejected the advice letter on October 10, 2019, citing an error and recommended a correction and a new filing for recovery.

534 on August 1, 2019, to recover the $ 1,243 balance as of September 30, 2017, via a surcharge over a three-year period.

The CPUC rejected the advice letter on October 10, 2019, citing an error in the name of the memorandum account and recommended a correction and a new filing for recovery.

SJWC filed to correct the record and received the CPUC’s decision on April 10, 2020.

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SJWC filed Advice Letter No.

537 with the CPUC requesting authorization to refund the balance in its 2018 Tax Accounting Memorandum Account as required by the GRC decision on October 18, 2019.

537 with the CPUC requesting authorization to refund the balance in its 2018 Tax Accounting Memorandum Account as required by the general rate case decision on October 18, 2019.

On December 3, 2019, Advice Letter 537-A was filed to refund the balance via a one-time surcredit.

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19-12-002 with the CPUC requesting approval for cost recovery to deploy Advanced Metering Infrastructure throughout its service area.

The application seeks revenue increases of $ 2,315 or 0.61 % in 2021, $ 3,960 or 1.04 % in 2022, and $ 2,510 or 0.65 % in 2023, and $ 341 or 0.09 % in 2024 based on current rates in effect.

The application seeks revenue increases of $ 2,315 or 0.61 % in 2021, $ 3,960 or 1.04 % in 2022, $ 2,510 or 0.65 % in 2023, and $ 341 or 0.09 % in 2024 based on current rates in effect.

A decision from the CPUC is anticipated in the fourth quarter of 2020.

On January 22, 2020, SJWC, along with three other California water utilities, filed a joint request for a one-year deferment on the Cost of Capital filings which would otherwise be due on May 1, 2020.

Postponing the filing one year would alleviate administrative processing costs on the utilities as well as the CPUC staff, and provide relief for both CPUC and utility resources already strained by numerous other proceedings.

The request is conditioned on no changes to the current Water Cost of Capital Mechanism in place during the one-year deferment.

Postponing the filing one year would alleviate administrative processing costs on the utilities as well as the CPUC staff, and provide relief for both CPUC and utility resources

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

already strained by numerous other proceedings.

The request was conditioned on no changes to the current Water Cost of Capital Mechanism in place during the one-year deferment.

On March 11, 2020, the CPUC approved the request.

On March 19, 2020, SJWC filed Advice Letter 546 to extend customer protections listed in the company’s Disaster Relief Customer Protections and Outreach Plan as required by the CPUC in response to the Coronavirus (“COVID-19”) pandemic.

The filing also activated SJWC’s Catastrophic Event Memorandum Account (“CEMA”) to track costs related to the company’s response which include labor and materials, anticipated increase in bad debt from the suspension of shutoffs for non-payment, waived deposits and reconnection fees, and divergence from actual versus authorized usage.

The filing also activated SJWC’s Catastrophic Event Memorandum Account (“CEMA”) to track costs related to SJWC’s response which includes labor and materials, anticipated increase in bad debt from the suspension of shutoffs for non-payment, waived deposits and reconnection fees, and divergence from actual versus authorized usage.

The customer protections and CEMA were approved effective March 4, 2020.

SJWC anticipates requesting recovery of the COVID-19 pandemic response costs in a future GRC or other filings.

SJWC anticipates requesting recovery of the COVID-19 pandemic response costs in a future general rate case or other filings.

Connecticut Regulatory Affairs

As of March 31, 2020, Water Infrastructure Conservation Adjustment (“WICA”) surcharges for Connecticut Water and Avon Water were 3.24 % and 9.31 % , respectively.

As of June 30, 2020, Water Infrastructure Conservation Adjustment (“WICA”) surcharges for Connecticut Water and Avon Water were 5.75 % and 9.31 % , respectively.

HVWC does not currently have an approved WICA surcharge.

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Additionally, on February 7, 2020, Connecticut Water filed its annual WICA reconciliation which called for a 0.09 % reduction of the WICA surcharge.

On March 25, 2020, Connecticut Public Utilities Regulatory Authority (“PURA”) approved a net cumulative 5.75 % surcharge for Connecticut Water which became effective on customers’ bills on April 1, 2020.

On March 3, 2020, the Company filed an application, Docket No.

20-03-04, with PURA to merger Avon Water and HVWC with and into Connecticut Water.

On March 25, 2020, PURA approved a net cumulative 5.75 % surcharge for Connecticut Water which became effective on customers’ bills on April 1, 2020.

On March 3, 2020, Connecticut Water filed an application, Docket No.

20-03-04, with PURA to merge Avon Water and HVWC with and into Connecticut Water.

The application is to streamline borrowings, regulatory filings and internal administrative tasks associated with maintaining separate corporate entities.

The company has responded to several interrogatories and has attended a hearing on the merger application.

Connecticut Water anticipates a final decision on the proceeding in the third quarter of 2020.

On March 12, 2020, PURA issued Docket No.

20-03-15 to establish a State of Emergency Utility Shut-off Moratorium for the COVID-19 pandemic.

The moratorium ordered regulated utility companies to refrain from terminating utility service to residential customers, except for safety reasons until May 1, 2020, or until such other time as determined by the PURA.

The moratorium ordered regulated utility companies to refrain from terminating utility service to residential customers, except for safety reasons until August 1, 2020, or until such other time as determined by the PURA.

In the same docket, PURA further directed the public service companies to maintain a detailed record of costs incurred and revenues lost as a result of implementing its orders in the docket and may establish a regulatory asset to track incurred costs.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

Approval for recovery of additional costs incurred and/or revenues lost relating to the COVID-19 pandemic would be considered for recovery in the Connecticut Water’s next general rate case proceeding.

Texas Regulatory Affairs

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The WPC is the annual filing to change the component of CLWSC’s water rates for changes in purchased water costs since the last annual true-up report.

Two WPC true-up reports were filed to report 2019 costs.

The changes in the purchased water costs for the Deer Creek Ranch water system resulted in a decrease in the usage charge from $ 2.19 dollars to $ 2.02 dollars per thousand gallons, and an increase in the monthly base charge of $ 3.04 dollars per residential account.

These Deer Creek Ranch rate changes became effective October 1, 2019.

The Deer Creek Ranch rate changes became effective October 1, 2019.

The 2019 WPC true-up report for the water systems located in the Canyon Lake area resulted in a reduction of the WPC usage rate from $ 1.05 dollars to $ 0.95 dollars per thousand gallons which became effective on February 1, 2020.

The WPC filings for Deer Creek Ranch and the Canyon Lake area were approved by the Public Utilities Commission of Texas (“PUCT”) and a new tariff with the WPC rates has been issued.

The WPC filings for Deer Creek Ranch and the Canyon Lake area were approved by the Public Utilities Commission of Texas (“PUCT”) and a new tariff with the WPC rates was issued in May 2020.

In connection with the disaster declaration in Texas, the PUCT issued Order No.

50664-106 and Accounting Order No.

50664-108 that are effective during the COVID-19 pandemic.

CLWSC has responded to these orders by stopping disconnections for nonpayment of utility bills, and not charging fees for late payment.

The orders also instructs utilities to record the incremental costs and lost revenues from the COVID-19 pandemic in a regulatory tracking account for recovery in future rates.

50664-106 to mitigate the impact of the COVID-19 pandemic on residential water utility customers.

CLWSC responded to these orders by stopping disconnections for nonpayment of utility bills, and not charging fees for late payment.

The PUCT allowed this order to expire on June 13, 2020.

The PUCT also issued Accounting Orders under No.

50664-108, which instructs utilities to record the incremental costs and lost revenues from the COVID-19 pandemic in a regulatory tracking account for recovery in future rates.

These amounts will be considered by the PUCT for recovery in each utility’s next rate application.

Maine Regulatory Affairs

On December 20, 2019, Maine Water filed for a general a rate increase for their Skowhegan Division seeking approximately $ 221 , or 14.7 % , in additional revenue with the Maine Public Utilities Commission (“MPUC”).

A final decision from the MPUC is expected in the second quarter of 2020.

On December 20, 2019, Maine Water filed for a general a rate increase for their Skowhegan Division seeking approximately $ 221 , or 14.7 % , in additional revenue with the MPUC.

On June 17, 2020, the MPUC approved a general rate increase for Skowhegan Division customers allowing $ 198 in additional revenue.

Per the MPUC decision, the increase will be implemented

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

in two steps:

an initial 9.80 % rate increase effective June 15, 2020, and a 3.51 % rate increase effective July 1, 2021.

The combined rate increase is 13.31 % .

On January 20, 2020, Maine Water filed Water Infrastructure Surcharge (“WISC”) applications with the MPUC in four divisions requesting an increase between 1.76 % and 3.00 % , representing approximately $ 371 in additional revenues.

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SJWC also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC.

The Monterey Water Revenue Adjustment Mechanism (“WRAM”) tracks the difference between the revenue received for actual metered sales through the tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a uniform rate would have been in effect.

Balancing and memorandum accounts are recognized by SJWC when it is probable that future recovery of previously incurred costs or future refunds that are to be credited to customers will occur through the ratemaking process.

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A reserve is recorded for amounts SJW Group estimates will not be collected within the 24-month period.

This reserve is based on an estimate of actual usage over the recovery period, offset by applicable drought surcharges.

This reserve is based on an estimate of actual usage over the recovery period.

In assessing the probability criteria for balancing and memorandum accounts between general rate cases, SJWC considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 340-25 recognition criteria.

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When such evidence provides sufficient support, the balances are recorded in SJW Group’s consolidated financial statements.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

On December 19, 2019, the CPUC denied the recovery of the 2018 WCMA in Advice Letter No.

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Due to the decision, SJWC believes WCMA tracking no longer meets the probability criteria under ASC Topic 980-605-25.

For the three months ended March 31, 2019 , SJWC recognized a regulatory liability of $ 752 due to sales in excess of authorized usage accumulated in the 2019 WCMA account.

Since the balance represents an amount due to customers, SJWC recorded a regulatory liability for the amount with a corresponding reduction to revenues.

SJWC also recognized a regulatory liability of $ 309 due to sales in excess of authorized usage accumulated in the 2018 WCMA account for the three months ended March 31, 2019 based on ASC Topic 980-605-25.

As of March 31, 2019 , a reserve of $ 80 was recorded which is the estimated amount that would not be collected within the 24-month period, as required by the guidance.

For the three and six months ended June 30, 2019 , SJWC recognized regulatory assets of $ 1,320 and $ 568 , respectively, due to lost revenues accumulated in the 2019 WCMA account net of a reserve of $ 11 for the estimated amount that will not be collected within the 24-month period, as required by the guidance.

2018 WCMA activity for the three and six months ended June 30, 2019 , represents interest and reserve activity on the accumulated balance.

For the three and six months ended June 30, 2019 , a reserve of $94 and $ 174 , respectively, was recorded.

The amounts have been reflected in the 2018 WCMA and 2019 WCMA balances shown in the table below.

Three months ended March 31, 2020

Three months ended March 31, 2019

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2020

(in thousands, except share and per share data)

Three months ended June 30, 2020

Three months ended June 30, 2019

Beginning Balance

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Revenue accounts:

Monterey WRAM

2014-2017 WCMA

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Total cost-recovery accounts

As of March 31, 2020 , the total balance in SJWC’s balancing and memorandum accounts combined, including interest, that has not been recorded into the financial statements was a net under-collection of $ 1,780 .

All balancing accounts and memorandum-type accounts not included for recovery or refund in the current general rate case will be reviewed by the CPUC in SJWC’s next general rate case or at the time an individual account balance reaches a threshold of 2 % of authorized revenue, whichever occurs first.

Six months ended June 30, 2020

Six months ended June 30, 2019

Beginning Balance

Regulatory Asset Increase (Decrease)

Refunds (Collections) Adjustments

Ending Balance

Beginning Balance

Regulatory Asset Increase (Decrease)

Refunds (Collections) Adjustments

Ending Balance

Revenue accounts:

Monterey WRAM

2014-2017 WCMA

2012 General Rate Case true-up

Cost of capital memorandum account

Tax memorandum account

Total revenue accounts

Cost-recovery accounts:

Water supply costs

Total cost-recovery accounts

As of June 30, 2020 , the total balance in SJWC’s balancing and memorandum accounts combined, including interest, that has not been recorded into the financial statements was a net under-collection of $ 1,759 .

All balancing accounts and memorandum-type accounts not included for recovery or refund in the current general rate case will be reviewed by the CPUC in SJWC’s next

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

June 30, 2020

(in thousands, except share and per share data)

Regulatory Assets and Liabilities

Regulatory assets and liabilities are comprised of the following as of March 31, 2020 , and December 31, 2019 :

March 31, 2020

general rate case or at the time an individual account balance reaches a threshold of 2 % of authorized revenue, whichever occurs first.

Regulatory Assets

Regulatory assets are comprised of the following as of June 30, 2020 , and December 31, 2019 :

June 30, 2020

December 31, 2019

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Balancing and memorandum accounts, net

Water Revenue Adjustment (“WRA”)

Total regulatory assets, net in Consolidated Balance Sheets

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

June 30, 2020

(in thousands, except share and per share data)

The following table summarizes the estimated preliminary fair value of assets acquired and liabilities assumed as of March 31, 2020 .

The following table summarizes the estimated preliminary fair value of assets acquired and liabilities assumed as of June 30, 2020 .

Assets acquired:

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If SJW Group determines that as a result of the qualitative assessment it is more likely than not (> 50% likelihood) that the fair value is less than carrying amount, then a quantitative test is performed.

Subsequent Events

On April 24, 2020, SJW Group and SJW Land Company entered into a Termination and Payoff agreement with JPMorgan Chase Bank, N.A.

as the lender (the “Lender”) to terminate the SJW Group and SJW Land $ 15,000 credit agreement, effective as of April 29, 2020.

On May 11, 2020, the SJWC entered into a Second Amendment (the “Second Amendment”) to the SJWC’s existing $ 125,000 credit agreement, dated as of June 1, 2016, with the Lender, as amended by the First Amendment, dated January 12, 2018 (collectively, the “Existing SJWC Credit Agreement”), with the Lender.

The Second Amendment amends the Existing SJWC Credit Agreement to, among other things, increase the total commitment by $ 15,000 , from $ 125,000 to $ 140,000 .

On May 11, 2020, SJWC entered into a $ 50,000 credit agreement (the “New SJWC Credit Agreement”) with the Lender.

Proceeds of borrowings under the New SJWC Credit Agreement may be used to refinance existing debt, for working capital, and for general corporate purposes.

The New SJWC Credit Agreement has a maturity date of November 11, 2020.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2020

(in thousands, except share and per share data)

Borrowings under the New SJWC Credit Agreement bear interest at either the Alternate Base Rate (“ABR”) or the LIBOR (as defined in the New SJWC Credit Agreement) rate.

ABR borrowings (which are borrowings bearing interest at a rate determined by reference to the ABR) will bear interest at a rate per annum equal to (i) the greatest of (a) the prime rate in effect on such day, (b) the federal funds effective rate on such day plus 0.5%, and (c) the adjusted LIBOR rate for a one-month interest period on such day plus 1% plus (ii) the Applicable Rate (as defined in the New SJWC Credit Agreement), which is determined based on a pricing grid that is dependent upon the credit rating of the company as determined by either S&P or Moody’s.

Eurodollar borrowings under the New SJWC Credit Agreement will bear interest at a rate per annum equal to (i) the adjusted LIBOR rate for the interest period in effect plus (ii) the Applicable Rate.

The New SJWC Credit Agreement also includes certain financial covenants that require the company to maintain a maximum funded debt to capitalization ratio and a minimum interest coverage ratio and to limit the company’s maximum consolidated cash balance.

Legal Proceedings

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements