What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-07-30 compared with 2021-04-30 · 242 added, 164 removed, 380 unchanged (52% 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,

2021 2020 2021 2020

REVENUE $ 152,241 147,209 $ 267,026 262,963

10 unchanged sentences

Depreciation and amortization 23,512 22,753 46,950 44,135

Merger related expenses — 354

Total operating expense 119,602 111,139 221,308 211,466

3 unchanged sentences

Pension non-service cost 339 ( 7 ) 665 ( 52 )

Gain on sale of Texas Water Alliance 3,000 — 3,000 —

Other, net 1,784 1,048 3,538 1,805

Income before income taxes 24,081 23,931 25,801 26,786

(Benefit) provision for income taxes ( 896 ) 438

Provision for income taxes 3,306 4,210 2,410 4,648

NET INCOME 20,775 19,721 23,391 22,138

29 unchanged sentences

Accounts receivable:

Customers, net of allowances for uncollectible accounts of $ 3,614 and $ 3,891 on March 31, 2021 and December 31, 2020, respectively

Customers, net of allowances for uncollectible accounts of $ 3,866 and $ 3,891 on June 30, 2021 and December 31, 2020, respectively

50,825 46,832

23 unchanged sentences

authorized 70,000,000 shares;

issued and outstanding shares 29,789,887 on March 31, 2021 and 28,556,605 on December 31, 2020

issued and outstanding shares 29,804,927 on June 30, 2021 and 28,556,605 on December 31, 2020

Additional paid-in capital 579,057 510,158

11 unchanged sentences

Accrued payroll 13,895 14,012

Income tax payable 246 —

Other current liabilities 16,608 19,203

4 unchanged sentences

POSTRETIREMENT BENEFIT PLANS 125,594 121,597

REGULATORY LIABILITIES — —

OTHER NONCURRENT LIABILITIES 24,958 21,786

COMMITMENTS AND CONTINGENCIES — —

COMMITMENTS AND CONTINGENCIES (See Note 12)

$ 3,409,522 3,311,465

11 unchanged sentences

Net income — — — 2,616 — 2,616

Unrealized gain on investment, net of tax benefit of $ 14

Unrealized gain on investment, net of tax of $ 14

— — — — 38 38

6 unchanged sentences

BALANCES, March 31, 2021 29,789,887 30 578,395 400,897 ( 1,026 ) 978,296

Net income — — — 20,775 — 20,775

Unrealized gain on investment, net of tax of $ 39

— — — — 107 107

Share-based compensation — — 791 ( 28 ) — 763

Issuance of restricted and deferred stock units 15,040 — ( 9 ) — — ( 9 )

Common stock issuance, net of costs — — ( 120 ) — — ( 120 )

Dividends paid ($ 0.34 per share)

— — — ( 10,133 ) — ( 10,133 )

BALANCES, June 30, 2021 29,804,927 $ 30 $ 579,057 $ 411,511 $ ( 919 ) $ 989,679

Common Stock Additional

6 unchanged sentences

Net income — — — 2,417 — 2,417

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

Unrealized loss on investment, net of tax of $( 50 )

— — — — ( 135 ) ( 135 )

5 unchanged sentences

BALANCES, March 31, 2020 28,497,841 28 507,075 376,447 ( 9 ) 883,541

Net income — — — 19,721 — 19,721

Unrealized gain on investment, net of tax of $ 4

— — — — 10 10

Share-based compensation — — 1,009 ( 43 ) — 966

Issuance of restricted and deferred stock units 18,864 1 14 — — 15

Dividends paid ($ 0.32 per share)

— — — ( 9,122 ) — ( 9,122 )

BALANCES, June 30, 2020 28,516,705 $ 29 $ 508,098 $ 387,003 $ 1 $ 895,131

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:

5 unchanged sentences

Allowance for equity funds used during construction ( 916 ) —

Gain on sale of Texas Water Alliance ( 3,000 ) —

Changes in operating assets and liabilities:

4 unchanged sentences

Postretirement benefits 1,955 4,295

Regulatory assets and liabilities related to balancing and memorandum accounts ( 1,750 ) ( 10,158 )

Regulatory assets and liabilities excluding income tax temporary differences, net and postretirement benefits.

( 8,231 ) ( 13,903 )

Up-front service concession payment — ( 5,000 )

7 unchanged sentences

Payments to retire utility plant, net of salvage ( 909 ) ( 1,649 )

Proceeds from sale of Texas Water Alliance 3,000 —

Payment for asset acquisition ( 1,452 ) —

NET CASH USED IN INVESTING ACTIVITIES ( 107,005 ) ( 81,098 )

5 unchanged sentences

Issuance of common stock, net of issuance costs 66,775 —

Debt issuance costs ( 296 ) ( 214 )

Dividends paid ( 19,857 ) ( 18,240 )

12 unchanged sentences

Supplemental disclosure of non-cash activities:

Accrued payables for additions to utility plant $ 29,123 18,006

Change in accrued payables for construction costs capitalized 3,391 ( 4,166 )

Utility property installed by developers 1,230 3,154

Accrued additional common stock issuance costs 353 —

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2021

JUNE 30, 2021

(in thousands, except share and per share data)

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the results for the interim periods.

The unaudited interim financial information has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (the “SEC”).

The unaudited interim financial information has been prepared in accordance with accounting principles generally accepted in the United States of America and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission.

The Notes to Consolidated Financial Statements in SJW Group’s 2020 Annual Report on Form 10-K should be read with the accompanying unaudited condensed consolidated financial statements.

Recently Adopted Accounting Principles

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes”, which simplifies the accounting for income taxes, eliminates certain exceptions within Topic 740, “Income Taxes”, and clarifies certain aspects of the current guidance to promote consistency among reporting entities.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Simplifying the Accounting for Income Taxes”, which simplifies the accounting for income taxes, eliminates certain exceptions within Topic 740, “Income Taxes”, and clarifies certain aspects of the current guidance to promote consistency among reporting entities.

ASU 2019-12 was effective for SJW Group in the first quarter of fiscal 2021.

The adoption of ASU 2019-12 did not have a material impact on the consolidated financial statements.

Impacts of Coronavirus (“COVID-19”)

The outbreak of COVID-19 had significant impact on the global economy.

Financial impacts experienced by SJW Group due to the COVID-19 pandemic include higher uncollectible accounts receivables and increased costs from COVID-19 related prevention activities.

The regulators in the states SJW Group operates have approved mechanisms to either record a regulatory asset or track in a memorandum account expenses and savings related to COVID-19.

San Jose Water Company (“SJWC”) and SJWTX, Inc.

doing business as Canyon Lake Water Company (“CLWSC”) have determined that future recovery of the account is probable and have recognized the related regulatory assets.

Probability criteria has not yet been met for Connecticut Water Service, Inc.

If a state regulator disagrees with the calculation of recorded account balances, we may be required to make adjustments that could adversely affect our results of operations.

SJW Group continues to monitor COVID-19 developments affecting our business, employees and suppliers and will take additional precautions as management believes is necessary.

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,

2021 2020 2021 2020

Revenue from contracts with customers $ 147,204 142,163 $ 259,442 247,299

Alternative revenue programs, net 2,656 3,049 2,768 3,553

Other balancing and memorandum accounts revenue, net 1,091 8,744

Other balancing and memorandum accounts, net 1,477 1,629 2,998 10,211

Other regulatory mechanisms, net ( 416 ) ( 1,076 ) ( 846 ) ( 914 )

Rental income 1,320 1,444 2,664 2,814

2 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”), shares potentially issuable under the performance stock plans assumed through the business

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

For the three months ended June 30, 2021 and 2020, 4,304 and 9,397 anti-dilutive restricted common stock units were excluded from the dilutive earnings per share calculation, respectively.

For the six months ended June 30, 2021 and 2020, 12,883 and 19,191 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 June 30, 2021 and 2020, the amounts allocated to administrative and general expense were $ 120 and $ 370 , respectively.

For the six months

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

June 30, 2021

(in thousands, except share and per share data)

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

For the three months ended March 31, 2021 and 2020, 8,579 and 17,573 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, 2021, and 2020, the amounts allocated to administrative and general expense were $ 493 and $ 1,098 , respectively.

ended June 30, 2021, and 2020, the amounts allocated to administrative and general expense were $ 1,456 and $ 1,469 , respectively.

Real Estate Investments

The major components of real estate investments as of March 31, 2021, and December 31, 2020, are as follows:

The major components of real estate investments as of June 30, 2021, and December 31, 2020, are as follows:

2021 December 31,

4 unchanged sentences

Total $ 43,026 43,346

Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets, ranging from 7 to 39 years.

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

A former wholly owned subsidiary of SJW Group, Texas Water Alliance Limited was sold to Guadalupe-Blanco River Authority (“GBRA”) in 2017.

The sales agreement with GBRA included a holdback amount of $ 3,000 to be paid to SJW Group on June 30, 2021, subject to reduction under certain conditions.

SJW Group received the holdback amount without reduction from the GBRA on June 29, 2021 and recognized a pre-tax gain on sale of $ 3,000 .

Regulatory Rate Filings

6 unchanged sentences

The resolution also requires water utilities to develop a transition plan regarding shutoffs and terminations with customers once the moratorium ends.

On April 1, 2021, SJWC filed Advice Letter 560 which includes such plan.

On April 1, 2021, San Jose Water Company (“SJWC”) filed Advice Letter 560 which includes such plan and the filing was approved on June 16, 2021.

On June 11, 2021, Governor Newsom issued Executive Order N-08-21 which ends the suspension on customer disconnection activities on September 30, 2021.

On June 16, 2021, the CPUC directed its regulated water utilities to extend the suspension on customer disconnection activities through September 30, 2021, in response to the Governor’s order.

On June 23, 2021, SJWC filed Advice Letter 565 to extend Resolution M-4849’s emergency customer protections through September 30, 2021.

This advice was approved on July 1, 2021.

SJWC filed Advice Letter 556 on November 16, 2020, with the CPUC requesting authorization to increase its revenue requirement by 11,750 or 3.04 % in 2021 for the final escalation year authorized in our 2018 General Rate Case Decision 18-011-025 which established rates for 2019, 2020, and 2021.

3 unchanged sentences

The application also includes requests to recover $ 18,499 from balancing and memorandum accounts, authorization for a $ 435,000 capital budget, further alignment between actual and authorized usage, and a shift to greater revenue collection in the service charge.

The application will undergo a year-long review process and new rates, if approved, are expected to be effective in the first quarter of 2022.

On January 5, 2021, SJWC, along with three other California water utilities, filed a joint request for an additional one-year deferment on its Cost of Capital filing which would otherwise be due on May 1, 2021.

Postponing the filing an additional year would have alleviated administrative processing costs on the utilities as well as the CPUC staff, and provided relief for both CPUC and utility resources already strained by numerous other proceedings and COVID-19.

The request was conditioned on no changes being made as a result of the current Water Cost of Capital Mechanism in place during the one-year deferment.

The request was denied on February 22, 2021.

SJWC expects to file its Cost of Capital application on May 3, 2021, as required by the CPUC.

The application will undergo a year-long review process and new rates, if approved, are expected to be effective in the second quarter of 2022.

On May 3, 2021, SJWC filed Application No.

21-05-004 requesting authority to adjust its cost of capital for the period from January 1, 2022 through December 31, 2024.

The request seeks a revenue increase of $ 6,418 or 1.61 % in 2022.

The application also proposes a rate of return of 8.11 % from the current rate of 7.64 %, a decrease in the average cost of debt rate from 6.20 % to 5.48 %, and a return of equity of 10.30 % from the current rate of 8.90 %.

In addition, the request seeks to adjust SJWC’s currently authorized capital structure of approximately 47 % debt and 53 % equity to approximately 45 % debt and 55 % equity.

If approved, rates are expected to be effective on January 1, 2022.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

June 30, 2021

(in thousands, except share and per share data)

On May 27, 2021, SJWC filed Advice Letter No.

561/561A with the CPUC requesting authorization to increase revenue by $ 17,262 or 4.34 % to recover the increases to purchased potable water charges, the groundwater extraction fee, and purchased recycled water charges implemented by Santa Clara Valley Water District (“Valley Water”) and South Bay Water Recycling effective July 1, 2021.

This advice letter was approved with an effective date of July 1, 2021.

On June 9, 2021, Valley Water declared a water shortage emergency and asked its retailers to reduce consumption by 15% based on 2019’s volume.

On June 18, 2021, SJWC filed Advice Letter 563 with the CPUC to activate Stage 3 of its Rule 14.1, Water Shortage Contingency Plan, in response to Valley Water’s declaration of drought emergency and call for 15% mandatory conservation.

Advice Letter 564 was also filed on June 9, 2021, to establish a Water Conservation Memorandum Account to track the revenue impact of authorized vs actual water consumption and the incremental expenses required to implement our mandatory water conservation plan.

Similar memorandum accounts were authorized during the previous drought.

On July 20, 2021, Advice Letter 564 was approved.

Advice Letter 563 is pending with the CPUC.

Connecticut Regulatory Affairs

3 unchanged sentences

On March 3, 2021, PURA approved the reconciliation, resulting in a net cumulative 7.03 % surcharge for Connecticut Water which became effective on customers’ bills on April 1, 2021.

As of March 31, 2021, WICA surcharges for Connecticut Water and its Avon Water division were 5.75 % and 9.31 %, respectively.

The Heritage Village Water (“HVWC”) division does not have an approved WICA surcharge.

On January 15, 2021, Connecticut Water filed an application with PURA to amend rates for its customers, including the divisions of Avon Water and HVWC.

As of June 30, 2021, WICA surcharges for Connecticut Water and its Avon Water division were 7.03 % and 8.51 %, respectively.

The Heritage Village Water division does not have an approved WICA surcharge.

On January 15, 2021, Connecticut Water filed an application with PURA to amend rates for its customers, including the divisions of Avon and Heritage Village.

The filing requests an increase of $ 20,206 in annual revenues that includes more than $ 265,514 in completed infrastructure investments that are not currently in approved rates and surcharges.

4 unchanged sentences

PURA has 200 days from the filing date to review the application, and the approved rates will go into effect soon thereafter.

Connecticut Water expects to receive a decision in the third quarter of 2021.

On July 28, 2021, Connecticut Water received the final decision approving an increase of $ 5,208 in annual revenues, a return on equity of 9.0 %, with new rates effective July 28, 2021.

The final decision also approved the low-income rate, tiered block rate structure for residential water customers and the cost of debt and equity percentage as requested.

The final decision did not include all of the requested proforma plant in service due to the timing of its completion.

However, no plant was disallowed.

Connecticut Water will seek recovery for the projects in the future, including a portion of plant which is eligible for recovery through WICA.

In addition, the final decision reset WICA, which was approaching its statutory cap to zero .

Long-term debt issuances for Connecticut Water require regulatory authorization which is typically obtained for a specified amount of debt to be issued during a specified period of time.

1 unchanged sentence

Connecticut Water anticipates to use the proceeds to pay down line of credit borrowings and payoff maturing debt, as well as general working capital needs.

Connecticut Water expects to receive a decision from PURA within 60 days of its filing.

Connecticut Water received approval of the financings from PURA on June 9, 2021.

Texas Regulatory Affairs

On January 29, 2021, CLWSC submitted its Water Pass-Through Charge (“WPC”) true-up report for the Canyon Lake area water systems’ 2020 purchased water costs.

On January 29, 2021, SJWTX, Inc., doing business as Canyon Lake Water Service Company (“CLWSC”) submitted its Water Pass-Through Charge (“WPC”) true-up report for the Canyon Lake area water systems’ 2020 purchased water costs.

The WPC is the annual filing to change the monthly per thousand gallons charge for changes in purchased water costs since the last annual true-up report.

2 unchanged sentences

A WPC filing for Deer Creek Ranch is required only when there is a change in purchased water costs.

The WPC true-up report for this system was submitted December 1, 2020, which resulted in a decrease in the usage charge from $ 2.02 to $ 1.84 dollars per thousand gallons, and an increase in the monthly base charge of $ 0.51 dollars per residential account.

The WPC true-up report for this system was submitted December 1, 2020, which resulted in a decrease in the usage charge from $ 2.02 to $ 1.84

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2021

(in thousands, except share and per share data)

dollars per thousand gallons, and an increase in the monthly base charge of $ 0.51 dollars per residential account.

The Deer Creek Ranch WPC rate changes became effective February 25, 2021.

2 unchanged sentences

51812-6 which prohibited disconnections for non-payment, suspended the rules for late fees and interest, and allowed for estimated billing for the duration of the disaster declaration.

On March 5, 2021, the PUCT reinstituted the utilities’ ability to resume charging late fees.

On March 5, 2021, the PUCT reinstituted the utilities’ ability to resume charging late fees, and on June 15, 2021, removed the prohibition on disconnections for non-payment.

On June 28, 2021, CLWSC announced that it reached an agreement to acquire the Kendall West and Bandera East utilities in Bandera and Medina counties in Texas and that change in ownership applications had been filed with the PUCT.

The acquisition, pending approval by the PUCT, would grow CLWSC by 1,400 service connections that serve an estimated 4,000 county residences.

A decision by the PUCT is expected in the fourth quarter of 2021.

Maine Regulatory Affairs

On June 17, 2020, the Main Public Utilities Commission (“MPUC”) approved a general rate increase for Skowhegan Division customers allowing $ 198 in additional revenue.

On June 17, 2020, the Maine Public Utilities Commission (“MPUC”) approved a general rate increase for Skowhegan Division customers allowing $ 198 in additional revenue.

Per the MPUC decision, the increase will be implemented in two steps:

4 unchanged sentences

On March 10, 2021, Maine Water filed a general rate increase application for the Biddeford Saco Division seeking approximately $ 6,659 , or 77.5 %, in additional revenue.

The application has proposed a multi-year rate plan that is designed to

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

(in thousands, except share and per share data)

ease the transition to higher water bills over the period from July 2021 to July, 2023 .

The primary driver for the increase in rates is the support for a new drinking water treatment facility on the Saco River, a $ 60,000 project to replace the existing facility that is expected to be in service in the second quarter of 2022, and a decision on the requested revenue increase is expected in the second quarter of 2022, in alignment with the completion of the new water treatment facility.

The application has proposed a multi-year rate plan that is designed to ease the transition to higher water bills over the period from July 2021 to July 2023.

On June 23, 2021, the MPUC approved the first step in the plan adopting the proposed rate smoothing mechanism and implementing a temporary 22.65 % surcharge on all customer bills.

The surcharge will be in effect for one year while the MPUC reviews and acts on the requested increase in base rates.

A decision on the requested revenue increase is expected in the second quarter of 2022, in alignment with the completion of the new water treatment facility.

Regulatory Assets, Net

Regulatory assets, net are comprised of the following as of March 31, 2021, and December 31, 2020:

March 31, 2021 December 31, 2020

Regulatory assets, net are comprised of the following as of June 30, 2021, and December 31, 2020:

June 30, 2021 December 31, 2020

Regulatory assets:

3 unchanged sentences

Balancing and memorandum accounts, net 31,317 25,463

Water Rate Adjustment (“WRA”) 174 323

Water Rate Adjustment 3,033 323

Other, net 7,940 8,176

Total regulatory assets, net in Consolidated Balance Sheets 161,618 158,230

current regulatory asset, net 226 1,748

Total regulatory assets, net in Condensed Consolidated Balance Sheets 173,387 158,230

current regulatory assets, net 1,075 1,748

Total regulatory assets, net, less current portion $ 172,312 156,482

At March 31, 2021 and December 31, 2020, SJW Group’s regulatory assets, net not earning a return primarily included the postretirement pensions and other medical benefits unfunded amount, and business combinations debt premium, net.

The total amount of regulatory assets, net not earning a return at March 31, 2021 and December 31, 2020, either by interest on the regulatory asset/liability or as a component of rate base at the allowed rate of return was $ 119,745 and $ 119,236 , respectively.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2021

(in thousands, except share and per share data)

At June 30, 2021 and December 31, 2020, SJW Group’s regulatory assets, net not earning a return primarily included the postretirement pensions and other medical benefits unfunded amount, and the business combinations debt premium, net.

The total amount of regulatory assets, net not earning a return at June 30, 2021, and December 31, 2020, either by interest on the regulatory asset/liability or as a component of rate base at the allowed rate of return was $ 120,482 and $ 119,236 , respectively.

Balancing and Memorandum Accounts

2 unchanged sentences

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.

In addition, in the case of special revenue programs such as the Water Conservation Memorandum Account (“WCMA”) and Water Revenue Adjustment (“WRA”), SJWC and CTWS follow the requirements of ASC Topic 980-605-25—“Alternative Revenue Programs” in determining revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end in which the revenue is recorded.

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.

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 980-340-25—“Other Assets and Deferred Costs” recognition criteria.

Such evidence may include regulatory rules and decisions, past practices, and other facts and circumstances that would indicate that recovery or refund is probable.

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

Balancing and memorandum accounts recorded to regulatory assets, net for the three and six months ended June 30, 2021 and 2020 as follows:

Three months ended June 30, 2021 Three months ended June 30, 2020

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 $ 13,853 1,424 1 15,278 $ 8,958 1,591 — 10,549

Cost of capital memorandum account ( 1,561 ) ( 1 ) — ( 1,562 ) ( 1,558 ) ( 2 ) — ( 1,560 )

Tax memorandum account 333 — — 333 332 — — 332

All others ( 980 ) 147 4 ( 829 ) ( 1,074 ) 40 — ( 1,034 )

Total revenue accounts $ 11,645 1,570 5 13,220 $ 6,658 1,629 — 8,287

Cost-recovery accounts:

Water supply costs 8,910 984 1 9,895 5,061 838 — 5,899

Pension 3,844 366 — 4,210 2,886 99 — 2,985

Hydro Generation Research, Development and Demonstration Memorandum Account (“PRVMA”)

1,027 — ( 99 ) 928 — — — —

COVID-19 Catastrophic Event Memorandum Account (“CEMA”) 2,266 352 — 2,618 — — — —

All others 445 1 — 446 443 1 — 444

Total cost-recovery accounts $ 16,492 1,703 ( 98 ) 18,097 $ 8,390 938 — 9,328

Total $ 28,137 3,273 ( 93 ) 31,317 $ 15,048 2,567 — 17,615

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

June 30, 2021

(in thousands, except share and per share data)

Three months ended March 31, 2021 Three months ended March 31, 2020

Six months ended June 30, 2021 Six months ended June 30, 2020

1 unchanged sentence

Monterey WRAM $ 12,077 3,200 1 15,278 $ 7,015 3,561 ( 27 ) 10,549

2014-2017 WCMA 666 — — 666 708 — ( 43 ) 665

2012 General Rate Case true-up 752 — 1 753 752 — — 752

Cost of capital memorandum account ( 1,561 ) ( 1 ) — ( 1,562 ) ( 1,553 ) ( 7 ) — ( 1,560 )

5 unchanged sentences

Pension 3,478 732 — 4,210 2,449 514 22 2,985

Hydro Generation Research, Development and Demonstration Memorandum Account (“PRVMA”)

1,108 — ( 180 ) 928 — — — —

COVID-19 Catastrophic Event Memorandum Account (“CEMA”) 2,266 — — 2,266 — — — —

CEMA 2,266 352 — 2,618 — — — —

All others 445 1 — 446 446 2 ( 4 ) 444

8 unchanged sentences

The Offering closed on March 11, 2021 and the offering of option shares closed on March 16, 2021.

SJW Group received net proceeds of approximately $ 58,122 from the Offering and received additional net proceeds of approximately $ 8,774 from the sale of the option shares, in each case after deducting the underwriting discounts and commissions and estimated offering expenses payable by SJW Group.

SJW Group received net proceeds of approximately $ 66,775 from the Offering and the sale of option shares, after deducting the underwriting discounts and commissions and offering expenses.

SJW Group used the proceeds from the offerings to pay down a bank line of credit agreement, dated as of June 1, 2016, between SJWC and JPMorgan Chase Bank, N.A.

and for general corporate purposes, which include, among other things, financing infrastructure improvements and other capital expenditures, repayment of debt or other corporate obligations and working capital.

and for general corporate purposes, which included, among other things, financing infrastructure improvements and other capital expenditures, repayment of debt or other corporate obligations and working capital.

The Incentive Plan allows SJW Group to provide employees, non-employee board members or the board of directors of any parent or subsidiary, consultants, and other independent advisors who provide services to the company or any parent or subsidiary the opportunity to acquire an equity interest in SJW Group.

As of June 30, 2021, 174,489 shares are issuable upon the vesting of outstanding restricted stock units and deferred restricted stock units and an additional 685,578 shares are available for award issuances under the Incentive Plan.

In connection with the merger with CTWS on October 9, 2019, SJW Group assumed outstanding awards of restricted stock units and deferred share units under the following stock plans:

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

As of June 30, 2021, approximately 56,056 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units under the CTWS Plans.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

June 30, 2021

(in thousands, except share and per share data)

SJW Group accounts for stock-based compensation based on the grant date fair value of awards issued to employees in accordance with FASB ASC Topic 718 - “Compensation - Stock Compensation,” which requires the measurement and recognition of compensation expense based on the estimated fair value of stock-based payment awards.

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, 2021, 187,170 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units and an additional 688,365 shares are available for award issuances under the Incentive Plan.

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

In connection with the merger with Connecticut Water Service, Inc.

(“CTWS”) on October 9, 2019, SJW Group assumed outstanding awards of restricted stock units and deferred share units under the following stock plans:

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

As of March 31, 2021, approximately 55,761 shares are issuable upon the exercise of outstanding restricted stock units and deferred restricted stock units under the CTWS Plans.

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, 2021, and 2020.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

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

5 unchanged sentences

Restricted Stock and Deferred Restricted Stock

For the three months ended March 31, 2021, and 2020, SJW Group granted under the Incentive Plan 33,701 and 28,367 , respectively, one year and three year service-based restricted stock awards with a weighted-average grant date fair value of $ 64.22 and $ 65.89 , respectively, per unit.

Performance-based and market-based restricted stock awards granted for the three months ended March 31, 2021, and 2020 were 29,459 and 24,581 target units, respectively, with a weighted-average grant date fair value of $ 66.35 and $ 73.85 , respectively, per unit.

For the three months ended June 30, 2021, and 2020, SJW Group granted under the Incentive Plan 11,732 and 14,346 , respectively, one year and three year service-based restricted stock awards with a weighted-average grant date fair value of $ 65.43 and $ 60.17 , respectively, per unit.

For the six months ended June 30, 2021, and 2020, SJW Group granted under the Incentive Plan 45,433 and 42,713 , respectively, one year and three year service-based restricted stock awards with a weighted-average grant date fair value of $ 64.53 and $ 63.97 , respectively, per unit.

For the three months ended June 30, 2021, and 2020, SJW Group granted under the Incentive Plan 1,182 and 138 target units, respectively, performance-based and market-based restricted stock awards with a weighted-average grant date fair value of $ 65.70 and $ 66.99 , respectively, per unit.

For the six months ended June 30, 2021, and 2020, SJW Group granted under the Incentive Plan 30,641 and 24,719 target units, respectively, performance-based and market-based restricted stock awards granted with a weighted-average grant date fair value of $ 66.33 and $ 72.01 , 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, 2021, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $ 7,203 .

As of June 30, 2021, the total unrecognized compensation costs related to restricted and deferred restricted stock plans amounted to $ 6,528 .

This cost is expected to be recognized over a weighted-average period of 1.91 years.

Employee Stock Purchase Plan

The ESPP allows eligible employees to purchase shares of SJW Group’s common stock at 85 % of the fair value of shares on the purchase date.

Under the ESPP, employees can designate up to a maximum of 10 % of their base compensation for the purchase of shares of common stock, subject to certain restrictions.

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

SJW Group’s recorded expenses were $ 86 and $ 174 for the three and six months ended June 30, 2021, respectively, and $ 74 and $ 160 for the three and six months ended June 30, 2020, respectively, related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ends July 30, 2021, for the ESPP is approximately $ 30 .

This cost is expected to be recognized during the third quarter of 2021.

Bank Borrowings and Long-Term Liabilities

SJW Group’s contractual obligations and commitments include senior notes, bank term loans, revenue bonds, state revolving fund loans 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 of the respective subsidiaries.

Lines of Credit

On April 23, 2021, SJWC closed its $ 140,000 line of credit agreement which was set to mature on June 1, 2021, and entered into a new $ 140,000 credit agreement (“SJWC Credit Agreement”) with JPMorgan Chase Bank, N.A., as the lender (the “Lender”).

The SJWC Credit Agreement provides an unsecured credit facility with a letter of credit sublimit of $ 15,000 .

Proceeds of borrowings under the 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 December 31, 2023.

The line of credit bears interest at variable rates.

The SJWC Credit Agreement contains customary representations, warranties and events of default, as well as restrictive covenants customary for facilities of this type.

The SJWC Credit Agreement also includes certain customary financial covenants such as a funded debt to capitalization ratio.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

June 30, 2021

(in thousands, except share and per share data)

SJW Group’s recorded expenses were $ 88 and $ 86 for the three months ended March 31, 2021 and 2020, respectively, related to the ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ends July 30, 2021, for the ESPP is approximately $ 123 .

This cost is expected to be recognized during the second and third quarters of 2021.

Long-Term Liabilities and Bank Borrowings

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

Also on April 23, 2021, SJW Group, as guarantor, and CLWSC closed its $ 5,000 line of credit agreement which was set to mature on June 1, 2021, and entered into a new $ 5,000 credit agreement (“SJWTX Credit Agreement”) with the Lender.

The SJWTX Credit Agreement provides an unsecured credit facility with a letter of credit sublimit of $ 1,000 .

The new SJWTX Credit Agreement has a maturity date of December 31, 2023.

Long-Term Debt

On March 2, 2021, Maine Water entered into a credit agreement with a commercial bank, pursuant to an existing master loan agreement under which the commercial bank issued Maine Water a promissory note on the same date with an aggregate principal amount of $ 17,000 and a fixed interest rate of 3.89 %, due March 1, 2041.

5 unchanged sentences

Proceeds from the borrowing were received on March 18, 2021.

As of March 31, 2021, Maine Water was in compliance with all financial, affirmative and negative covenants under this agreement.

On May 13, 2021, CLWSC entered into a master credit agreement and promissory note with a commercial bank under which it entered into a borrowing agreement for an aggregate principal amount not to exceed $ 30,000 , of which $ 20,000 was advanced at the closing date.

The borrowing carries a fixed interest rate of 4.01 % due on March 20, 2041.

The remaining aggregate principal amount of the promissory note is to be advanced at the discretion of CLWSC before the maturity date.

The notes are unsecured obligations of CLWSC.

Interest is payable quarterly in arrears on the 20th day of January, April, July and October of each year.

The promissory note contains customary representations and warranties.

Under the promissory note, CLWSC 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 result in all of the notes then outstanding becoming immediately due and payable.

On June 25, 2021, SJWC entered into a note purchase agreement with certain affiliates of New York Life Insurance (collectively the “Purchasers”), pursuant to which the company sold an aggregate principal amount of $ 50,000 of its 3.00 % Senior Notes, Series N (“Series N Notes”) to the Purchasers.

The Series N Notes are unsecured obligations of SJWC and are due on June 25, 2051.

Interest is payable semi-annually in arrears on January 1st and July 1st of each year.

The note purchase agreement contains customary affirmative and negative covenants for as long as the Series N Notes are outstanding.

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

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

Benefit Plans

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

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.

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.

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.

6 unchanged sentences

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, 2021, and 2020 are as follows:

Three months ended March 31,

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2021

(in thousands, except share and per share data)

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, 2021, and 2020 are as follows:

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

Service cost $ 2,688 2,337 $ 5,423 4,780

4 unchanged sentences

Total $ 2,283 2,139 $ 4,638 4,865

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

(in thousands, except share and per share data)

In 2021, SJW Group expects to make required and discretionary cash contributions of up to $ 9,043 to the pension plans and Social Welfare Plan.

For the three months ended March 31, 2021, SJW Group has made no contributions to such plans.

For the three months ended March 31, 2021, income tax benefit was $ 896 .

Income tax expense for the three months ended March 31, 2020, was $ 438 .

The effective consolidated income tax rates were ( 52 )% and 15 % for the three months ended March 31, 2021, and 2020, respectively.

The lower effective rates for the three months ended March 31, 2021, were primarily due to excess tax benefits relating to share-based payment awards, state tax credits and other discrete tax items.

SJW Group had unrecognized tax benefits, before the impact of deductions of state taxes, excluding interest and penalties of approximately $ 6,511 and $ 6,468 as of March 31, 2021 and December 31, 2020, respectively.

In 2021, SJW Group expects to make required and discretionary cash contributions of up to $ 9,043 to the pension plans and other postretirement benefits.

For the three and six months ended June 30, 2021, SJW Group has made $ 1,480 contributions to such plans.

For the three and six months ended June 30, 2021, income tax expense was $ 3,306 and $ 2,410 , respectively.

Income tax expense for the three and six months ended June 30, 2020, was $ 4,210 and $ 4,648 , respectively.

The effective consolidated income tax rates were 14 % and 18 % for the three months ended June 30, 2021 and 2020, respectively, and 9 % and 17 % for the six months ended June 30, 2021, and 2020, respectively.

The lower effective rates for the three and six months ended June 30, 2021, were primarily due to flow-through tax benefits.

In addition, discrete tax benefits recorded in the first quarter of 2021 resulted in a lower effective tax rate for the six months ended June 30, 2021.

SJW Group had unrecognized tax benefits, before the impact of deductions of state taxes, excluding interest and penalties of approximately $ 6,882 and $ 6,468 as of June 30, 2021 and December 31, 2020, respectively.

SJW Group does not expect its unrecognized tax benefits to change significantly within the next 12 months.

On March 11, 2021, the American Rescue Plan Act was signed into law.

SJW Group is currently evaluating the impact this legislation may have on the consolidated financial results.

On March 11, 2021, the American Rescue Plan Act (the “Act”) was signed into law.

SJW Group has considered the income tax implications of the Act in its estimated tax provision and does not believe it will materially impact the company’s year-end tax rate.

Fair Value Measurement

The following instruments are not measured at fair value on SJW Group’s condensed consolidated balance sheets as of March 31, 2021, but require disclosure of their fair values:

The following instruments are not measured at fair value on SJW Group’s condensed consolidated balance sheets as of June 30, 2021, 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 March 31, 2021, approximates their carrying value as reported on the condensed consolidated balance sheets.

The estimated fair value of such instruments as of June 30, 2021, 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, 2021.

There have been no changes in valuation techniques during the three and six months ended June 30, 2021.

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.

The fair value of SJW Group’s long-term debt was approximately $ 1,486,355 and $ 1,570,727 as of March 31, 2021, and December 31, 2020, 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 long-term debt was $ 1,379,313 and $ 1,363,821 as of March 31, 2021, and December 31, 2020, respectively.

The fair value of SJW Group’s long-term debt was approximately $ 1,546,640 and $ 1,570,727 as of June 30, 2021, and December 31, 2020, 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 long-term debt was $ 1,398,396 and $ 1,363,821 as of June 30, 2021, and December 31, 2020, respectively.

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

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, 2021, and December 31, 2020:

Fair Value Measurements at March 31, 2021

Asset Category Total Quoted

(Level 1) Significant

(Level 2) Significant

Money market funds $ 145 145 — —

Mutual funds 2,034 2,034 — —

Fixed income 830 830 — —

Total $ 3,009 3,009 — —

CTWS’s additional retirement benefits under the supplemental executive retirement plans and retirement contracts are funded by investment assets held by a Rabbi Trust.

The fair value of the money market funds, mutual funds and fixed income investments in the Rabbi Trust was $ 3,078 and $ 3,014 as of June 30, 2021, and December 31, 2020, respectively, and are categorized as Level 1 in the fair value hierarchy.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

June 30, 2021

(in thousands, except share and per share data)

Fair Value Measurements at December 31, 2020

Asset Category Total Quoted

(Level 1) Significant

(Level 2) Significant

Money market funds $ 83 83 — —

Mutual funds 2,101 2,101 — —

Fixed income 830 830 — —

Total $ 3,014 3,014 — —

Segment and Non-Tariffed Business Reporting

8 unchanged sentences

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, 2021

For Three Months Ended June 30, 2021

Water Utility Services Real Estate Services All Other (1) SJW Group

6 unchanged sentences

Interest on long-term debt and other interest expense 8,347 — — 5,334 8,347 5,334 13,681

(Benefit) provision for income taxes ( 116 ) 182 109 ( 1,071 ) ( 116 ) ( 780 ) ( 896 )

Provision (benefit) for income taxes 4,580 203 96 ( 1,573 ) 4,580 ( 1,274 ) 3,306

Assets $ 3,300,414 8,248 45,090 55,770 3,300,414 109,108 3,409,522

For Three Months Ended June 30, 2020

Water Utility Services Real Estate Services All Other (1) SJW Group

Regulated Non-tariffed Non-tariffed Non-tariffed Regulated Non-tariffed Total

Operating revenue $ 143,072 2,693 1,444 — 143,072 4,137 147,209

Operating expense 107,185 1,759 850 1,345 107,185 3,954 111,139

Operating income (loss) 35,887 934 594 ( 1,345 ) 35,887 183 36,070

Net income (loss) 22,236 881 443 ( 3,839 ) 22,236 ( 2,515 ) 19,721

Depreciation and amortization 22,123 108 298 224 22,123 630 22,753

Interest on long-term debt and other interest expense 8,289 — — 4,891 8,289 4,891 13,180

Provision (benefit) for income taxes 5,449 260 124 ( 1,623 ) 5,449 ( 1,239 ) 4,210

Assets $ 3,079,118 9,913 44,889 76,057 3,079,118 130,859 3,209,977

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2021

June 30, 2021

(in thousands, except share and per share data)

For Three Months Ended March 31, 2020

For Six Months Ended June 30, 2021

Water Utility Services Real Estate Services All Other (1) SJW Group

8 unchanged sentences

Assets $ 3,300,414 8,248 45,090 55,770 3,300,414 109,108 3,409,522

For Six Months Ended June 30, 2020

Water Utility Services Real Estate Services All Other (1) SJW Group

Regulated Non-tariffed Non-tariffed Non-tariffed Regulated Non-tariffed Total

Operating revenue $ 254,439 5,710 2,814 — 254,439 8,524 262,963

Operating expense 203,202 3,120 1,681 3,463 203,202 8,264 211,466

Operating income (loss) 51,237 2,590 1,133 ( 3,463 ) 51,237 260 51,497

Net income (loss) 28,064 2,351 831 ( 9,108 ) 28,064 ( 5,926 ) 22,138

Depreciation and amortization 42,872 216 600 447 42,872 1,263 44,135

Interest on long-term debt and other interest expense 16,463 — — 10,001 16,463 10,001 26,464

Provision (benefit) for income taxes 6,651 730 256 ( 2,989 ) 6,651 ( 2,003 ) 4,648

Assets $ 3,079,118 9,913 44,889 76,057 3,079,118 130,859 3,209,977

____________________

(1) The “All Other” category for the three months ended March 31, 2021 and March 31, 2020, includes the accounts of SJW Group, SJWNE LLC and CTWS on a stand-alone basis.

(2) As of March 31, 2021 and December 31, 2021, the Company has performed an allocation of goodwill associated with the acquisition of CTWS to two reporting units, Connecticut and Maine, which are both aggregated within the Regulated Water Utility Services reportable segment.

Subsequent Events

On April 23, 2021, SJWC paid off its existing $ 140,000 line of credit agreement which was set to mature on June 1, 2021, and entered into a new $ 140,000 credit agreement (“SJWC Credit Agreement”) with JPMorgan Chase Bank, N.A., as the lender (the “Lender”).

The SJWC Credit Agreement provides an unsecured credit facility with a letter of credit sublimit of $ 15,000 .

Proceeds of borrowings under the 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 December 31, 2023.

The SJWC Credit Agreement contains customary representations, warranties and events of default, as well as a restrictive covenants customary for facilities of this type.

The SJWC Credit Agreement also includes certain financial covenants that requires the Company to maintain a maximum funded debt to capitalization ratio.

Also on April 23, 2021, SJW Group, as guarantor, and SJWTX paid off its existing $ 5,000 line of credit agreement which was set to mature on June 1, 2021, and entered into a new $ 5,000 credit agreement (“SJWTX Credit Agreement”) with the Lender.

The SJWTX Credit Agreement provides an unsecured credit facility with a letter of credit sublimit of $ 1,000 .

The new SJWTX Credit Agreement has a maturity date of December 31, 2023.

Legal Proceedings

(1) The “All Other” category for the six months ended June 30, 2021 and June 30, 2020, includes the accounts of SJW Group, SJWNE LLC and CTWS on a stand-alone basis.

(2) As of June 30, 2021 and December 31, 2020, the Company has performed an allocation of goodwill associated with the acquisition of CTWS to two reporting units, Connecticut and Maine, which are both aggregated within the Regulated Water Utility Services reportable segment.

Commitments and Contingencies

SJW Group is subject to ordinary routine litigation incidental to its business.

1 unchanged sentence

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