What changed in this filing

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Item 1. Financial Statements

2024-07-25 compared with 2024-04-26 · 167 added, 97 removed, 456 unchanged (37% 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,

2024 2023 2024 2023

Operating revenue

17 unchanged sentences

Pension non-service credit (cost)

939 ( 102 ) 1,889 ( 166 )

Other, net 1,205 2,115 3,856 5,381

2 unchanged sentences

20,696 18,286 32,395 29,816

Other comprehensive (loss) income, net ( 442 ) 93

Other comprehensive income (loss), net

— 9 ( 442 ) 102

Comprehensive income

4 unchanged sentences

Dividends per share

$ 0.40 0.38 $ 0.80 0.76

Weighted average shares outstanding

22 unchanged sentences

Accounts receivable:

Customers, net of allowances for uncollectible accounts of $ 6,198 and $ 6,551 on March 31, 2024 and December 31, 2023, respectively

Customers, net of allowances for uncollectible accounts of $ 802 and $ 6,551 on June 30, 2024 and December 31, 2023, respectively

70,238 67,870

28 unchanged sentences

authorized 70,000,000 shares;

issued and outstanding share s 32,201,216 on March 31, 2024 and 32,023,004 on December 31, 2023

issued and outstanding share s 32,668,904 on June 30, 2024 and 32,023,004 on December 31, 2023

Additional paid-in capital 771,189 736,191

11 unchanged sentences

Accrued payroll 10,683 12,229

Income tax payable 2,059 —

Current regulatory liabilities 1,930 3,059

39 unchanged sentences

32,201,216 $ 32 744,621 494,249 1,349 1,240,251

Net income — — — 20,696 — 20,696

Stock-based compensation — — 1,275 ( 8 ) 1,267

Issuance of restricted and deferred stock units 9,083 — ( 2 ) — — ( 2 )

Common stock issuance, net of costs 458,605 1 25,295 — — 25,296

Dividends paid ($ 0.40 per share)

— — — ( 12,900 ) — ( 12,900 )

Balances, June 30, 2024 32,668,904 $ 33 771,189 502,037 1,349 1,274,608

Common Stock Additional

17 unchanged sentences

31,427,124 $ 31 692,742 458,142 1,570 1,152,485

Net income — — — 18,286 — 18,286

Unrealized gain on investment, net of taxes of $( 37 )

Stock-based compensation — — 1,139 ( 17 ) 1,122

Issuance of restricted and deferred stock units 13,429 — ( 20 ) — — ( 20 )

Common stock issuance, net of costs 290,477 1 22,781 — — 22,782

Dividends paid ($ 0.38 per share)

— — — ( 11,947 ) — ( 11,947 )

Balances, June 30, 2023 31,731,030 $ 32 716,642 464,464 1,578 1,182,716

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:

14 unchanged sentences

Net cash provided by operating activities 100,532 97,364

51,216 50,607

Investing activities:

3 unchanged sentences

Cost to retire utility plant, net of salvage ( 1,434 ) ( 468 )

( 744 ) ( 167 )

Proceeds from sale of real estate investments

Other changes, net ( 29 ) 125

Net cash used in investing activities ( 130,982 ) ( 125,379 )

( 74,273 ) ( 55,029 )

Financing activities:

9 unchanged sentences

Net cash provided by financing activities 43,531 41,145

17,876 15,411

Net change in cash and cash equivalents 13,081 13,130

( 5,181 ) 10,989

Cash and cash equivalents, beginning of period 9,723 12,344

Cash and cash equivalents, end of period $ 22,804 25,474

$ 4,542 23,333

Cash paid during the period for:

4 unchanged sentences

Utility property installed by developers $ 748 938

Proceeds receivable from sale of real estate investments

Accrued selling expenses on sale of real estate investments

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

JUNE 30, 2024

(in thousands, except share and per share data)

15 unchanged sentences

SJW Group’s revenue components are as follows:

Three months ended March 31,

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

2024 2023 2024 2023

Revenue from contracts with customers $ 173,106 159,724 $ 323,114 295,560

4 unchanged sentences

Nonutility Properties and Real Estate Investments

The major components of real estate investments and nonutility properties as of March 31, 2024 and December 31, 2023, are as follows:

The major components of real estate investments and nonutility properties as of June 30, 2024 and December 31, 2023, are as follows:

2024 December 31,

5 unchanged sentences

Total $ 13,280 13,156

In March 2023, SJW Land Company entered into a broker agreement to sell its warehouse, office buildings, and land property located in Knoxville, Tennessee.

In March 2023, SJW Land Company entered into a broker agreement to sell its warehouse, office building, and land property located in Knoxville, Tennessee.

The company reclassified the Tennessee properties from held-and-used to held-for-sale at March 31, 2023.

The company’s intention is to complete the sale of these assets within the next twelve months.

The company recorded the Tennessee properties at the lower of their carrying value or estimated fair value less

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

June 30, 2024

(in thousands, except share and per share data)

records the Tennessee properties at the lower of their carrying value or estimated fair value less cost to sell, and also stopped recording depreciation on assets held for sale.

SJW Group's broker provides the estimated fair value of the Tennessee properties.

No impairment has been recorded as the estimated fair value less cost to sell exceeds carrying value.

The property is classified as part of the Real Estate Services reportable segment.

cost to sell, and also stopped recording depreciation on assets held for sale.

SJW Group's broker provided the estimated fair value of the Tennessee properties.

In April 2024, SJW Land Company completed the sale of a warehouse building of the Tennessee properties for $ 27,000 .

The pre-tax gain on the sale was $ 6,918 .

In June 2024, SJW Land Company completed the sale of an office building, land, and parking lot of the Tennessee properties for $ 17,000 .

The pre-tax loss on the sale was $ 7,827 .

The net pre-tax loss associated with these transactions for the three and six months ended June 30, 2024 was $ 909 and is included in the “Other, net” line on the condensed consolidated statements of comprehensive income.

A portion of the proceeds from these sales totaling $ 2,801 is being held in escrow pending completion of certain post-closing obligations.

As a result of these two transactions, the sale of the Tennessee properties is complete and the company does not have any other assets held for sale.

The sale of the Tennessee properties does not represent a strategic shift that has or will have a major effect on SJW Group;

therefore, the sale does not qualify for treatment as a discontinued operation.

In April 2024, SJW Land Company completed the sale of a warehouse building of the Tennessee properties for $ 27,000 .

The estimated pre-tax gain on the sale is $ 7,000 .

The following represents the major components of the Tennessee warehouse buildings and land property recorded in assets held-for-sale on the condensed consolidated balance sheets as of March 31, 2024:

The Tennessee properties are included in SJW Group’s “Real Estate Services” reportable segment in Note 9 , “Segment and Non-Tariffed Business Reporting”.

The following represents the major components of the Tennessee properties that were recorded in assets held-for-sale on the condensed consolidated balance sheets as of December 31, 2023:

Land $ 13,170

4 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, 2024, 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, 2024, 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, 2024 approximates their carrying value as reported on the condensed consolidated balance sheets.

There have been no changes in valuation techniques during the three months ended March 31, 2024.

The estimated fair value of such instruments as of June 30, 2024 approximates their carrying value as reported on the condensed consolidated balance sheets.

There have been no changes in valuation techniques during the three and six months ended June 30, 2024.

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 $ 1,355,609 and $ 1,394,412 as of March 31, 2024 and December 31, 2023, 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.

Of the total fair value of long-term debt at March 31, 2024 and December 31, 2023, $ 1,339,659 and $ 1,378,683 , respectively, would be categorized as Level 2 in the fair value hierarchy and $ 15,950 and $ 15,729 , respectively, would be categorized as Level 3 in the fair value hierarchy.

The fair value of SJW Group’s long-term debt was $ 1,335,706 and $ 1,394,412 as of June 30, 2024 and December 31, 2023, 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.

Of the total fair value of long-term debt at June 30, 2024 and December 31, 2023, $ 1,319,532 and $ 1,378,683 , respectively, would be categorized as Level 2 in the fair value hierarchy and $ 16,174 and $ 15,729 , respectively, would be categorized as Level 3 in the fair value hierarchy.

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 $ 2,890 and $ 2,833 as of March 31, 2024 and December 31, 2023, respectively, and are categorized as Level 1 in the fair value hierarchy.

The fair value of the money market funds, mutual funds and fixed income investments in the Rabbi Trust was $ 2,639 and $ 2,833 as of June 30, 2024 and December 31, 2023, respectively, and are categorized as Level 1 in the fair value hierarchy.

Earnings per Share

1 unchanged sentence

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 plans, shares potentially issuable under the performance stock plans assumed through the business combination with CTWS, and shares potentially issuable under SJW Group’s employee stock purchase plans.

For the three months ended March 31, 2024 and 2023, 12,221 and 8,855 anti-dilutive restricted common stock units were excluded from the diluted earnings per share calculation, respectively.

New Accounting Standards

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures.” (“ASU 2023-07”).

Among other changes, the ASU requires disclosure of significant segment expenses and extends certain annual disclosures to interim periods.

The ASU is effective for SJW Group beginning with its annual financial

For the three months ended June 30, 2024 and 2023, 6,567 and 1,843 anti-dilutive restricted common stock units were excluded from the diluted earnings per share calculation, respectively.

For the six months ended June 30, 2024 and 2023, 9,394 and 10,698 anti-dilutive restricted common stock units were excluded from the diluted earnings per share calculation, respectively.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

June 30, 2024

(in thousands, except share and per share data)

statements for the year ending December 31, 2024.

Accounts Receivable

During the second quarter of 2024, SJW Group recorded a reduction to its allowance for credit losses of $ 7,822 , of which $ 3,960 resulted in a reduction to regulatory assets and $ 3,862 was recorded through administrative and general expense ($ 2,782 net of tax or $ 0.09 per diluted share).

New Accounting Standards

The recently issued accounting standards that have not yet been adopted by the company as of June 30, 2024 are as follows:

Standard Description Date of Adoption Application Effect on the Condensed Consolidated Financial Statements

Accounting Standards Update (“ASU”) 2023-07 “Improvements to Reportable Segment Disclosures”

The ASU requires disclosure of significant segment expenses, extends certain annual disclosures to interim periods, and additional qualitative disclosures regarding the chief operating decision maker.

The ASU is effective for SJW Group beginning with its annual financial statements for the year ending December 31, 2024.

Early adoption is permitted.

SJW Group is currently evaluating the requirements of ASU 2023-07.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures.” The ASU amends certain income tax disclosure requirements, including adding requirements to present the reconciliation of income tax expense computed at the statutory rate to actual income tax expense using both percentages and amounts and providing a disaggregation of income taxes paid.

Retrospective SJW Group is currently evaluating the requirements of ASU 2023-07.

ASU 2023-09 “Improvements to Income Tax Disclosures”

The ASU amends certain income tax disclosure requirements, including adding requirements to present the reconciliation of income tax expense computed at the statutory rate to actual income tax expense using both percentages and amounts and providing a disaggregation of income taxes paid.

Further, certain disclosures are eliminated, including the current requirement to disclose information on changes in unrecognized tax benefits in the next 12 months.

1 unchanged sentence

Early adoption is permitted.

Prospective, with retrospective application also permitted.

SJW Group is currently evaluating the requirements of ASU 2023-09.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2024

(in thousands, except share and per share data)

Regulatory Matters

Regulatory assets and liabilities are comprised of the following as of March 31, 2024 and December 31, 2023:

March 31, 2024 December 31, 2023

Regulatory assets and liabilities are comprised of the following as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

Regulatory assets:

37 unchanged sentences

(e) MWRAM is described in the following section.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

(in thousands, except share and per share data)

(f) Represents costs associated with SJWC’s CAP.

(g) Primarily related to increased bad debt expenses associated with SJWC’s response to COVID-19.

The California Public Utilities Commission (“CPUC”) has authorized water utilities to activate CEMA accounts in order to track savings and costs related to SJWC’s response to catastrophic events, which includes external labor and materials, increases in bad debt from suspension of shutoffs for non-payment, waived deposits and reconnection fees, and divergence from actual versus authorized usage.

(g) The California Public Utilities Commission (“CPUC”) has authorized water utilities to activate CEMA accounts in order to track savings and costs related to SJWC’s response to catastrophic events, which includes external labor and materials, increases in bad debt from suspension of shutoffs for non-payment, waived deposits and reconnection fees, and divergence from actual versus authorized usage.

At December 31, 2023, balance primarily relates to increased bad debt expenses associated with SJWC’s response to COVID-19.

(h) Represents the difference between revenues collected in interim rates in effect as of January 1, 2022 and revenues that would result from rates authorized in SJWC’s 2022 general rate case retroactive to January 1, 2022.

(i) Reflects differences in actual water supply costs compared to amounts assumed in base rates, including applicable changes and variations in costs and quantities that affect the overall mix of the water supply.

(j) Other includes other balancing and memorandum accounts and regulatory mechanisms, deferred costs for certain information technology activities, asset retirement obligations and rate case expenses.

(k) As of March 31, 2024 and December 31, 2023, primarily relates to the current portion of MWRAM.

(k) As of June 30, 2024, primarily relates to the current portion of CWC’s deferred well redevelopment and rate case costs.

As of December 31, 2023, primarily relates to the current portion of MWRAM.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2024

(in thousands, except share and per share data)

(l) Represents amounts collected in rates from customers for estimated costs to retire assets at the end of their expected useful lives before the costs are incurred.

(m) On December 22, 2017 the Tax Act was signed into law.

(m) On December 22, 2017 the Tax Cuts and Jobs Act of 2017 (the "Tax Act”) was signed into law.

The Tax Act included a reduction in the federal income tax rate from 35% to 21%.

1 unchanged sentence

The benefit of amortization of excess deferred income taxes flows back to the customers under current normalization rules and agreed upon methods with the commissions.

(n) Consists of Water Rate Adjustment mechanism (“WRA”) and WCMA, which are described in the following section.

(n) Consists of Water Rate Adjustment mechanism (“WRA”) and Water Conservation Memorandum Account (“ WCMA”), which are described in the following section.

(o) Other includes other balancing and memorandum accounts, other regulatory mechanisms and accrued tank painting costs.

(p) As of March 31, 2024 and December 31, 2023, primarily relates to the current portion of WRA.

(p) As of June 30, 2024 and December 31, 2023, primarily relates to the current portion of WRA.

SJWC has established balancing accounts for the purpose of tracking the under-collection or over-collection associated with expense changes and revenue authorized by the CPUC to offset those expense changes.

In 2022, SJWC’s general rate case decision approved the use of the Full Cost Balancing Account to track the water supply costs and energy consumption.

SJWC has been authorized for the use of the Full Cost Balancing Account to track the water supply costs and energy consumption.

The MWRAM balancing account 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.

SJWC also maintains memorandum accounts to track 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 WCMA allows SJWC to track lost revenue, net of related water costs, associated with reduced sales due to water conservation and associated calls for water use reductions.

The WCMA allows SJWC to track lost revenue, net of related water costs, associated with reduced sales due to water conservation and associated calls for water use reductions, both mandatory and voluntary.

SJWC records the lost revenue captured in the WCMA balancing accounts.

3 unchanged sentences

All balancing accounts and memorandum 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.

CWC has been authorized by the Connecticut Public Utilities Regulatory Authority (“PURA”) to utilize a Water Revenue Adjustment mechanism (“WRA”), a decoupling mechanism, to mitigate risk associated with changes in demand.

CWC has been authorized by the Connecticut Public Utilities Regulatory Authority (“PURA”) to utilize a WRA, a decoupling mechanism, to mitigate risk associated with changes in demand.

The WRA is used to reconcile actual water demands with the demands projected in the most recent general rate case and allows the company to implement a surcharge or sur-credit as necessary to recover or refund the revenues approved in the general rate case.

The WRA allows the company to defer, as a regulatory asset or liability, the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings.

As of March 31, 2024 and December 31, 2023, SJW Group’s regulatory assets not earning a return primarily included unrecognized pensions and other postretirement benefits and business combination debt premiums.

The total amount of regulatory assets not earning a return at March 31, 2024 and December 31, 2023, either by interest on the regulatory asset or as a component of rate base at the allowed rate of return, was $ 42,598 and $ 43,141 , respectively.

As of June 30, 2024 and December 31, 2023, SJW Group’s regulatory assets not earning a return primarily included unrecognized pensions and other postretirement benefits and business combination debt premiums.

The total amount of regulatory assets not earning a return at June 30, 2024 and December 31, 2023, either by interest on the regulatory asset or as a component of rate base at the allowed rate of return, was $ 41,960 and $ 43,141 , respectively.

Capitalization

2 unchanged sentences

Morgan Securities LLC, Janney Montgomery Scott LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC, pursuant to which the company may offer and sell shares of its common stock, $ 0.001 par value per share, from time to time in “at-the-market” offerings, having an aggregate gross sales price of up to $ 240,000 .

For the three months ended March 31, 2024, SJW Group issued and sold a total of 126,025 shares of

For the three and six months ended June 30, 2024, SJW Group issued and sold a total of 458,605 and 584,630 shares of common stock, respectively, at a weighted average price of $ 56.13 and $ 56.35 per share, respectively, and received $ 25,296 and $ 32,302 in net proceeds, respectively, under the Equity Distribution Agreement.

Since the inception of the Equity Distribution Agreement, SJW Group has issued and sold 2,589,287 shares of common stock at a weighted average price of $ 69.68 for a total net proceeds of $ 176,299 and has $ 59,567 of aggregate gross sales price of shares remaining to issue under the Equity Distribution Agreement.

Lines of Credit 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.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

June 30, 2024

(in thousands, except share and per share data)

common stock with a weighted average price of $ 57.13 per share and received $ 7,006 in net proceeds under the Equity Distribution Agreement.

Since the inception of the Equity Distribution Agreement, SJW Group has issued and sold 2,130,682 shares of common stock at a weighted average price of $ 72.60 for a total net proceeds of $ 151,004 and has $ 85,309 remaining under the Equity Distribution Agreement to issue into shares.

Lines of Credit 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.

Lines of Credit

The weighted-average interest rate on short-term borrowings outstanding at March 31, 2024, was 6.42 % compared to 6.48 % at December 31, 2023.

The weighted average interest rate on short-term borrowings outstanding at June 30, 2024, was 6.45 % compared to 6.48 % at December 31, 2023.

Long-term Financing Agreements

3 unchanged sentences

The closing of the notes purchase agreement occurred in January 2024.

Income tax expense for the three months ended March 31, 2024 and 2023 was $ 2,231 and $ 1,078 , respectively.

The effective consolidated income tax rates were 16 % and 9 % for the three months ended March 31, 2024 and 2023, respectively.

The higher effective tax rate for the three months ended March 31, 2024 was primarily due to the tax deficiencies recorded in the first quarter of 2024 for share-based payments 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 $ 4,488 and $ 4,511 as of March 31, 2024 and December 31, 2023, respectively.

For the three and six months ended June 30, 2024, income tax expense was $ 3,724 and 5,955 , respectively.

Income tax benefit for the three and six months ended June 30, 2023 was $ 1,512 and $ 434 , respectively.

The effective consolidated income tax rates were 15 % and ( 9 )% for the three months ended June 30, 2024 and 2023, respectively, and 16 % and ( 1 )% for the six months ended June 30, 2024 and 2023, respectively.

The higher effective tax rate for the three and six months ended June 30, 2024 was primarily due to the partial release of an uncertain tax position reserve in the second quarter of 2023 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 $ 4,630 and $ 4,511 as of June 30, 2024 and December 31, 2023, respectively.

SJW Group currently does not expect uncertain tax positions to change significantly over the next 12 months, except in the case of a lapse of the statute of limitations.

16 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

June 30, 2024

(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 months ended March 31, 2024 and 2023 are as follows:

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, 2024 and 2023 are as follows:

Pension Benefits Other Benefits

Three months ended March 31,

Three months ended June 30,

2024 2023 2024 2023

2 unchanged sentences

Expected return on assets ( 4,463 ) ( 4,069 ) ( 267 ) ( 217 )

Amortization of actuarial loss (gain)

Amortization of actuarial (gain) loss

( 18 ) 554 ( 161 ) ( 88 )

1 unchanged sentence

Total $ 802 1,938 $ 33 172

Pension Benefits Other Benefits

Six months ended June 30,

2024 2023 2024 2023

Service cost $ 3,331 3,784 $ 332 320

Interest cost 7,226 7,115 591 634

Expected return on assets ( 8,926 ) ( 8,138 ) ( 534 ) ( 434 )

Amortization of actuarial (gain) loss

( 35 ) 1,108 ( 322 ) ( 176 )

Amortization of prior service cost 7 7 — —

Total $ 1,603 3,876 $ 67 344

In 2024, SJW Group expects to make required and discretionary cash contributions of up to $ 4,515 to the pension plans and other postretirement benefits.

For the three months ended March 31, 2024, SJW Group has made no contributions to such plans.

For the three and six months ended June 30, 2024, SJW Group has made $ 2,258 of contributions to such plans.

SJW Group’s long-term incentive plans 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 subsidiary the opportunity to acquire an equity interest in SJW Group.

1 unchanged sentence

In addition, shares are issued to employees under SJW Group’s employee stock purchase plan (“ESPP”).

As of March 31, 2024, 181,280 shares are issuable upon the vesting of outstanding restricted stock units and deferred restricted stock units and an additional 1,055,383 shares are available for award issuances under the long-term incentive plans.

A summary of compensation costs charged to income, by award type, and proceeds from the ESPP, are presented below for the three months ended March 31, 2024 and 2023:

Three months ended March 31,

As of June 30, 2024, 192,750 shares are issuable upon the vesting of outstanding restricted stock units and deferred restricted stock units and an additional 1,034,642 shares are available for award issuances under the long-term incentive plans.

A summary of compensation costs charged to income, by award type, and proceeds from the ESPP, are presented below for the three and six months ended June 30, 2024 and 2023:

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

2024 2023 2024 2023

Compensation costs charged to income:

3 unchanged sentences

ESPP proceeds $ — — $ 1,101 1,080

Restricted Stock and Deferred Restricted Stock

For the three months ended March 31, 2024 and 2023, SJW Group granted 37,520 and 27,732 , respectively, one year and three year service-based restricted stock awards with a weighted-average grant date fair value per unit of $ 61.10 and $ 77.88 , respectively.

For the three months ended March 31, 2024 and 2023, SJW Group granted 44,433 and 31,345 target units, respectively, of performance-based and market-based restricted stock awards with a weighted-average grant date fair value per unit of $ 53.69 and $ 80.05 , respectively.

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, 2024, the total unrecognized compensation costs related to restricted and deferred restricted stock plans was $ 8,149 .

This cost is expected to be recognized over a weighted-average period of 2.17 years.

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

June 30, 2024

(in thousands, except share and per share data)

Restricted Stock and Deferred Restricted Stock

For the three months ended June 30, 2024 and 2023, SJW Group granted 24,692 and 9,610 , respectively, one year and three year service-based restricted stock awards with a weighted average grant date fair value per unit of $ 50.04 and $ 75.28 , respectively.

For the six months ended June 30, 2024 and 2023, SJW Group granted 64,482 and 37,342 , respectively, one year and three year service-based restricted stock awards with a weighted average grant date fair value per unit of $ 58.39 and $ 77.21 , respectively.

For the three months ended June 30, 2024, SJW Group granted 356 target units of performance-based and market-based restricted stock awards with a weighted average grant date fair value per unit of $ 52.90 and no performance-based or market-based restricted stock awards were granted in the same period in 2023.

For the six months ended June 30, 2024 and 2023, SJW Group granted 45,763 and 31,345 target units, respectively, of performance-based and market-based restricted stock awards with a weighted average grant date fair value per unit of $ 55.60 and $ 80.05 , respectively.

As of June 30, 2024, the total unrecognized compensation costs related to restricted and deferred restricted stock plans was $ 7,555 .

This cost is expected to be recognized over a weighted average period of 2.04 years.

Employee Stock Purchase Plan

SJW Group’s recorded expenses for its ESPP were $ 97 and $ 90 for the three months ended March 31, 2024 and 2023, respectively.

The total unrecognized compensation costs related to the semi-annual offering period that ends July 31, 2024, for the employee stock purchase plan is approximately $ 141 .

This cost is expected to be recognized during the second and third quarters of 2024.

SJW Group’s recorded expenses for its ESPP were $ 106 and $ 203 for the three and six months ended June 30, 2024, respectively, and $ 106 and $ 196 for the three and six months ended June 30, 2023, respectively.

The total unrecognized compensation costs related to the semi-annual offering period that ends July 31, 2024, for the ESPP is approximately $ 35 .

This cost is expected to be recognized during the third quarter of 2024.

Segment and Non-Tariffed Business Reporting

9 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, 2024

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

June 30, 2024

(in thousands, except share and per share data)

For Three Months Ended June 30, 2024

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

7 unchanged sentences

Provision (benefit) for income taxes $ 5,325 301 ( 68 ) ( 1,834 ) 5,325 ( 1,601 ) 3,724

For Three Months Ended June 30, 2023

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

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

Operating revenue $ 152,525 2,945 1,416 — 152,525 4,361 156,886

Operating expense 122,678 1,789 661 600 122,678 3,050 125,728

Operating income (loss) 29,847 1,156 755 ( 600 ) 29,847 1,311 31,158

Net income (loss) 20,510 596 544 ( 3,364 ) 20,510 ( 2,224 ) 18,286

Depreciation and amortization 25,811 85 1 224 25,811 310 26,121

Interest on long-term debt and other interest expense 10,846 — — 5,551 10,846 5,551 16,397

Provision (benefit) for income taxes $ 102 320 243 ( 2,177 ) 102 ( 1,614 ) ( 1,512 )

For Six Months Ended June 30, 2024

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

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

Operating revenue $ 316,961 6,043 2,552 — 316,961 8,595 325,556

Operating expense 250,030 3,989 1,186 1,868 250,030 7,043 257,073

Operating income (loss) 66,931 2,054 1,366 ( 1,868 ) 66,931 1,552 68,483

Net income (loss) 38,556 1,230 583 ( 7,974 ) 38,556 ( 6,161 ) 32,395

Depreciation and amortization 56,118 170 2 446 56,118 618 56,736

Interest on long-term debt and other interest expense 23,579 445 — 11,854 23,579 12,299 35,878

Provision (benefit) for income taxes $ 9,021 619 198 ( 3,883 ) 9,021 ( 3,066 ) 5,955

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

June 30, 2024

(in thousands, except share and per share data)

For Three Months Ended March 31, 2023

For Six Months Ended June 30, 2023

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

8 unchanged sentences

____________________

(1) The “All Other” category for the three months ended March 31, 2024 and 2023, includes the accounts of SJW Group, SJWNE LLC, CTWS and SJWTX Holdings, Inc.

(1) The “All Other” category for the three and six months ended June 30, 2024 and 2023, includes the accounts of SJW Group, SJWNE LLC, CTWS and SJWTX Holdings, Inc.

on a stand-alone basis.

SJW Group’s assets by segment are as follows:

March 31, 2024

June 30, 2024

December 31, 2023

25 unchanged sentences

The purchase price of KT Water Development was $ 7,338 , all of which was cash, and was determined in accordance with a fair market value process defined under the Texas Water Code.

The transaction was accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805—“Business Combinations.” The transaction

The transaction was accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805—“Business Combinations.” The transaction consideration was allocated to utility plant.

The final purchase price allocation was completed during the quarter ended March 31, 2024, with no change from the preliminary purchase price allocation.

Transaction costs were not material.

The results of KT Water Development are included in SJW Group’s consolidated statements of comprehensive income since the acquisition date

SJW GROUP AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

March 31, 2024

June 30, 2024

(in thousands, except share and per share data)

consideration was allocated to utility plant.

The final purchase price allocation was completed during the quarter ended March 31, 2024, with no change from the preliminary purchase price allocation.

Transaction costs were not material.

The results of KT Water Development are included in SJW Group’s consolidated statements of comprehensive income since the acquisition date and were not material.

and were not material.

Pro forma financial information has not been presented because the acquisition was not material to SJW Group’s consolidated financial statements.

13 unchanged sentences

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