SJW Group

S J W C o r p .

201 5 

A N N U A L   R E P O R T

Dear Fellow Shareholder:

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(cid:71)(cid:72)(cid:386)(cid:69)(cid:75)(cid:71)(cid:80)(cid:86)(cid:14)(cid:2)(cid:67)(cid:80)(cid:70)(cid:2)(cid:85)(cid:87)(cid:82)(cid:71)(cid:84)(cid:75)(cid:81)(cid:84)(cid:2)(cid:87)(cid:86)(cid:75)(cid:78)(cid:75)(cid:86)(cid:91)(cid:2)(cid:79)(cid:81)(cid:70)(cid:71)(cid:78)(cid:14)(cid:2)(cid:67)(cid:80)(cid:70)(cid:2)(cid:85)(cid:87)(cid:82)(cid:71)(cid:84)(cid:68)(cid:2)(cid:71)(cid:90)(cid:71)(cid:69)(cid:87)(cid:86)(cid:75)(cid:81)(cid:80)(cid:2)(cid:81)(cid:72)(cid:2)(cid:81)(cid:87)(cid:84)(cid:2)(cid:68)(cid:87)(cid:85)(cid:75)(cid:80)(cid:71)(cid:85)(cid:85)(cid:2)(cid:82)(cid:78)(cid:67)(cid:80)(cid:14)(cid:2)(cid:89)(cid:71)(cid:2)(cid:84)(cid:71)(cid:79)(cid:67)(cid:75)(cid:80)(cid:2)(cid:69)(cid:81)(cid:80)(cid:386)(cid:70)(cid:71)(cid:80)(cid:86)(cid:2)(cid:75)(cid:80)(cid:2)(cid:81)(cid:87)(cid:84)(cid:2)(cid:67)(cid:68)(cid:75)(cid:78)(cid:75)(cid:86)(cid:91)(cid:2)(cid:86)(cid:81)(cid:2)

(cid:70)(cid:71)(cid:78)(cid:75)(cid:88)(cid:71)(cid:84)(cid:2)(cid:85)(cid:87)(cid:85)(cid:86)(cid:67)(cid:75)(cid:80)(cid:71)(cid:70)(cid:2)(cid:73)(cid:84)(cid:81)(cid:89)(cid:86)(cid:74)(cid:2)(cid:75)(cid:80)(cid:2)(cid:82)(cid:84)(cid:81)(cid:386)(cid:86)(cid:67)(cid:68)(cid:75)(cid:78)(cid:75)(cid:86)(cid:91)(cid:14)(cid:2)(cid:71)(cid:67)(cid:84)(cid:80)(cid:75)(cid:80)(cid:73)(cid:85)(cid:14)(cid:2)(cid:67)(cid:80)(cid:70)(cid:2)(cid:70)(cid:75)(cid:88)(cid:75)(cid:70)(cid:71)(cid:80)(cid:70)(cid:85)(cid:16)(cid:2)

(cid:386)(cid:143)(cid:143)(cid:3)(cid:156)(cid:118)(cid:3)(cid:213)(cid:195)(cid:3)(cid:62)(cid:204)(cid:3)(cid:45)(cid:27)(cid:55)(cid:3)(cid:62)(cid:192)(cid:105)(cid:3)(cid:96)(cid:105)(cid:105)(cid:171)(cid:143)(cid:222)(cid:3)(cid:62)(cid:171)(cid:171)(cid:192)(cid:105)(cid:86)(cid:136)(cid:62)(cid:204)(cid:136)(cid:219)(cid:105)(cid:3)(cid:156)(cid:118)(cid:3)(cid:222)(cid:156)(cid:213)(cid:192)(cid:3)(cid:136)(cid:152)(cid:219)(cid:105)(cid:195)(cid:204)(cid:147)(cid:105)(cid:152)(cid:204)(cid:93)(cid:3)(cid:156)(cid:213)(cid:192)(cid:3)(cid:86)(cid:213)(cid:195)(cid:204)(cid:156)(cid:147)(cid:105)(cid:192)(cid:195)(cid:189)(cid:3)(cid:86)(cid:156)(cid:152)(cid:119)(cid:96)(cid:105)(cid:152)(cid:86)(cid:105)(cid:93)(cid:3)(cid:62)(cid:152)(cid:96)(cid:3)(cid:156)(cid:213)(cid:192)(cid:3)(cid:105)(cid:147)(cid:171)(cid:143)(cid:156)(cid:222)(cid:105)(cid:105)(cid:195)(cid:189)(cid:3)

commitment. On behalf of the Board and our employees, thank you for your investment in SJW.

W. Richard Roth, Chairman, President and CEO

 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

For the fiscal year ended December 31, 2015 
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the transition period from              to             

Commission file number: 1-8966

SJW CORP.

(Exact name of registrant as specified in its charter)

California
(State or other jurisdiction of incorporation or organization)

110 West Taylor Street, San Jose, California
(Address of principal executive offices)

77-0066628
(I.R.S. Employer Identification No.)

95110
(Zip Code)

408-279-7800
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $0.521 par value per share

Name of each exchange on which registered
New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities 

Securities registered pursuant to Section 12(g) of the Act: None

Act.    Yes  

    No  

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange 

Act.    Yes  

    No  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and 
(2) has been subject to such filing requirements for the past 90 days.    Yes  

    No  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 

be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this 
Form 10-K or any amendment to this Form 10-K.  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every 
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the 
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  

    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller 

reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the 
Exchange Act.

Large accelerated filer  

    Accelerated filer  

    Non-accelerated filer  

    Smaller reporting company  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  

    No  

As of June 30, 2015, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was 

approximately $487 million based on the closing sale price as reported on the New York Stock Exchange.

Indicate the number of shares outstanding of registrant's common stock, as of the latest practicable date.

Class
Common Stock, $0.521 par value per share

Outstanding at February 12, 2016
20,418,127

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement relating to the registrant's Annual Meeting of Shareholders, to be held on April 27, 2016, 

are incorporated by reference into Part III of this Form 10-K where indicated.

 
 
 
 
 
TABLE OF CONTENTS

PART I

Forward-Looking Statements .......................................................................................................................................
Item 1.
Business..........................................................................................................................................................
Item 1A. Risk Factors....................................................................................................................................................
Item 1B. Unresolved Staff Comments ..........................................................................................................................
Item 2.
Properties........................................................................................................................................................
Item 3.
Legal Proceedings ..........................................................................................................................................
Item 4. Mine Safety Disclosures.................................................................................................................................

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 

Securities ........................................................................................................................................................
Item 6.
Selected Financial Data..................................................................................................................................
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations .........................
Item 7A. Quantitative and Qualitative Disclosures About Market Risk .......................................................................
Item 8.
Financial Statements and Supplementary Data..............................................................................................
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ........................
Item 9A. Controls and Procedures.................................................................................................................................
Item 9B. Other Information...........................................................................................................................................

PART III

Item 10. Directors, Executive Officers and Corporate Governance.............................................................................
Item 11. Executive Compensation................................................................................................................................
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters......
Item 13. Certain Relationships and Related Transactions, and Director Independence...............................................
Item 14.
Principal Accountant Fees and Services.........................................................................................................

PART IV

Item 15. Exhibits and Financial Statement Schedules..................................................................................................

Exhibit Index ....................................................................................................................................................................

Signatures .........................................................................................................................................................................

Page

3

3

11

17

17

18

18

19

20
21

37

38

71

71

72

72

72

72

72

72

73

74

78

 
 
PART I

Forward-Looking Statements

This report contains forward-looking statements within the meaning of the federal securities laws relating to future 
events and future results of SJW Corp. and its subsidiaries that are based on current expectations, estimates, forecasts, and 
projections about SJW Corp. and its subsidiaries and the industries in which SJW Corp. and its subsidiaries operate and the 
beliefs and assumptions of the management of SJW Corp.  Such forward-looking statements are identified by words including 
“expect”, “estimate”, “anticipate”, “intends”, “seeks”, “plans”, “projects”, “may”, “should”, “will”, and variation of such 
words, and similar expressions.  These forward-looking statements are only predictions and are subject to risks, uncertainties, 
and assumptions that are difficult to predict.  Therefore, actual results may differ materially and adversely from those expressed 
in any forward-looking statements.  Important factors that could cause or contribute to such differences include, but are not 
limited to, those discussed in this report under Item 1A, “Risk Factors,” and Item 7, “Management's Discussion and Analysis of 
Financial Condition and Results of Operations,” and elsewhere, and in other reports SJW Corp. files with the Securities and 
Exchange Commission (the “SEC”), specifically the most recent report on Form 10-Q and reports on Form 8-K filed with the 
SEC, each as it may be amended from time to time.

SJW Corp. undertakes no obligation to update or revise the information contained in this report, including the forward-

looking statements, to reflect any event or circumstance that may arise after the date of this report.

Item 1. 

Business

General Development of Business

SJW Corp. was incorporated in California on February 8, 1985. SJW Corp. is a holding company with five subsidiaries:

• 

• 

• 

• 

• 

San Jose Water Company, a wholly owned subsidiary of SJW Corp., with its headquarters located at 110 
West Taylor Street in San Jose, California 95110, was originally incorporated under the laws of the State 
of California in 1866.  As part of a reorganization on February 8, 1985, San Jose Water Company became 
a wholly owned subsidiary of SJW Corp.  San Jose Water Company is a public utility in the business of 
providing water service to approximately 229,000 connections that serve a population of approximately 
one million people in an area comprising approximately 138 square miles in the metropolitan San Jose, 
California area. 

SJWTX, Inc., a wholly owned subsidiary of SJW Corp., was incorporated in the State of Texas in 2005.  
SJWTX, Inc. is doing business as Canyon Lake Water Service Company (“CLWSC”).  CLWSC is a 
public utility in the business of providing water service to approximately 12,500 connections that serve 
approximately 37,000 people.  CLWSC's service area comprises more than 243 square miles in western 
Comal County and southern Blanco County in the growing region between San Antonio and Austin, 
Texas.  SJWTX, Inc. has a 25% interest in Acequia Water Supply Corporation (“Acequia”).  The water 
supply corporation has been determined to be a variable interest entity within the scope of Financial 
Accounting Standards Board (FASB) Accounting Standard Codification (ASC) Topic 810
—“Consolidation” with SJWTX, Inc. as the primary beneficiary.  As a result, Acequia has been 
consolidated with SJWTX, Inc.

SJW Land Company, a wholly owned subsidiary of SJW Corp., was incorporated in 1985.  SJW Land 
Company owns undeveloped land in the states of California and Tennessee, owns and operates 
commercial buildings in the states of California, Arizona and Tennessee, and has a 70% limited 
partnership interest in 444 West Santa Clara Street, L.P. 

Texas Water Alliance Limited (“TWA”), a wholly owned subsidiary of SJW Corp., is undertaking 
activities that are necessary to develop a water supply project in Texas.  On February 22, 2016, SJW 
Corp. entered into an agreement with the Guadalupe-Blanco River Authority (“GBRA”), pursuant to 
which SJW Corp. agreed to sell all of its equity interest in TWA to GBRA for $31.0 million in cash (the 
“TWA Agreement”).  The TWA Agreement is subject to specified closing conditions, including the 
completion of a financing by GBRA to fund the purchase price.

SJW Group, Inc., a Delaware corporation, was formed in March 2015 for the sole purpose of effectuating 
a change in the state of incorporation of SJW Corp. from California to Delaware (the “Reincorporation”).  
The Reincorporation requires the approval of the California Public Utilities Commission (“CPUC”) and 
Public Utilities Commission of Texas (“PUCT”) and will not become effective until after we obtain such 
approvals.  In July and September 2015, applications were filed with the CPUC and PUCT, respectively, 
to seek such approvals and decisions are expected in the first quarter of 2016. 

Together, San Jose Water Company, CLWSC and TWA are referred to as “Water Utility Services.”

3

SJW Land Company and its consolidated variable interest entity, 444 West Santa Clara Street, L.P., which operates 

commercial building rentals, are collectively referred to as “Real Estate Services.”

Regulation and Rates

San Jose Water Company's rates, service and other matters affecting its business are subject to regulation by the CPUC.

Generally, there are three types of rate adjustments that affect San Jose Water Company's revenue collection: general 
rate adjustments, cost of capital adjustments, and offset rate adjustments.  General rate adjustments are authorized in general 
rate case decisions, which usually authorize an initial rate adjustment followed by two annual escalation adjustments.  General 
rate applications are normally filed and processed during the last year covered by the most recent general rate case as required 
by the CPUC in order to avoid any gaps in regulatory decisions on general rate adjustments.

Cost of capital adjustments are rate adjustments resulting from the CPUC's usual tri-annual establishment of a 

reasonable rate of return for San Jose Water Company's capital investments.

The purpose of an offset rate adjustment is to compensate utilities for changes in specific pre-authorized offsettable 

capital investments or expenses, primarily for purchased water, groundwater extraction charges and purchased power.  Pursuant 
to Section 792.5 of the California Public Utilities Code, a balancing account must be maintained for each expense item for 
which such revenue offsets have been authorized.  The purpose of a balancing account is to track the under-collection or over-
collection associated with such expense changes.

On September 15, 2014, San Jose Water Company filed an application for rehearing of 2012 General Rate Case 

Decision No. 14-08-006 to address a limited set of issues from San Jose Water Company's General Rate Case Decision No. 
14-08-006.  Specifically, San Jose Water Company sought rehearing on the duration of the interim rate period used to determine 
the General Rate Case true-up recovery and rehearing on the treatment of excess capacity labor in the provision of non-tariffed 
products and services.  On March 27, 2015, the CPUC issued Decision No. 15-03-048 granting a limited rehearing and 
modifying Decision No. 14-08-006 to recover over 12 months lost revenue in the amount of $1.9 million related to the 
extension of interim rates from the date of the 2012 General Rate Case Decision (August 14, 2014) to the date 2014 rates 
became effective (September 29, 2014).  Decision No. 15-03-048 also provided for a limited rehearing on the treatment of 
excess capacity labor in the provision of non-tariffed products and services.  On August 13, 2015, San Jose Water Company and 
the CPUC's Office of Ratepayer Advocates (“ORA”) submitted a settlement that resolved all outstanding issues related to the 
rehearing.  On October 1, 2015, the CPUC issued Decision No. 15-10-005 adopting the submitted settlement and closed the 
proceeding.  The settlement agreement did not affect authorized revenues or rates. 

On January 5, 2015, San Jose Water Company filed General Rate Case Application No. 15-01-002 requesting authority 
for an increase of revenue of $34.9 million, or 12.22%, in 2016, $10.0 million, or 3.11%, in 2017 and $17.6 million, or 5.36%, 
in 2018.  This General Rate Case filing also includes several requests, including but not limited to:  (1) recovery of the under-
collected balance of $4.8 million in balancing accounts, (2) disbursement of the over-collected balance of $976 thousand 
accrued in various memorandum accounts, and (3) implementation of a full revenue decoupling Water Revenue Adjustment 
Mechanism and associated Modified Cost Balancing Account.  The ORA submitted testimony on April 23, 2015, 
recommending increases of $23.5 million, or 8.54%, in 2016, $13.8 million, or 4.42%, in 2017 and $16.3 million, or 4.95% in 
2018.  San Jose Water Company and the ORA reached a settlement agreement on a range of issues, including full settlement on 
all contested utility plant in-service items.  Evidentiary hearings to address all remaining unsettled items took place in June 
2015 and briefs were submitted in July 2015.  Since a decision was not reached by the end of 2015, the CPUC has authorized 
San Jose Water Company to implement interim rates, effective January 1, 2016, until such time as decision is adopted.  Interim 
rates have been set equal to calendar year-end 2015 rates and will remain in effect until a decision is adopted.  Any difference 
between interim rates and the rates ultimately approved will be tracked in a memorandum account and will be submitted to the 
CPUC for recovery or refund.  A final General Rate Case is expected in the first half of 2016.

On March 26, 2015, San Jose Water Company filed Advice Letter No. 468 with the CPUC.  With this advice letter San 

Jose Water Company requested authorization to recover an under-collection balance of $9.6 million in the Mandatory 
Conservation Revenue Adjustment Memorandum Account (“MCRAMA”), using a Water Revenue Adjustment Mechanism 
(“WRAM”) methodology, that accumulated during the period April 1, 2014 through December 31, 2014.  On December 3, 
2015, the CPUC adopted Resolution W-5071.  The resolution authorized recovery of $4.3 million in lost revenues based on the 
use of a Water Conservation Memorandum Account (“WCMA”) calculation methodology.  The WCMA calculation 
methodology allows San Jose Water Company to track lost revenue associated with reduced sales due to the ongoing drought 
and the associated calls for water use reduction from the Santa Clara Valley Water District (“SCVWD”).  The lost revenues are 
to be recovered over a 12-month period via a surcharge of $0.08 per hundred cubic feet (“CCF”) beginning December 9, 2015.  
The MCRAMA was subsequently renamed the WCMA in Advice Letter No. 479.  See “Balancing and Memorandum 
Accounts” under Note 1 of Notes to Consolidated Financial Statements for further discussion on recognition of the approved 
recovery amount.

4

On May 1, 2015, San Jose Water Company filed Advice Letter No. 471 with the CPUC requesting to recover the 
cumulative balance of $1.9 million in the 2013 General Rate Case Interim Rates Memorandum Account for the period of 
August 15, 2014 through September 28, 2014.  The recovery of the balance for this 45-day period was authorized in the GRC 
rehearing Decision No. 15-03-048.  San Jose Water Company's request was authorized effective May 6, 2015.

On May 11, 2015, San Jose Water Company filed Advice Letters No. 472 and No. 473 with the CPUC.  With Advice 
Letter No. 472, San Jose Water Company sought to modify the existing Water Shortage Contingency Plan in Tariff Rule 14.1, 
so that the plan reflects examples put forward by the CPUC and so that the restrictions provided within the plan more closely 
matched the restrictions adopted by local government agencies.  Advice Letter No. 473 was filed pursuant to Executive Order 
B-29-15 by the Governor of the State of California, and by orders of the State Water Resources Control Board (“State Water 
Board”) and the CPUC.  With Advice Letter No. 473, San Jose Water Company requested authority from the CPUC to activate 
Stage 3 of Tariff Rule 14.1 and activate the Water Shortage Contingency Plan in Schedule No. 14.1 with staged mandatory 
reductions in water usage and drought surcharges.  Both Advice Letters No. 472 and No. 473 became effective on June 15, 
2015.  The drought surcharges will be recorded in a drought account authorized by the CPUC to track lost revenues from 
conservation.  The amount collected will offset future rate increases that would be necessary to recover lost revenue due to 
drought conservation efforts. 

On May 29, 2015, San Jose Water Company filed Advice Letter No. 474 with the CPUC requesting authorization to 

increase revenues by $18.4 million, or approximately 6.44%.  This filing covered increased costs that went into effect on July 1, 
2015 for purchased water and groundwater production charged to San Jose Water Company by the SCVWD.  As directed by the 
CPUC's Water Division, the revenue increase is recovered via surcharges on the existing quantity rate.  San Jose Water 
Company's request was authorized and became effective July 1, 2015.

On July 30, 2015, San Jose Water Company filed Application No. 15-07-027 with the CPUC seeking the authorization 
to change the state of incorporation of SJW Corp., the parent holding company of San Jose Water Company, from California to 
Delaware.  A decision in this matter is anticipated in the first quarter of 2016.

On August 21, 2015, San Jose Water Company filed Application No. 15-08-016 with the CPUC seeking authority to 

issue additional debt and equity securities of up to $150 million in aggregate for general purposes including property 
acquisition, construction, completion, extension or improvement of facilities.  On December 18, 2015, the CPUC issued 
Decision No. 15-12-018 authorizing San Jose Water Company to issue the requested debt and equity securities.

On August 21, 2015, San Jose Water Company filed Advice Letter 476 with the CPUC.  San Jose Water Company 
requested authorization for a rate base offset for improvements to the Montevina Water Treatment Plant.  In Decision No. 
13-07-028 the CPUC authorized San Jose Water Company to file annual advice letters to include in rate base costs of the 
Montevina Water Treatment Plant upgrade project.  The advice letter filing requested authorization for a revenue increase of 
approximately $275 thousand or about 0.09%.  The advice letter was approved and the increase in rates became effective 
September 20, 2015.  Revenue will be recorded through rates on a prospective basis.  This filing was the second such advice 
letter related to the Montevina Water Treatment Plant.  San Jose Water Company intends to continue to file similar annual 
advice letters until the project has been completed. 

On December 11, 2015, San Jose Water Company along with three other California water utilities (the “Joint Parties”), 

filed a request for a one year postponement of their 2016 Cost of Capital (“COC”) filings scheduled for March 31, 2016.  
Pursuant to the CPUC's rate case plan, the Joint Parties are required to file their COC applications on a triennial basis with the 
next scheduled filing due on March 31, 2016.  Postponing the filing for one year would alleviate administrative processing 
costs on the Joint Parties as well as the CPUC staff.  On February 1, 2016, the CPUC's executive director approved the Joint 
Parties request for a one year postponement.  Joint Parties are now required to file their next COC applications on March 31, 
2017.

On December 15, 2015, San Jose Water Company filed Advice Letter No. 481 with the CPUC requesting authorization 
to re-implement a previously existing surcharge of $0.0492 per CCF to amortize the remaining uncollected balancing account 
recovery authorized in General Rate Case Decision 14-08-006.  In Decision No. 14-08-006 the CPUC authorized San Jose 
Water Company to recover the $2.6 million under-collection in various balancing accounts over a 12-month period beginning in 
August of 2014.  However, at the end of the 12-month period $590 thousand of the originally authorized $2.6 million remained 
uncollected.  This under-collection is due primarily to actual sales being substantially lower than the commission authorized 
sales estimate which was used to calculate the surcharge level.  The advice letter was approved and effective on January 15, 
2016.

On February 5, 2016, San Jose Water Company filed Advice Letter No. 482 with the CPUC.  With this advice letter San 
Jose Water Company requested authorization to recover the $7.7 million balance accumulated in the WCMA during the period 
January 1, 2015 through December 31, 2015.  The WCMA is used to track the revenue impact of mandatory conservation upon 

5

San Jose Water Company’s quantity revenue resulting from mandatory conservation instituted by the State of California and the 
SCVWD.  The requested $7.7 million recovery is the net amount of the total drought related revenue reduction calculated in the 
WCMA offset by the drought surcharges collected during 2015.  If approved, the under-collection will be recovered via a 
surcharge of $0.1441 per CCF on the existing quantity rate for a period of 12 months from the date of CPUC approval.  San 
Jose Water Company has requested the recovery begin on or about April 7, 2016.

Effective September 1, 2014, CLWSC became subject to the economic regulation of the PUCT.  Prior to that time, 

CLWSC was subject to economic regulation by the Texas Commission on Environmental Quality (“TCEQ”).  Both the PUCT 
and TCEQ authorize rate increases after the filing of an Application for a Rate/Tariff Change.  Rate cases may be filed as they 
become necessary, provided there is no current rate case outstanding.  Further, rate cases may not be filed more frequently than 
once every 12 months.

On September 16, 2015, CLWSC filed an application with the PUCT requesting approval of the reincorporation of SJW 
Corp., Inc. from a California corporation to a Delaware corporation.  The application is currently being reviewed by PUCT and 
a decision in this matter is anticipated in the first quarter of 2016. 

Please also see Item 1A, “Risk Factors,” Item 7, “Management's Discussion and Analysis of Financial Condition and 

Results of Operations,” and Note 1 of Notes to Consolidated Financial Statements.

Financial Information about Industry Segments

See Note 12 of Notes to Consolidated Financial Statements for information regarding SJW Corp.'s business segments.

Description of Business

General

The principal business of Water Utility Services consists of the production, purchase, storage, purification, distribution, 
wholesale, and retail sale of water.  San Jose Water Company provides water service to approximately 229,000 connections that 
serve customers in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno, Saratoga and 
the Town of Los Gatos, and adjacent unincorporated territories, all in the County of Santa Clara in the State of California.  San 
Jose Water Company distributes water to customers in accordance with accepted water utility methods.  CLWSC provides 
water service to approximately 12,500 connections that serve approximately 37,000 people in a service area comprising more 
than 243 square miles in the growing region between San Antonio and Austin, Texas.  TWA has entered into arrangements with 
certain landowners in Gonzales County, Texas that provide for the development of a water supply project.  In connection with 
the project, TWA applied for groundwater production and transportation permits to meet the future water needs in CLWSC's 
service area and to the central Texas hill country communities and utilities adjacent to this area.  In January of 2013, TWA's 
permits were approved by the groundwater district in Gonzales County.  The permits were subsequently received in March 
2013.

San Jose Water Company also provides non-tariffed services under agreements with municipalities and other utilities. 

These non-tariffed services include water system operations, maintenance agreements and antenna leases.

In October 1997, San Jose Water Company commenced operation of the City of Cupertino municipal water system 

under the terms of a 25-year lease.  The system is adjacent to the San Jose Water Company service area and has approximately 
4,600 service connections.  Under the terms of the lease, San Jose Water Company paid an up-front $6.8 million concession fee 
to the City of Cupertino that is amortized over the contract term.  San Jose Water Company assumed responsibility for all 
maintenance and operating costs, while receiving all payments for water service.

Among other things, operating results from the water business fluctuate according to the demand for water, which is 

often influenced by seasonal conditions, such as summer temperatures or the amount and timing of precipitation in Water 
Utility Services' service areas.  Revenue, production expenses and income are affected by changes in water sales and the 
availability of surface water supply.  Overhead costs, such as payroll and benefits, depreciation, interest on long-term debt, and 
property taxes, remain fairly constant despite variations in the amount of water sold.  As a result, earnings are highest in the 
higher demand, warm summer months and lowest in the lower demand, cool winter months.

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Water Supply

San Jose Water Company's water supply consists of groundwater from wells, surface water from watershed run-off and 

diversion, reclaimed water, and imported water purchased from the SCVWD under the terms of a master contract with SCVWD 
expiring in 2051.  Purchased water provides approximately 40% to 50% of San Jose Water Company's annual production.  San 
Jose Water Company pumps approximately 40% to 50% of its water supply from the underground basin and pays a 
groundwater extraction charge to SCVWD.  Surface supply, which during a year of normal rainfall satisfies about 6% to 8% of 
San Jose Water Company's annual needs, provides approximately 1% of its water supply in a dry year and approximately 14% 
in a wet year.  In dry years, the decrease in water from surface run-off and diversion, and the corresponding increase in 
purchased and pumped water, increases production expenses substantially.

The pumps and motors at San Jose Water Company's groundwater production facilities are propelled by electric power.  
Over the last few years, San Jose Water Company has installed standby power generators at 33 of its strategic water production 
sites.  In addition, the commercial office and operations control centers are outfitted with standby power equipment that allow 
critical distribution and customer service operations to continue during a power outage.  SCVWD has informed San Jose Water 
Company that its filter plants, which deliver purchased water to San Jose Water Company, are also equipped with standby 
generators.  In the event of a power outage, San Jose Water Company believes it will be able to prevent an interruption of 
service to customers for a limited period by pumping water with its standby generators and by using purchased water from 
SCVWD.

In 2015, the level of water in the Santa Clara Valley groundwater basin, which is managed by the SCVWD, experienced 

a slight recovery due to:  (1) a reduction in groundwater pumping by various water retailers in the region, and (2) a modest 
increase in groundwater recharge efforts on the part of the SCVWD.  As reported by the SCVWD at the end of 2015, 
groundwater level in the Santa Clara Plain was slightly higher compared to the same time in 2014, but lower than the five-year 
average and the total groundwater storage at the end of 2015 was within Stage 3 (Severe) of the SCVWD's Water Shortage 
Contingency Plan.  On January 8, 2016, SCVWD's 10 reservoirs were 31.3% full with 52,862 acre-feet of water in storage.  As 
of December 31, 2015, San Jose Water Company's Lake Elsman contained 571 acre-feet or approximately 36% of the five-year 
seasonal average.  In addition, the rainfall at San Jose Water Company's Lake Elsman was measured at 9.35 inches for the 
period from July 1, 2015 through December 31, 2015, which is 55% of the five-year average.  Local surface water is a less 
costly source of water than groundwater or purchased water and its availability significantly impacts San Jose Water Company's 
results of operations.  San Jose Water Company believes that its various sources of water supply will be sufficient to meet 
customer demand in 2016 after consideration of implemented water restrictions and conservation activities in response to the 
continuing drought.

In response to the ongoing drought in California, on March 17, 2015, the State Water Board adopted an expanded 

emergency conservation regulation that became effective on March 27, 2015.  The regulation prohibits certain outdoor water 
uses for all Californians and also places water usage restrictions on businesses in the restaurant and hospitality sectors.  On 
March 25, 2015, SCVWD increased their conservation target from 20% to 30% through the end of 2015.  On April 1, 2015, 
Governor Edmund G. Brown Jr. issued an executive order imposing restrictions to achieve a statewide 25% reduction in 
potable urban water usage through February 28, 2016 based on 2013 usage.  On November 13, 2015, Governor Edmund G. 
Brown issued Executive Order B-36-15 that calls for an extension of restrictions on urban potable water usage until October 31, 
2016, should drought conditions persist through January of 2016.  On February 2, 2016, the State Water Board approved a 
resolution to extend the existing emergency conservation regulation as directed in the November 2015 executive order. 

On April 9, 2015, CPUC issued a resolution ordering its regulated water utilities to comply with the State Water Board's 

emergency conservation regulation, conduct additional customer outreach and implement restrictions on outdoor water use.  
Effective June 15, 2015, San Jose Water Company was authorized by the CPUC to activate Stage 3 of Tariff Rule 14.1 which is 
a water shortage contingency plan with mandatory water usage reductions and drought surcharges.  Tariff Rule 14.1 focuses 
primarily on restrictions of outdoor water use which accounts for 50% of a typical customer's water usage.  The drought 
surcharges are recorded in a drought account authorized by the CPUC.  The amount collected will offset future surcharges that 
would be necessary to recover lost revenue due to drought conservation efforts.  San Jose Water Company is continually 
working to remain in compliance with the various drought rules and regulations and is also working with local governments as 
well as the SCVWD to communicate consistent messages to the public about use restrictions and other matters related to the 
ongoing drought.

California also faces long-term water supply challenges.  San Jose Water Company actively works with SCVWD to 
meet the challenges by continuing to educate customers on responsible water use practices and conducting long-range water 
supply planning.

CLWSC's water supply consists of groundwater from wells and purchased treated and raw water from the GBRA.  

CLWSC has long-term agreements with the GBRA, which expire in 2037, 2040, 2044 and 2050.  The agreements, which are 

7

take-or-pay contracts, provide CLWSC with an aggregate of 6,900 acre-feet of water per year from Canyon Lake at prices that 
may be adjusted periodically by GBRA.

Please also see further discussion under Item 1A, “Risk Factors” and Item 7, “Management's Discussion and Analysis 

of Financial Condition and Results of Operations.”

Franchises

Franchises granted by local jurisdictions permit Water Utility Services to construct, maintain, and operate a water 

distribution system within the streets and other public properties of a given jurisdiction.  San Jose Water Company holds the 
necessary franchises to provide water in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte 
Sereno and Saratoga, the Town of Los Gatos and the unincorporated areas of Santa Clara County.  None of the franchises have 
a termination date, other than the franchise for the unincorporated areas of Santa Clara County, which terminates in 2020.

CLWSC holds the franchise for water and wastewater service to the City of Bulverde, which terminates in 2029.  The 

unincorporated areas that CLWSC serves in Comal and Blanco Counties do not require water service providers to obtain 
franchises.

Seasonal Factors

Water sales are seasonal in nature and influenced by weather conditions.  The timing of precipitation and climatic 

conditions can cause seasonal water consumption by customers to vary significantly.  Demand for water is generally lower 
during the cooler and rainy winter months.  Demand increases in the spring when the temperature rises and rain diminishes.

Competition

San Jose Water Company and CLWSC are public utilities regulated by the CPUC and PUCT, respectively, and operate 

within a service area approved by the regulators.  The statutory laws provide that no other investor-owned public utility may 
operate in the public utilities' service areas without first obtaining from the regulator a certificate of public convenience and 
necessity.  Past experience shows such a certificate will be issued only after demonstrating that service in such area is 
inadequate.

California law also provides that whenever a public agency constructs facilities to extend utility service to the service 

area of a privately-owned public utility, like San Jose Water Company, such an act constitutes the taking of property and is 
conditioned upon payment of just compensation to the private utility.

Under the California law, municipalities, water districts and other public agencies have been authorized to engage in the 
ownership and operation of water systems.  Such agencies are empowered to condemn properties operated by privately-owned 
public utilities upon payment of just compensation and are further authorized to issue bonds (including revenue bonds) for the 
purpose of acquiring or constructing water systems.  To the Company's knowledge, no municipality, water district or other 
public agency has pending any proceeding to condemn any part of its water systems.

Environmental Matters

Water Utility Services' produces potable water in accordance with all applicable county, state and federal environmental 

rules and regulations.  Additionally, public utilities are subject to environmental regulation by various other state and local 
governmental authorities.

Water Utility Services is currently in compliance with all of the United States Environmental Protection Agency's (the 

“EPA”) surface water treatment performance standards, drinking water standards for disinfection by-products and primary 
maximum contaminant levels.  These standards have been adopted and are enforced by the California State Water Board, 
Division of Drinking Water and the TCEQ for San Jose Water Company and CLWSC, respectively.

Other state and local environmental regulations apply to our Water Utility Services' operations and facilities.  These 

regulations relate primarily to the handling, storage and disposal of hazardous materials and discharges to the environment.  In 
2008, as part of routine replacement of infrastructure, San Jose Water Company identified legacy equipment containing 
elemental mercury which was released into the surrounding soil.  San Jose Water Company has determined the release posed no 
risk of contamination to the water supply, notified the appropriate authorities and remediated the affected area.  San Jose Water 
Company also identified 10 other potentially affected sites.  Six of these sites have been remediated and San Jose Water 
Company is continuing its assessment of the remaining sites in conjunction with its infrastructure replacement program.  SJW 
Corp. believes there will be no material financial impact related to this matter.  In 2013, as part of routine maintenance and 
replacement of infrastructure, San Jose Water Company identified certain non-soluble contaminants that could become a hazard 
if released into the environment.  As a precautionary measure, San Jose Water Company developed and implemented a plan to 
remove the source of the contaminants and expects to complete the plan in 2018.  SJW Corp. believes there will be no material 
financial impact related to this matter. 

8

San Jose Water Company is currently in compliance with all state and local regulations governing hazardous materials, 

point and non-point source discharges and the warning provisions of the California Safe Drinking Water and Toxic 
Enforcement Act of 1986.  Please also see Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and 
Results of Operations.”

Employees

As of December 31, 2015, SJW Corp. had 399 full-time employees, of whom 357 were San Jose Water Company 

employees and 42 were CLWSC employees.  At San Jose Water Company, 122 were executive, administrative or supervisory 
personnel, and 235 were members of unions.  In November 2013, San Jose Water Company reached three-year collective 
bargaining agreements with the Utility Workers of America, representing the majority of all employees, and the International 
Union of Operating Engineers, representing certain employees in the engineering department, covering the period from 
January 1, 2014 through December 31, 2016.  The agreements include a 2% wage increase in 2014, 2% in 2015 and 3% in 2016 
for union workers as well as increases in medical co-pays and employee cost-sharing.  As of December 31, 2015, CLWSC had 
42 employees, of whom 9 were exempt and 33 were non-exempt employees.  Non-exempt employees are subject to overtime 
but are not represented by a union.

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Officers of the Registrant

Name
D.R. Drysdale ..........

Age
60

A.R. Gere.................

49

C.S. Giordano ..........

59

P. L. Jensen..............

56

D.M. Leal.................

51

J.P. Lynch.................

56

S. Papazian ..............

40

W.R. Roth................

63

J.B. Tang..................

45

W.L. Avila-Walker...

52

A.F. Walters.............

45

Offices and Experience
San Jose Water Company—Vice President, Information Systems.  Mr. Drysdale has served as
Vice President of Information Systems since 2000.  From 1998 to 1999, Mr. Drysdale was
Director of Information Systems.  From 1994 to 1998, Mr. Drysdale was Data Processing
Manager.  Mr. Drysdale joined San Jose Water Company in 1992.

San Jose Water Company—Chief Operating Officer.  Mr. Gere has served as Chief Operating
Officer since April 2015.  From 2013 to April 2015, Mr. Gere was Vice President of
Operations.  From 2008 to 2013, Mr. Gere was Chief of Operations.  From 2006 to 2008, Mr.
Gere was Director of Maintenance.  From 2005 to 2006, Mr. Gere was Director of Operations
and Water Quality.  From 2003 to 2005, Mr. Gere was Manager of Operations and Water
Quality.  Mr. Gere has been with San Jose Water Company since 1995.

San Jose Water Company—Vice President, Engineering.  Mr. Giordano has served as Vice
President of Engineering since April 2013.  From June 2007 to April 2013, Mr. Giordano was
Chief Engineer.  From August 2000 to June 2007, Mr. Giordano was Director of Engineering
and Construction.  From January 1994 to August 2000, Mr. Giordano was Assistant Chief
Engineer.  Mr. Giordano has been with San Jose Water Company since 1994.

San Jose Water Company—Senior Vice President, Regulatory Affairs.  Mr. Jensen has served
as Senior Vice President of Regulatory Affairs since October 2011.  From July 2007 to October
2011, Mr. Jensen was Vice President of Regulatory Affairs.  From 1995 to July 2007, Mr.
Jensen was Director of Regulatory Affairs.  Mr. Jensen has been with San Jose Water Company
since 1995.

San Jose Water Company—Vice President, Human Resources.  Ms. Leal has served as Vice
President of Human Resources since 2013.  From 2001 to 2013, Ms. Leal was Director of
Human Resources.  From 2000 to 2001, Ms. Leal was employed as a Human Resources
Manager at Micrel Semiconductor, Inc.  From 1989 to 2000, Ms. Leal worked in various
capacities for San Jose Water Company.

SJW Corp.—Chief Financial Officer and Treasurer.  Mr. Lynch has served as Chief Financial
Officer and Treasurer since October 2010.  He is also Chief Financial Officer and Treasurer of
San Jose Water Company, SJW Land Company, SJWTX, Inc. and Texas Water Alliance
Limited.  Prior to joining the Corporation, Mr. Lynch was an Audit Partner with KPMG LLP.
Mr. Lynch was with KPMG LLP for 26 years.  Mr. Lynch is a certified public accountant.

SJW Corp.—General Counsel and Corporate Secretary.  Ms. Papazian has served as General
Counsel and Corporate Secretary for SJW Corp. and San Jose Water Company since April
2014.  From February 2005 to April 2014, Ms. Papazian was Corporate Secretary and
Attorney.  She is also Corporate Secretary of SJW Land Company, SJWTX, Inc. and Texas
Water Alliance Limited.  She was admitted to the California State Bar in January 2000 and
thereafter was an Associate Attorney at The Corporate Law Group from March 2000 until
February 2005.

SJW Corp.—President, Chief Executive Officer and Chairman of the Board of Directors of
SJW Corp., San Jose Water Company, SJW Land Company and SJWTX, Inc.  Mr. Roth is also
Chief Executive Officer and Chairman of the Board of Directors of Texas Water Alliance
Limited.  Mr. Roth was appointed Chief Executive Officer of SJW Corp. in 1999 and President
in 1996.  Mr. Roth has been with San Jose Water Company since 1990.

San Jose Water Company—Vice President, Government Relations and Corporate
Communications.  Mr. Tang has served as Vice President of Government Relations and
Corporate Communications since October 2014.  From 2012 to October 2014, Mr. Tang was
Director of Government Relations and Corporate Communications.  From 2009 to 2011, Mr.
Tang was Manager of Government Relations and Corporate Communications.

SJW Corp.—Controller.  Ms. Avila-Walker has served as Controller of San Jose Water
Company since September 2009.  Ms. Avila-Walker is also Controller of SJW Corp. since
October 2014.  From August 2008 to September 2009, Ms. Avila-Walker served as Director of
Compliance. From May 2005 to May 2008, Ms. Avila-Walker served as Director of Reporting
and Finance.

San Jose Water Company—Chief Administrative Officer.  Mr. Walters has served as Chief
Administrative Officer since January 31, 2014.  Prior to joining San Jose Water Company, Mr.
Walters was a managing director and a senior acquisitions officer in the Infrastructure
Investments Group of JP Morgan Asset Management from January 2009 to June 2013.

10

Financial Information about Foreign and Domestic Operations and Export Sales

SJW Corp.'s revenue and expense are derived substantially from Water Utility Services' operations located in the 

County of Santa Clara in the State of California and Comal and Blanco Counties in the State of Texas.

Available Information

SJW Corp.'s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and 

amendments to these reports, are made available free of charge through SJW Corp.'s website at http://www.sjwcorp.com, as 
soon as reasonably practicable, after SJW Corp. electronically files such material with, or furnish such material to, the SEC.  
The content of SJW Corp.'s website is not incorporated by reference to or part of this report.

You may also obtain a copy of any of these reports directly from the SEC.  You may read and copy any material we file 

or furnish with the SEC at their Public Reference Room, located at 100 F Street N.E., Washington, D.C. 20549.  The phone 
number for information about the operation of the Public Reference Room is 1-800-732-0330.  Because we electronically file 
our reports, you may also obtain this information from the SEC internet website at http://www.sec.gov.

Item 1A. 

Risk Factors

Investors should carefully consider the following risk factors and warnings before making an investment decision.  The 

risks described below are not the only ones facing SJW Corp.  Additional risks that SJW Corp. does not yet know of or that it 
currently thinks are immaterial may also impair its business operations.  If any of the following risks actually occur, SJW 
Corp.'s business, operating results or financial condition could be materially harmed.  In such case, the trading price of SJW 
Corp.'s common stock could decline and you may lose part or all of your investment.  Investors should also refer to the other 
information set forth in this Form 10-K, including the consolidated financial statements and the notes thereto.

Our business is regulated and may be adversely affected by changes to the regulatory environment.

San Jose Water Company and CLWSC are regulated public utilities.  The operating revenue of San Jose Water 

Company and CLWSC is generated primarily from the sale of water at rates authorized by the CPUC and the PUCT, 
respectively.  The CPUC and PUCT set rates that are intended to provide revenues sufficient to recover normal operating 
expenses, provide funds for replacement of water infrastructure and produce a fair and reasonable return on shareholder 
common equity.  Please refer to Part I, Item 1, “Regulation and Rates” for a discussion of the most recent regulatory 
proceedings affecting the rates of San Jose Water Company and CLWSC.  Consequently, our revenue and operating results 
depend upon the rates which the CPUC and PUCT authorize.

In our applications for rate approvals, we rely upon estimates and forecasts to propose rates for approval by the CPUC 

or PUCT.  No assurance can be given that our estimates and forecasts will be accurate or that the CPUC or PUCT will agree 
with our estimates and forecasts and approve our proposed rates.  To the extent our authorized rates may be too low, revenues 
may be insufficient to cover Water Utility Services' operating expenses, capital requirements and SJW Corp.'s historical 
dividend rate.  In addition, delays in approving rate increases may negatively affect our operating results and our operating cash 
flows. 

In addition, policies and regulations promulgated by the regulators govern the recovery of capital expenditures, the 

treatment of gains from the sale of real utility property, the offset of production and operating costs, the recovery of the cost of 
debt, the optimal equity structure, and the financial and operational flexibility to engage in non-tariffed operations.  If the 
regulators implement policies and regulations that will not allow San Jose Water Company and CLWSC to accomplish some or 
all of the items listed above, Water Utility Services' future operating results may be adversely affected.  Further, from time to 
time, the commissioners at the CPUC and the PUCT change.  Such changes could lead to changes in policies and regulations.  
There can be no assurance that the resulting changes in policies and regulation, if any, will not adversely affect our operating 
results or financial condition. 

Recovery of regulatory assets is subject to adjustment by the regulatory agency and could impact the operating 

results of Water Utility Services.

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as 

permitted by FASB ASC Topic 980—“Regulated Operations.”  In accordance with ASC Topic 980, Water Utility Services 
record deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and 
credits will be recovered in the ratemaking process in a period different from when the costs and credits were incurred.  Please 
refer to Note 1 of the Notes to Consolidated Financial Statements for a summary of net regulatory assets.  If the assessment of 
the probability of recovery in the ratemaking process is incorrect and the applicable ratemaking body determines that a deferred 
cost is not recoverable through future rate increases, the regulatory assets or liabilities would need to be adjusted, which could 
have an adverse effect on our results of operations and financial condition.

11

Changes in water supply, water supply costs or the mix of water supply could adversely affect the operating 

results and business of Water Utility Services.

San Jose Water Company's supply of water primarily relies upon three main sources: water purchased from SCVWD, 

surface water from its Santa Cruz Mountains watershed, and pumped underground water.  Changes and variations in quantities 
from each of these three sources affect the overall mix of the water supply, thereby affecting the cost of the water supply.  
Surface water is the least costly source of water.  If there is an adverse change to the mix of water supply and San Jose Water 
Company is not allowed by the CPUC to recover the additional or increased water supply costs, its operating results may be 
adversely affected.

SCVWD receives an allotment of water from state and federal water projects.  If San Jose Water Company has 
difficulties obtaining a high quality water supply from SCVWD due to availability, environmental, legal or other restrictions 
(see also Part I, Item 1, “Water Supply”), it may not be able to fully satisfy customer demand in its service area and its 
operating results and business may be adversely affected.  Additionally, the availability of water from San Jose Water 
Company's Santa Cruz Mountains watershed depends on the weather and fluctuates with each season.  In a normal year, surface 
water supply provides 6% to 8% of the total water supply of the system.  In a season with little rainfall, such as the record 
drought conditions in 2014 and 2015, water supply from surface water sources may be low, thereby causing San Jose Water 
Company to increase the amount of water purchased from outside sources at a higher cost than surface water, thus increasing 
water production expenses.  If the drought condition continues throughout 2016, we may be required to rely more heavily on 
purchased water than surface water, which would increase our costs and adversely affect our results of operations.

In addition, San Jose Water Company's ability to use surface water is subject to regulations regarding water quality and 

volume limitations.  If new regulations are imposed or existing regulations are changed or given new interpretations, the 
availability of surface water may be materially reduced.  A reduction in surface water could result in the need to procure more 
costly water from other sources, thereby increasing overall water production expenses and adversely affecting our operating 
results.

Because the extraction of water from the groundwater basin and the operation of the water distribution system require a 

significant amount of energy, increases in energy prices could increase operating expenses of San Jose Water Company.  The 
cost of energy is beyond our control and can change unpredictably and substantially based on load supply and demand.  
Therefore, San Jose Water Company cannot be certain that it will be able to contain energy costs into the future.

San Jose Water Company continues to utilize Pacific Gas & Electric's time of use rate schedules to minimize its overall 

energy costs primarily for groundwater pumping.  Optimization and energy management efficiency is achieved through the 
implementation of Supervisory Control and Data Acquisition system software applications that control pumps based on demand 
and cost of energy.  An increase in demand or a reduction in the availability of surface water or import water could result in the 
need to pump more water during peak hours which may adversely affect the operating results of San Jose Water Company.

San Jose Water Company has been granted certain balancing accounts by the CPUC to track various water supply 

expenses and revenues.  There is no assurance that the CPUC will allow recovery or refund of these balances when submitted 
by San Jose Water Company. 

CLWSC's primary water supply is 6,900 acre-feet of water which is pumped from Canyon Lake at three lake intakes or 

delivered as treated water from GBRA's Western Canyon Pipeline, in accordance with the terms of its contracts with the 
GBRA, which are long-term take-or-pay contracts.  This supply is supplemented by groundwater pumped from wells.  While 
the contract provides a committed long-term water supply for future demand, CLWSC customers currently do not use the 
volume of water allowed under the contracts which increases the cost of water for existing customers, and there is no assurance 
that future demands up to the committed supply volume will occur.  Texas faces operating challenges and long-term water 
supply constraints similar to California as described above.  (See also Part I, Item 1, “Water Supply”).

12

Fluctuations in customer demand for water due to seasonality, restrictions of use, weather, and lifestyle can 

adversely affect operating results.

Water Utility Services' operations are seasonal, thus quarterly fluctuation in results of operations may be significant.  

Rainfall and other weather conditions also affect the operations of Water Utility Services.  Most water consumption occurs 
during the third quarter of each year when weather tends to be warm and dry.  In periods of drought, if customers are 
encouraged or required to conserve water due to a shortage of water supply or restriction of use, revenue tends to be lower.  
Similarly, in unusually wet periods, water supply tends to be higher and customer demand tends to be lower, again resulting in 
lower revenues.  Furthermore, certain lifestyle choices made by customers can affect demand for water.  For example, a 
significant portion of residential water use is for outside irrigation of lawns and landscaping.  If there is a decreased desire by 
customers to maintain landscaping for their homes or restrictions are placed on outside irrigation, residential water demand 
would decrease, which would result in lower revenues.

Conservation efforts and construction codes, which require the use of low-flow plumbing fixtures, could diminish water 

consumption and result in reduced revenue.  In addition, in time of drought, water conservation may become a regulatory 
requirement that impacts the water usage of our customers.  For example, in response to the ongoing drought in California, on 
March 17, 2015, the State Water Board adopted an expanded emergency conservation regulation that became effective on 
March 27, 2015.  The regulation prohibits certain outdoor water uses for all Californians and also places water usage 
restrictions on businesses in the restaurant and hospitality sectors.  On March 25, 2015, the SCVWD increased their 
conservation target from 20% to 30% through the end of 2015.  On April 1, 2015, Governor Edmund G. Brown Jr. issued an 
executive order imposing restrictions to achieve a statewide 25% reduction in potable urban water usage through February 28, 
2016 based on 2013 usage.  On November 13, 2015, Governor Edmund G. Brown issued Executive Order B-36-15 that calls 
for an extension of restrictions on urban potable water usage until October 31, 2016, should drought conditions persist through 
January of 2016.  On February 2, 2016, the State Water Board approved a resolution to extend the existing emergency 
conservation regulation as directed in the November 2015 executive order.  San Jose Water Company is continually working to 
remain in compliance with the various drought rules and regulations and is also working with local governments as well as the 
SCVWD to communicate consistent messages on the drought to the public.  (See also Part I, Item 1, “Water Supply”.)

The implementation of mandatory conservation measures has resulted and is expected to result in lower water usage by 
our customers which may adversely affect our results of operation.  If the current drought and the related conservation measures 
continue, we may experience fluctuations in the timing of or a reduction in customer revenue.  Furthermore, while the CPUC 
approved WCMA and MCMA memorandum accounts would allow us to recover revenue reductions due to water conservation 
activities and certain conservation related costs, such memorandum accounts are subject to a review and approval process by 
the CPUC, which can be lengthy, and there is no assurance that we will be able to recover in a timely manner all of the revenue 
and costs recorded in the memorandum accounts.

A contamination event or other decline in source water quality could affect the water supply of Water Utility 

Services and therefore adversely affect our business and operating results.

Water Utility Services is required under environmental regulations to comply with water quality requirements.  Through 

water quality compliance programs, Water Utility Services continually monitors for contamination and pollution of its sources 
of water.  In addition, a watershed management program provides a proactive approach to minimize potential contamination 
activities.  There can be no assurance that Water Utility Services will continue to comply with all applicable water quality 
requirements.  In the event a contamination is detected, Water Utility Services must either commence treatment to remove the 
contaminant or procure water from an alternative source.  Either of these results may be costly, may increase future capital 
expenditures and there can be no assurance that the regulators would approve a rate increase to enable us to recover the costs 
arising from such remedies.  In addition, we could be held liable for consequences arising from hazardous substances in our 
water supplies or other environmental damages.  Our insurance policies may not cover or may not be sufficient to cover the 
costs of these claims.

Water Utility Services is subject to litigation risks concerning water quality and contamination.

Although Water Utility Services has not been and is not a party to any environmental and product-related lawsuits, such 

lawsuits against other water utilities have increased in frequency in recent years.  If Water Utility Services is subject to an 
environmental or product-related lawsuit, they might incur significant legal costs and it is uncertain whether it would be able to 
recover the legal costs from ratepayers or other third parties.  Although Water Utility Services has liability insurance coverage 
for bodily injury and property damage, pollution liability is excluded from this coverage and our excess liability coverage.  
A pollution liability policy is in place, but is subject to exclusions and limitations.  Costs for defense are included within the 
limit of insurance on the pollution liability policy.  In addition, any complaints or lawsuits against us based on water quality and 
contamination may receive negative publicity that can damage our reputation and adversely affect our business and trading 
price of our common stock.

13

New or more stringent environmental regulations could increase Water Utility Services' operating costs and 

affect its business.

Water Utility Services' operations are subject to water quality and pollution control regulations issued by the EPA and 

environmental laws and regulations administered by the respective states and local regulatory agencies.

New or more stringent environmental and water quality regulations could increase Water Utility Services' water quality 

compliance costs, hamper Water Utility Services' available water supplies, and increase future capital expenditure.

Under the federal Safe Drinking Water Act, Water Utility Services is subject to regulation by the EPA of the quality of 

water it sells and treatment techniques it uses to make the water potable.  The EPA promulgates nationally applicable standards, 
including maximum contaminant levels for drinking water.  Water Utility Services is currently in compliance with all of the 
primary maximum contaminant levels promulgated to date.  Additional or more stringent requirements may be adopted by each 
state.  There can be no assurance that Water Utility Services will be able to continue to comply with all water quality 
requirements.

Water Utility Services has implemented monitoring activities and installed specific water treatment improvements in 
order to comply with existing maximum contaminant levels and plan for compliance with future drinking water regulations.  
However, the EPA and the respective state agencies have continuing authority to issue additional regulations under the Safe 
Drinking Water Act.  New or more stringent environmental standards could be imposed that will raise Water Utility Services' 
operating costs, including requirements for increased monitoring, additional treatment of underground water supplies, 
fluoridation of all supplies, more stringent performance standards for treatment plants and procedures to further reduce levels of 
disinfection by-products.  There are currently limited regulatory mechanisms and procedures available to the Company for the 
recovery of such costs and there can be no assurance that such costs will be fully recovered.

Water Utility Services rely on information technology and systems that are key to business operations.  A system 

malfunction, security breach or other disruptions could compromise our information and expose us to liability, which 
could adversely affect business operations.

Information technology is key to the operation of Water Utility Services, including but not limited to payroll, general 

ledger activities, outsourced bill preparation and remittance processing, providing customer service and the use of Supervisory 
Control and Data Acquisition systems to operate our distribution system.  Among other things, system malfunctions and 
security breaches could prevent us from operating or monitoring our facilities, billing and collecting cash accurately and timely 
analysis of financial results.  In addition, we collect, process, and store sensitive data from our customers and employees, 
including personally identifiable information, on our networks.  Despite our security measures, our information technology and 
infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions.  
Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or 
stolen which could result in legal claims or proceedings, violation of privacy laws or damage to our reputation.  Our 
profitability and cash flow could be affected negatively in the event these systems do not operate effectively or are breached.

The water utility business requires significant capital expenditures that are dependent on our ability to secure 

appropriate funding.  If SJW Corp. is unable to generate sufficient operating cash flows and obtain sufficient capital or 
if the rates at which we borrow increase, there would be a negative impact on our results of operations.

The water utility business is capital-intensive.  Expenditure levels for renewal and modernization of the system will 

grow at an increasing rate as components reach the end of their useful lives.  SJW Corp. funds capital expenditures through a 
variety of sources, including cash received from operations, funds received from developers as contributions or advances, 
borrowings through the lines of credit, and equity or debt financing.  We cannot provide any assurance that the historical 
sources of funds for capital expenditures will continue to be adequate or that the cost of funds will remain at levels permitting 
us to earn a reasonable rate of return.  A significant change in any of the funding sources could impair the ability of Water 
Utility Services to fund its capital expenditures, which could impact our ability to grow our utility asset base and earnings.  Any 
increase in the cost of capital through higher interest rates or otherwise could adversely affect our results of operations.

Our ability to raise capital through equity or debt may be affected by the economy and condition of the debt and equity 
markets.  Disruptions in the capital and credit markets or deteriorations in the strength of financial institutions could adversely 
affect SJW Corp.'s ability to draw on its line of credit, issue long-term debt or sell its equity.  In addition, government policies, 
the state of the credit markets and other factors could result in increased interest rates, which would increase SJW Corp.'s cost 
of capital.  Furthermore, equity financings may result in dilution to our existing shareholders and debt financings may contain 
covenants that restrict the actions of SJW Corp. and its subsidiaries.

14

We operate in areas subject to natural disasters or that may be the target of terrorist activities.

We operate in areas that are prone to earthquakes, fires and other natural disasters.  A significant seismic event in 

northern California, where the majority of our operations are concentrated, or other natural disaster in northern California or 
Texas could adversely impact our ability to deliver water to our customers and our costs of operations.  A major disaster could 
damage or destroy substantial capital assets.  Our California and Texas based regulators have historically allowed utilities to 
establish catastrophic event memorandum accounts as a possible mechanism to recover costs.  However, we can give no 
assurance that our regulators, or any other commission would allow any such cost recovery mechanism in the future.

In light of the potential threats to the nation's health and security due to terrorist attacks, we have taken steps to increase 
security measures at our facilities and heighten employee awareness of threats to our water supply.  We have also tightened our 
security measures regarding the delivery and handling of certain chemicals used in our business.  We have and will continue to 
bear increased costs for security precautions to protect our facilities, operations and supplies.  These costs may be significant.  
While some of these costs are likely to be recovered in the form of higher rates, there can be no assurance that the CPUC and 
PUCT will approve a rate increase to recover all or part of such costs and, as a result, the Company's operating results and 
business may be adversely affected.  Further, despite these tightened security measures, we may not be in a position to control 
the outcome of terrorist events should they occur.

A failure of our reservoirs, storage tanks, mains or distribution networks could result in losses and damages that 

may affect our financial condition and reputation.

We distribute water through an extensive network of mains and store water in reservoirs and storage tanks located 

across our service areas.  A substantial portion of Water Utility Services distribution system was constructed during the period 
from 1945 to 1980.  A failure of major mains, reservoirs, or tanks could result in injuries and damage to residential and/or 
commercial property for which we may be responsible, in whole or in part.  The failure of major mains, reservoirs or tanks may 
also result in the need to shut down some facilities or parts of our water distribution network in order to conduct repairs.  Such 
failures and shutdowns may limit our ability to supply water in sufficient quantities to our customers and to meet the water 
delivery requirements prescribed by governmental regulators, which could adversely affect our financial condition, results of 
operations, cash flow, liquidity and reputation.  Any business interruption or other losses might not be covered by insurance 
policies or be recoverable in rates, and such losses may make it difficult for us to secure insurance in the future at acceptable 
rates.

SJW Land Company has a significant real estate portfolio that is subject to various business and investment 

risks.

SJW Land Company owns a diversified real estate portfolio in multiple states.  The risks in investing directly in real 

estate vary depending on the investment strategy and investment objective and include the following:

• 

• 

• 

Liquidity risk—real estate investments are illiquid.  The lag time to build or reduce the real estate 
portfolio is long.

Obsolescence risk—real estate property is location specific.  Location obsolescence can occur due to a 
decline of a particular sub-market or neighborhood.  Functional obsolescence can also occur from 
physical depreciation, wear and tear, and other architectural and physical features which could be curable 
or incurable.
Market and general economic risks—real estate investment is tied to overall domestic economic growth 
and, therefore, carries market risk which cannot be eliminated by diversification.  Generally, all property 
types benefit from national economic growth, though the benefits range according to local factors, such 
as local supply and demand and job creation.  Because real estate leases are typically staggered and last 
for multiple years, there is generally a delayed effect in the performance of real estate in relation to the 
overall economy.  This delayed effect can insulate or deteriorate the financial impact to SJW Land 
Company in a downturn or an improved economic environment.

Vacancy rates can climb and market rents can be impacted and weakened by general economic forces, 
therefore affecting income to SJW Land Company.

The value of real estate can drop materially due to a deflationary market, decline in rental income, 
market cycle of supply and demand, long lag time in real estate development, legislative and 
governmental actions, environmental concerns, increases in rates of returns demanded by investors, and 
fluctuation of interest rates, eroding any unrealized capital appreciation and, potentially, invested capital.

A drop in the value of a real estate property or increase in vacancy could result in reduced future cash 
flows to amounts below the property's current carrying value and could result in an impairment charge.

• 

Concentration/Credit risk—the risk of a tenant declaring bankruptcy and seeking relief from its 
contractual rental obligation could affect the income and the financial results of SJW Land Company.  

15

Diversification of many tenants across many properties may mitigate the risk, but can never eliminate it.  
This risk is most prevalent in a recessionary environment.

The success of SJW Land Company's real estate investment strategy depends largely on ongoing local, state and federal 
land use development activities and regulations, future economic conditions, the development and fluctuations in the sale of the 
undeveloped properties, the ability to identify the developer/potential buyer of the available-for-sale real estate, the timing of 
the transaction, favorable tax law, and the ability to maintain and manage portfolio properties.  There is no guarantee that we 
will be able to execute the strategy successfully and failure to do so may aversely affect our operating results and financial 
condition.

There can be no assurance that we will continue to pay dividends in the future or, if dividends are paid, that they 

will be in amounts similar to past dividends.

Dividends on our common stock will only be paid if and when declared by our Board of Directors.  Our earnings, 
financial condition, capital requirements, applicable regulations and other factors, including the timeliness and adequacy of rate 
increases, will determine both our ability to pay dividends on common stock and the amount of the dividends declared by our 
Board of Directors.  There can be no assurance that we will continue to pay dividends in the future or, if dividends are paid, that 
they will be in amounts similar to past dividends.

The price of our common stock may be volatile and may be affected by market conditions beyond our control.

The trading price of our common stock may fluctuate in the future based on a variety of factors, many of which are 
beyond our control.  Factors that could cause fluctuations in the trading price of our common stock include volatility of the 
stock market, regulatory developments, general economic conditions and trends, actual or anticipated changes or fluctuations in 
our results of operations, actual or anticipated changes in the expectations of investors or securities analysts, actual or 
anticipated developments in our competitors' businesses or the competitive landscape generally, litigation involving us or our 
industry, and major catastrophic events or sales of large blocks of our stock. 

Equity markets in general can experience extreme price and volume fluctuations which may continue to adversely affect 

the market price of our common stock for reasons unrelated to our business or operating results.

Our business strategy, which includes acquiring water systems and expanding non-tariffed services, will expose 

us to new risks which could have a material adverse effect on our business.

Our business strategy focuses on the following: 

(1) 

(2) 

(3) 

Regional regulated water utility operations; 

Regional non-tariffed water utility related services provided in accordance with the guidelines 
established by the CPUC in California and the PUCT in Texas; and 

Out-of-region water and utility related services. 

As part of our pursuit of the above three strategic areas, the Company considers from time to time opportunities to 

acquire businesses and assets.  However, SJW Corp. cannot be certain it will be successful in identifying and consummating 
any strategic business acquisitions relating to such opportunities.  In addition, the execution of our business strategy will expose 
us to different risks than those associated with the current utility operations.  We expect to incur costs in connection with the 
execution of this strategy and any integration of an acquired business could involve significant costs, the assumption of certain 
known and unknown liabilities related to the acquired assets, the diversion of management's time and resources, the potential 
for a negative impact on SJW Corp.'s financial position and operating results, entering markets in which SJW Corp. has no or 
limited direct prior experience and the potential loss of key employees of any acquired company.  Any future acquisition we 
decide to undertake may also impact our ability to finance our business, affect our compliance with regulatory requirements, 
and impose additional burdens on our operations.  Any businesses we acquire may not achieve sales, customer growth and 
projected profitability that would justify the investment.  Any difficulties we encounter in the integration process, including the 
integration of controls necessary for internal control and financial reporting, could interfere with our operations, reduce our 
operating margins and adversely affect our internal controls.  SJW Corp. cannot be certain that any transaction will be 
successful or that it will not materially harm its operating results or financial condition. 

Adverse investment returns and other factors may increase our pension costs and pension plan funding 

requirements.

A substantial number of our employees are covered by a defined benefit pension plan.  Our pension costs and the 

funded status of the plan are affected by a number of factors including the discount rate, mortality rates of plan participants, 
investment returns on plan assets, and pension reform legislation.  Any change in such factors could result in an increase in 
future pension costs and an increase in our pension liability, requiring an increase in plan contributions.

16

Work stoppages and other labor relations matters could adversely affect our business and operating results.

As of December 31, 2015, 235 of our 399 total employees were union employees.  Most of our unionized employees 

are represented by the Utility Workers of America, except certain employees in the engineering department are represented by 
the International Union of Operating Engineers.

We may experience difficulties and delays in the collective bargaining process to reach suitable agreements with union 

employees, particularly in light of increasing healthcare and pension costs.  In addition, changes in applicable law and 
regulations could have an adverse effect on management's negotiating position with the unions.  Labor actions, work stoppages 
or the threat of work stoppages, and our failure to obtain favorable labor contract terms during future negotiations may 
adversely affect our business, financial condition, results of operations, cash flows and liquidity.

Item 1B. 

Unresolved Staff Comments

None.

Item 2. 

Properties

The properties of San Jose Water Company consist of a unified water production system located in the County of Santa 
Clara in the State of California.  In general, the property is comprised of franchise rights, water rights, necessary rights-of-way, 
approximately 7,000 acres of land held in fee (which is primarily non-developable watershed), impounding reservoirs with a 
capacity of approximately 2.256 billion gallons, 2,470 miles of transmission and distribution mains, distribution storage of 
approximately 239 million gallons, wells, boosting facilities, diversions, surface water treatment plants, equipment, office 
buildings and other property necessary to supply its customers.

San Jose Water Company maintains all of its properties in good operating condition in accordance with customary 

practice for a water utility.  San Jose Water Company's groundwater pumping stations have a production capacity of 
approximately 208 million gallons per day and the present capacity for taking purchased water is approximately 90 million 
gallons per day.  The surface water collection system has a physical delivery capacity of approximately 35 million gallons per 
day.  During 2015, a maximum and average of 121 million gallons and 92 million gallons of water per day, respectively, were 
delivered to the system.

CLWSC maintains a service area that covers approximately 243 square miles located in the southern region of the Texas 

hill country in Comal and Blanco counties.  Our service area surrounds an 8,200 surface acre reservoir (Canyon Lake).  
Production wells are located in a Comal Trinity Groundwater Conservation District regulated portion of the Trinity aquifer and 
have the ability to pump a combined 2.9 billion gallons annually.  CLWSC has contracts for 2 billion gallons of untreated 
surface water and 235 million gallons of treated surface water from the GBRA annually.  CLWSC owns and operates three 
surface water treatment plants with a combined production capacity of 7 million gallons per day.  CLWSC has 561 miles of 
transmission and distribution mains and maintains 65 storage tanks with a total storage capacity of 7.4 million gallons.  CLWSC 
owns and operates three wastewater treatment plants with a combined capacity of 60,000 gallons per day.

Water Utility Services hold all of its principal properties in fee simple, subject to current tax and assessment liens, 

rights-of-way, easements, and certain minor defects in title which do not materially affect their use.

17

As of December 31, 2015, SJW Land Company owns approximately 66 acres of property in the states of Arizona and 

Tennessee and approximately five undeveloped acres of land and two acres of land with commercial properties primarily in the 
San Jose metropolitan area.  SJW Land Company also owns a 70% limited partnership interest in 444 West Santa Clara Street, 
L.P.  One of our California properties is owned by such partnership.  SJW Land Company consolidates its limited partnership 
interest in 444 West Santa Clara Street, L.P. as a variable interest entity within the scope of ASC Topic 810.  The following 
table is a summary of SJW Land Company properties described above:

Location

Description
2 Commercial buildings ...................... San Jose, California
Warehouse building............................. Phoenix, Arizona
Warehouse building............................. Knoxville, Tennessee
Commercial building ........................... Knoxville, Tennessee
Parking lot ........................................... Knoxville, Tennessee
Undeveloped land................................ San Jose, California

Acreage

Square Footage
28,000

176,000

361,500

135,000

N/A

N/A

2

11

30

15

10

5

% for Year Ended 
December 31, 2015
of SJW Land Company

Revenue

Expense

10%

12%

34%

44%

N/A

N/A

10%

9%

29%

52%

N/A

N/A

Item 3. 

Legal Proceedings

SJW Corp. is subject to ordinary routine litigation incidental to its business.  There are no pending legal proceedings to 
which SJW Corp. or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a 
material effect on SJW Corp.'s business, financial position, results of operations or cash flows.

Item 4. 

Mine Safety Disclosures

None.

18

 
 
 
 
 
PART II

Item 5. 

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities

Market Information

SJW Corp.'s common stock is traded on the New York Stock Exchange under the symbol SJW.  Information as to the 
high and low sales prices for SJW Corp.'s common stock for each quarter in the 2015 and 2014 fiscal years is contained in the 
section captioned “Market price range of stock” in the tables set forth in Note 15 of “Notes to Consolidated Financial 
Statements” in Part II, Item 8.

As of December 31, 2015, there were 400 record holders of SJW Corp.'s common stock.

Dividends

Dividends have been paid on SJW Corp.'s and its predecessor's common stock for 289 consecutive quarters and the 
annual dividend amount has increased in each of the last 48 years.  Additional information as to the cash dividends paid on 
common stock in 2015 and 2014 is contained in the section captioned “Dividend per share” in the tables set forth in Note 15 of 
“Notes to Consolidated Financial Statements” in Part II, Item 8.  Future dividends will be determined by the Board of Directors 
after consideration of various financial, economic and business factors.

Five-Year Performance Graph

The following performance graph compares the changes in the cumulative shareholder return on SJW Corp.'s common 

stock with the cumulative total return on a Water Utility Index and the Standard & Poor's 500 Index during the last five years 
ended December 31, 2015.  The comparison assumes $100 was invested on December 31, 2010 in SJW Corp.'s common stock 
and in each of the foregoing indices and assumes reinvestment of dividends.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

Among SJW Corp., a Water Utility Index and the S&P 500 Index

The following descriptive data of the performance graph is supplied in accordance with Rule 304(d) of Regulation S-T 

(numbers represent U.S. dollars ($)):

SJW Corp..........................................................

Water Utility Index ...........................................

S&P 500 Index..................................................

100

100

100

92

114

102

107

138

118

123

166

157

136

204

178

129

230

181

2010

2011

2012

2013

2014

2015

The Water Utility Index is the 9 water company Water Utility Index prepared by Wells Fargo Securities, LLC.

19

Item 6. 

Selected Financial Data

FIVE YEAR FINANCIAL AND STATISTICAL REVIEW
SJW Corp. and Subsidiaries

2015

2014

2013

2012

2011

CONSOLIDATED RESULTS OF OPERATIONS
(in thousands)
Operating revenue ................................................................ $
Operating expense:

Purchased water .................................................................

Power .................................................................................

Groundwater extraction charges ........................................

Other production expenses.................................................

Administrative and general ................................................

Maintenance.......................................................................

Property taxes and other non-income taxes .......................

Depreciation and amortization...........................................

305,082

319,668

276,869

261,547

238,955

61,089

6,121

31,240

12,178

47,131

14,956

11,667

40,740

47,280

9,865

53,678

11,929

40,573

14,474

11,086

37,905

63,225

7,619

37,927

12,073

43,714

13,548

10,317

35,039

66,106

5,796

23,940

11,445

42,812

13,350

9,703

33,098

54,317

5,394

20,997

11,345

39,136

13,261

8,921

31,193

Total operating expense.................................................

225,122

226,790

223,462

206,250

184,564

Operating income .................................................................

Interest expense, other income and expense ........................

Income before income taxes.................................................

Provision for income taxes ...................................................

Net income ...........................................................................

Dividends paid......................................................................
CONSOLIDATED PER SHARE DATA
Earnings per share - diluted..................................................

Dividends paid......................................................................

79,960
(18,806)
61,154

23,272

37,882

15,885

1.85

0.78

Book value per common share .............................................
CONSOLIDATED BALANCE SHEET (in thousands)
Utility plant and intangible assets ........................................ $ 1,524,422
Less accumulated depreciation and amortization.................
487,659
1,036,763
Net utility plant .............................................................
Net real estate investment ....................................................
61,484
1,340,963
Total assets ...........................................................................
Capitalization:

18.83

92,878
(16,101)
76,777

24,971

51,806

15,177

2.54

0.75

17.75

53,407
(16,888)
36,519

14,135

22,384

14,443

1.12

0.73

14.71

55,297
(17,437)
37,860

15,542

22,318

13,231

1.18

0.71

14.71

54,391
(18,947)
35,444

14,566

20,878

12,823

1.11

0.69

14.20

1,413,151
450,137
963,014
62,201
1,269,304

1,314,191
415,453
898,738
67,819
1,109,986

1,216,235
384,675
831,560
65,187
1,087,499

1,112,127
355,914
756,213
78,542
1,038,810

Shareholders' equity...........................................................
Long-term debt, less current portion..................................

Total capitalization........................................................ $

383,783
380,825
764,608

360,155
384,365
744,520

321,175
334,997
656,172

274,604
335,598
610,202

264,004
343,848
607,852

OTHER STATISTICS—WATER UTILITY
SERVICES
Average revenue per connection .......................................... $
Investment in gross utility plant per connection .................. $
Connections at year-end .......................................................
Miles of main at year-end.....................................................
Water production (million gallons) ......................................
Maximum daily production (million gallons) ......................
Population served (estimate) ................................................

1,263
6,311
241,555
3,031
36,535
130
1,089,000

1,328
5,869
240,773
2,939
44,649
173
1,085,000

1,159
5,499
238,977
2,920
49,638
187
1,077,000

1,101
5,119
237,600
2,893
47,655
190
1,071,000

1,101
4,702
236,500
2,915
46,033
181
1,066,000

20

Item 7. 

Management's Discussion and Analysis of Financial Condition and Results of Operations
(Dollar amounts in thousands, except where otherwise noted)

Description of Business

SJW Corp. is a publicly traded company and is a holding company with five subsidiaries:

San Jose Water Company, a wholly owned subsidiary, is a public utility in the business of providing water service to 

approximately 229,000 connections that serve a population of approximately one million people in an area comprising 
approximately 138 square miles in the metropolitan San Jose, California area. 

SJWTX, Inc., a wholly owned subsidiary of SJW Corp., doing business as Canyon Lake Water Service Company, is a 
public utility in the business of providing water service to approximately 12,500 connections that serve approximately 37,000 
people.  CLWSC's service area comprises more than 243 square miles in western Comal County and southern Blanco County in 
the growing region between San Antonio and Austin, Texas.  SJWTX, Inc. has a 25% interest in Acequia Water Supply 
Corporation.  Acequia has been determined to be a variable interest entity within the scope of ASC Topic 810 with SJWTX, Inc. 
as the primary beneficiary.  As a result, Acequia has been consolidated with SJWTX, Inc.  

SJW Land Company, a wholly owned subsidiary of SJW Corp., owns undeveloped land in the states of California and 
Tennessee, owns and operates commercial buildings in the states of California, Arizona and Tennessee and has a 70% limited 
partnership interest in 444 West Santa Clara Street, L.P.  444 West Santa Clara Street, L.P. has been determined to be a variable 
interest entity within the scope of ASC Topic 810 with SJW Land Company as the primary beneficiary.  As a result, 444 West 
Santa Clara Street L.P. has been consolidated with SJW Land Company.

Texas Water Alliance Limited, a wholly owned subsidiary of SJW Corp., is undertaking activities that are necessary to 

develop a water supply project in Texas.  In connection with the project, TWA obtained groundwater production and 
transportation permits to meet the future water needs in the Canyon Lake Water Service Company's service area and to the 
central Texas hill country communities and utilities adjacent to the area.  On February 22, 2016, SJW Corp. entered into an 
agreement with the GBRA, pursuant to which SJW Corp. agreed to sell all of its equity interest in TWA to GBRA for $31.0 
million in cash (the “TWA Agreement”).  The TWA Agreement is subject to specified closing conditions, including the 
completion of a financing by GBRA to fund the purchase price.

SJW Group, Inc., a Delaware corporation, was formed in March 2015 for the sole purpose of effectuating a change in 

the state of incorporation of SJW Corp. from California to Delaware (the “Reincorporation”).  The Reincorporation requires the 
approval of the California Public Utilities Commission (“CPUC”) and Public Utilities Commission of Texas (“PUCT”) and will 
not become effective until after we obtain such approvals.  In July and September 2015, applications were filed with the CPUC 
and PUCT, respectively, to seek such approvals and decisions are expected in the first quarter of 2016.

Business Strategy for Water Utility Services

SJW Corp. focuses its business initiatives in three strategic areas:

(1) 

(2) 

Regional regulated water utility operations;

Regional non-tariffed water utility related services provided in accordance with the guidelines established by 
the CPUC in California and the PUCT in Texas; and

(3) 

Out-of-region water and utility related services.

Regional Regulated Activities

SJW Corp.'s regulated utility operation is conducted through San Jose Water Company and CLWSC.  SJW Corp. plans 
and applies a diligent and disciplined approach to maintaining and improving its water system infrastructures.  It also seeks to 
acquire regulated water systems adjacent to or near its existing service territory.

The United States water utility industry is largely fragmented and is dominated by municipal-owned water systems.  
The water industry is regulated, and provides a life-sustaining product.  This makes water utilities subject to lower business 
cycle risks than non-tariffed industries.

Regional Non-tariffed Activities

Operating in accordance with guidelines established by the CPUC, San Jose Water Company provides non-tariffed 

services, such as water system operations, maintenance agreements and antenna leases under agreements with municipalities 
and other utilities.  CLWSC provides non-tariffed wholesale water service to adjacent utilities.

San Jose Water Company also seeks appropriate non-tariffed business opportunities that complement its existing 

operations or that allow it to extend its core competencies beyond existing operations.  San Jose Water Company seeks 

21

opportunities to fully utilize its capabilities and existing capacity by providing services to other regional water systems, which 
also will benefit its existing regional customers.

Out-of-Region Opportunities

SJW Corp. also from time to time pursues opportunities to participate in out-of-region water and utility related services, 

particularly regulated water businesses.  SJW Corp. evaluates out-of-region and out-of-state opportunities that meet SJW 
Corp.'s risk and return profile.

The factors SJW Corp. considers in evaluating such opportunities include:

• 

• 

• 

• 

• 

• 

• 

potential profitability;

regulatory environment;

additional growth opportunities within the region;

water supply, water quality and environmental issues;

capital requirements;

general economic conditions; and

synergy potential.

As part of our pursuit of the above three strategic areas, the Company considers from time to time opportunities to 

acquire businesses and assets.  However, SJW Corp. cannot be certain it will be successful in identifying and consummating 
any strategic business acquisitions relating to such opportunities.  In addition, the execution of our business strategy will expose 
us to different risks than those associated with the current utility operations.  We expect to incur costs in connection with the 
execution of this strategy and any integration of an acquired business could involve significant costs, the assumption of certain 
known and unknown liabilities related to the acquired assets, the diversion of management's time and resources, the potential 
for a negative impact on SJW Corp.'s financial position and operating results, entering markets in which SJW Corp. has no or 
limited direct prior experience and the potential loss of key employees of any acquired company.  Any future acquisition we 
decide to undertake may also impact our ability to finance our business, affect our compliance with regulatory requirements, 
and impose additional burdens on our operations.  Any businesses we acquire may not achieve sales, customer growth and 
projected profitability that would justify the investment.  Any difficulties we encounter in the integration process, including the 
integration of controls necessary for internal control and financial reporting, could interfere with our operations, reduce our 
operating margins and adversely affect our internal controls.  SJW Corp. cannot be certain that any transaction will be 
successful or that it will not materially harm its operating results or financial condition.

Real Estate Services

SJW Corp.'s real estate investment activity is conducted through SJW Land Company.  SJW Land Company owns 

undeveloped land in the states of California and Tennessee and owns and operates a portfolio of commercial buildings in the 
states of California, Arizona and Tennessee.  SJW Land Company also owns a limited partnership interest in 444 West Santa 
Clara Street, L.P.  The partnership owns a commercial building in San Jose, California.  SJW Land Company manages its 
acquired income producing and other properties until such time a determination is made to reinvest proceeds from sale of such 
properties.  SJW Land Company's real estate investments diversify SJW Corp.'s asset base.

Critical Accounting Policies

SJW Corp. has identified accounting policies delineated below as the policies critical to its business operations and the 
understanding of the results of operations.  The preparation of consolidated financial statements requires management to make 
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial 
statements and revenues and expenses during the reporting period.  SJW Corp. bases its estimates on historical experience and 
other assumptions that are believed to be reasonable under the circumstances.  For a detailed discussion on the application of 
these and other accounting policies, see Note 1 of “Notes to Consolidated Financial Statements.”  SJW Corp.'s critical 
accounting policies are as follows:

Revenue Recognition

SJW Corp. recognizes its regulated and non-tariffed revenue when services have been rendered, in accordance with 

FASB ASC Topic 605—“Revenue Recognition.”

Metered revenue of Water Utility Services includes billing to customers based on meter readings plus an estimate of 
water used between the customers' last meter reading and the end of the accounting period.  Water Utility Services read the 
majority of its customers' meters on a bi-monthly basis and records its revenue based on its meter reading results.  Unbilled 
revenue from the last meter reading date to the end of the accounting period is estimated based on the most recent usage 

22

patterns, production records and the effective tariff rates.  Actual results could differ from those estimates, which may result in 
an adjustment to operating revenue in the period which the revision to Water Utility Services' estimates is determined.  San Jose 
Water Company also recognizes balancing and memorandum accounts in its revenue 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.

Revenues also include a surcharge collected from regulated customers that is paid to the CPUC.  This surcharge is 

recorded both in operating revenues and administrative and general expenses.  

SJW Corp. recognizes its non-tariffed revenue based on the nature of the non-tariffed business activities.  Revenue from 

San Jose Water Company's non-tariffed utility operations, maintenance agreements or antenna leases are recognized when 
services have been rendered.  Revenue from SJW Land Company properties is generally recognized ratably over the term of the 
leases.

Balancing and Memorandum Accounts

The purpose of a balancing account is to track the under-collection or over-collection associated with expense changes 

and the revenue authorized by the CPUC to offset those expense changes.  Pursuant to Section 792.5 of the California Public 
Utilities Code, a balancing account must be maintained for expense items for which revenue offsets have been authorized.

Balancing accounts are currently being maintained for the following items: purchased water, purchased power, 
groundwater extraction charges, and pensions.  The amount in the water production balancing accounts varies with the 
seasonality of the water utility business such that, during the summer months when the demand for water is at its peak, the 
account tends to reflect an under-collection, while during the winter months when demand for water is relatively lower, the 
account tends to reflect an over-collection.  The pension balancing account is intended to capture the difference between actual 
pension expense and the amount approved in rates by the CPUC.

The Company also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain 

unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, cost of capital, 
WCMA, drought surcharges, Monterey Water Revenue Adjustment Mechanism, and other approved activities or as directed by 
the CPUC.  The drought surcharge memorandum account tracks monies received from drought surcharges.  The amount 
collected will offset future surcharges that would be necessary to recover lost revenue due to drought conservation efforts.  The 
Monterey Water Revenue Adjustment Mechanism 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 San Jose Water Company 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 WCMA, San Jose Water Company follows 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 
will be recorded for amounts we estimate will not be collected within the 24-month period.  This reserve will be based on the 
difference between authorized usage in the last general rate case decision and an estimate of actual usage over the recovery 
period, offset by applicable drought surcharges.  In assessing the probability criteria for balancing and memorandum accounts 
between general rate cases, San Jose Water Company considers evidence that may exist prior to CPUC authorization that would 
satisfy ASC Topic 980 subtopic 340-25 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 for balance recognition, the balances are recorded in SJW Corp.'s financial statements.

It is typical for the CPUC to incorporate any over-collected and/or under-collected balances in balancing or 
memorandum accounts into customer rates at the time rate decisions are made as part of the Company's general rate case 
proceedings by assessing temporary surcredits and/or surcharges.  In the case where the Company's balancing or memorandum-
type accounts that have been authorized by the CPUC reach certain thresholds or have termination dates, the Company can 
request the CPUC to recognize the amounts in customer rates prior to the next regular general rate case proceeding by filing an 
advice letter.

23

Recognition of Regulatory Assets and Liabilities

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as 

permitted by ASC Topic 980.  In accordance with ASC Topic 980, Water Utility Services, to the extent applicable, records 
deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits 
will be recognized in the ratemaking process in a period different from when the costs and credits are incurred.  Accounting for 
such costs and credits is based on management's judgment and prior historical ratemaking practices, and it occurs when 
management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility 
Services through the ratemaking process.  The regulatory assets and liabilities recorded by Water Utility Services, in particular, 
San Jose Water Company, primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting 
purposes, balancing and memorandum accounts, postretirement pension benefits, medical costs, accrued benefits for vacation 
and asset retirement obligations that have not been passed through in rates.  The Company adjusts the related asset and 
liabilities for these items through its regulatory asset and liability accounts at year-end, except for certain postretirement benefit 
costs and balancing and memorandum accounts which are adjusted monthly.  The disallowance of any asset in future 
ratemaking, including deferred regulatory assets, would require San Jose Water Company to immediately recognize the impact 
of the costs for financial reporting purposes.  No disallowances were recognized during the years ending December 31, 2015, 
2014 or 2013. 

Pension Plan Accounting

San Jose Water Company offers a Pension Plan, Executive Supplemental Retirement Plan, Cash Balance Executive 

Supplemental Retirement Plan and certain postretirement benefits other than pensions to employees retiring with a minimum 
level of service.  Accounting for pensions and other postretirement benefits requires assumptions about the discount rate applied 
to expected benefit obligations, expected return on plan assets, the rate of future compensation increases expected to be 
received by the employees, mortality, turnover and medical costs.  Plan assets are marked to market at each reporting date.  See 
assumptions and disclosures detailed in Note 10 of “Notes to Consolidated Financial Statements.”

Income Taxes

SJW Corp. estimates its federal and state income taxes as part of the process of preparing consolidated financial 

statements.  The process involves estimating the actual current tax exposure together with assessing temporary differences 
resulting from different treatment of items for tax and accounting purposes, including the evaluation of the treatment acceptable 
in the water utility industry and regulatory environment.  These differences result in deferred tax assets and liabilities, which are 
included on the balance sheet.  If actual results, due to changes in the regulatory treatment, or significant changes in tax-related 
estimates or assumptions or changes in law, differ materially from these estimates, the provision for income taxes will be 
materially impacted.

Factors Affecting Our Results of Operations

SJW Corp.'s financial condition and results of operations are influenced by a variety of factors including the following:

• 

• 

• 
• 

• 

• 

• 

economic utility regulation;

infrastructure investment;

compliance with environmental, health and safety standards;
production expenses;

customer growth;

water usage per customer; and

weather conditions, seasonality and sources of water supply.

Economic Utility Regulation

Water Utility Services is generally subject to economic regulation by their respective state commissions overseeing 

public utilities.  Regulatory policies vary from state to state and may change over time.  In addition, there may be regulatory lag 
between the time a capital investment is made, a consumption decrease occurs, or an operating expense increases and when 
those items are adjusted in utility rates.

San Jose Water Company employs a forward-looking test year and has been authorized to use several mechanisms to 

mitigate risks faced due to regulatory lag and new and changing legislation, policies and regulation.  These include 
memorandum accounts to track revenue impacts due to catastrophic events, certain unforeseen water quality expenses related to 
new federal and state water quality standards, energy efficiency, cost of capital, WCMA, drought surcharges, Monterey Water 
Revenue Adjustment Mechanism, and other approved activities or as directed by the CPUC.  Rate recovery for the balances in 
these memorandum accounts is generally allowed in a subsequent general rate case.  San Jose Water Company also maintains 

24

balancing accounts to track changes in purchased water, purchased power, groundwater extraction charges and pension costs for 
later rate recovery.

Regulatory risk is mitigated in California by use of a forward-looking test year which allows the return on and return of 

utility plant on a forecasted basis as it is placed in service, and in some cases interim rate relief is allowed in the event of 
regulatory lag.

Pursuant to Texas regulation, CLWSC employs a historical test year.  Additionally, rate cases may be filed as necessary, 

provided there is no current rate case outstanding.  Further, rate cases may not be filed more frequently than once every 12 
months.

Infrastructure Investment

The water utility business is capital-intensive.  In 2015 and 2014, Company-funded capital improvements were $96,012 

and $91,846, respectively, for additions to, or replacements of, property, plant and equipment for our Water Utility Services.  
We plan to spend approximately $141,298 in 2016 and $614,520 over the next five years for capital improvements, subject to 
CPUC and PUCT approval.  Included in this amount is approximately $46,900 remaining to be spent on upgrades to San Jose 
Water Company's 40-year old Montevina Water Treatment Plant.  SJW Corp. funds these expenditures through a variety of 
sources, including cash received from operations, equity issuances and borrowings.  SJW Corp. relies upon a line of credit, 
which will expire on September 1, 2016, to fund capital expenditures in the short term and has historically issued long-term 
debt to refinance our short-term debt.  While our ability to obtain financing will continue to be a key risk, we believe that based 
on our 2015 activities, we will have access to the external funding sources necessary to implement our on-going capital 
investment programs in the future.

Compliance with Environmental, Health and Safety Standards

Water Utility Services' operations are subject to water quality and pollution control regulations issued by the EPA and 

environmental laws and regulations administered by the respective states and local regulatory agencies.  Under the federal Safe 
Drinking Water Act, Water Utility Services is subject to regulation by the EPA of the quality of water it sells and treatment 
techniques it uses to make the water potable.  The EPA promulgates nationally applicable standards, including maximum 
contaminant levels for drinking water.  Water Utility Services has implemented monitoring activities and installed specific 
water treatment improvements enabling it to comply with existing maximum contaminant levels and plan for compliance with 
future drinking water regulations.  However, the EPA and the respective state agencies have continuing authority to issue 
additional regulations under the Safe Drinking Water Act.  We incur substantial costs associated with compliance with 
environmental, health and safety and water quality regulation to which our Water Utility Services is subject.

Environmental, health and safety and water quality regulations are complex and change frequently, and the overall trend 
has been that they have become more stringent over time.  It is possible that new or more stringent environmental standards and 
water quality regulations could be imposed that will increase Water Utility Services' water quality compliance costs, hamper 
Water Utility Services' available water supplies, and increase future capital expenditures.  Future drinking water regulations 
may require increased monitoring, additional treatment of underground water supplies, fluoridation of all supplies, more 
stringent performance standards for treatment plants and procedures to further reduce levels of disinfection by-products.  In the 
past, Water Utility Services has generally been able to recover expenses associated with compliance related to environmental, 
health and safety standards, but future recoveries could be affected by regulatory lag and the corresponding uncertainties 
surrounding rate recovery.

Production Expenses

Water Utility Services' operations require significant production inputs which result in significant production expenses.  

These expenses include power, which is used to operate pumps and other equipment, purchased water and groundwater 
extraction charges.  For 2015, production expenses accounted for approximately 49% of our total operating expenses.  Price 
increases associated with these production inputs would adversely impact our results of operations until rate relief is granted.

Customer Growth

Customer growth in our Water Utility Services is driven by:  (i) organic population growth within our authorized service 
areas and (ii) the addition of new customers to our regulated customer base by acquiring regulated water systems adjacent to or 
near our existing service territories.  During 2015, 2014 and 2013, we had cash outflows of $991, $1,768 and $3,349, 
respectively, for acquisitions and water rights which we believe will allow us to expand our regulated customer base.  Before 
entering new regulated markets, we evaluate the regulatory environment to ensure that we will have the opportunity to achieve 
an appropriate rate of return on our investment while maintaining our high standards for quality, reliability and compliance with 
environmental, health and safety and water quality standards.

25

Water Usage Per Customer

Fluctuations in customer demand for water could be due to seasonality, restrictions of use, weather or lifestyle choices, 

all of which could affect Water Utility Services' results of operations.  San Jose Water Company residential usage decreased 
22.6% and 14.9% from 2014 to 2015 and 2013 to 2014, respectively.  San Jose Water Company business usage decreased 
14.1% and 5.9% from 2014 to 2015 and 2013 to 2014, respectively.  In addition, 2015 residential and business usage was 
30.3% and 5.7%, respectively, lower than the amount authorized in our 2013-2015 general rate case.  Residential usage in 2014 
was 9.9% lower and business usage was 9.8% higher than the amount authorized in our 2013-2015 general rate case.  CLWSC 
residential and business usage decreased 9.8% from 2014 to 2015 and increased 1% from 2013 to 2014. 

Weather Conditions, Seasonality and Sources of Water Supply

Our ability to meet the existing and future water demands of our customers depends on an adequate supply of water.  

Drought, governmental restrictions, overuse of sources of water, the protection of threatened species or habitats or other factors 
may limit the availability of ground and surface water.  Also, customer usage of water is affected by weather conditions, in 
particular during the warmer months.  Our water systems experience higher demand in the summer due to the warmer 
temperatures and increased usage by customers for outside irrigation of lawns and landscaping.  In periods of drought, if 
customers are encouraged or required to conserve water due to a shortage of supply or restriction of use, revenue tends to be 
lower.  Water use restrictions may be imposed at a regional or state level and may affect our service areas regardless of our 
readiness to meet unrestricted customer demands.  Similarly, in unusually wet periods, water supply tends to be higher and 
customer demand tends to be lower, again resulting in lower revenues.  

In response to the ongoing drought in California, on March 17, 2015, the State Water Board adopted an expanded 

emergency conservation regulation that became effective on March 27, 2015.  The regulation prohibits certain outdoor water 
uses for all Californians and also places water usage restrictions on businesses in the restaurant and hospitality sectors.  On 
March 25, 2015, the SCVWD increased their conservation target from 20% to 30% through the end of 2015.  On April 1, 2015, 
Governor Edmund G. Brown Jr. issued an executive order imposing restrictions to achieve a statewide 25% reduction in potable 
urban water usage through February 28, 2016 based on 2013 usage.  On November 13, 2015, Governor Edmund G. Brown 
issued Executive Order B-36-15 that calls for an extension of restrictions on urban potable water usage until October 31, 2016, 
should drought conditions persist through January of 2016.  On February 2, 2016, the State Water Board approved a resolution 
to extend the existing emergency conservation regulation as directed in the November 2015 executive order.  

On April 9, 2015, the CPUC issued a resolution ordering its regulated water utilities to comply with the State Water 

Board's emergency conservation regulation, conduct additional customer outreach and implement restrictions on outdoor water 
use.  Effective June 15, 2015, San Jose Water Company was authorized by the CPUC to activate Stage 3 of Tariff Rule 14.1 
which is a water shortage contingency plan with mandatory water usage reductions and drought surcharges.  Tariff Rule 14.1 
focuses primarily on restrictions of outdoor water use which accounts for 50% of a typical customer's water usage.  The drought 
surcharges are recorded in a regulatory liability account which has been authorized by the CPUC to track monies received from 
drought surcharges and will be used to reduce future customer surcharges that result from drought conservation activities.  San 
Jose Water Company is continually working to remain in compliance with the various drought rules and regulations and is also 
working with local governments as well as the SCVWD to communicate consistent messages to the public about use 
restrictions and related matters because of the ongoing drought.

San Jose Water Company believes that its various sources of water supply, which consists of groundwater from wells, 

surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from the SCVWD, will be 
sufficient to meet customer demand for 2016 after consideration of implemented water restrictions and drought conservation 
activities.  However, additional conservation measures which may include water rationing may be necessary if the drought 
continues.  In addition, San Jose Water Company actively works with the SCVWD to address California's long-term water 
supply challenges by continuing to educate customers on responsible water use practices and to conduct long-range water 
supply planning.  CLWSC believes that they will be able to meet customer demand for 2016 with their water supply which 
consists of groundwater from wells and purchased treated and raw water from the GBRA.

Results of Operations

Among other things, water sales are seasonal in nature and influenced by weather conditions.  The timing of 
precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly.  Revenue is 
generally higher in the warm, dry summer months when water usage and sales are greater and lower in the winter months when 
cooler temperatures and increased rainfall curtail water usage and sales.  

See Item 1, “Business” for a discussion of the California drought and political and regulatory activities that have 

occurred in response to ongoing drought conditions.

26

Overview

SJW Corp.'s consolidated net income for the year ended December 31, 2015 was $37,882, compared to $51,806 for the 

same period in 2014.  This represents an decrease of $13,924 or 27%, from 2014.  The decrease in net income was primarily 
due to the recognition in 2014 of $46,456 in true-up revenue resulting from the general rate case decision.  On September 29, 
2014, the CPUC approved a surcharge to true-up the difference between interim rates and authorized rates of $46,700 as well as 
one-time refunds of $200 that were recognized in 2014.  Collection of the surcharge was authorized to occur over a three-year 
period which commenced on October 2, 2014. This decrease in revenue was partially offset by the recognition of $20,492 in 
revenue related to the WCMA.  On December 3, 2015, the CPUC approved a surcharge to recover lost revenues for the period 
of April 1, 2014 through December 31, 2014 related to the ongoing drought and the associated calls for water use reduction 
from the SCVWD.  The resolution authorized San Jose Water Company to recover $4,259 of lost revenues tracked through the 
WCMA account over a 12-month period via a surcharge of $0.08 per CCF beginning December 9, 2015.  A reserve was 
recorded of $1,278 for the estimated amount that may not be collected within 24 months of year-end based upon guidance in 
ASC Topic 980 subtopic 605-25.  The net amount of $2,981 has been recorded in revenue for the year ended December 31, 
2015.  In addition, San Jose Water Company recognized $19,854 of lost revenues accumulated in the WCMA account during 
the year ended December 31, 2015, less a $2,343 reserve for the estimated amount that may not be collected timely based upon 
the same guidance.

Operating Revenue

Operating revenue by segment was as follows:

Operating Revenue

Water Utility Services................................................................................ $
Real Estate Services ..................................................................................

298,094

6,988

$

305,082

312,649

7,019

319,668

270,664

6,205

276,869

2015

2014

2013

The change in consolidated operating revenues was due to the following factors:

2015 vs. 2014
Increase/(decrease)

2014 vs. 2013
Increase/(decrease)

Water Utility Services:

Consumption changes........................................................ $
Increase in customers ........................................................

Rate increases ....................................................................

Balancing and memorandum accounts:

     2012 general rate case true-up......................................

     Water Conservation Memorandum Account................

     All other........................................................................

Texas general rate case refund...........................................

Real Estate Services.............................................................

$

(36,332)
1,226

37,818

(44,519)
20,492

6,760

—
(31)
(14,586)

(11)% $

— %

12 %

(17,987)
1,816

20,224

(14)%
6 %

2 %

— %

— %

46,456
—
(9,476)
952

814

(5)% $

42,799

(6)%

— %

7 %

17 %
— %

(3)%

— %

— %

15 %

2015 vs. 2014

The revenue decrease consists of $14,555 from Water Utility Services and $31 from Real Estate Services.

The revenue decrease for Water Utility Services is primarily the result of the recognition of $46,456 true-up revenue 

approved by the CPUC in September 2014 and a decrease in consumption primarily due to the record drought in California and 
associated conservation measures.  These decreases were partially offset by an increase in rates as approved in the 2012 general 
rate case decision, an increase in the revenue recognized related to certain balancing and memorandum accounts, and an 
increase in customers.  The Company also recognized lost 2014 and 2015 revenue that was being tracked in the Water 
Conservation Memorandum Account until the criteria of ASC Topic 980 subtopic 605-25 was met.

27

 
The revenue decrease for Real Estate Services was primarily the result of decreased rental income from our Tennessee 

property due to lower common area maintenance expense reimbursements. 

2014 vs. 2013

The revenue increase consists of $41,985 from Water Utility Services and $814 from Real Estate Services.

The revenue increase for Water Utility Services primarily consists of the recognition of $46,456 true-up revenue 

approved by the CPUC in September 2014 and increases in rates as approved in the 2012 general rate case decision.  These 
increases were partially offset by a decrease in customer consumption primarily due to the record drought in California and 
associated conservation and a decrease in revenue recognized related to certain balancing and memorandum accounts. 

The revenue increase for Real Estate Services was primarily the result of increased rental income from our Tennessee 
property.  The Tennessee commercial building and warehouse building had a new tenant whose lease term commenced in July 
2013.  A full year of lease income was recognized in 2014, compared to only six months in 2013. 

Water Utility Services' Operating Revenue and Customer Counts

The following tables present operating revenues and number of customers by customer group of Water Utility Services:

Operating Revenue by Customer Group

Residential and business............................................................................ $
Industrial....................................................................................................

Public authorities .......................................................................................

Others ........................................................................................................

Balancing and memorandum accounts......................................................

2015

2014

2013

251,617

249,302

245,601

1,446

11,764

8,536

24,731

1,492

11,766

8,091

41,998

1,209

12,104

7,683

4,067

$

298,094

312,649

270,664

Number of Customers

Residential and business............................................................................

235,883

235,179

233,452

2015

2014

2013

Industrial....................................................................................................

Public authorities .......................................................................................

Others ........................................................................................................

76

1,368

4,228

76

1,374

4,144

77

1,401

4,047

241,555

240,773

238,977

Operating Expense

Operating expense by segment was as follows:

Operating Expense

Water Utility Services................................................................................ $
Real Estate Services ..................................................................................

All Other....................................................................................................

218,687

4,079

2,356

$

225,122

221,600

4,193

997

226,790

218,444

4,000

1,018

223,462

2015

2014

2013

28

 
 
The change in consolidated operating expenses was due to the following factors:

2015 vs. 2014
Increase/(decrease)

2014 vs. 2013
Increase/(decrease)

Water production expenses:

Change in surface water supply................................. $
Change in usage and new customers .........................

Purchased water and groundwater extraction charge
and energy price increase ..........................................

Total water production expenses..................................

Administrative and general ..........................................

Maintenance.................................................................

Property taxes and other non-income taxes .................

Depreciation and amortization.....................................

$

Sources of Water Supply

(2,630)
(21,468)

11,974
(12,124)
6,558

482

581

2,835
(1,668)

(1)% $

(9)%

4,880
(11,449)

5 %

(5)%

3 %

— %

— %

1 %

(1)% $

8,477

1,908
(3,141)
926

769

2,866

3,328

2 %

(5)%

4 %

1 %

(1)%

— %

— %

1 %

1 %

San Jose Water Company's water supply consists of groundwater from wells, surface water from watershed run-off and 

diversion, reclaimed water, and imported water purchased from the SCVWD under the terms of a master contract with SCVWD 
expiring in 2051.  Surface water is the least expensive source of water.  Changes and variations in quantities from each of these 
sources affect the overall mix of the water supply, thereby affecting the cost of the water supply.  In addition, the water rates for 
purchased water and the groundwater extraction charge may be increased by the SCVWD at any time.  If an increase occurs, 
then San Jose Water Company would file an advice letter with the CPUC seeking authorization to increase revenues to offset 
the rate increase.

CLWSC's water supply consists of groundwater from wells and purchased treated and raw water from the GBRA.  

CLWSC has long-term agreements with the GBRA, which expire in 2037, 2040, 2044 and 2050.  The agreements, which are 
take-or-pay contracts, provide CLWSC with an aggregate of 6,900 acre-feet of water per year from Canyon Lake at prices that 
may be adjusted periodically by GBRA.

The following table presents the sources of water supply for Water Utility Services:

Purchased water.........................................................................................

Groundwater ..............................................................................................
Surface water .............................................................................................

Reclaimed water ........................................................................................

Average water production expense per MG.............................................. $

Source of Water Supply

2015

2014

2013

(million gallons) (MG)

21,338

13,005

1,553

639

36,535

3,028

18,491

25,052

421

685

44,649

2,749

27,119

19,300

2,537

682

49,638

2,435

Water production in 2015 for Water Utility Services decreased 8,114 million gallons from 2014.  Water production in 

2014 decreased 4,989 million gallons from 2013.  The changes are primarily attributable to changes in consumption by 
customers and are consistent with the changes in the related water production expenses.

The contract water rates for San Jose Water Company are determined by SCVWD.  These rates are adjusted periodically 
and coincide with SCVWD's fiscal year, which ends on June 30.  The contract water rate for SCVWD's fiscal years 2016, 2015 
and 2014 was $3.1, $2.6 and $2.4 per million gallons, respectively.  The contractual cost of the groundwater extraction charge 
for water pumped from the ground basin was $2.7, $2.3 and $2.1 per million gallons for SCVWD's fiscal years 2016, 2015, and 
2014, respectively.

Unaccounted-for water for 2015 and 2014 approximated 8.1% and 7.1%, respectively, as a percentage of production.  

The unaccounted-for water estimate is based on the results of past experience and the impact of lower flows through the system 

29

 
 
 
 
 
as a result of conservation activities, partially offset by Water Utility Services' main replacements and lost water reduction 
programs.

The various components of operating expenses are discussed below.

Water production expenses

2015 vs. 2014

Water production expenses decreased $21,468 due to a decrease in customer usage and $2,630 due to an increase in the 
use of available surface water in 2015 compared to 2014.  These decreases were offset by a $11,974 increase due to higher per 
unit costs paid for purchased water, groundwater extraction and energy charges.  Effective July 2015, SCVWD increased the 
unit price of purchased water by approximately 17% and the groundwater extraction charge by approximately 20%.  

2014 vs. 2013

Water production expenses increased $8,477 due to higher per unit costs paid for purchased water, groundwater 

extraction and energy charges and $4,880 due to a decrease in the use of available surface water in 2014 compared to 2013.  
The decrease in the use of available surface water was due to the record drought in California.  Effective July 2014, SCVWD 
increased the unit price of purchased water by approximately 9% and the groundwater extraction charge by approximately 10%.  
The increases were offset by a $11,449 decrease in customer usage.

Administrative and General Expense
Administrative and general expenses include payroll related to administrative and general functions, all employee 
benefits charged to expense accounts, insurance expenses, legal fees, regulatory utility commissions' expenses, expenses 
associated with being a public company, and general corporate expenses.

2015 vs. 2014

Administrative and general expense increased $6,558 in 2015, or 16%, in comparison to 2014.  The increase consisted 

primarily of:  (1) $3,368 due to a increase in pension expense as a result of a decreasing discount rate and updated mortality 
data to reflect increasing life expectancies in the United States, (2) $1,219 increase in legal fees primarily relating to lease 
amendments for our Texas water supply project, (3) $1,158 increase in salaries, (4) $419 increases in regulatory surcharges due 
to higher rates, and (5) $394 increase in miscellaneous expenses.

2014 vs. 2013

Administrative and general expense decreased $3,141 in 2014, or 7%, in comparison to 2013.  The decrease consisted 

primarily of:  (1) $3,614 due to a decrease in pension expense as a result of an increasing discount rate coupled with an increase 
in return on pension plan assets, and (2) $1,088 decrease due to nonrecurring settlement payments and bonus payments incurred 
in 2013 in connection with securing permits for our Texas water supply project recorded in prior year, offset by (3) a $1,098 
increase in salaries and (4) $463 increase in miscellaneous expenses. 

Maintenance Expense

Maintenance expense increased $482 in 2015, or 3%, in comparison to 2014, and increased $926 in 2014, or 7%, in 

comparison to 2013.  The increase in 2015 consisted primarily of a $298 increase in paving expense due to a change in paving 
specifications required by City of San Jose.  The increase in 2014 consisted primarily of:  (1) $421 increase in transportation 
and fuel expense, and (2) $305 increase in contracted work, paving, and materials and supplies as a result of an increase in main 
and service leaks.  

Property Taxes and Other Non-income Taxes

Property taxes and other non-income taxes for 2015 and 2014 increased $581 and $769 from prior years, respectively.  
The increases were primarily a result of increased utility plant.  SJW Corp. anticipates increases in 2016 for property taxes and 
other non-income taxes due to increases in utility plant.

Depreciation and Amortization

Depreciation and amortization expense increased $2,835 in 2015, or 7%, in comparison to 2014, and increased $2,866 
in 2014, or 8%, in comparison to 2013.  The increase in both years was due to increases in utility plant.  SJW Corp. anticipates 
increases in 2016 for depreciation expense due to increases in utility plant.

Other Income and Expense

The change in other (expense) income in 2015 compared to 2014 was primarily due to a $2,017 gain from the sale of 

125,969 shares of California Water Service Group stock in 2014 and an increase in interest on long-term debt due to the 

30

issuance of Series L senior note in 2014.  This decrease was partially offset by an increase in the gain from the sale of a 
portfolio of San Jose Water Company non-utility properties in 2015 compared to the sale of our SJW Land Company Texas 
property and a California non-utility property recorded in prior year.

The change in other (expense) income in 2014 compared to 2013 was primarily due to a $2,017 pre-tax gain from the 
sale of 125,969 shares of California Water Service Group stock.  No similar sale occurred in 2013.  This increase was partially 
offset by a decrease in the pre-tax gain from the sale of our Texas property and California nonutility property compared to the 
pre-tax gain recorded in prior year on the sale of our SJW Land Company Connecticut property.   

SJW Corp.'s consolidated weighted-average cost of long-term debt, including the mortgages and the amortization of 
debt issuance costs, was 6.2% for the years ended December 31, 2015 and 2014, and 6.3% for the year ended December 31, 
2013.

Provision for Income Taxes

Income tax expense for 2015 was $23,272, compared to $24,971 in 2014.  The effective consolidated income tax rate 
was 38% for 2015, 33% for 2014 and 39% for 2013.  The change in the effective consolidated income tax rate between 2014 
and 2015 was primarily due to a state income tax benefit of $4,482 recognized in 2014 related to the adoption of new 
Department of Treasury and Internal Revenue Service Tangible Property Regulations for 2013 and prior years.  SJW Corp. is 
currently undergoing an income tax examination by The California Franchise Tax Board for refund claims for fiscal years 2008 
through 2012.  Please refer to Note 5, “Income Taxes,” of Notes to Consolidated Financial Statements for a reconciliation of 
actual to expected income tax expense.

Other Comprehensive (Loss) Income

Other comprehensive loss in 2015 was $206, net of tax, due to a change in the market value of our investment in 

California Water Service Group stock.  Other comprehensive loss in 2014 was $870, net of tax, due to a change in the market 
value of the investment in California Water Service Group stock of $301 and the recognition of unrealized holding gains of 
$1,171 that was reclassified out of accumulated other comprehensive income due to the sale of California Water Service Group 
stock during the year. 

Liquidity and Capital Resources

Water Utility Services' business derives the majority of its revenue directly from residential and business customers.  

Water Utility Services bills the majority of its customers' on a bi-monthly basis.  Payments from customers are impacted by the 
general economic conditions in the areas where SJW Corp. operates.  Payment delinquencies are mitigated by service 
interruptions due to non-payment.  Because California is a high cost of living state, it is possible that Californians may migrate 
to other states with a lower cost-of-living.  As of December 31, 2015, the change in the number of customers has been minimal 
and write-offs for uncollectible accounts have been less than 1% of total revenue, unchanged from the prior year.  Management 
believes it can continue to collect its accounts receivable balances at its historical collection rate.

Funds collected from Water Utility Services' customers are used to pay for water production expenses, in addition to all 

costs associated with general operations.  Funds were also generated from borrowings on the line of credit and sale of  non-
utility properties owned by San Jose Water Company.  From these amounts, SJW Corp. paid cash dividends of approximately 
$15,885 and funded its 2015 working capital and capital expenditure program.

The condition of the capital and credit markets or the strength of financial institutions could impact SJW Corp.'s ability 

to draw on its line of credit, issue long-term debt or sell its equity.  In addition, government policies, the state of the credit 
markets and other factors could result in increased interest rates, which would increase SJW Corp.'s cost of capital.  While our 
ability to obtain financing will continue to be a key risk, we believe that based on our 2015 activities, we will have access to the 
external funding sources necessary to implement our on-going capital investment programs in the future.

In 2015, the common dividends declared and paid on SJW Corp.'s common stock represented 42% of net income for 

2015.  Dividends have been paid on SJW Corp.'s and its predecessor's common stock for 289 consecutive quarters and the 
annual dividend amount has increased in each of the last 48 years.  While historically SJW Corp. has generally paid dividends 
equal to approximately 50% to 60% of its net income, SJW Corp. cannot guarantee that this trend will continue in the future.

On February 22, 2016, SJW Corp. entered into a Purchase and Sale Agreement with the GBRA pursuant to which SJW 

Corp. agreed to sell all of its equity interest in TWA to GBRA for $31,000 in cash (the “TWA Agreement”).  Pursuant to the 
TWA Agreement, (i) upon closing of the transaction, GBRA will hold back $3,000 in the payment of the total purchase price 
and (ii) such holdback amount, subject to reductions under certain circumstances, shall be paid to SJW Corp. four years 
following the closing.  The TWA Agreement is subject to specified closing conditions, including without limitation, the 
completion of a financing by GBRA to fund the purchase price.  There is no guarantee that all of the closing conditions will be 

31

satisfied, and the failure to complete the sale of TWA may adversely affect the financial conditions and results of operations of 
SJW Corp.

Cash Flow from Operations

In 2015, SJW Corp. generated cash flow from operations of approximately $97,200 compared to $65,900 in 2014 and 
$63,400 in 2013.  Cash flow from operations is primarily generated by net income from revenue producing activities, adjusted 
for non-cash expenses for depreciation and amortization, deferred income taxes, gains on the sale of assets, and changes in 
working capital items.  Cash flow from operations increased in 2015 by approximately $31,300.  This increase was caused 
primarily by a combination of the following factors:  (1) recognition in the prior year of true-up revenue resulting from the 
general rate case decision added $41,200 in the balancing and memorandum accounts, (2) net income adjusted for non-cash 
items and gains from asset activity decreased $19,400, and (3) all other items caused a $9,500 increase.  The increase in 2014 
by approximately $2,500 was caused by a combination of the following factors: (1) net income adjusted for non-cash items and 
gains from asset activity increased $43,700, (2) general working capital and postretirement changes caused a $2,400 increase, 
(3) collections of previously billed and accrued receivables increased by $1,800, (4) recognition and collection of the balancing 
and memorandum accounts drove a decrease of $36,500, (5) payments of amounts previously invoiced and accruals related to 
groundwater extraction charges and purchased water decreased by $4,500, and (6) net collection of taxes receivable was $4,400 
less than the prior year. 

Cash Flow from Investing Activities

In 2015, SJW Corp. used approximately $96,000 of cash for Company funded capital expenditures, $10,800 for 
developer funded capital expenditures, $3,700 in utility plant retirement costs, $1,100 for real estate investments related to the 
leasehold improvement additions for the properties located in Knoxville, Tennessee, and $1,000 for acquisitions and rights to 
provide water service.  These uses were offset by cash proceeds of $2,000 from the sale of non-utility properties owned by San 
Jose Water Company.  In 2014, SJW Corp. used approximately $91,800 of cash for Company funded capital expenditures, 
$10,100 for developer funded capital expenditures, $1,800 for acquisitions and rights to provide water service, and $1,600 in 
utility plant retirement costs.  These uses were offset by cash proceeds of $4,600 from the sales of SJW Land Company's real 
estate investment in Texas and a non-utility property owned by San Jose Water Company, and $3,100 from the sale of 
California Water Service Group stock. 

Water Utility Services budgeted capital expenditures for 2016, exclusive of capital expenditures financed by customer 

contributions and advances is as follows:

Budgeted Capital
Expenditures
2016

Water treatment....................................................................................................................... $
Source of supply......................................................................................................................

Reservoirs and tanks ...............................................................................................................

Pump stations and equipment .................................................................................................
Equipment and other ...............................................................................................................

Montevina Water Treatment Plant...........................................................................................

Recycled water, green and alternative energy projects...........................................................

Distribution system .................................................................................................................

1,784

10,443

10,842

8,978

13,890

24,500

5,505

65,356

1%

7%

8%

6%

10%

18%

4%

46%

$

141,298

100%

The 2016 capital expenditures budget is concentrated in main replacements.  Included in the distribution system 
budgeted capital expenditures of $65,356 is approximately $43,000 that is planned to be spent to replace Water Utility Services' 
pipes and mains. 

Water Utility Services' capital expenditures are incurred in connection with normal upgrading and expansion of existing 

facilities and to comply with environmental regulations.  Over the next five years, Water Utility Services expects to incur 
approximately $614,520 in capital expenditures, which includes replacement of pipes and mains, and maintaining water 
systems.  This amount is subject to CPUC and PUCT approval.  Capital expenditures have the effect of increasing utility plant 
on which Water Utility Services earns a return.  Water Utility Services actual capital expenditures may vary from their 
projections due to changes in the expected demand for services, weather patterns, actions by governmental agencies and general 

32

 
economic conditions.  Total additions to utility plant normally exceed Company-financed additions as a result of new facilities 
construction funded with advances from developers and contributions in aid of construction.

A substantial portion of San Jose Water Company's distribution system was constructed during the period from 1945 to 

1980.  Expenditure levels for renewal and modernization of this part of the system will grow at an increasing rate as these 
components reach the end of their useful lives.  In most cases, replacement cost will significantly exceed the original 
installation cost of the retired assets due to increases in the costs of goods and services and increased regulation.

Cash Flow from Financing Activities

Net cash provided by financing activities for the year ended December 31, 2015 decreased by approximately $15,600 
from the same period in the prior year, primarily as a result of a decrease in the amount of new long-term borrowing, partially 
offset by an increase in net borrowings on the line of credit and receipts of advances and contributions in aid of construction.  
SJW Corp.'s cash management policy includes the issuance of long-term debt to pay down borrowings on the lines of credit.  As 
such, when long-term borrowings are high, borrowings on the line of credit tend to be low and when long-term borrowings are 
low, borrowings on the line of credit tend to be high.

SJW Corp., SJW Land Company and San Jose Water Company have unsecured bank lines of credit totaling $100,000, 

of which $3,000 under the San Jose Water Company line of credit has been set aside in the form of letters of credit for its 
California Department of Water Resources' Safe Drinking Water State Revolving Fund (“SDWSRF”) loans as of December 31, 
2015.  Our drawdowns on our lines of credit are restricted by our funded debt not exceeding a percent of total capitalization as 
defined in our debt covenants.  SJW Corp. expects to periodically draw down on the lines of credit as dictated by our funding 
needs and subsequently repay such borrowings with cash from operations and issuance of long-term debt or equity.  See also 
“Sources of Capital—Water Utility Services” below.

Sources of Capital

Water Utility Services

San Jose Water Company's ability to finance future construction programs and sustain dividend payments depends on its 

ability to maintain or increase internally generated funds and attract external financing.  The level of future earnings and the 
related cash flow from operations is dependent, in large part, upon the timing and outcome of regulatory proceedings.

San Jose Water Company's financing activity is designed to achieve a capital structure consistent with regulatory 
guidelines of approximately 49% debt and 51% equity.  As of December 31, 2015, San Jose Water Company's funded debt and 
equity were approximately 45% and 55%, respectively.  The average borrowing rate of San Jose Water Company's long-term 
debt was 6.5% as of December 31, 2015.

Funding for San Jose Water Company's future capital expenditure program is expected to be provided primarily through 

internally-generated funds, the issuance of new long-term debt and the issuance of equity, all of which will be consistent with 
the regulator's guidelines.

SJW Corp. has outstanding a $50,000 unsecured senior note as of December 31, 2015.  The senior note has terms and 

conditions that restrict SJW Corp. from issuing additional funded debt if:  (1) the funded consolidated debt would exceed 
66-2/3% of total capitalization, and (2) the minimum net worth of SJW Corp. becomes less than $175,000 plus 30% of Water 
Utility Services cumulative net income, since June 30, 2011.  As of December 31, 2015, SJW Corp. was not restricted from 
issuing future indebtedness as a result of these terms and conditions. 

San Jose Water Company has outstanding $250,000 of unsecured senior notes as of December 31, 2015.  The senior 

note agreements of San Jose Water Company generally have terms and conditions that restrict San Jose Water Company from 
issuing additional funded debt if:  (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income 
available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges.  As of 
December 31, 2015, San Jose Water Company's funded debt was 45% of total capitalization and the net income available for 
interest charges was 439% of interest charges.  As of December 31, 2015, San Jose Water Company was not restricted from 
issuing future indebtedness as a result of these terms and conditions. 

San Jose Water Company has outstanding $50,000 in California Pollution Control Financing Authority revenue bonds 
as of December 31, 2015.  The loan agreement for the revenue bonds contains affirmative and negative covenants customary 
for a loan agreement relating to revenue bonds, including, among other things, complying with certain disclosure obligations 
and covenants relating to the tax exempt status of the interest on the bonds and limitations and prohibitions relating to the 
transfer of the projects funded by the loan proceeds and the assignment of the loan agreement.  As of December 31, 2015, San 
Jose Water Company was in compliance with all such covenants. 

33

San Jose Water Company has received two loans in the aggregate principal amount of $3,076 from the California 
Department of Water Resources' SDWSRF for the retrofit of San Jose Water Company's water treatment plants.  Terms of these 
loans require semi-annual payments over 20 years of principal and interest at an annual rate of 2.39% and 2.60%.  The 
outstanding balance as of December 31, 2015 is $1,849.

SJWTX, Inc., doing business as Canyon Lake Water Service Company, has outstanding $15,000 of senior notes as of 

December 31, 2015.  The senior note agreement has terms and conditions that restrict SJWTX, Inc. from issuing additional 
funded debt if:  (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest 
charges for the trailing 12-calendar-month period would be less than 175% of interest charges.  In addition, SJW Corp. is a 
guarantor of SJWTX, Inc.'s senior note which has terms and conditions that restrict SJW Corp. from issuing additional funded 
debt if:  (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW 
Corp. becomes less than $125,000 plus 30% of Water Utility Services cumulative net income, since December 31, 2005.  As of 
December 31, 2015, SJWTX, Inc. and SJW Corp. were not restricted from issuing future indebtedness as a result of these terms 
and conditions. 

Real Estate Services

As of December 31, 2015, SJW Land Company's outstanding balance of mortgages related to acquiring properties in 
various states totaled $14,631.  The mortgages have various payments, interest and amortization terms and all are secured by 
the respective properties.

As of December 31, 2015, SJW Land Company also had an outstanding mortgage loan in the amount of $2,836 
borrowed by its variable interest entity, 444 West Santa Clara Street, L.P.  The mortgage loan is due in 2021 and is amortized 
over 20 years with an interest rate of 5.68%.  The mortgage loan is secured by the partnership's real property and is non-
recourse to SJW Land Company.

The average borrowing rate of SJW Land Company mortgages is 5.71%.

SJW Corp. and its Subsidiaries

SJW Corp. and its subsidiaries consolidated long-term debt was 50% of total capitalization as of December 31, 2015.  

Management believes that SJW Corp. is capable of obtaining future long-term capital to fund regulated and non-tariffed growth 
opportunities and capital expenditure requirements.

As of December 31, 2015, SJW Corp. and its subsidiaries had unsecured bank lines of credit, allowing aggregate short-
term borrowings of up to $100,000, of which $15,000 was available to SJW Corp. and SJW Land Company under a single line 
of credit and $85,000 was available to San Jose Water Company under another line of credit.  $3,000 under the San Jose Water 
Company line of credit is set aside in the form of letters of credit for its SDWSRF loans.  At December 31, 2015, SJW Corp. 
and its subsidiaries had available unused short-term bank lines of credit of $62,400.  These lines of credit bear interest at 
variable rates.  They will expire on September 1, 2016.  The cost of borrowing on SJW Corp.'s short-term credit facilities 
averaged 1.31% for 2015.  SJW Corp., on a consolidated basis, has the following affirmative covenants on its unsecured bank 
line of credit:  (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available for interest 
charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges.  As of December 31, 2015, SJW 
Corp.'s funded debt was 50% of total capitalization and the net income available for interest charges was 376% of interest 
charges.  As of December 31, 2015, SJW Corp. was in compliance with all covenants.  San Jose Water Company's unsecured 
bank line of credit has the following affirmative covenants:  (1) the funded debt cannot exceed 66-2/3% of total capitalization, 
and (2) net income available for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest 
charges.  As of December 31, 2015, San Jose Water Company was in compliance with all covenants.

34

Off-Balance Sheet Arrangement/Contractual Obligations

SJW Corp. has no significant contractual obligations not fully recorded on its Consolidated Balance Sheet or not fully 

disclosed in the Notes to Consolidated Financial Statements.

SJW Corp.'s contractual obligations and commitments as of December 31, 2015 are as follows:

Contractual Obligations Due in

Total

Less than
1 Year

1-3
Years

3-5
Years

Senior notes, Water Utility Services............................... $ 265,000
SJW Land Company mortgages .....................................
14,631

Advances for construction, San Jose Water Company*.

SDWSRF loans, San Jose Water Company....................

444 West Santa Clara Street, L.P. long-term debt (non-
recourse to SJW Land Company)...................................

California Pollution Control Financing Authority
Revenue Bonds, San Jose Water Company....................

63,159

1,849

2,836

50,000

Senior note, SJW Corp. ..................................................
50,000
Total contractual cash obligation.................................... $ 447,475
Total interest on contractual obligations ........................ $ 358,386

—

3,272

2,549

101

119

—

—

6,041

23,123

—

11,359

5,098

312

259

—

—

17,028

44,803

—

—

5,098

328

290

—

—

5,716

44,489

After
5 Years
265,000

—

50,414

1,108

2,168

50,000

50,000

418,690

245,971

* As of December 31, 2015, advances for construction was $76,572 of which $13,413 was related to non-refundable 

advances for construction.

In addition to the obligations listed above, San Jose Water Company issued two standby letters of credit with a 
commercial bank in the amounts of $2,000 and $1,000 in support of its $1,122 and $727 SDWSRF loans which were funded in 
2005 and 2008.  The letters of credit automatically renew for one year each December and the amount of coverage can be 
reduced as the loan principal balance decreases.

In regards to uncertain tax positions, we are unable to predict the timing of tax settlements as tax audits can involve 
complex issues and the resolution of those issues may span multiple years, particularly if subject to negotiation or litigation.

San Jose Water Company purchases water from SCVWD under terms of a master contract expiring in 2051.  Delivery 
schedules for purchased water are based on a contract year beginning July 1, and are negotiated every three years under terms 
of the master contract with SCVWD.  For the years ended December 31, 2015, 2014 and 2013, San Jose Water Company 
purchased from SCVWD 18,482 million gallons ($52,553), 17,782 million gallons ($44,444) and 22,700 million gallons 
($52,500), respectively, of contract water.  In accordance with the reduction of treated water deliveries approved by the 
SCVWD Board of Directors on November 25, 2015, the delivery schedule was reduced by 20% through June 30, 2016.  Based 
on current prices and estimated deliveries, San Jose Water Company committed to purchase from SCVWD a minimum of 90% 
of the reduced delivery schedule, or 19,360 million gallons ($59,060) of water at the current contract water rate of $3.1 per 
million gallons in the year ending December 31, 2016.  Additionally, San Jose Water Company purchases non-contract water 
from SCVWD on an “as needed” basis if the water supply is available.  The contract water rates for San Jose Water Company 
are determined by SCVWD.  These rates are adjusted periodically and coincide with SCVWD's fiscal year, which ends on 
June 30.  The contract water rate for SCVWD's fiscal years 2016, 2015 and 2014 was $3.1, $2.6 and $2.4 per million gallons, 
respectively. 

San Jose Water Company also pumps water from the local groundwater basin.  There are no delivery schedules or 

contractual obligations associated with the purchase of groundwater.  SCVWD determines the groundwater extraction charge 
and it is applied on a per unit basis.  In addition to the SCVWD groundwater extraction charge, San Jose Water Company also 
incurs power costs to pump the groundwater from the basin.

San Jose Water Company sponsors a noncontributory defined benefit pension plan and provides health care and life 

insurance benefits for retired employees.  In 2015, San Jose Water Company contributed $9,374 and $468 to the pension plan 
and other postretirement benefit plan, respectively.  In 2016, San Jose Water Company expects to make required and 
discretionary cash contributions of up to $8,200 to the pension plan and other postretirement benefit plan.  The amount of 
required contributions for years thereafter is not actuarially determinable.

35

 
 
 
 
San Jose Water Company's other benefit obligations include employees' and directors' postretirement benefits, an 

Executive Supplemental Retirement Plan, Cash Balance Executive Supplemental Retirement Plan, Special Deferral Election 
Plan and Deferral Election Program for non-employee directors.  Under these benefit plans, San Jose Water Company is 
committed to pay approximately $793 annually to former officers and directors.  Future payments may fluctuate depending on 
the life span of the retirees and as current officers and executives retire.

San Jose Water Company has remaining commitments of $46,900 with one vendor related to Phase 2 upgrades to the 

Montevina Water Treatment Plant.  This amount is expected to be spent during 2016 and 2017.

CLWSC purchases water from GBRA under terms of agreements expiring in 2037, 2040, 2044 and 2050.  The 

agreements, which are take-or-pay contracts, provide CLWSC with 6,900 acre-feet per year of water supply from Canyon Lake.  
The water rate may be adjusted by GBRA at any time, provided they give CLWSC a 60-day written notice on the proposed 
adjustment.

TWA has entered into approximately 180 water leases with property owners for certain real property rights for the 
development, production, transportation and use of groundwater in and under their property.  In accordance with the water 
leases, TWA is committed to pay between $1,000 and $1,300 per year from 2016 to 2020.  TWA may terminate the water leases 
at any time during the pre-production phase, upon two years prior written notice.

444 West Santa Clara Street, L.P.

SJW Land Company owns a 70% limited partnership interest in 444 West Santa Clara Street, L.P., a real estate limited 
partnership.  A real estate development firm owns the remaining 30% limited partnership interest.  A commercial building was 
constructed on the property of 444 West Santa Clara Street, L.P. and is leased to an international real estate firm.  The lease 
expires in August 2019.  SJW Land Company consolidates its limited partnership interest in 444 West Santa Clara Street, L.P. 
as a variable interest entity within the scope of ASC Topic 810.

Impact of Recent Accounting Pronouncements

In January 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-05 - “Service Concession 

Arrangements” which became effective for SJW Corp. during the first quarter of 2015.  ASU 2014-05 specifies that an 
operating entity should not account for a service concession arrangement as a lease in accordance with FASB ASC Topic 840 - 
“Leases.”  An operating entity should refer to other accounting guidance topics as applicable to account for various aspects of a 
service concession arrangement.  ASU 2014-05 also specifies that infrastructure constructed by an operator in a service 
concession arrangement should not be recognized as property, plant, and equipment of the operator.  ASU 2014-05 required 
application on a modified retrospective basis to service concession arrangements that existed at January 1, 2015.  San Jose 
Water Company operates the City of Cupertino's municipal water system under a service concession arrangement.  Upon 
adoption of this standard, SJW Corp. reclassified $1,859 of Depreciable Plant and Equipment for infrastructure related to the 
Cupertino service concession arrangement to intangible assets and the related accumulated depreciation of $377 to accumulated 
amortization.  In addition, SJW Corp. recognized a cumulative effect adjustment of $436, net of tax, to the opening balance of 
retained earnings.

In May 2014, the FASB issued ASU 2014-09 which supersedes most of the current revenue recognition requirements, 

including most industry-specific guidance.  On July 9, 2015, the FASB agreed to defer by one year the mandatory effective date 
but will also provide entities the option to adopt it as of the original effective date.  The updated standard will become 
mandatory for SJW Corp. in the first quarter of 2018 and permits the use of either the retrospective or cumulative effect 
transition method.  Management is currently evaluating the effect that the new standard will have on our consolidated financial 
statements and related disclosures.

In February 2015, the FASB issued ASU 2015-02 which modifies the evaluation of whether limited partnerships and 

similar legal entities are variable or voting interest entities, eliminates the presumption that the general partner should 
consolidate a limited partnership, modifies the consolidation analysis for reporting entities that are involved in variable interest 
entities, particularly those that have fee arrangements and related party relationships, and provides a scope exception from 
consolidation guidance for reporting entities with interests in legal entities that operate as registered money market funds.  ASU 
2015-02 is effective for us in the first quarter of 2016, and adoption does not have a material impact on our consolidated 
financial statements.     

In April 2015, the FASB issued ASU 2015-03 regarding simplification of the presentation of debt issuance costs, which 

requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction 
from the carrying amount of that debt liability, consistent with debt discounts.  The update is effective for SJW Corp. beginning 
in the first quarter of the fiscal year ending December 31, 2016.  Earlier adoption is permitted for financial statements that have 
not been previously issued.  SJW Corp. is required to apply the guidance on a retrospective basis with additional disclosure 

36

requirements upon transition.  The adoption of the ASU does not have a material impact on our consolidated financial 
statements.

In November 2015, the FASB issued ASU 2015-17 which requires entities with a classified balance sheet to present all 

deferred tax assets and liabilities as noncurrent.  The ASU is effective for fiscal years and interim periods beginning after 
December 31, 2016.  Early adoption is permitted.  The Company early adopted this ASU during the quarter ended December 
31, 2015.  The adoption of the ASU did not have an impact on prior periods.

In January 2016, the FASB issued ASU 2016-01 which will significantly change the recognition of changes in fair value 

of financial liabilities when the fair value option is elected and require equity investments to be measured at fair value with 
changes in fair value recognized in net income instead of through other comprehensive income.  The update is effective for 
SJW Corp. beginning in the first quarter of the fiscal year ending December 31, 2018.  Management is currently evaluating the 
effect that the new standard will have on our consolidated financial statements and related disclosures.

Item 7A. 

Quantitative and Qualitative Disclosures About Market Risk

SJW Corp. is subject to market risks in the normal course of business, including changes in interest rates, pension plan 

asset values, and equity prices.  The exposure to changes in interest rates can result from the issuance of debt and short-term 
funds obtained through the Company's variable rate lines of credit.  San Jose Water Company sponsors a noncontributory 
pension plan for its employees.  Pension costs and the funded status of the plan are affected by a number of factors including 
the discount rate and investment returns on plan assets.  SJW Corp. also owned 259,151 shares of common stock of California 
Water Service Group as of December 31, 2015, which is listed on the New York Stock Exchange, and is therefore exposed to 
the risk of fluctuations and changes in equity prices.

SJW Corp. has no derivative financial instruments, financial instruments with significant off-balance sheet risks, or 

financial instruments with concentrations of credit risk. 

37

Item 8. 

Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
SJW Corp.:

We have audited the accompanying consolidated balance sheets of SJW Corp. and subsidiaries as of December 31, 2015 and 2014, 
and the related consolidated statements of comprehensive income, changes in shareholders’ equity, and cash flows for each of the 
years in the three-year period ended December 31, 2015. In connection with our audits of the consolidated financial statements, 
we have also audited the related financial statement schedule listed in Item 15. We also have audited SJW Corp’s internal control 
over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) 
issued  by  the  Committee  of  Sponsoring  Organizations  of  the  Treadway  Commission  (COSO).  SJW  Corp’s  management  is 
responsible for these consolidated financial statements, for the financial statement schedule and for maintaining effective internal 
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included 
in  the  accompanying  Management’s  Report  on  Internal  Control  over  Financial  Reporting  appearing  under  Item  9A.  Our 
responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control 
over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements 
are free of material misstatement and whether effective internal control over financial reporting was maintained in all material 
respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts 
and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, 
and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining 
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and 
evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing 
such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for 
our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability 
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted 
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain 
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets 
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial 
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are 
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable 
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that 
could have a material effect on the financial statements.

Because  of  its  inherent  limitations,  internal  control  over  financial  reporting  may  not  prevent  or  detect  misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because 
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position 
of SJW Corp. and subsidiaries as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of 
the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. 
Also  in  our  opinion,  the  related  financial  statement  schedule,  when  considered  in  relation  to  the  basic  consolidated  financial 
statements taken as a whole, presents fairly, in all material respects, the information set forth therein.  Also in our opinion, SJW 
Corp maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on 
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of 
the Treadway Commission (COSO).

Santa Clara, CA
February 25, 2016

/s/ KPMG LLP

38

SJW Corp. and Subsidiaries
CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

Assets
Utility plant:

Land ...................................................................................................................................... $
Depreciable plant and equipment .........................................................................................

Construction in progress .......................................................................................................

Intangible assets....................................................................................................................

Less accumulated depreciation and amortization .................................................................

Real estate investments .........................................................................................................
Less accumulated depreciation and amortization ...................................................................

December 31,

2015

2014

17,853

1,438,321

45,573

22,675

1,524,422

487,659

1,036,763

74,641
13,157

61,484

16,838

1,353,772

23,208

19,333

1,413,151

450,137

963,014

73,794
11,593

62,201

Current assets:

Cash and cash equivalents ....................................................................................................

5,239

2,399

Accounts receivable:

Customers, net of allowances for uncollectible accounts of $200 and $150 in 2015
and 2014, respectively .....................................................................................................

Income tax........................................................................................................................

Other ................................................................................................................................

Accrued unbilled utility revenue ..........................................................................................

Current regulatory assets, net ...............................................................................................

Other current assets...............................................................................................................

Other assets:

Investment in California Water Service Group.....................................................................

Unamortized debt issuance, broker and reacquisition costs .................................................

Net regulatory assets, less current portion............................................................................
Other .....................................................................................................................................

16,390

10,852

2,192

17,417

16,542

4,744

73,376

6,030

4,721

152,021
6,568

169,340

14,997

8,871

3,385

18,074

16,853

3,514

68,093

6,378

5,218

158,010
6,390

175,996

$

1,340,963

1,269,304

See Accompanying Notes to Consolidated Financial Statements.
39

 
 
SJW Corp. and Subsidiaries

CONSOLIDATED BALANCE SHEETS (Continued)

(in thousands, except share and per share data)

Capitalization and Liabilities
Capitalization:

Shareholders' equity:

Common stock, $0.521 par value; authorized 36,000,000 shares; issued and
outstanding 20,381,949 shares in 2015 and 20,286,840 shares in 2014 ......................... $
Additional paid-in capital ................................................................................................

Retained earnings ............................................................................................................

Accumulated other comprehensive income.....................................................................

Total shareholders' equity.....................................................................................................

Long-term debt, less current portion ....................................................................................

Current liabilities:

Line of credit ........................................................................................................................

Current portion of long-term debt ........................................................................................

Accrued groundwater extraction charges, purchased water and power ...............................

Accounts payable .................................................................................................................

Accrued interest....................................................................................................................

Accrued property taxes and other non-income taxes ...........................................................

Accrued payroll ....................................................................................................................

Other current liabilities.........................................................................................................

Deferred income taxes ..........................................................................................................
Advances for construction ...................................................................................................
Contributions in aid of construction ...................................................................................
Postretirement benefit plans................................................................................................
Other noncurrent liabilities .................................................................................................
Commitments and contingencies.........................................................................................

December 31,

2015

2014

10,616

68,636

302,220

2,311

383,783

380,825
764,608

34,600

3,491

7,163

16,196

6,193

1,622

4,203

6,155

79,623

198,775

76,572

141,194

70,230

9,961

10,567

66,298

280,773

2,517

360,155

384,365
744,520

13,200

584

6,030

7,001

6,361

1,607

3,755

6,156

44,694

185,506

73,303

138,502

74,187

8,592

—
1,340,963

$

—
1,269,304

See Accompanying Notes to Consolidated Financial Statements.

40

 
 
 
SJW Corp. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31 (in thousands, except share and per share data)

Operating revenue ................................................................................... $
Operating expense:

Production Expenses:

2015

2014

2013

305,082

319,668

276,869

Purchased water..................................................................................

Power..................................................................................................

Groundwater extraction charges.........................................................

Other production expenses .................................................................

61,089

6,121

31,240

12,178

47,280

9,865

53,678

11,929

63,225

7,619

37,927

12,073

Total production expenses.......................................................................

110,628

122,752

120,844

Administrative and general .....................................................................

Maintenance ............................................................................................

Property taxes and other non-income taxes ............................................
Depreciation and amortization ................................................................
Total operating expense ...................................................................
Operating income ....................................................................................
Other (expense) income:

Interest on long-term debt .......................................................................

Mortgage and other interest expense ......................................................

Gain on sale of California Water Service Group stock...........................

Gain on sale of real estate investment.....................................................

Dividend income .....................................................................................

Other, net.................................................................................................

Income before income taxes ...................................................................

Provision for income taxes......................................................................

Net income......................................................................................... $

Other comprehensive (loss) income:

Unrealized (loss) income on investment, net of taxes of ($141) in
2015, $208 in 2014 and $741 in 2013.....................................................

Reclassification adjustment for gain realized on investment, net of
taxes of $805 in 2014 ..............................................................................

Comprehensive income ............................................................... $

Earnings per share

—Basic.................................................................................................... $
—Diluted................................................................................................. $

Weighted average shares outstanding

47,131

14,956

11,667
40,740

225,122

79,960

(20,925)
(1,261)
—

1,886

174

1,320

61,154

23,272

37,882

40,573

14,474

11,086
37,905

226,790

92,878

(19,423)
(1,365)
2,017

554

189

1,927

76,777

24,971

51,806

(206)

301

—

37,676

1.86

1.85

(1,171)
50,936

2.56

2.54

43,714

13,548

10,317
35,039

223,462

53,407

(18,667)
(1,255)
—

1,063

246

1,725

36,519

14,135

22,384

1,077

—

23,461

1.13

1.12

—Basic....................................................................................................

—Diluted.................................................................................................

20,360,663

20,515,643

20,227,297

20,416,734

19,774,589

19,971,236

See Accompanying Notes to Consolidated Financial Statements.

41

SJW Corp. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(in thousands, except share and per share data)

Common Stock

Number of
Shares

Amount

Additional
Paid-in
Capital

Balances, December 31, 2012 ........... 18,670,566
—

Net income .......................................

Unrealized income (loss) on 
investment, net of tax effect of $741

Share-based compensation ...............

Exercise of stock options and
similar instruments ...........................

Employee stock purchase plan .........

Dividend reinvestment and stock
purchase plan....................................
Common stock issued.......................

—

—

43,665

30,869

3,111
1,421,000

Dividends paid ($0.73 per share) .....

—
Balances, December 31, 2013 ........... 20,169,211
—

Net income .......................................

Unrealized income (loss) on 
investment, net of tax effect of $208

Reclassification adjustment for gain 
realized on investment, net of tax 
effect of $805....................................

Share-based compensation ...............

Exercise of stock options and
similar instruments ...........................

Employee stock purchase plan .........

Dividend reinvestment and stock
purchase plan....................................

—

—

—

80,796

35,682

1,151

Dividends paid ($0.75 per share) .....

—
Balances, December 31, 2014 ........... 20,286,840
—

Net income .......................................
Cumulative effect of change in 
accounting principle, net of tax 
effect of $300....................................

Unrealized income (loss) on 
investment, net of tax effect of $141

Share-based compensation ...............

Exercise of stock options and
similar instruments ...........................

Employee stock purchase plan .........

—

—

—

61,791

33,318

Dividends paid ($0.78 per share) .....

—
Balances, December 31, 2015 ........... 20,381,949

9,724

26,117

—

—

—

23

16

2
740

—

10,505

—

—

—

—

42

19

1

—

—

—

912

46

706

82
35,154

—

63,017

—

—

—

1,031

1,397

820

33

—

10,567

66,298

—

—

—

—

32

17

—

—

—

—

1,603

(143)
878

—

10,616

68,636

Retained
Earnings

236,453

22,384

—
(128)

—

—

—
—
(14,443)
244,266

51,806

—

—
(122)

—

—

—
(15,177)
280,773

37,882

(436)

—
(114)

—

—
(15,885)
302,220

Accumulated
Other
Comprehensive
Income

2,310

—

1,077

—

—

—

—
—

—

3,387

—

301

(1,171)
—

—

—

—

—

2,517

—

Total
Shareholders'
Equity
274,604

22,384

1,077

784

69

722

84
35,894
(14,443)
321,175

51,806

301

(1,171)
909

1,439

839

34
(15,177)
360,155

37,882

—

(436)

(206)
—

—

—

—

2,311

(206)
1,489

(111)
895
(15,885)
383,783

See Accompanying Notes to Consolidated Financial Statements.

42

 
 
SJW Corp. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31 (in thousands)

2015

2014

2013

Operating activities:

Net income .......................................................................................................................... $
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization ......................................................................................
Deferred income taxes...................................................................................................
Share-based compensation ............................................................................................
Gain on sale of real estate investment ...........................................................................
Gain on sale of California Water Service Group stock .................................................

Changes in operating assets and liabilities:

Accounts receivable and accrued unbilled utility revenue ............................................
Accounts payable and other current liabilities ..............................................................
Accrued groundwater extraction charges, purchased water and power ........................
Tax receivable and accrued taxes ..................................................................................
Postretirement benefits ..................................................................................................
Regulatory asset related to balancing and memorandum accounts ...............................
Other noncurrent assets and noncurrent liabilities ........................................................
Other changes, net .........................................................................................................
Net cash provided by operating activities ..........................................................................
Investing activities:

Additions to utility plant:

Company-funded ...........................................................................................................
Contributions in aid of construction..............................................................................
Additions to real estate investment .....................................................................................
Payments for business/asset acquisition and water rights ...................................................
Cost to retire utility plant, net of salvage ............................................................................
Proceeds from sale of real estate investment.......................................................................
Proceeds from sale of California Water Service Group stock.............................................
Net cash used in investing activities....................................................................................
Financing activities:

Borrowings from line of credit............................................................................................
Repayments of line of credit ...............................................................................................
Long-term borrowings.........................................................................................................
Repayments of long-term borrowings.................................................................................
Debt issuance costs..............................................................................................................
Dividends paid.....................................................................................................................
Issuance of common stock, net of issuance costs................................................................
Exercise of stock options and similar instruments ..............................................................
Tax benefits realized from share options exercised.............................................................
Receipts of advances and contributions in aid of construction ...........................................
Refunds of advances for construction .................................................................................
Net cash provided by financing activities...........................................................................
Net change in cash and cash equivalents............................................................................
Cash and cash equivalents, beginning of year ...................................................................
Cash and cash equivalents, end of year.............................................................................. $
Cash paid during the year for:

Interest ................................................................................................................................. $
Income taxes........................................................................................................................ $

Supplemental disclosure of non-cash activities:

Increase (Decrease) in accrued payables for construction costs capitalized ....................... $
Utility property installed by developers .............................................................................. $

37,882

42,330
15,925
1,603
(1,886)
—

735
1,550
1,133
(3,297)
(117)
1,429
1,950
(1,980)
97,257

(96,012)
(10,762)
(1,097)
(991)
(3,673)
1,925
—
(110,610)

97,000
(75,600)
—
(633)
—
(15,885)
—
895
634
12,266
(2,484)
16,193
2,840
2,399
5,239

23,634
9,723

7,540
1,011

51,806

39,491
26,067
1,031
(554)
(2,017)

(1,276)
(403)
(1,751)
(5,546)
(325)
(39,727)
(2,001)
1,116
65,911

(91,846)
(10,090)
(13)
(1,768)
(1,551)
4,572
3,056
(97,640)

57,200
(66,400)
50,000
(602)
(528)
(15,177)
—
1,917
462
7,569
(2,612)
31,829
100
2,299
2,399

21,046
6,324

(4,981)
6,549

22,384

36,595
11,567
912
(1,063)
—

(3,073)
(369)
2,709
(1,112)
127
(3,257)
(884)
(1,111)
63,425

(82,720)
(11,605)
(4,232)
(3,349)
(2,695)
8,831
—
(95,770)

48,600
(41,500)
—
(5,439)
(19)
(14,443)
35,894
1,004
28
10,293
(2,296)
32,122
(223)
2,522
2,299

20,886
4,186

4,588
2,162

See Accompanying Notes to Consolidated Financial Statements.

43

SJW CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2015, 2014 and 2013 
(Dollars in thousands, except share and per share data)

Note 1. 

Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the accounts of SJW Corp., its wholly owned subsidiaries, 

and two variable interest entities in which two SJW Corp. subsidiaries are the primary beneficiaries.  All intercompany 
transactions and balances have been eliminated in consolidation.

SJW Corp.'s principal subsidiary, San Jose Water Company, is a regulated California water utility providing water 

service to approximately one million people in the greater metropolitan San Jose area.  San Jose Water Company's accounting 
policies comply with the applicable uniform system of accounts prescribed by the CPUC and conform to generally accepted 
accounting principles for rate-regulated public utilities.  Approximately 93% of San Jose Water Company's revenues are 
derived from the sale of water to residential and business customers.

SJWTX, Inc., a wholly owned subsidiary of SJW Corp., is incorporated in the State of Texas and is doing business as 
Canyon Lake Water Service Company (“CLWSC”).  CLWSC is a public utility in the business of providing water service to 
approximately 37,000 people.  CLWSC's service area comprises more than 243 square miles in western Comal County and 
southern Blanco County in the growing region between San Antonio and Austin, Texas.  SJWTX, Inc. has a 25% interest in 
Acequia Water Supply Corporation.  Acequia has been determined to be a variable interest entity within the scope of ASC Topic 
810 with SJWTX, Inc. as the primary beneficiary.  As a result, Acequia has been consolidated with SJWTX, Inc.

SJW Land Company owns commercial properties, several undeveloped real estate properties, and warehouse properties 
in the states of California, Arizona, and Tennessee and holds a 70% limited partnership interest in 444 West Santa Clara Street, 
L.P.  444 West Santa Clara Street, L.P. has been determined to be a variable interest entity within the scope of ASC Topic 810 
with SJW Land Company as the primary beneficiary.  As a result, 444 West Santa Clara Street L.P. has been consolidated with 
SJW Land Company (see Note 9). 

Texas Water Alliance Limited, a wholly owned subsidiary of SJW Corp., is undertaking activities that are necessary to 

develop a water supply project in Texas.  In connection with the project, TWA obtained groundwater production and 
transportation permits to meet the future water needs in the Canyon Lake Water Service Company's service area and to the 
central Texas hill country communities and utilities adjacent to the area.

SJW Group, Inc., a Delaware corporation, was formed in March 2015 for the sole purpose of effectuating a change in 

the state of incorporation of SJW Corp. from California to Delaware (the “Reincorporation”).  The Reincorporation requires the 
approval of the California Public Utilities Commission (“CPUC”) and Public Utilities Commission of Texas (“PUCT”) and will 
not become effective until after we obtain such approvals.  In July and September 2015, applications were filed with the CPUC 
and PUCT, respectively, to seek such approvals and decisions are expected in the first quarter of 2016.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in 

the United States of America requires management to make estimates and assumptions that affect the reported amounts of 
assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and 
the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Utility Plant

The cost of additions, replacements and betterments to utility plant is capitalized.  The amount of interest capitalized in 

2015, 2014 and 2013 was $1,188, $1,112 and $905, respectively.  Construction in progress was $45,573 and $23,208 at 
December 31, 2015 and 2014, respectively.

44

 
The major components of depreciable plant and equipment as of December 31, 2015 and 2014 are as follows:

Equipment ............................................................................................................................... $
Transmission and distribution .................................................................................................

Office buildings and other structures ......................................................................................

2015

254,940

1,108,659

74,722

Total depreciable plant and equipment................................................................................. $

1,438,321

2014

242,383

1,042,794

68,595

1,353,772

Depreciation is computed using the straight-line method over the estimated service lives of the assets, ranging from 5 to 

75 years.  The estimated service lives of depreciable plant and equipment are as follows:

Equipment.............................................................................................................................................................

Transmission and distribution plant......................................................................................................................

Office buildings and other structures....................................................................................................................

Useful Lives
5 to 35 years

35 to 75 years

7 to 50 years

For the years 2015, 2014 and 2013, depreciation expense as a percent of the beginning of the year balance of 
depreciable plant was approximately 3.4%, 3.4% and 3.4%, respectively.  A portion of depreciation expense is allocated to 
administrative and general expense.  For the years 2015, 2014 and 2013, the amounts allocated to administrative and general 
expense were $1,590, $1,586 and $1,556, respectively.  Depreciation expense for utility plant for the years ended December 31, 
2015, 2014 and 2013 was $38,233, $35,424 and $32,616, respectively.  The cost of utility plant retired, including retirement 
costs (less salvage), is charged to accumulated depreciation and no gain or loss is recognized.

Utility Plant Intangible Assets

All intangible assets are recorded at cost and are amortized using the straight-line method over the legal or estimated 

economic life of the asset, ranging from 5 to 70 years (see Note 6).

In January 2014, the FASB issued ASU 2014-05 - “Service Concession Arrangements” which became effective for the 

Company during the first quarter of 2015.  ASU 2014-05 specifies that an operating entity should not account for a service 
concession arrangement as a lease in accordance with FASB ASC Topic 840 - “Leases.”  An operating entity should refer to 
other accounting guidance topics as applicable to account for various aspects of a service concession arrangement.  ASU 
2014-05 also specifies that infrastructure constructed by an operator in a service concession arrangement should not be 
recognized as property, plant, and equipment of the operator.  ASU 2014-05 required application on a modified retrospective 
basis to service concession arrangements that existed at January 1, 2015.  San Jose Water Company operates the City of 
Cupertino's municipal water system under a service concession arrangement.  Upon adoption of this standard, SJW Corp. 
reclassified $1,859 of Depreciable Plant and Equipment for infrastructure related to the Cupertino service concession 
arrangement to intangible assets and the related accumulated depreciation of $377 to accumulated amortization.  In addition, 
the Company recognized a cumulative effect adjustment of $436, net of tax, to the opening balance of retained earnings. 

Real Estate Investments

Real estate investments are recorded at cost and consist primarily of land and buildings.  Net gains and losses from the 

sale of real estate investments are recorded as a component of other (expense) income in the Consolidated Statements of 
Comprehensive Income.  Nonutility property in Water Utility Services is also classified in real estate investments and not 
separately disclosed on the balance sheet based on the immateriality of the amount.  Nonutility property is property that is 
neither used nor useful in providing water utility services to customers and is excluded from the rate base for rate-setting 
purposes.  San Jose Water Company recognizes gain/loss on disposition of nonutility property in accordance with CPUC Code 
Section 790, whereby the net proceeds are reinvested back into property that is useful in providing water utility services to 
customers.  There is no depreciation associated with nonutility property as it is all land.  The major components of real estate 
investments as of December 31, 2015 and 2014 are as follows:

Land ........................................................................................................................................ $
Buildings and improvements ..................................................................................................

Intangibles ...............................................................................................................................

Total real estate investment.............................................................................................. $

17,297

57,015

329

74,641

17,297

56,168

329

73,794

2015

2014

45

 
 
Depreciation on real estate investments is computed using the straight-line method over the estimated useful lives of the 

assets, ranging from 5 to 39 years.

On August 14, 2015, San Jose Water Company sold five nonutility properties located in San Jose, California for $2,015.  

SJW Corp. recognized a pre-tax gain on the sale of real estate investments of $1,886, after selling expenses of $91.

On August 1, 2014, San Jose Water Company sold a nonutility property located in San Jose, California for $300.  The 

Company recognized a pre-tax gain on the sale of real estate investment of $281, after selling expense of $10.

On June 30, 2014, SJW Land Company sold its retail building located in El Paso, Texas for $4,450.  The Company 

recognized a pre-tax gain on the sale of real estate investment of $273, after selling expenses of $169. 

On February 1, 2013, SJW Land Company sold its warehouse building located in Windsor, Connecticut for $9,200.  

The Company recognized a pre-tax gain on the sale of real estate investment of $1,063, after selling expenses of $369.

Real estate investments include $73,658 and $72,402 as of December 31, 2015 and 2014, respectively, of assets that are 

leased or available for lease.  The following schedule shows the future minimum rental payments to be received from third 
parties under operating leases that have remaining noncancelable lease terms in excess of one year as of December 31, 2015:

Year ending December 31:
2016 ...................................................................................................................................................................... $
2017 ......................................................................................................................................................................

2018 ......................................................................................................................................................................

2019 ......................................................................................................................................................................

2020 ......................................................................................................................................................................

Thereafter..............................................................................................................................................................

Rental Revenue
5,514

5,612

4,789

3,753

3,302

10,389

Impairment of Long-Lived Assets

In accordance with the requirements of FASB ASC Topic 360—“Property, Plant and Equipment,” the long-lived assets 
of SJW Corp. are reviewed for impairment when changes in circumstances or events require adjustments to the carrying values 
of the assets.  When such changes in circumstances or events occur, the Company assesses recoverability by determining 
whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows.  To the extent 
an impairment exists, the asset is written down to its estimated fair value with a corresponding charge to operations in the 
period in which the impairment is identified.  Long-lived assets consist primarily of utility plant in service, real estate 
investments, intangible assets, and regulatory assets.  In addition, the Company tests unamortized intangible assets, which 
primarily relate to water rights, at least annually or more frequently if events or changes in circumstances indicate that this asset 
may be impaired.  The Company first performs a qualitative assessment to determine whether it is necessary to perform the 
quantitative impairment test.  In assessing the qualitative factors, the Company considers the impact of these key factors:  
change in industry and competitive environment, financial performance, and other relevant Company-specific events.  If the 
Company determines that as a result of the qualitative assessment it is more likely than not (> 50% likelihood) that the fair 
value is less than carrying amount, then a quantitative test is performed.  No impairments occurred during 2015 or 2014.

Financial Instruments

The following instruments are not measured at fair value on the Company's consolidated balance sheets but require 
disclosure of fair values:  cash and cash equivalents, accounts receivable and accounts payable.  The estimated fair value of 
such instruments approximates their carrying value as reported on the 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.  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 long-term debt is discussed in Note 4, pension plan 
assets in Note 10 and investment in California Water Service Group Stock in Note 13.

Investment in California Water Service Group

SJW Corp.'s investment in California Water Service Group is accounted for under FASB ASC Topic 320—“Investments

—Debt and Equity Securities,” as an available-for-sale marketable security.  The investment is recorded on the Consolidated 
Balance Sheet at its quoted market price with the change in unrealized gain or loss reported, net of tax, as a component of other 
comprehensive income (loss) (see Note 13).

46

Regulatory Rate Filings

On September 15, 2014, San Jose Water Company filed an application for rehearing of 2012 General Rate Case 

Decision No. 14-08-006 to address a limited set of issues from San Jose Water Company's General Rate Case Decision No. 
14-08-006.  Specifically, San Jose Water Company sought rehearing on the duration of the interim rate period used to determine 
the General Rate Case true-up recovery and rehearing on the treatment of excess capacity labor in the provision of non-tariffed 
products and services.  On March 27, 2015, the CPUC issued Decision No. 15-03-048 granting a limited rehearing and 
modifying Decision No. 14-08-006 to recover lost revenue in the amount of $1,937 related to the extension of interim rates 
from the date of the 2012 General Rate Case Decision (August 14, 2014) to the date 2014 rates became effective (September 
29, 2014).  Decision No. 15-03-048 also provided for a limited rehearing on the treatment of excess capacity labor in the 
provision of non-tariffed products and services.  On August 13, 2015, San Jose Water Company and the CPUC's Office of 
Ratepayer Advocates (“ORA”) submitted a settlement that resolved all outstanding issues related to the rehearing.  On October 
1, 2015, the CPUC issued Decision No. 15-10-005 adopting the submitted settlement and closed the proceeding.  The 
settlement agreement did not affect authorized revenues or rates. 

On January 5, 2015, San Jose Water Company filed General Rate Case Application No. 15-01-002 requesting authority 

for an increase of revenue of $34,928, or 12.22%, in 2016, $9,954, or 3.11%, in 2017 and $17,567, or 5.36%, in 2018.  This 
General Rate Case filing also includes several requests, including but not limited to:  (1) recovery of the under-collected 
balance of $4,752 in balancing accounts, (2) disbursement of the over-collected balance of $976 accrued in various 
memorandum accounts, and (3) implementation of a full revenue decoupling Water Revenue Adjustment Mechanism and 
associated Modified Cost Balancing Account.  The ORA submitted testimony on April 23 2015, recommending increases of 
$23,468, or 8.54%, in 2016, $13,803, or 4.42%, in 2017 and $16,261, or 4.95% in 2018.  San Jose Water Company and the 
CPUC's ORA reached a settlement agreement on a range of issues, including full settlement on all contested utility plant in-
service items.  Evidentiary hearings to address all remaining unsettled items took place in June 2015 and briefs were submitted 
in July 2015.  Since a decision was not reached by the end of 2015, the CPUC has authorized San Jose Water Company to 
implement interim rates, effective January 1, 2016, until such time as decision is adopted.  Interim rates have been set equal to 
calendar year-end 2015 rates and will remain in effect until a decision is adopted.  Any difference between interim rates and the 
rates ultimately approved will be tracked in a memorandum account and will be submitted for recovery or refund.  A final 
General Rate Case is expected in the first half of 2016.

On March 26, 2015, San Jose Water Company filed Advice Letter No. 468 with the CPUC.  With this advice letter San 
Jose Water Company requested authorization to recover an under-collection balance of $9,567 in the Mandatory Conservation 
Revenue Adjustment Memorandum Account (“MCRAMA”), using a Water Revenue Adjustment Mechanism (“WRAM”) 
methodology, that accumulated during the period April 1, 2014 through December 31, 2014.  On December 3, 2015, the CPUC 
adopted Resolution W-5071.  The resolution authorized recovery of $4,259 in lost revenues based on the use of a Water 
Conservation Memorandum Account (“WCMA”) calculation methodology.  The WCMA calculation methodology allows San 
Jose Water Company to track lost revenue associated with reduced sales due to the ongoing drought and the associated calls for 
water use reduction from the SCVWD.  Lost revenues authorized for collection are to be recovered over a 12-month period via 
a surcharge of $0.08 per CCF beginning December 9, 2015.  The MCRAMA was subsequently renamed the WCMA in Advice 
Letter No. 479.  See “Balancing and Memorandum Accounts” under Note 1 of Notes to Consolidated Financial Statements for 
further discussion on recognition of the approved recovery amount.

On May 1, 2015, San Jose Water Company filed Advice Letter No. 471 with the CPUC requesting to recover the 
cumulative balance of $1,937 in the 2013 General Rate Case Interim Rates Memorandum Account for the period of August 15, 
2014 through September 28, 2014. Recovery of the balance for this 45-day period was authorized in the GRC rehearing 
Decision No. 15-03-048.  San Jose Water Company's request was authorized effective May 6, 2015.

On May 11, 2015, San Jose Water Company filed Advice Letters No. 472 and No. 473 with the CPUC.  With Advice 
Letter No. 472, San Jose Water Company sought to modify the existing Water Shortage Contingency Plan in Tariff Rule 14.1, 
so that the plan reflects examples put forward by the CPUC and so that the restrictions provided within the plan more closely 
matched the restrictions adopted by local government agencies.  Advice Letter No. 473 was filed pursuant to Executive Order 
B-29-15 by the Governor of the State of California, and by orders of the State Water Board and the CPUC.  With Advice Letter 
No. 473, San Jose Water Company requested authority from the CPUC to activate Stage 3 of Tariff Rule 14.1 and activate the 
Water Shortage Contingency Plan in Schedule No. 14.1 with staged mandatory reductions in water usage and drought 
surcharges.  Both Advice Letters No. 472 and No. 473 became effective on June 15, 2015.  The drought surcharges will be 
recorded in a drought account authorized by the CPUC to track lost revenues from conservation.  The amount collected will 
offset future rate increases that would be necessary to recover lost revenue due to drought conservation efforts, such as the 
WCMA. 

On May 29, 2015, San Jose Water Company filed Advice Letter No. 474 with the CPUC requesting authorization to 
increase revenues by $18,357, or approximately 6.44%.  This filing covered increased costs that went into effect on July 1, 

47

2015 for purchased water and groundwater production charged to San Jose Water Company by the SCVWD.  As directed by the 
CPUC's Water Division, the revenue increase is recovered via surcharges on the existing quantity rate.  San Jose Water 
Company's request was authorized and became effective July 1, 2015.

On July 30, 2015, San Jose Water Company filed Application No. 15-07-027 with the CPUC seeking the authorization 
to change the state of incorporation of SJW Corp., the parent holding company of San Jose Water Company, from California to 
Delaware.  A decision in this matter is anticipated in the first quarter of 2016.

On August 21, 2015, San Jose Water Company filed Application No. 15-08-016 with the CPUC seeking authority to 

issue additional debt and equity securities of up to $150,000 in aggregate for general purposes including property acquisition, 
construction, completion, extension or improvement of facilities.  On December 18, 2015, the CPUC adopted Decision No. 
15-12-018 authorizing San Jose Water Company to issue the requested debt and equity securities.

On August 21, 2015, San Jose Water Company filed Advice Letter 476 with the CPUC.  San Jose Water Company 
requested authorization for a rate base offset for improvements to the Montevina Water Treatment Plant.  In Decision No. 
13-07-028 the CPUC authorized San Jose Water Company to file annual advice letters to include in rate base costs of the 
Montevina Water Treatment Plant upgrade project.  The advice letter filing requested authorization for a revenue increase of 
approximately $275 or about 0.09%.  The advice letter was approved and the increase in rates became effective September 20, 
2015.  Revenue will be recorded through rates on a prospective basis.  This filing was the second such advice letter related to 
the Montevina Water Treatment Plant.  San Jose Water Company will continue to file similar annual advice letters until the 
project has been completed. 

On December 11, 2015, San Jose Water Company along with three other California water utilities (the “Joint Parties”), 

filed a request for a one year postponement of their 2016 Cost of Capital (“COC”) filings scheduled for March 31, 2016.  
Pursuant to the CPUC's rate case plan, the Joint Parties are required to file their COC applications on a triennial basis with the 
next scheduled filing due on March 31, 2016.  Postponing the filing for one year would alleviate administrative processing 
costs on the Joint Parties as well as the CPUC staff.  On February 1, 2016, the CPUC's executive director approved the Joint 
Parties request for a one year postponement.  Joint Parties are now required to file their next COC applications on March 31, 
2017.

On December 15, 2015, San Jose Water Company filed Advice Letter No. 481 with the CPUC requesting authorization 
to re-implement a previously existing surcharge of $0.0492 per CCF to amortize the remaining uncollected balancing account 
recovery authorized in General Rate Case Decision 14-08-006.  In Decision No. 14-08-006 the CPUC authorized San Jose 
Water Company to recover the $2,599 under-collection in various balancing accounts over a 12-month period beginning in 
August of 2014.  However, at the end of the 12-month period $590 of the originally authorized $2,599 remained uncollected.  
This under-collection is due primarily to actual sales being substantially lower than the commission authorized sales estimate 
which was used to calculate the surcharge level.  The advice letter was approved and effective on January 15, 2016.

On February 5, 2016, San Jose Water Company filed Advice Letter No. 482 with the CPUC.  With this advice letter San 

Jose Water Company requested authorization to recover the $7,668 balance accumulated in the WCMA during the period 
January 1, 2015 through December 31, 2015.  The WCMA is used to track the revenue impact of mandatory conservation upon 
San Jose Water Company’s quantity revenue resulting from mandatory conservation instituted by the State of California and the 
SCVWD.  The requested $7,668 recovery is the net amount of the total drought related revenue reduction calculated in the 
WCMA offset by the drought surcharges collected during 2015.  If approved, the under-collection will be recovered via a 
surcharge of $0.1441 per CCF on the existing quantity rate for a period of 12 months from the date of CPUC approval.  San 
Jose Water Company has requested the recovery begin on or about April 7, 2016.

Effective September 1, 2014, CLWSC became subject to the economic regulation of the PUCT.  Prior to that time, 

CLWSC was subject to economic regulation by the Texas Commission on Environmental Quality (“TCEQ”).  Both the PUCT 
and TCEQ authorize rate increases after the filing of an Application for a Rate/Tariff Change.  Rate cases may be filed as they 
become necessary, provided there is no current rate case outstanding.  Further, rate cases may not be filed more frequently than 
once every 12 months.

On September 16, 2015, CLWSC filed an application with the PUCT requesting approval of the reincorporation of SJW 
Corp., Inc. from a California corporation to a Delaware corporation.  The application is currently being reviewed by PUCT and 
a decision in this matter is anticipated in the first quarter of 2016. 

Balancing and Memorandum Accounts

For California, the CPUC has established a balancing account mechanism for the purpose of tracking the under-
collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense 
changes.  The Company also maintains memorandum accounts to track revenue impacts due to catastrophic events, certain 

48

unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, cost of capital, 
WCMA, drought surcharges, Monterey Water Revenue Adjustment Mechanism, and other approved activities or as directed by 
the CPUC. 

Balancing and memorandum accounts are recognized by San Jose Water Company 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 WCMA, San Jose Water Company follows 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 
will be recorded for amounts we estimate will not be collected within the 24-month period.  This reserve will be based on the 
difference between authorized usage in the last general rate case decision and an estimate of actual usage over the recovery 
period, offset by applicable drought surcharges.  In assessing the probability criteria for balancing and memorandum accounts 
between general rate cases, San Jose Water Company considers evidence that may exist prior to CPUC authorization that would 
satisfy ASC Topic 980 subtopic 340-25 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 for balance recognition, the balances are recorded in SJW Corp.'s financial statements. 

On December 3, 2015, the CPUC approved a surcharge to recover lost revenues for the period of April 1, 2014 through 

December 31, 2014 related to the ongoing drought and the associated calls for water use reduction from the SCVWD.  The 
resolution authorized San Jose Water Company to recover $4,259 of lost revenues tracked through the WCMA account over a 
twelve month period via a surcharge of $0.08 per CCF beginning December 9, 2015.  A reserve was recorded of $1,278 for the 
estimated amount that may not be collected within 24 months of December 31, 2015, the year-end of the period in which the 
revenue is being recorded, in accordance with FASB ASC Topic 980-605-25—“Alternative Revenue Programs”.  The reserve 
was determined based on the difference between authorized usage in the last general rate case decision and an estimate of actual 
usage over the recovery period, offset by applicable drought surcharges.  The net amount of $2,981 has been recorded into the 
2014 WCMA row in the table below. 

Based on FASB ASC Topic 980-605-25—“Alternative Revenue Programs,” San Jose Water Company also recognized 

in revenue $19,854 of lost revenues accumulated in the WCMA account for the year ended December 31, 2015 less a $2,343 
reserve for the estimated amount that may not be collected within the 24 month period defined in the guidance.  The regulatory 
asset was offset with the regulatory liability amount of $12,139 representing Tariff Rule 14.1 drought surcharges collected for 
the same period as allowed for in Advice Letter 473A which was approved by the CPUC and became effective June 15, 2015.  
The net amount of $5,372 has been recorded as a revenue addition in the 2015 WCMA row in the table below.

San Jose Water Company met the recognition requirements for certain of its balancing and memorandum accounts and 

certain amounts subject to balancing and memorandum accounts and recorded revenue and regulatory assets as follows:

For the year ended December 31, 2015

Beginning
Balance

Revenue 
Increase 
(Reduction)

Refunds
(Collections)

Surcharge
Offset

Ending 
Balance

Memorandum accounts:

2014 WCMA............................................................................... $
2015 WCMA...............................................................................

All others.....................................................................................

Total memorandum accounts......................................................... $

Balancing accounts:

Water supply costs ......................................................................

Drought surcharges .....................................................................

Pension........................................................................................

2012 General Rate Case true-up .................................................

All others.....................................................................................

Total balancing accounts................................................................ $

—

—

(1,377)

(1,377)

890

—

1,412

44,400

1,736

48,438

2,981

17,511

1,494

21,986

2,025

—

(924)

1,937

(293)

2,745

(37)

—

477

440

(144)

(12,498)

(1,040)

(13,267)

(77)

(27,026)

—

(12,139)

—

(12,139)

—

12,139

—

—

—

12,139

2,944

5,372

594

8,910

2,771

(359)

(552)

33,070

1,366

36,296

Total ............................................................................................... $

47,061

24,731

(26,586)

—

45,206

49

 
For the year ended December 31, 2014

Beginning
Balance

Revenue 
Increase 
(Reduction)

Refunds
(Collections)

Surcharge
Offset

Ending 
Balance

Memorandum accounts:

All others .................................................................................... $
Total memorandum accounts......................................................... $

(1,896)

(1,896)

Balancing accounts:

Water supply costs......................................................................

Pension .......................................................................................

2012 General Rate Case true-up.................................................

All others ....................................................................................

Total balancing accounts ............................................................... $

(2,378)

9,734

—

2,229

9,585

341

341

3,353

(7,705)

46,456

(447)

41,657

178

178

(85)

(617)

(2,056)

(46)

(2,804)

Total............................................................................................... $

7,689

41,998

(2,626)

—

—

—

—

—

—

—

—

(1,377)

(1,377)

890

1,412

44,400

1,736

48,438

47,061

For the year ended December 31, 2013

Beginning
Balance

Revenue 
Increase 
(Reduction)

Refunds
(Collections)

Surcharge
Offset

Ending 
Balance

Memorandum accounts:

All others .................................................................................... $
Total memorandum accounts......................................................... $

(1,887)

(1,887)

Balancing accounts:

Water supply costs......................................................................

Pension .......................................................................................

All others ....................................................................................

Total balancing accounts ............................................................... $

(1,590)

6,657

369

5,436

869

869

(788)

3,077

1,860

4,149

(878)

(878)

—

—

—

—

Total............................................................................................... $

3,549

5,018

(878)

—

—

—

—

—

—

—

(1,896)

(1,896)

(2,378)

9,734

2,229

9,585

7,689

As of December 31, 2015, the total balance in San Jose Water Company's balancing and memorandum accounts 
combined, including interest, that has not been recorded into the financial statements was a net under-collection of $1,081.  All 
balancing accounts and memorandum-type accounts not included for recovery or refund in the current general rate case will be 
reviewed by the CPUC in San Jose Water Company's next general rate case or at the time an individual account reaches a 
threshold of 2% of authorized revenue, whichever occurs first.

Regulatory Assets and Liabilities

Generally accepted accounting principles for water utilities include the recognition of regulatory assets and liabilities as 

permitted by ASC Topic 980.  In accordance with ASC Topic 980, Water Utility Services, to the extent applicable, records 
deferred costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits 
will be recognized in the ratemaking process in a period different from when the costs and credits are incurred.  Accounting for 
such costs and credits is based on management's judgment and prior historical ratemaking practices, and it occurs when 
management determines that it is probable that these costs and credits will be recognized in the future revenue of Water Utility 
Services through the ratemaking process.  The regulatory assets and liabilities recorded by Water Utility Services, in particular, 
San Jose Water Company, primarily relate to the recognition of deferred income taxes for ratemaking versus tax accounting 
purposes, balancing and memorandum accounts, postretirement pension benefits, medical costs, accrued benefits for vacation 
and asset retirement obligations that have not yet been passed through in rates.  The Company adjusts the related asset and 
liabilities for these items through its regulatory asset and liability accounts at year-end, except for certain postretirement benefit 
costs and balancing and memorandum accounts which are adjusted monthly.  The Company expects to recover regulatory assets 
related to plant depreciation income tax temporary differences over the average lives of the plant assets of between 5 to 75 
years. 

50

 
 
Rate-regulated enterprises are required to charge a regulatory asset to earnings if and when that asset no longer meets 

the criteria for being recorded as a regulatory asset.  San Jose Water Company continually evaluates the recoverability of 
regulatory assets by assessing whether the amortization of the balance over the remaining life can be recovered through 
expected and undiscounted future cash flows.

Regulatory assets and liabilities are comprised of the following as of December 31:

2015

2014

Regulatory assets:

Income tax temporary differences, net ................................................................................. $
Postretirement pensions and other medical benefits.............................................................

Balancing and memorandum accounts, net ..........................................................................

Other, net ..............................................................................................................................
Total regulatory assets, net in Consolidated Balance Sheets .................................................. $
Less: current regulatory asset, net...........................................................................................
Total regulatory assets, net, less current portion..................................................................... $

8,184

109,168

45,206

6,005

168,563

16,542

152,021

6,731

115,494

47,061

5,577

174,863

16,853

158,010

Income Taxes

Income taxes are accounted for using the asset and liability method.  Deferred tax assets and liabilities are recognized 

for the effect of temporary differences between financial and tax reporting.  Deferred tax assets and liabilities are measured 
using current tax rates in effect.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the 
period that includes the enactment date.

To the extent permitted by the CPUC, investment tax credits resulting from utility plant additions are deferred and 

amortized over the estimated useful lives of the related property.

Advances for Construction and Contributions in Aid of Construction

In California, advances for construction received after 1981 are refunded ratably over 40 years.  Estimated refunds for 

the next five years and thereafter are shown below:

2016 .................................................................................................................................................................... $
2017 ....................................................................................................................................................................

2018 ....................................................................................................................................................................

2019 ....................................................................................................................................................................

2020 ....................................................................................................................................................................

Thereafter............................................................................................................................................................

Estimated Refunds
2,549

2,549

2,549

2,549

2,549

50,414

As of December 31, 2015, advances for construction was $76,572 of which $13,413 was related to non-refundable 

advances for construction.

Contributions in aid of construction represent funds received from developers that are not refundable under applicable 

regulations.  Depreciation applicable to utility plant constructed with these contributions is charged to contributions in aid of 
construction.

Customer advances and contributions in aid of construction received subsequent to 1986 and prior to June 12, 1996 

generally must be included in federal taxable income.  Taxes paid relating to advances and contributions are recorded as 
deferred tax assets for financial reporting purposes and are amortized over 40 years for advances, and over the tax depreciable 
life of the related asset for contributions.  Receipts subsequent to June 12, 1996 are generally exempt from federal taxable 
income, unless specifically prescribed under treasury regulations.

Advances and contributions received subsequent to 1991 and prior to 1997 are included in California state taxable 

income.

51

 
 
Asset Retirement Obligation

SJW Corp.'s asset retirement obligation is recorded as a liability included in other non-current liabilities.  It reflects 

principally the retirement costs of wells and other anticipated clean-up costs, which by law, must be remediated upon 
retirement.  Retirement costs have historically been recovered through rates at the time of retirement.  As a result, the liability is 
offset by a regulatory asset.  For the years ended December 31, 2015 and 2014, the asset retirement obligation is as follows:

Retirement obligation.............................................................................................................. $
Discount rate ...........................................................................................................................

Present value, recorded as a liability.......................................................................................

Deferred tax.............................................................................................................................
Regulatory asset ...................................................................................................................... $

4,249

6%

1,961

1,348

3,309

4,355

6%

1,994

1,371

3,365

2015

2014

Revenue

SJW Corp. recognizes its regulated and non-tariffed revenue when services have been rendered, in accordance with 

ASC Topic 605.

Metered revenue of Water Utility Services includes billing to customers based on meter readings plus an estimate of 
water used between the customers' last meter reading and the end of the accounting period.  Water Utility Services read the 
majority of its customers' meters on a bi-monthly basis and records its revenue based on its meter reading results.  Unbilled 
revenue from the last meter reading date to the end of the accounting period is estimated based on the most recent usage 
patterns, production records and the effective tariff rates.  Actual results could differ from those estimates, which may result in 
an adjustment to the operating revenue in the period which the revision to Water Utility Services' estimates is determined.  San 
Jose Water Company also recognizes balancing and memorandum accounts in its revenue 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 assessing the probability criteria for balancing and memorandum accounts between general rate cases, San Jose 
Water Company considers evidence that may exist prior to CPUC authorization that would satisfy ASC Topic 980 subtopic 
340-25 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 for 
balance recognition, the balances are recorded in SJW Corp.'s financial statements.  In addition, in the case of special revenue 
programs such as the WCMA, San Jose Water Company follows the requirements of ASC Topic 980-605-25 in determining 
revenue recognition, including the requirement that such revenues will be collected within 24 months of the year-end the 
revenue is recorded.  A reserve will be recorded for amounts which we estimate will not be collected within the 24 month 
criteria.  This reserve will be based on the difference between authorized usage in the last general rate case decision and an 
estimate of actual usage over the recovery period, offset by applicable drought surcharges.   

Revenue also includes a surcharge collected from regulated customers that is paid to the CPUC.  This surcharge is 

recorded both in operating revenues and administrative and general expenses.  For the years ended December 31, 2015, 2014 
and 2013, the surcharge was $4,605, $3,872 and $3,741, respectively.

Revenue from San Jose Water Company's non-tariffed utility operations, maintenance agreements or antenna leases are 
recognized when services have been rendered.  Non-tariffed operating revenue in 2015, 2014 and 2013 includes $6,145, $6,175 
and $5,882, respectively, from the operation of the City of Cupertino municipal water system.  Revenue from SJW Land 
Company properties is recognized ratably over the term of the related leases.

Share-Based Payment

SJW Corp. utilizes the Black-Scholes option-pricing model to calculate the fair value of restricted stock awards.  The 

Black-Scholes option-pricing model requires the use of subjective assumptions, to compute the fair value of options at the grant 
date, and is the basis for share-based compensation for financial reporting purposes.  In addition, SJW Corp. estimates 
forfeitures for share-based awards that are not expected to vest.

SJW Corp. utilizes the Monte Carlo valuation model, which requires the use of subjective assumptions, to compute the 

fair value of market-vesting restricted stock units.

The compensation cost charged to income is recognized on a straight-line basis over the requisite service period, which 

is the vesting period. 

Maintenance Expense

Planned major maintenance projects are charged to expense as incurred. 

52

Earnings per Share

Basic earnings per share is calculated using income available to common shareholders, divided by the weighted average 
number of shares outstanding during the year.  The two-class method in computing basic earnings per share is not used because 
the number of participating securities as defined in FASB ASC Topic 260—“Earnings Per Share” is not significant.  The two-
class method is an earnings allocation formula that determines earnings per share for each class of common stock and 
participating security.  Diluted earnings per share is calculated using income available to common shareholders divided by the 
weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in 
connection with stock options, deferred restricted common stock awards under SJW Corp.'s Long-Term Incentive Plan and 
shares potentially issuable under the Employee Stock Purchase Plans.  Restricted common stock units and stock options of 
1,978, 2,791 and 3,071 as of December 31, 2015, 2014 and 2013, respectively, were excluded from the dilutive earnings per 
share calculation as their effect would have been anti-dilutive.

Note 2. 

Capitalization

SJW Corp. is authorized to issue 36,000,000 shares of common stock of $0.521 par value per share.  At December 31, 

2015 and 2014, 20,381,949 and 20,286,840, respectively, shares of common stock were issued and outstanding.

At December 31, 2015 and 2014, 176,407 shares of preferred stock of $25 par value per share were authorized; no 

shares of preferred stock were issued or outstanding.

Note 3. 

Lines of Credit

As of December 31, 2015, SJW Corp. and its subsidiaries had unsecured bank lines of credit, allowing aggregate short-
term borrowings of up to $100,000, of which $15,000 was available to SJW Corp. and SJW Land Company under one line of 
credit and $85,000 was available to San Jose Water Company under another line of credit.  San Jose Water Company has issued 
two standby letters of credit with a commercial bank in the amount of $3,000 in support of its California Department of Water 
Resources' Safe Drinking Water State Revolving Fund (“SDWSRF”) loans which were funded in 2005 and 2008.  The letters of 
credit automatically renew for one year each December unless the issuing bank elects not to renew it, and the amount of 
coverage can be reduced as the loan principal balance decreases.  As of December 31, 2015, $3,000 under the San Jose Water 
Company line of credit is set aside in the form of letters of credit for its SDWSRF loans.  The lines of credit bear interest at 
variable rates, and will expire on September 1, 2016.  As of December 31, 2015 and 2014, SJW Corp. has an outstanding 
balance on the lines of credit of $34,600 and $13,200, respectively.  Cost of borrowing on the lines of credit averaged 1.31% 
and 1.15% as of December 31, 2015 and 2014, respectively. 

SJW Corp., on a consolidated basis, and San Jose Water Company have the following affirmative covenants on their 

unsecured bank lines of credit:  (1) the funded debt cannot exceed 66-2/3% of total capitalization, and (2) net income available 
for interest charges for the trailing 12-calendar-month period cannot be less than 175% of interest charges.  As of December 31, 
2015, SJW Corp. and San Jose Water Company, respectively, were in compliance with the unsecured bank line of credit 
affirmative covenants.  In addition, the Company shall maintain a zero balance on each line of credit for a period of at least 
thirty consecutive days during:  (1) the period commencing November 1, 2014 and ending August 31, 2015, and (2) each 12-
month period thereafter commencing September 1, 2015.   

53

Note 4. 

Long-Term Debt

Long-term debt as of December 31 was as follows:

Description
Senior notes, San Jose Water Company:

   Series A 8.58%........................................................................................
   Series B 7.37% .......................................................................................
   Series C 9.45% .......................................................................................
   Series D 7.15% .......................................................................................
   Series E 6.81%........................................................................................
   Series F 7.20%........................................................................................
   Series G 5.93% .......................................................................................
   Series H 5.71% .......................................................................................
   Series I 5.93%.........................................................................................
   Series J 6.54% ........................................................................................
   Series K 6.75% .......................................................................................
   Series L 5.14%........................................................................................
SJWTX, Inc. Series A 6.27%.....................................................................

SJW Corp. Series A 4.35%........................................................................

Total senior notes...........................................................................

Mortgage loans 5.61% - 6.09% .................................................................

444 West Santa Clara Street, L.P. 5.68% (non-recourse to SJW Land
Company) ..................................................................................................

California Pollution Control Financing Authority Revenue Bonds
5.10%, San Jose Water Company..............................................................

SDWSRF loans 2.39% and 2.60%, San Jose Water Company .................

Total debt.................................................................................................

Less: current portion ...............................................................................

Total long-term debt, less current portion...............................................

Due Date

2015

2014

2022

2024

2020

2026

2028

2031

2033

2037

2037

2024

2039
2044

2036

2021

2016

2017

2021

2040

2027

$

20,000

30,000

10,000

15,000

15,000

20,000

20,000

20,000

20,000

10,000

20,000
50,000

15,000

50,000

$

315,000

2,997

11,634

2,836

50,000

1,849

384,316

3,491

380,825

$

$

20,000

30,000

10,000

15,000

15,000

20,000

20,000

20,000

20,000

10,000

20,000
50,000

15,000

50,000

315,000

3,109

11,896

2,947

50,000

1,997

384,949

584

384,365

Senior notes held by institutional investors are unsecured obligations of SJW Corp., San Jose Water Company and 
SJWTX, Inc. and require interest-only payments until maturity.  To minimize issuance costs, all of the companies' debt has 
historically been placed privately.

The senior note agreements of San Jose Water Company generally have terms and conditions that restrict the Company 

from issuing additional funded debt if:  (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income 
available for interest charges for the trailing 12-calendar-month period would be less than 175% of interest charges.  As of 
December 31, 2015, San Jose Water Company was not restricted from issuing future indebtedness as a result of these terms and 
conditions.

The senior note agreement of SJWTX, Inc. has terms and conditions that restrict SJWTX, Inc. from issuing additional 

funded debt if:  (1) the funded debt would exceed 66-2/3% of total capitalization, and (2) net income available for interest 
charges for the trailing 12-calendar-month period would be less than 175% of interest charges.  In addition, SJW Corp. is a 
guarantor of SJWTX, Inc.'s senior note which has terms and conditions that restrict SJW Corp. from issuing additional funded 
debt if:  (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth of SJW 
Corp. becomes less than $125,000 plus 30% of Water Utility Services cumulative net income, since December 31, 2005.  As of 
December 31, 2015, SJWTX, Inc. and SJW Corp. were not restricted from issuing future indebtedness as a result of these terms 
and conditions.

The senior note agreement of SJW Corp. has terms and conditions that restrict SJW Corp. from issuing additional 

funded debt if:  (1) the funded consolidated debt would exceed 66-2/3% of total capitalization, and (2) the minimum net worth 

54

of SJW Corp. becomes less than $175,000 plus 30% of Water Utility Services cumulative net income, since June 30, 2011.  As 
of December 31, 2015, SJW Corp. was not restricted from issuing future indebtedness as a result of these terms and conditions. 

The mortgage loans, which are the obligations of SJW Land Company, are due in 2016 and 2017.  These loans amortize 

over 10 years, are secured by two leased properties and carry a fixed interest rate with 120 monthly principal and interest 
payments.  The loan agreements generally restrict the Company from prepayment in the first three years and require submission 
of periodic financial reports as part of the loan covenants. An amortization schedule of the mortgage loans is as follows:

Year
2016 ...........................................................................................................
2017 ...........................................................................................................

Total Payment

Interest

Principal

4,034
11,469

762
110

3,272
11,359

Amortization Schedule

444 West Santa Clara Street, L.P., in which SJW Land Company owns a 70% limited partnership interest, has a 
mortgage loan in the outstanding amount of $2,836 as of December 31, 2015.  The mortgage loan is due in 2021 and is 
amortized over 20 years with an interest rate of 5.68%.  The mortgage loan is secured by the partnership's real property and is 
non-recourse to SJW Land Company.  An amortization schedule of the mortgage loan with 444 West Santa Clara Street, L.P. is 
as follows:

Year
2016 ...........................................................................................................
2017 ...........................................................................................................
2018 ...........................................................................................................
2019 ...........................................................................................................
2020 ...........................................................................................................
Thereafter ..................................................................................................

Total Payment

Amortization Schedule
Interest

Principal

276
276
276
276
276
2,210

157
150
143
135
127
42

119
126
133
141
149
2,168

San Jose Water Company has outstanding $50,000 in California Pollution Control Financing Authority revenue bonds 
as of December 31, 2015.  The loan agreement for the revenue bonds contains affirmative and negative covenants customary 
for a loan agreement relating to revenue bonds, including, among other things, complying with certain disclosure obligations 
and covenants relating to the tax exempt status of the interest on the bonds and limitations and prohibitions relating to the 
transfer of the projects funded by the loan proceeds and the assignment of the loan agreement.  As of December 31, 2015, San 
Jose Water Company was in compliance with all such covenants.

San Jose Water Company has two loans from the SDWSRF at a rate of 2.39% and 2.60%.  The outstanding loan 
balances as of December 31, 2015 is $1,849.  San Jose Water Company issued standby letters of credit with a commercial bank 
in the amount of $3,000 in support of these loans.  The letters of credit automatically renew for one year each December unless 
the issuing bank elects not to renew it.  The amount of coverage can be reduced as the principal balances decrease.  An 
amortization schedule of the SDWSRF loans is as follows:

Year
2016 ...........................................................................................................

2017 ...........................................................................................................

2018 ...........................................................................................................

2019 ...........................................................................................................

2020 ...........................................................................................................

Thereafter ..................................................................................................

Amortization Schedule

Total Payment

Interest

Principal

132

196

196

196

196

1,200

31

42

38

34

30

92

101

154

158

162

166

1,108

The fair value of long-term debt as of December 31, 2015 and 2014 was approximately $500,035 and $460,171, 
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 fair value of long-term debt would be categorized 
as Level 2 of the fair value hierarchy.

55

 
 
 
Note 5. 

Income Taxes

The components of income tax expense were:

Current:

Federal..................................................................................................... $
State.........................................................................................................

Deferred:

Federal.....................................................................................................

State.........................................................................................................

$

2015

2014

2013

3,723

3,924

16,109
(484)
23,272

50
(1,146)

28,493
(2,426)
24,971

(525)
3,093

11,743
(176)
14,135

The following table reconciles income tax expense to the amount computed by applying the federal statutory rate to 

income before income taxes of $61,154, $76,777 and $36,519 in 2015, 2014 and 2013:

“Expected” federal income tax.................................................................. $
Increase (decrease) in taxes attributable to:

State taxes, net of federal income tax benefit .........................................

Dividend received deduction ..................................................................

Uncertain tax positions............................................................................

Sales & Use Enterprise Zone Credit .......................................................

Tangible Property Regulations................................................................

Other items, net .......................................................................................

$

2015

2014

2013

21,404

26,872

12,782

3,332
(43)
3

—
(1,081)
(343)
23,272

4,155
(46)
—
(880)
(5,127)
(3)
24,971

1,836
(60)
(650)
—

—

227

14,135

The components of the net deferred tax liability as of December 31 was as follows:

2015

2014

Deferred tax assets:

Advances and contributions.................................................................................................. $
Unamortized investment tax credit.......................................................................................

Pensions and postretirement benefits....................................................................................

California franchise tax.........................................................................................................

Net operating loss .................................................................................................................
Other .....................................................................................................................................
Total deferred tax assets.......................................................................................................... $
Deferred tax liabilities:

Utility plant........................................................................................................................... $
Pension and postretirement benefits .....................................................................................

Investment in stock ...............................................................................................................

Deferred gain and other-property related..............................................................................

Debt reacquisition costs........................................................................................................

Other .....................................................................................................................................
Total deferred tax liabilities .................................................................................................... $
Net deferred tax liabilities....................................................................................................... $

16,612

676

4,094

1,322

—

3,410

26,114

165,293

44,482

2,193

11,686

397

838

224,889

198,775

16,212

709

4,216

—

5,065

1,697

27,899

150,662

47,059

2,335

11,695

443

1,211

213,405

185,506

Management evaluates the realizability of deferred tax assets based on all available evidence, both positive and 
negative.  The realization of deferred tax assets is dependent on our ability to generate sufficient future taxable income during 

56

periods in which the deferred tax assets are expected to reverse.  Based on all available evidence, management believes it is 
more likely than not that SJW Corp. will realize the benefits of these deferred tax assets.

As of December 31, 2015, the Company has estimated that it will utilize the entire federal net operating loss carry 

forward of $15,854 and state net operating loss carryforward of $1,525 to offset taxable income generated in 2015.

The total amount of unrecognized tax benefits, before the impact of deductions for state taxes, excluding interest and 
penalties was $795 and $684 as of December 31, 2015 and 2014, respectively.  The amount of tax benefits, net of any federal 
benefits for state taxes and inclusive of interest that would impact the effective rate, if recognized, is approximately $17 and 
$14 as of December 31, 2015 and 2014, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

Balance at December 31, 2014 ............................................................................................................................. $
Increase related to tax positions taken during a prior year, including interest .....................................................

Reductions related to tax positions taken in a prior year, including interest........................................................
Balance at December 31, 2015 ............................................................................................................................. $

649

106

—

755

SJW Corp.'s policy is to classify interest and penalties associated with unrecognized tax benefits, if any, in tax expense.  

Accrued interest expense, net of the benefit of tax deductions which would be available on the payment of such interest, is 
approximately $17 as of December 31, 2015.  SJW Corp. has not accrued any penalties for unrecognized tax benefits.  The 
amount of interest recognized in 2015 was an expense of $3.

SJW Corp. does not foresee material changes to its gross uncertain tax liability due to the lapse of the statute of 

limitations within the next 12 months following December 31, 2015. 

In the second quarter of 2014, SJW Corp. recorded $880 in State of California enterprise zone sales and use tax credits 

related to tax years 2008 through 2012.  SJW Corp. is currently undergoing an income tax examination by The California 
Franchise Tax Board for refund claims for fiscal years 2008 through 2012. 

SJW Corp. applied for the accounting method changes required to comply with the Tangible Property Regulations with 

its 2014 tax returns.  As of December 31, 2015, the 2015 federal and state repairs and maintenance deduction under the new 
methodology was $18,820, resulting in an estimated $6,587 federal deferred tax liability and a state income tax benefit of 
$1,081.

On September 13, 2013, the Department of Treasury and the Internal Revenue Service issued final tangible property 
regulations under provisions that generally are intended to simplify, clarify and make more administrable the 2011 temporary 
and proposed tangible property regulations.  These regulations broadly apply to amounts to acquire, produce or improve 
tangible property, as well as dispositions of such property and provide criteria for determining whether such amounts can be 
deducted or should be capitalized as part of the asset.  The final regulations generally are effective for tax years beginning on or 
after January 1, 2014.  During the third quarter of 2014, management completed its evaluation of the capitalization elections 
under the new regulations in order to establish their method of complying with the new regulations and record the impact in the 
consolidated financial statements.  To comply with the new regulations, SJW Corp. applied the accounting method change in 
the 2014 tax returns for the expensing of certain utility asset improvement costs for tax purposes as of December 31, 2013 that 
were previously being capitalized for book and tax purposes.  As of December 31, 2014, the 2014 federal and state repairs and 
maintenance deduction under the new methodology was $11,221, resulting in an estimated $3,927 federal deferred tax liability 
and a state income tax benefit of $645.  During the year ended December 31, 2014, SJW Corp. also completed a detailed 
analysis of the repairs and maintenance deduction related to 2013 and prior years, and recorded the estimated federal and state 
impact in the consolidated financial statements as of December 31, 2014.  SJW Corp.'s Internal Revenue Code (“IRC”) §481(a) 
adjustment for Federal purposes was $35,912 and resulted in a $12,569 deferred tax liability as of December 31, 2014.  SJW 
Corp.'s IRC §481(a) adjustment for state purposes was $77,999 and resulted in a $4,482 reduction to state income tax expense 
for the year ended December 31, 2014.

57

SJW Corp. files U.S. federal income tax returns and income tax returns in various states.  The Company is no longer 
subject to tax examination for fiscal years prior to 2012 for federal purposes and 2010 for state purposes.  The open tax years 
for the jurisdictions in which SJW Corp. files are as follows:

Jurisdiction
Federal ..................................................................................................................................................................

California ..............................................................................................................................................................

Arizona .................................................................................................................................................................

Connecticut ...........................................................................................................................................................

Florida...................................................................................................................................................................

Tennessee..............................................................................................................................................................

Texas.....................................................................................................................................................................

Years Open
2012 - 2014

2010 - 2014

2011 - 2014

2012 - 2014

2012

2012 - 2014

2011 - 2014

Note 6. 

Intangible Assets

Intangible assets consist of a concession fee paid to the City of Cupertino of $6,800 for operating the City of Cupertino 

municipal water system and other intangibles of $15,875.  Other intangibles consists of $12,059 which was paid for service area 
and water rights related to our subsidiaries in Texas, $2,352 of Depreciable Plant and Equipment for infrastructure related to the 
Cupertino service concession arrangement (See Note 1 of Notes to Consolidated Financial Statements), $1,040 incurred in 
conjunction with SCVWD water contracts related to the operation of San Jose Water Company and $424 in other miscellaneous 
intangibles.  All intangible assets are recorded at cost and all, except for TWA water rights, are being amortized using the 
straight-line method over the legal or estimated economic life of the asset ranging from 5 to 70 years.  TWA water rights are not 
being amortized as they have been determined to have an indefinite useful life.

Amortization expense for the intangible assets was $453, $364 and $354 for the years ended December 31, 2015, 2014 

and 2013, respectively.  Amortization expense for 2016, 2017, 2018, 2019 and 2020 is anticipated to be $453 per year.

The costs of intangible assets as of December 31, 2015 and 2014 are as follows:

Concession fees....................................................................................................................... $
Other intangibles .....................................................................................................................

Intangible assets ......................................................................................................................

Less: Accumulated amortization

Concession fees ....................................................................................................................

Other intangibles...................................................................................................................
Net intangible assets................................................................................................................ $

6,800

15,875

22,675

4,964

2,153

15,558

6,800

12,533

19,333

4,692

860

13,781

2015

2014

Note 7. 

Commitments

San Jose Water Company purchases water from SCVWD under terms of a master contract expiring in 2051.  Delivery 
schedules for purchased water are based on a contract year beginning July 1, and are negotiated every three years under terms 
of the master contract with SCVWD.  For the years ended December 31, 2015, 2014 and 2013, San Jose Water Company 
purchased from SCVWD 18,482 million gallons ($52,553), 17,782 million gallons ($44,444) and 22,700 million gallons 
($52,500), respectively, of contract water.  In accordance with the reduction of treated water deliveries approved by the 
SCVWD Board of Directors on November 25, 2015, the contractual delivery schedule was reduced by 20% through June 30, 
2016.  Based on current prices and estimated deliveries, San Jose Water Company is committed to purchase from SCVWD a 
minimum of 90% of the reduced delivery schedule, or 19,360 million gallons ($59,060) of water at the current contract water 
rate of $3.1 per million gallons in the year ending December 31, 2016.  Additionally, San Jose Water Company purchases non-
contract water from SCVWD on an “as needed” basis if the water supply is available. 

In 1997, San Jose Water Company entered into a 25-year contract agreement with the City of Cupertino to operate the 

City's municipal water system.  San Jose Water Company paid a one-time, up-front concession fee of $6,800 to the City of 
Cupertino which is amortized over the contract term.  Under the terms of the contract agreement, San Jose Water Company 
assumed responsibility for all maintenance and operating costs, while receiving all payments for water service.  Water service 
rates are generally subject to approval by the Cupertino City Council.

58

San Jose Water Company has remaining commitments of $46,900 with one vendor related to Phase 2 upgrades to the 

Montevina Water Treatment Plant.  This amount is expected to be spent during 2016 and 2017.

CLWSC has long-term contracts with the GBRA.  The terms of the agreements expire in 2037, 2040, 2044 and 2050.  
The agreements, which are take-or-pay contracts, provide CLWSC with 6,900 acre-feet per year of water supply from Canyon 
Lake.  The water rate may be adjusted by GBRA at any time, provided they give CLWSC a 60-day written notice on the 
proposed adjustment.

TWA has entered into approximately 180 water leases with property owners for certain real property rights for the 
development, production, transportation and use of groundwater in and under their property.  In accordance with the water 
leases, TWA is committed to pay between $1,000 and $1,300 per year from 2016 to 2020.  TWA may terminate the water leases 
at any time during the pre-production phase, upon two years prior written notice.

As of December 31, 2015, San Jose Water Company had 357 employees, of whom 122 were executive, administrative 
or supervisory personnel, and of whom 235 were members of unions.  In November 2013, San Jose Water Company reached a 
three-year collective bargaining agreement with the Utility Workers of America, representing the majority of all employees, and 
the International Union of Operating Engineers, representing certain employees in the engineering department, covering the 
period from January 1, 2014 through December 31, 2016.  The agreements include a 2% wage increase in 2014, 2% in 2015 
and 3% in 2016 for union workers as well as increases in medical co-pays and employee cost-sharing. 

Note 8. 

Contingencies

SJW Corp. is subject to ordinary routine litigation incidental to its business.  There are no pending legal proceedings to 
which SJW Corp. or any of its subsidiaries is a party, or to which any of its properties is the subject, that are expected to have a 
material effect on SJW Corp.'s business, financial position, results of operations or cash flows.

Note 9. 

Partnership Interest

In September 1999, SJW Land Company formed 444 West Santa Clara Street, L.P., a limited partnership, with a real 
estate development firm whereby SJW Land Company contributed real property in exchange for a 70% limited partnership 
interest.  A commercial building was constructed on the partnership property and is leased to an unrelated international real 
estate firm under a long-term lease expiring in August 2019.

The consolidated financial statements of SJW Corp. at December 31, 2015 and 2014 include the operating results of 444 
West Santa Clara Street, L.P.  Intercompany balances and transactions have been eliminated.  Results of operations and balances 
of the non-controlling interest are not material to the consolidated financial statements.

Note 10. 

Benefit Plans

Pension Plans

San Jose Water Company sponsors a noncontributory defined benefit pension plan (the “Pension Plan”) for its eligible 

employees.  Employees hired before March 31, 2008 are entitled to receive retirement benefits using a formula based on the 
employee's three highest years of compensation (whether or not consecutive).  For 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. 

The Pension Plan is administered by a committee that is composed of an equal number of company and union 

representatives (the “Committee”).  The Committee has retained an investment consultant, Wells Fargo Advisors Financial 
Network, LLC, to assist it with, among other things, asset allocation strategy, investment policy advice, performance 
monitoring, and investment manager due diligence.  Individual investment decisions have been delegated by the Committee to 
the investment managers who are monitored by the investment consultant.  Investment guidelines provided in the Investment 
Policy Statement require that at least 25% of plan assets be invested in fixed income securities.  As of December 31, 2015, the 
plan assets consist of approximately 35% bonds, 9% cash equivalents, and 56% equities.  Furthermore, equities are to be 
diversified by industry groups and selected to achieve a balance of long-term growth and income combined with a goal of long-
term preservation of capital.  Except as provided for in the prospectus of any co-mingled investments, investment managers 
may not invest in commodities and futures contracts, private placements, options, letter stock, speculative securities, nor may 
they hold more than 5% of assets of any one private corporation.  Except as provided for in the prospectus of any co-mingled 
investments, fixed income assets may only be invested in bonds, commercial paper, and money market funds with acceptable 
ratings by Moody's or Standard & Poor's as defined by the Investment Policy Statement.  The investment managers 
performance is reviewed regularly by the investment consultant who provides semi-annual reports to the Committee for review.

Plan assets are marked to market at each measurement date, resulting in unrealized actuarial gains or losses.  Unrealized 

actuarial gains and losses on pension assets are amortized over the expected future working lifetime of participants of 12.36 

59

years for actuarial expense calculation purposes.  Market losses in 2014 increased pension expense by approximately $3,473 in 
2015 and market gains in 2013 decreased pension expense by approximately $790 in 2014.

For the past 10 years, the plan has achieved a 5.91% return on its investments while the applicable benchmark was 
5.95% for the same period.  The applicable benchmark is a weighted-average of returns for those benchmarks shown in the 
table below.  For the past five years, the investment managers, following the required investment guidelines, achieved a 7.41% 
return on their investments, while the applicable benchmark was 7.13% for the same period.

Generally, it is expected of the investment managers that the performance of the assets held in the Pension Plan, 
computed on a total annual rate of return basis, should meet or exceed specific performance standards over a three-to-five-year 
period and/or full market cycle.  These standards include specific absolute and risk-adjusted performance standards over a 
three-to-five-year period and/or full market cycle.

San Jose Water Company calculates the market-related value of the defined benefit pension plan assets, which is 
defined under FASB ASC Topic 715—“Compensation—Retirement Benefits” as a balance used to calculate the expected return 
on plan assets, using fair value.  Fair value for San Jose Water Company is based on quoted prices in active markets for 
identical assets and significant observable inputs.

Officers hired before March 31, 2008 are eligible to receive additional retirement benefits under San Jose Water 

Company's Executive Supplemental Retirement Plan, and officers hired on or after March 31, 2008 are eligible to receive 
additional retirement benefits under San Jose Water Company's Cash Balance Executive Supplemental Retirement Plan.  Both 
of the plans are non-qualified plans in which only officers and other designated members of management may participate.  The 
annual cost of the plans has been included in the determination of the net periodic benefit cost shown below.  The plans, which 
are unfunded, had a projected benefit obligation of $16,566 and $15,806 as of December 31, 2015 and 2014, respectively, and 
net periodic pension cost of $1,542, $1,300 and $1,248 for 2015, 2014 and 2013, respectively.

Other Postretirement Benefits

In addition to providing pension and savings benefits, San Jose Water Company also provides health care and life 
insurance benefits for retired employees under the San Jose Water Company Social Welfare Plan.  The plan is a flat dollar plan 
which is unaffected by variations in health care costs.

Flexible Spending Plan

Effective February 1, 2004, San Jose Water Company established a Flexible Spending Account for its employees for the 

purpose of providing eligible employees with the opportunity to choose from among the fringe benefits available under the 
plan.  The flexible spending plan is intended to qualify as a cafeteria plan under the provisions of the Internal Revenue Code 
Section 125.  The flexible spending plan allows employees to save pre-tax income in a Health Care Spending Account 
(“HCSA”) and/or a Dependent Care Spending Account (“DCSA”) to help defray the cost of out-of-pocket medical and 
dependent care expenses.  The annual maximum limit under the HCSA and DCSA plans is $2.5 and $5, respectively.

Deferral Plan

San Jose Water Company sponsors a salary deferral plan that allows employees to defer and contribute a portion of their 

earnings to the plan.  Contributions, not to exceed set limits, are matched by San Jose Water Company.  San Jose Water 
Company contributions were $1,149, $1,101 and $1,087 in 2015, 2014 and 2013, respectively.

Special Deferral Election Plan and Deferral Election Program

SJW Corp. maintains a Special Deferral Election Plan allowing certain executives and a Deferral Election Program 
allowing non-employee directors to defer a portion of their earnings each year and to realize an investment return on those 
funds during the deferral period.  Executives and non-employee directors have to make an election on the deferral and 
distribution method of the deferrals before services are rendered.  Executives and non-employee directors had deferred $4,073, 
$3,463 and $3,203 under the plans as of December 31, 2015, 2014 and 2013, respectively.

60

Assumptions Utilized on Actuarial Calculations

Net periodic cost for the defined benefit plans and other postretirement benefits was calculated using the following 

weighted-average assumptions:

Discount rate ..........................................................................

Expected return on plan assets ...............................................

Rate of compensation increase ...............................................

Pension Benefits

Other Benefits

2015
%

3.88

7.00

4.00

2014
%

4.82

7.00

4.00

2013
%

3.92

7.00

4.00

2015
%

3.80

7.00

N/A

2014
%

4.70

7.00

N/A

2013
%

3.80

7.00

N/A

The expected rate of return on plan assets was determined based on a review of historical returns, both for the Pension 

Plan and for medium- to large-sized defined benefit pension funds with similar asset allocations.  This review generated 
separate expected returns for each asset class.  These expected future returns were then blended based on the Pension Plan's 
target asset allocation.

Benefit obligations for the defined benefit plans and other postretirement benefits were calculated using the following 

weighted-average assumptions as of December 31:

Discount rate ................................................................

Rate of compensation increase.....................................

Pension Benefits

Other Benefits

2015
%

4.24

4.00

2014
%

3.88

4.00

2015
%

4.10

N/A

2014
%

3.80

N/A

San Jose Water Company utilized each plan's projected benefit stream in conjunction with the Citigroup Pension 
Discount Curve in determining the discount rate used in calculating the pension and other postretirement benefits liabilities at 
the measurement date.

In 2014, San Jose Water Company adopted the Society of Actuaries newly issued RP-2014 Mortality Tables and 
Mortality Improvement Scale MP-2014 to determine mortality assumptions.  The newly issued tables and scales reflect 
increasing life expectancies of participants in the United States.  See also “Reconciliation of Funded Status” below.

Net Periodic Pension Costs

Net periodic costs for the defined benefit plans and other postretirement benefits for the years ended December 31 was 

as follows:

Components of net periodic benefit cost

Pension Benefits

Other Benefits

2015

2014

2013

2015

2014

2013

Service cost .................................................... $
Interest cost ....................................................

Expected return on assets ...............................

Amortization of prior service cost..................

Recognized actuarial loss ...............................
Net periodic benefit cost ................................ $

5,072

6,342

(6,984)

376

4,005

8,811

3,938

6,098
(6,414)
376

1,879

5,877

4,594

$

5,393
(5,289)
394

4,052

9,144

$

379

504
(283)
197

188

985

284

508
(268)
197

59

780

361

508
(230)
197

189

1,025

61

 
 
 
 
 
 
 
Reconciliation of Funded Status

For the defined benefit plans and other postretirement benefits, the benefit obligation is the projected benefit obligation 
and the accumulated benefit obligation, respectively.  The projected benefit obligations and the funded status of San Jose Water 
Company's defined benefit pension and other postretirement plans as of December 31 were as follows:

Pension Benefits

Other Benefits

2015

2014

2015

2014

Change in benefit obligation

Benefit obligation at beginning of year ..................... $
Service cost................................................................

Interest cost................................................................

Actuarial (gain)/loss ..................................................

Benefits paid..............................................................
Benefit obligation at end of year ............................... $

Change in plan assets

Fair value of assets at beginning of year ................... $
Actual return on plan assets.......................................
Employer contributions .............................................

Benefits paid..............................................................

Fair value of plan assets at end of year......................
Funded status at end of year ...................................... $

165,304

5,072

6,342
(7,436)
(5,014)
164,268

99,628

965
9,374
(5,014)
104,953
(59,315)

128,699

$

13,714

3,938

6,098

31,161
(4,592)
165,304

91,358

$

$

6,392
6,470
(4,592)
99,628
(65,676) $

379

504

2,231
(408)
16,420

4,251

79
468
(336)
4,462
(11,958)

10,976

284

508

2,322
(376)
13,714

3,995

119
434
(297)
4,251
(9,463)

The amounts recognized on the balance sheet as of December 31 were as follows:

Current liabilities ......................................................... $
Noncurrent liabilities ...................................................

$

Pension Benefits

Other Benefits

2015

2014

2015

2014

957

58,358

59,315

883

64,793

65,676

$

$

86

11,872

11,958

69

9,394

9,463

San Jose Water Company recorded a regulatory asset, including a gross-up for taxes, on the projected benefit obligation 

of the postretirement benefit plans as follows:

Funded status of obligation ..................................................................................................... $
Accrued benefit cost................................................................................................................

Amount to be recovered in future rates...................................................................................

Tax gross-up............................................................................................................................
Regulatory asset ...................................................................................................................... $

2015

2014

71,273
(6,587)
64,686

44,482

75,139
(6,704)
68,435

47,059

109,168

115,494

The estimated amortization for the year ended December 31, 2016 is as follows:

Amortization of prior service cost .......................................................................................... $
Amortization of loss................................................................................................................
Total......................................................................................................................................... $

Pension Benefits
3,440

376

3,816

Other Benefits

197

188

385

62

 
 
 
 
Plan Assets

Plan assets for the years ended December 31 were as follows:

Pension Benefits

Other Benefits

2015

2014

2015

2014

Fair value of assets at end of year:
Debt securities.............................................................. $

Equity securities...........................................................

Cash and equivalents....................................................

37,088

35%

58,958

56%

8,907

9%

35,034

$

1,527

35%

58,286

59%

6,308

6%

34%

2,343

53%

592

13%

Total ............................................................................. $

104,953

99,628

$

4,462

1,401

33%

2,347

55%

503

12%

4,251

The following tables summarize the fair values of plan assets by major categories as of December 31, 2015 and 2014:

Fair Value Measurements at December 31, 2015

Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Benchmark

Total

$

9,500

$

9,500

$

— $

Asset Category
Cash and cash equivalents .......

Actively Managed (a):

—

—

—

—

—

—

—

—

—

All Cap Equity.......................

Russell 3000 Value

4,067

4,041

U.S. Large Cap Equity...........

U.S. Mid Cap Equity .............

U.S. Small Cap Equity...........

Russell 1000, Russell 1000
Growth, Russell 1000 Value

Russell Mid Cap, 
Russell Mid Cap Growth, 
Russell Mid Cap Value

Russell 2000, Russell 2000
Growth, Russell 2000 Value,
Russell 2500

Non-U.S. Large Cap Equity ..

MSCI EAFE

REIT ......................................

NAREIT—Equity REIT's

Fixed Income (b)......................
Total..................................

(b)

36,010

36,010

5,886

5,886

5,188

4,804

5,346

38,614

5,188

4,804

—

—

26

—

—

—

—

5,346

38,614

$ 109,415

$

65,429

$

43,986

$

___________________________________
The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in 
a diversified array of fixed income securities to provide preservation of capital plus generation of income.
(a) 
(b) 

Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.
Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate 
Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.

63

 
 
 
 
 
Fair Value Measurements at December 31, 2014

Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)

Significant
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Benchmark

Total

$

6,811

$

6,811

$

— $

Asset Category
Cash and cash equivalents .......

Actively Managed (a):

—

—

—

—

—

—

—

—

—

All Cap Equity.......................

Russell 3000 Value

4,266

4,237

U.S. Large Cap Equity...........

U.S. Mid Cap Equity .............

U.S. Small Cap Equity...........

Russell 1000, Russell 1000 
Growth, Russell 1000 Value

Russell Mid Cap, 
Russell Mid Cap Growth, 
Russell Mid Cap Value

Russell 2000, Russell 2000
Growth, Russell 2000 Value

Non-U.S. Large Cap Equity ..

MSCI EAFE

REIT ......................................
Fixed Income (b)......................

Total..................................

NAREIT—Equity REIT's

(b)

35,489

35,489

6,069

4,982

4,758

5,069

36,435

6,069

4,982

4,758

—

—

29

—

—

—

—

5,069

36,435

$ 103,879

$

62,346

$

41,533

$

___________________________________
The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in 
a diversified array of fixed income securities to provide preservation of capital plus generation of income.
(a) 
(b) 

Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.
Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate 
Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.

In 2016, San Jose Water Company expects to make required and discretionary cash contributions of up to $8,200 to the 

pension plan and other postretirement benefit plan. 

Benefits expected to be paid in the next five years and in the aggregate for the five years thereafter are:

2016 .............................................................................................................................. $
2017 ..............................................................................................................................

2018 ..............................................................................................................................

2019 ..............................................................................................................................
2020 ..............................................................................................................................

2021 - 2025 .....................................................................................................................

5,879

$

6,169

6,546

6,743
7,191

42,464

660

697

734

767
795

3,705

Pension Plan

Other Postretirement
Benefit Plan

Note 11. 

Equity Plans

Common Stock

SJW Corp. has a Long-Term Stock Incentive Plan (the “Plan”), which has 1,800,000 shares of common stock reserved 
for issuance.  The Plan was initially adopted by the Board of Directors on March 6, 2002.  On January 30, 2013, the amended 
and restated Plan was adopted by the Board and became effective on April 24, 2013.  The Plan was subsequently amended and 
the amended and restated Plan was adopted by the Board on July 29, 2015.

The Plan allows SJW Corp. 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 Corp.

A participant in the Plan generally may not receive Plan awards covering an aggregate of more than 600,000 shares of 
common stock in any calendar year.  Additionally, awards granted under the Plan may be conditioned upon the attainment of 
specified Company performance goals.  The types of awards included in the Plan are restricted stock awards, restricted stock 

64

 
 
 
units, performance shares, or other share-based awards.  In addition, shares were issued to employees under the Employee 
Stock Purchase Plan (“ESPP”).  The last offering period under the ESPP ended on July 31, 2014.  A 2014 Employee Stock 
Purchase Plan (“2014 ESPP”) was approved by Company shareholders in April 2014.  The initial offering period under the 
2014 ESPP commenced on August 1, 2014 with a January 30, 2015 purchase date.  SJW Corp. also had a Dividend 
Reinvestment and Stock Purchase Plan (“DRSPP”) which allowed eligible participants to buy shares and reinvest cash 
dividends in SJW Corp. common stock.  The DRSPP was terminated effective as of April 14, 2014.

As of December 31, 2015, 2014 and 2013, 516,956, 429,352 and 341,914 shares have been issued pursuant to the Plan, 

and 245,976, 296,831 and 307,919 shares are issuable upon the exercise of outstanding options, restricted stock units, and 
deferred restricted stock units for the years ended 2015, 2014 and 2013, respectively.  The remaining shares available for 
issuance under the Plan are 1,037,068 as of December 31, 2015.  The compensation costs charged to income is recognized on a 
straight-line basis over the requisite service period.  

A summary of compensation costs charged to income, proceeds from the exercise of stock options and similar 
instruments and the tax benefit realized from stock options and similar instruments exercised, that are recorded to additional 
paid-in capital and common stock, by award type, are presented below for the years ended December 31:

2015

2014

2013

Compensation costs charged to income:

ESPP........................................................................................................ $
Restricted stock and deferred restricted stock.........................................
Total compensation costs charged to income............................................ $
Proceeds from the exercise of stock options and similar instruments:

Stock options........................................................................................... $
ESPP........................................................................................................

DRSPP.....................................................................................................

Total proceeds from the exercise of stock options and similar
instruments ................................................................................................ $
Excess tax benefits realized from share options exercised and stock
issuance:

Stock options........................................................................................... $
Restricted stock and deferred restricted stock.........................................

Total excess tax benefits realized from share options exercised and
stock issuance ............................................................................................ $

158
1,445

1,603

—

895

—

895

—

634

634

148
883

1,031

1,044

839

34

1,917

213

249

462

128
784

912

198

722

84

1,004

(69)
97

28

Stock Options

SJW Corp. applies FASB ASC Topic 718—“Compensation—Stock Compensation,” for all existing and new share-
based compensation plans.  To estimate the fair value of options at grant date as the basis for the share-based compensation 
awards, SJW Corp. utilizes the Black-Scholes option-pricing model, which requires the use of subjective assumptions.  Further, 
as required under ASC Topic 718, SJW Corp. estimates forfeitures for the share-based awards that are not expected to vest.  
Changes in these inputs and assumptions can affect the measure of estimated fair value of our share-based compensation and 
the amount and timing of expense recognition.

Awards in the form of stock options under the Plan allow executives to purchase common shares at a specified price.  

Options are granted at an exercise price that is not less than the per share market price on the date of the grant.  Options vest at 
a 25% rate on each annual date over four years and have a contractual term of 10 years.

As of December 31, 2015, there are no outstanding options and no option award activity during the year ended 

December 31, 2015. 

The total intrinsic value of options exercised during the years ended December 31, 2015, 2014 and 2013, was $0, $581, 

and $179, respectively.

As of December 31, 2015, there are no unrecognized compensation costs related to stock options.

65

Restricted Stock and Deferred Restricted Stock

Under SJW Corp.'s Amended and Restated Deferred Restricted Stock Program (the “Deferred Restricted Stock 
Program”), SJW Corp. granted deferred restricted stock units to non-employee Board members.  This program was amended 
effective January 1, 2008.  As a result of that amendment, no new awards of deferred restricted stock units will be made under 
the Deferred Restricted Stock Program with respect to Board service after December 31, 2007.

On January 27, 2015, certain officers of SJW Corp. were granted performance-based restricted stock units covering an 
aggregate target number of SJW Corp.'s shares of common stock equal to 3,252 that will vest based on the actual attainment of 
specified performance goals measured for the 2015 calendar year and continued service through December 31, 2015.  The 
number of shares issuable under the awards, ranging between 0% to 150% of the target number of shares, is based on the level 
of actual attainment of specified performance goals.  The units do not include dividend equivalent rights.  The awards have no 
market conditions and the share-based compensation expense of $34.36 per unit which is based on the award grant date fair 
value is being recognized.  As of December 31, 2015, the specified performance goals and service requirement were met and 
150% of the target number of shares is expected to vest February 29, 2016 upon approval of the Executive Compensation 
Committee of the Board on February 22, 2016. 

On January 27, 2015, a key employee of SJW Corp. was granted performance-based restricted stock units covering a 

number of SJW Corp.'s shares of common stock equal to 6,639 that will vest based on the actual attainment of a specified 
performance goal measured over the 2015 calendar year and continued service through December 31, 2015.  The units do not 
include dividend equivalent rights.  The award has no market conditions and the share-based compensation expense of $34.36 
per unit which is based on the award grant date fair value is being recognized.  As of December 31, 2015, the specified 
performance goal and service requirement were met and the award is expected to vest February 29, 2016 upon approval of the 
Executive Compensation Committee of the Board on February 22, 2016. 

On April 29, 2015, an officer of SJW Corp. was granted performance-based restricted stock units covering a target 

number of SJW Corp.'s shares of common stock equal to 501 that will vest based on the actual attainment of specified 
performance goals measured for the 2015 calendar year and continued service through December 31, 2015.  The number of 
shares issuable under the award, ranging between 0% to 150% of the target number of shares, is based on the level of actual 
attainment of specified performance goals.  The units do not include dividend equivalent rights.  The award has no market 
conditions and the share-based compensation expense of $29.37 per unit which is based on the award grant date fair value is 
being recognized assuming the performance goal will be attained.  As of December 31, 2015, the specified performance goals 
and service requirement were met and 150% of the target number of shares is expected to vest February 29, 2016 upon approval 
of the Executive Compensation Committee of the Board on February 22, 2016.

A summary of SJW Corp.'s restricted and deferred restricted stock awards as of December 31, 2015, and changes during 

the year ended December 31, 2015, are presented below:

Outstanding as of January 1, 2015 ..........................................................................................

Issued ....................................................................................................................................
Vested....................................................................................................................................

Forfeited or expired ..............................................................................................................

Outstanding as of December 31, 2015 ....................................................................................

Shares vested as of December 31, 2015..................................................................................

Units

259,807

$

32,516
$
(83,086) $
— $

209,237

115,693

$

$

Weighted-
Average Grant-
Date Fair Value
18.56

30.98

32.79

—

21.49

16.52

A summary of the status of SJW Corp.'s nonvested restricted and deferred restricted stock awards as of December 31, 

2015, and changes during the year ended December 31, 2015, are presented below:

Nonvested as of January 1, 2015 ............................................................................................

Granted .................................................................................................................................

Vested....................................................................................................................................
Forfeited................................................................................................................................

Nonvested as of December 31, 2015 ......................................................................................

66

Units

130,467

$

$
32,516
(69,439) $
— $

93,544

$

Weighted-    
Average Grant-
Date Fair Value
20.75

30.98
16.28

—

27.63

As of December 31, 2015, the total unrecognized compensation costs related to restricted and deferred restricted stock 

plans amounted to $1,231.  This cost is expected to be recognized over a weighted-average period of 0.83 years.

Dividend Equivalent Rights

Under the Plan, certain holders of options, restricted stock and deferred restricted stock awards may have the right to 

receive dividend equivalent rights (“DERs”) each time a dividend is paid on common stock after the grant date.  Stock 
compensation on DERs is recognized as a liability and recorded against retained earnings on the date dividends are issued.

The Deferred Restricted Stock and Deferral Election Programs for non-employee Board members were amended 
effective January 1, 2008, to allow the DERs' with respect to the deferred shares to remain in effect only through December 31, 
2017.  Accordingly, the last DERs' conversion into deferred restricted stock units will occur on the first business day in 
January 2018.  Previously, no such time limitation was placed in the Deferred Restricted Stock and Deferral Election Program.

As of December 31, 2015, 2014 and 2013, a cumulative of 70,691, 66,458 and 61,733 dividend equivalent rights were 

converted, since inception, to deferred restricted stock awards, respectively.  For the years ended December 31, 2015, 2014 and 
2013, $114, $122 and $128, respectively, related to dividend equivalent rights were recorded against retained earnings and were 
accrued as a liability.

Employee Stock Purchase Plan

The 2014 ESPP allows eligible employees to purchase shares of SJW Corp.'s common stock at 85% of the fair value of 

shares on the purchase date.  Under the 2014 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 SJW 
Corp.'s common stock have been reserved for issuance under the 2014 ESPP.

As of December 31, 2015, the 2014 ESPP had two purchase intervals since its inception.  As of December 31, 2015, a 
total of 33,318 shares were issued under the 2014 ESPP.  Prior to the inception of the 2014 ESPP plan, the ESPP had nineteen 
purchase intervals.  As of December 31, 2014 and 2013, a total of 35,682 and 30,869 shares, respectively, were issued under the 
prior ESPP.  Both plans have no look-back provisions.  For the years ended December 31, 2015, 2014 and 2013, cash received 
from employees towards the 2014 ESPP and ESPP amounted to $916, $854 and $796, respectively.

After considering estimated employee terminations or withdrawals from the plan before the purchase date, for the years 
ended December 31, 2015, 2014 and 2013, SJW Corp.'s recorded expenses were $162, $151 and $140 related to the 2014 ESPP 
and the prior ESPP.

The total unrecognized compensation costs related to the semi-annual offering period that ended January 29, 2016 for 

the 2014 ESPP is approximately $64.  This cost is expected to be recognized during the first quarter of 2016.

Dividend Reinvestment and Stock Purchase Plan

SJW Corp. adopted the DRSPP effective April 19, 2011.  The DRSPP offered shareholders the ability to reinvest cash 
dividends in SJW Corp. common stock and also purchase additional shares of SJW Corp. common stock.  A total of 3,000,000 
shares of common stock were reserved for issuance under the DRSPP.  SJW Corp. terminated the DRSPP effective as of April 
14, 2014.  For the years ended December 31 2014 and 2013, 829 and 3,487 shares, respectively, were issued under the DRSPP.

Note 12. 

Segment and Non-Tariffed Businesses Reporting

SJW Corp. is a holding company with five subsidiaries:  (i) San Jose Water Company, a water utility operation with 

both regulated and non-tariffed businesses, (ii) SJW Land Company and its consolidated variable interest entity, 444 West Santa 
Clara Street, L.P., operate commercial building rentals, (iii) SJWTX, Inc. which is doing business as Canyon Lake Water 
Service Company, a regulated water utility located in Canyon Lake, Texas, and its consolidated non-tariffed variable interest 
entity, Acequia Water Supply Corporation, (iv) Texas Water Alliance Limited, a non-tariffed water utility operation which is 
undertaking activities that are necessary to develop a water supply project in Texas, and (v) SJW Group, Inc., a Delaware 
corporation formed in March 2015 for the sole purpose of effectuating a change in the state of incorporation of SJW Corp. from 
California to Delaware.  Any future reincorporation is subject to CPUC approval.  In accordance with FASB ASC Topic 280
—“Segment Reporting,” SJW Corp. has determined that it has two reportable business segments.  The first segment is that of 
providing water utility and utility-related services to its customers through SJW Corp.'s subsidiaries, San Jose Water Company, 
Canyon Lake Water Service Company and Texas Water Alliance, together referred to as “Water Utility Services.”  The second 
segment is property management and investment activity conducted by SJW Land Company, referred to as “Real Estate 
Services.”

67

SJW Corp.'s reportable segments have been determined based on information used by the chief operating decision 

maker.  SJW Corp.'s chief operating decision maker is its senior staff which includes the Chairman, President and Chief 
Executive Officer, Chief Financial Officer and Treasurer, Chief Operating Officer, Chief Administrative Officer, and Senior 
Vice President of Regulatory Affairs.  The senior staff reviews financial information presented on a consolidated basis that is 
accompanied by disaggregated information about operating revenue, net income and total assets, by subsidiaries.

The following tables set forth information relating to SJW Corp.'s reportable segments and distribution of regulated and 

non-tariffed business activities within the reportable segments.  Certain allocated assets, revenue and expenses have been 
included in the reportable segment amounts.  Other business activity of SJW Corp. not included in the reportable segments is 
included in the “All Other” category.

Operating revenue .......................

Operating expense.......................

Operating income (loss) ..............
Net income (loss) ........................

Depreciation and amortization ....

Senior note, mortgage and other
interest expense ...........................

Regulated
291,949

214,538

77,411
38,402

38,742

18,935

Income tax expense (benefit) in
net income ...................................
23,802
Assets .......................................... 1,253,785

Water Utility Services

For year ended December 31, 2015

Real
Estate
Services

Non-
tariffed

6,988

4,079

2,909
953

1,564

All Other (1)

Non-
tariffed

—

2,356
(2,356)
(2,355)
—

SJW Corp.

Non-
tariffed

13,133

10,584

2,549
(520)
1,998

Regulated
291,949

214,538

77,411
38,402

38,742

Total
305,082

225,122

79,960
37,882

40,740

Non-
tariffed

6,145

4,149

1,996
882

434

—

1,019

2,232

18,935

3,251

22,186

730

18,106

513

65,622

(1,773)
3,450

23,802

1,253,785

(530)
87,178

23,272

1,340,963

Water Utility Services

Regulated
306,474

216,914

89,560

50,612

35,926

17,555

Non-
tariffed

6,175

4,686

1,489

668

359

—

For year ended December 31, 2014

Real
Estate
Services

Non-
tariffed

7,019

4,193

2,826

1,050

1,620

All Other (1)

Non-
tariffed

—

997
(997)
(524)
—

SJW Corp.

Non-
tariffed

13,194

9,876

3,318

1,194

1,979

Regulated
306,474

216,914

89,560

50,612

35,926

Total
319,668

226,790

92,878

51,806

37,905

1,022

2,211

17,555

3,233

20,788

Operating revenue .......................

Operating expense.......................

Operating income (loss) ..............

Net income (loss) ........................
Depreciation and amortization ....

Senior note, mortgage and other
interest expense ...........................

Income tax expense (benefit) in
net income ...................................
24,210
Assets .......................................... 1,180,583

471

18,071

542

65,847

(252)
4,803

24,210

761

24,971

1,180,583

88,721

1,269,304

68

 
 
 
 
 
 
Water Utility Services

For year ended December 31, 2013

Real
Estate
Services

Non-
tariffed

6,205

4,000

2,205

920

1,612

All Other (1)

Non-
tariffed

—

1,018
(1,018)
(1,601)
—

SJW Corp.

Non-
tariffed

12,087

10,701

1,386
(889)
1,972

Regulated
264,782

212,761

52,021

23,273

33,067

Total
276,869

223,462

53,407

22,384

35,039

Non-
tariffed

5,882

5,683

199

(208)

360

Operating revenue .......................

Operating expense.......................

Operating income (loss) ..............

Net income (loss) ........................

Depreciation and amortization ....

Senior note, mortgage and other
interest expense ...........................

Regulated
264,782

212,761

52,021

23,273

33,067

16,616

—

1,120

2,186

16,616

3,306

19,922

Income tax expense (benefit) in
net income ...................................
14,446
Assets .......................................... 1,013,229
____________________
(1) 
As of December 31, 2015, SJW Group, Inc. had no revenue or expenses recorded and as of December 31, 2015 held no assets.  For the years ended 
December 31, 2014 and 2013, the “All Other” category includes the accounts of SJW Corp. on a stand-alone basis. 

For the year ended December 31, 2015, the “All Other” category includes the accounts of SJW Corp. on a stand-alone basis and SJW Group, Inc.  

(311)
96,757

(1,203)
8,815

1,013,229

14,446

16,163

71,779

124

768

1,109,986

14,135

Note 13. 

California Water Service Group Stock

SJW Corp. classifies its investment in California Water Service Group as available-for-sale.  On June 30, 2014, SJW 

Corp. sold 125,969 shares of California Water Service Group for $3,056, before fees of $10.  SJW Corp. recognized a gain on 
the sale of the stock of approximately $2,017, tax expense of approximately $822, for a net gain of $1,195.  The unrealized 
holding gain associated with the shares sold, that was reclassified out of accumulated other comprehensive income was $1,171 
and was based on the fair value of the stock as of March 31, 2014.  As of December 31, 2015, SJW Corp. held 259,151 shares 
of California Water Service Group.  The stock is carried at quoted market price with changes in unrealized gain or loss reported, 
net of tax, as a component of other comprehensive income. 

As of December 31, 2015 and 2014, fair value of the Company's investment in California Water Service Group was 

$6,030 and $6,378, respectively, and would be categorized as Level 1 of the fair value hierarchy.

Note 14. 

Subsequent Event

On February 22, 2016, SJW Corp. entered into a purchase and sale agreement with the GBRA, pursuant to which the 
Company agreed to sell all of its equity interests in its wholly-owned subsidiary Texas Water Alliance Limited to GBRA for 
$31,000 in cash.  Pursuant to the purchase and sale agreement, (i) upon closing of the transaction, GBRA will hold back $3,000 
in the payment of the total purchase price and (ii) such holdback amount, subject to reductions under certain circumstances, 
shall be paid to SJW Corp. four years following the closing.  The purchase and sale agreement is subject to specified closing 
conditions, including without limitation the completion of a financing by GBRA to fund the purchase price.

69

 
 
 
Note 15. 

Unaudited Quarterly Financial Data

Summarized quarterly financial data is as follows:

March

June

September

December

2015 Quarter Ended

Operating revenue........................................................ $
Operating income.........................................................

Net income ...................................................................

Comprehensive income................................................

Earnings per share:

—Basic ......................................................................

—Diluted ...................................................................

Market price range of stock:

—High .......................................................................

—Low........................................................................

Dividend per share .......................................................

62,112

12,805

4,695

4,680

0.23

0.23

35.60

30.09

0.20

72,402

17,210

7,461

7,206

0.37

0.36

31.68

28.68

0.19

82,955

18,260

9,534

9,422

0.47

0.46

31.36

27.73

0.20

87,613

31,685

16,192

16,368

0.79

0.79

33.68

27.64

0.19

March

June

September

December

2014 Quarter Ended

Operating revenue........................................................ $
Operating income.........................................................

Net income ...................................................................

Comprehensive income................................................

Earnings per share:

—Basic ......................................................................

—Diluted ...................................................................

Market price range of stock:

—High .......................................................................

—Low........................................................................

Dividend per share .......................................................

54,596

6,054

906

1,104

0.04

0.04

30.40

27.84

0.19

70,356

12,121

6,846

5,716

0.34

0.34

29.51

25.87

0.19

125,430

59,114

38,366

38,095

1.90

1.88

28.25

25.64

0.19

69,286

15,589

5,688

6,021

0.28

0.28

32.87

26.77

0.19

70

 
 
 
 
 
SJW CORP.

FINANCIAL STATEMENT SCHEDULE

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

Years ended December 31, 2015, 2014 and 2013 

(in thousands)

Schedule II

Description
Allowance for doubtful accounts:

Balance, beginning of period .................................................................. $
Charged to expense .................................................................................

Accounts written off................................................................................

Recoveries of accounts written off..........................................................
Balance, end of period ............................................................................ $

Reserve for litigation and claims:

Balance, beginning of period .................................................................. $
Charged to expense .................................................................................

Revision to accrual, due to settlements ...................................................

Payments .................................................................................................
Balance, end of period ............................................................................ $

2015

2014

2013

150

392
(528)
186

200

133

213
(16)
(67)
263

170

321
(489)
148

150

136

71
(5)
(69)
133

225

442
(620)
123

170

281

220
(105)
(260)
136

Item 9. 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. 

Controls and Procedures

Evaluation of Disclosure Control and Procedures

SJW Corp.'s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated 

the effectiveness of SJW Corp.'s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the 
Securities Exchange Act of 1934, as amended, the “Exchange Act”), as of the end of the period covered by this report.  Based 
on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that SJW Corp.'s disclosure controls and 
procedures as of the end of the period covered by this report have been designed and are functioning effectively to provide 
reasonable assurance that the information required to be disclosed by SJW Corp. in the reports that it files or submits under the 
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, 
and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief 
Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required 
disclosure.  SJW Corp. believes that a control system, no matter how well designed and operated, cannot provide absolute 
assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all 
control issues and instances of fraud, if any, within a company have been detected.

Management's Report on Internal Control over Financial Reporting

SJW Corp.'s management is responsible for establishing and maintaining an adequate internal control structure over 

financial reporting and for an assessment of the effectiveness of internal control over financial reporting, as such items are 
defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Management has utilized the criteria established in “Internal Control-Integrated Framework (2013)” issued by the 

Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of internal control over 
financial reporting.

SJW Corp.'s management has performed an assessment of the effectiveness of internal control over financial reporting 

as of December 31, 2015.  Based on this assessment, management has concluded SJW Corp.'s internal control over financial 
reporting as of December 31, 2015 is effective.

71

KPMG LLP has audited the effectiveness of the Company's internal control over financial reporting as of December 31, 

2015.  Its report is included in Item 8 of this report.

Changes in Internal Controls

There has been no change in internal control over financial reporting during the fourth fiscal quarter of 2015 that has 

materially affected, or is reasonably likely to materially affect, the internal controls over financial reporting of SJW Corp.

Item 9B. 

Other Information

SJW Corp. intends to post information about the operating and financial performance of SJW Corp. and its subsidiaries 

on its web sites at www.sjwater.com and www.sjwcorp.com from time to time.

PART III

Item 10. 

Directors, Executive Officers and Corporate Governance

The information required by this item is contained in part under the caption “Officers of the Registrant” in Part I, 
Item 1, of this report, and in SJW Corp.'s Proxy Statement for its 2016 Annual Meeting of Shareholders to be held on April 27, 
2016 (the “2016 Proxy Statement”) under the captions “Proposal 1—Election of Directors” and “Section 16(a) Beneficial 
Ownership Reporting Compliance,” and is incorporated herein by reference.

Code of Ethics

SJW Corp. has adopted a code of ethics that applies to SJW Corp.'s Chief Executive Officer, Chief Financial Officer, 
Controller and all other officers.  The text of the code of ethics is available, free of charge, at the Company's website at http://
www.sjwcorp.com.  SJW Corp. intends to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an 
amendment to, or a waiver from, a provision of its code of ethics by posting such information on its website.

Corporate Governance Policies and Board Committee Charters

The Corporate Governance Policies and the charters for the board committees—the Audit Committee, Executive 
Compensation Committee, Real Estate Committee, and Nominating & Governance Committee—are available at the Company's 
website at http://www.sjwcorp.com.  Shareholders may also request a free hard copy of the Corporate Governance Policies and 
the charters from the following address and phone number:

SJW Corp.
110 West Taylor Street
San Jose, CA 95110
Attn: Corporate Secretary
Phone: 800-250-5147

Item 11. 

Executive Compensation

The information required by this item is contained in the 2016 Proxy Statement under the captions “Compensation of 

Directors,” “Executive Compensation and Related Information,” “Compensation Committee Interlocks and Insider 
Participation,” and “Committee Reports” and is incorporated herein by reference.

Item 12. 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is contained in the 2016 Proxy Statement under the captions “Security Ownership 

of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance under Equity Compensation Plans” 
and is incorporated herein by reference.

Item 13. 

Certain Relationships and Related Transactions, and Director Independence

The information required by this item is contained in the 2016 Proxy Statement under the caption “Certain 

Relationships and Related Transactions” and “Independent Directors” and is incorporated herein by reference.

Item 14. 

Principal Accountant Fees and Services

The information required by this item is contained in the 2016 Proxy Statement under the caption “Principal 

Independent Accountants' Fees and Services” and is incorporated herein by reference.

72

Item 15. 

Exhibits and Financial Statement Schedules

PART IV

(a)(1)    Financial Statements

Report of Independent Registered Public Accounting Firm.............................................................................................

Consolidated Balance Sheets as of December 31, 2015 and 2014 ...................................................................................

Consolidated Statements of Comprehensive Income for the Years ended December 31, 2015, 2014 and 2013 .............

Consolidated Statements of Changes in Shareholders' Equity for the Years ended December 31, 2015, 2014 and 
2013 ..................................................................................................................................................................................

Consolidated Statements of Cash Flows for the Years ended December 31, 2015, 2014 and 2013 ................................

Notes to Consolidated Financial Statements ....................................................................................................................

(a)(2)    Financial Statement Schedule

Valuation and Qualifying Accounts and Reserves, Years ended December 31, 2015, 2014 and 2013

Page

38

39

41

42

43

44

71

All other schedules are omitted as the required information is inapplicable or the information is presented in the 

consolidated financial statements or related notes.

(a)(3)    Exhibits required to be filed by Item 601 of Regulation S-K.

See Exhibit Index located immediately following this Item 15.

The exhibits filed herewith are attached hereto (except as noted) and those indicated on the Exhibit Index which are not 

filed herewith were previously filed with the Securities and Exchange Commission as indicated.

73

 
Exhibit No.

Description

EXHIBIT INDEX

3.1

3.2

3.3

3.4

4

4.1

4.2

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

Restated Articles of Incorporation of SJW Corp. Incorporated by reference to Exhibit 3.1 to Form 10-K for
year ended December 31, 2001.

Certificate of Amendment of the Restated Articles of Incorporation of SJW Corp., as filed with the Secretary of
State of the State of California on February 22, 2006. Incorporated by reference to Exhibit 3.1 to Form 8-K
filed on February 27, 2006.

By-Laws of SJW Corp., as amended on July 28, 2010. Incorporated by reference to Exhibit 3.1 to Form 8-K
filed on July 29, 2010.

Amended and Restated By-Laws of SJW Corp. effective as of January 28, 2015. Incorporated by reference to
Exhibit 3.1 to Form 8-K filed on January 30, 2015.

Instruments Defining the Rights of Security Holders, including Indentures: No current issue of the registrant's
long-term debt exceeds 10 percent of its total assets. SJW Corp. hereby agrees to furnish upon request to the
Commission a copy of each instrument defining the rights of holders of unregistered senior and subordinated
debt of the Company.

Indenture dated as of June 1, 2010 between San Jose Water Company and Wells Fargo Bank, National
Association. Incorporated by reference to Exhibit 4.1 to Form 10-Q for the quarter ended June 30, 2010.

4.35% Senior Notes due June 30, 2021.  SJW Corp. agrees to furnish a copy of such Senior Notes to the
Commission upon request.

Water Supply Contract dated January 27, 1981, between San Jose Water Works and the Santa Clara Valley
Water District, as amended. Incorporated by reference to Exhibit 10.1 to Form 10-K for the year ended
December 31, 2001.

Limited Partnership Agreement of 444 West Santa Clara Street, L.P., entered into as of September 2, 1999,
between SJW Land Company and Toeniskoetter & Breeding, Inc. Development. Incorporated by reference to
Exhibit 10.18 to Form 10-Q for the quarter ended September 30, 1999.

Grantor Trust Agreement by and between San Jose Water Company and Wells Fargo Bank, National
Association dated November 2, 2012. Incorporated by reference as Exhibit 10.4 to Form 10-K for the year
ended December 31, 2012.

Credit Agreement dated March 1, 2012 by and between SJW Corp., SJW Land Company and Wells Fargo
Bank, National Association and Promissory Note dated March 1, 2012.  Incorporated by reference as Exhibit
10.1 to Form 8-K filed on March 7, 2012.

First Amendment to Credit Agreement by and between SJW Corp., SJW Land Company and Wells Fargo
Bank, National Association dated January 11, 2013. Incorporated by reference as Exhibit 10.10 to Form 10-K
for the year ended December 31, 2012.

Second Amendment to Credit Agreement dated as of June 23, 2014 between SJW Corp., SJW Land Company
and Wells Fargo Bank, National Association, and Revolving Line of Credit Note dated June 23, 2014.
Incorporated by reference as Exhibit 10.2 to Form 8-K filed on June 25, 2014.

Third Amendment to Credit Agreement dated as of August 1, 2014 between SJW Corp., SJW Land Company
and Wells Fargo Bank, National Association. Incorporated by reference as Exhibit 10.4 to Form 10-Q filed for
the quarter ended June 30, 2014.

Credit Agreement dated March 1, 2012 by and between San Jose Water Company and Wells Fargo Bank,
National Association and Promissory Note dated March 1, 2012.  Incorporated by reference as Exhibit 10.2 to
Form 8-K filed on March 7, 2012.

First Amendment to Credit Agreement by and between San Jose Water Company and Wells Fargo Bank,
National Association dated January 11, 2013. Incorporated by reference as Exhibit 10.16 to Form 10-K for the
year ended December 31, 2012.

74

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

10.19

10.20

10.21

10.22

10.23

10.24

10.25

10.26

Second Amendment to Credit Agreement dated as of June 23, 2014 between San Jose Water Company and
Wells Fargo Bank, National Association, and Revolving Line of Credit Note dated June 23, 2014. Incorporated
by reference as Exhibit 10.1 to Form 8-K filed on June 25, 2014.

Third Amendment to Credit Agreement dated as of August 1, 2014 between San Jose Water Company and
Wells Fargo Bank, National Association. Incorporated by reference as Exhibit 10.2 to Form 10-Q filed for the
quarter ended June 30, 2014.

Loan Agreement dated as of June 1, 2010 between the California Pollution Control Financing Authority and
San Jose Water Company. Incorporated by reference to Exhibit 10.3 to Form 10-Q for the quarter ended
June 30, 2010.

Bond Purchase agreement dated June 9, 2010 among Goldman, Sachs & Co., the Treasurer of the State of
California and the California Pollution Control Financing Authority and approved by San Jose Water
Company. Incorporated by reference to Exhibit 10.4 to Form 10-Q for the quarter ended June 30, 2010.

Note Agreement between SJW Corp. and the Prudential Insurance Company of America, dated June 30, 2011.
Incorporated by reference as Exhibit 10.3 to Form 8-K filed on July 7, 2011.

Note Agreement between San Jose Water Company and John Hancock Life Insurance Company (U.S.A.) and
its affiliate, dated January 24, 2014. Incorporated by reference as Exhibit 10.1 to Form 8-K filed on January
29, 2014.

Form of Letter Amendment to SJW Corp. Director Pension Plan. Incorporated by reference as Exhibit 10.25 to
Form 10-K for the year ended December 31, 2007. (2)

San Jose Water Company Executive Supplemental Retirement Plan, as amended and restated effective January
1, 2012. Incorporated by reference as Exhibit 10.20 to Form 10-K for the year ended December 31, 2011. (2)

San Jose Water Company Cash Balance Executive Supplemental Retirement Plan as amended and restated
effective January 1, 2012.  Incorporated by reference as Exhibit 10.23 to Form 10-K for the year ended
December 31, 2011. (2)

First Amendment to San Jose Water Company's Cash Balance Executive Supplemental Retirement Plan
effective as of October 30, 2013. Incorporated by reference as Exhibit 10.15 to Form 10-K for the year ended
December 31, 2013. (2)

Second Amendment to San Jose Water Company's Cash Balance Executive Supplemental Retirement Plan
effective as of January 31, 2014. Incorporated by reference as Exhibit 10.2 to Form 8-K filed on January 30,
2014. (2)

SJW Corp. Long-Term Incentive Plan, as amended and restated on January 30, 2013 effective as of April 24,
2013. Incorporated by reference as Exhibit 10.2 to Form 10-Q for the quarter ended June 30, 2013. (2)

SJW Corp. Long-Term Incentive Plan, as amended and restated on July 29, 2015.  Incorporated by reference as
Exhibit 10.1 to Form 10-Q filed for the quarter ended September 30, 2015. (2)

Chief Executive Officer Employment Agreement amended and restated, effective January 1, 2008.
Incorporated by reference to Exhibit 10.9 to Form 10-K for the year ended December 31, 2008. (2)

First Amendment, effective as of January 1, 2010, to the Chief Executive Officer Employment Agreement
amended and restated effective January 1, 2008. Incorporated by reference to Exhibit 10.1 to Form 8-K filed
on December 18, 2009. (2)

Second Amendment dated January 26, 2010 to the Chief Executive Officer Employment Agreement amended
and restated effective January 1, 2008. Incorporated by reference to Exhibit 10.11 to Form 10-K for the year
ended December 31, 2009. (2)

Amendment, effective as of July 30, 2014, to the Amended and Restated Employment Agreement of W.
Richard Roth, together with Exhibit A (Form of Restricted Stock Unit Issuance Agreement - Service Award),
Exhibit B (Form of Restricted Stock Unit Issuance Agreement - TSR Award), and Exhibit C (Form of
Restricted Stock Unit Issuance Agreement - ROE Award). Incorporated by reference as Exhibit 10.1 to Form 8-
K filed on August 1, 2014. (2)

75

10.27

10.28

10.29

10.30

10.31

10.32

10.33

10.34

10.35

10.36

10.37

10.38

10.39

10.40

10.41

10.42

10.43

10.44

10.45

10.46

Offer Letter to Mr. James P. Lynch dated September 22, 2010 and accepted September 27, 2010. Incorporated
by reference to Exhibit 10.1 to Form 8-K filed on October 1, 2010. (2)

Offer Letter to Andrew F. Walters. Incorporated by reference as Exhibit 10.1 to Form 8-K filed on January 30,
2014. (2)

Offer Letter to Mr. Andrew Gere.  Incorporated by reference as Exhibit 10.1 to the Form 10-Q filed for the
quarter ended June 30, 2015. (2)

Standard Form of Stock Option Agreement, as adopted by SJW Corp. Board of Directors on April 29, 2003.
Incorporated by reference to Exhibit 10.22 to Form 10-Q for the quarter ended June 30, 2003. (2)

SJW Corp. Executive Officer Short-Term Incentive Plan, as amended and restated on January 30, 2013
effective as of April 24, 2013. Incorporated by reference as Exhibit 10.1 to Form 10-Q for the quarter ended
June 30, 2013. (2)

SJW Corp. Executive Severance Plan, as amended and restated, effective January 1, 2010 and amended
effective October 26, 2010. Incorporated by reference as Exhibit 10.23 to Form 10-K for the year ended
December 31, 2010. (2)

San Jose Water Company Special Deferral Election Plan, as amended and restated, effective January 1, 2013.
Incorporated by reference as Exhibit 10.36 to Form 10-K for the year ended December 31, 2012. (2)

SJW Corp. Amended and Restated Deferred Restricted Stock Program, effective January 1, 2008. Incorporated
by reference as Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2008. (2)

SJW Corp. Deferral Election Program for Non-Employee Board Members, as amended and restated effective
October 30, 2013. Incorporated by reference as Exhibit 10.32 to Form 10-K for the year ended December 31,
2013. (2)

Form of Restricted Stock Unit Award Agreement for non-employee Board Members. Incorporated by reference
as Exhibit 10.3 to Form 10-Q for the quarter ended June 30, 2013. (2)

Formulaic Equity Award Program for Non-Employee Board Members. Incorporated by reference as Exhibit
10.34 to Form 10-K for the year ended December 31, 2013. (2)

SJW Corp. Director Compensation and Expense Reimbursement Policies, amended and restated effective
January 1, 2014. Incorporated by reference as Exhibit 10.36 to Form 10-K for the year ended December 31,
2013. (2)

Restricted Stock Unit Issuance Agreement, amended and restated, effective as of July 1, 2008. Incorporated by
reference as Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 2008. (2)

Deferred Restricted Stock Award Agreement, amended and restated, as of October 22, 2008. Incorporated by
reference as Exhibit 10.21 to Form 10-K for the year ended December 31, 2008. (2)

Chief Executive Officer Restricted Stock Unit Issuance Agreement, amended and restated effective
October 22, 2008. Incorporated by reference as Exhibit 10.25 to Form 10-K for the year ended December 31,
2008. (2)

Form of Chief Executive Officer Restricted Stock Unit Issuance Agreement. Incorporated by reference as
Exhibit 10.30 to Form 10-K for the year ended December 31, 2009. (2)

Form of Chief Executive Officer Restricted Stock Unit Issuance Agreement. Incorporated by reference as
Exhibit 10.31 to Form 10-K for the year ended December 31, 2009. (2)

Form of Chief Executive Officer Restricted Stock Unit Issuance Agreement. Incorporated by reference as
Exhibit 10.49 to Form 10-K for the year ended December 31, 2011. (2)

Form of Restricted Stock Unit Issuance Agreement. Incorporated by reference as Exhibit 10.34 to Form 10-K
for the year ended December 31, 2009. (2)

Form of Restricted Stock Unit Issuance Agreement.  Incorporated by reference as Exhibit 10.53 to Form 10-K
for the year ended December 31, 2011. (2)

76

10.47

10.48

10.49

10.50

10.51

10.52

10.53

21.1

23

31.1

31.2

32.1

32.2

Form of Restricted Stock Unit Issuance Agreement (ROE Goal). Incorporated by reference as Exhibit 10.52 to
Form 10-K filed for the year ended December 31, 2014. (2)

Performance Goals for the Chief Executive Officer 2013 Fiscal Year Bonus. Incorporated by reference as
Exhibit 10.61 to Form 10-K for the year ended December 31, 2012. (2)

Performance Goals for the Chief Executive Officer 2014 Fiscal Year Bonus. Incorporated by reference as
Exhibit 10.58 to Form 10-K for the year ended December 31, 2013. (2)

Performance Goals for the Chief Executive Officer 2015 Fiscal Year Bonus. Incorporated by reference as
Exhibit 10.55 to Form 10-K for the fiscal year ended December 31, 2014. (2)

Performance Goals for the Chief Executive Officer 2016 Fiscal Year Bonus. (1)(2)

Form of Indemnification Agreement between SJW Corp. and officers. Incorporated by reference as Exhibit
10.37 to Form 10-K for the year ended December 31, 2009. (2)

Form of Indemnification Agreement between SJW Corp. and Board members. Incorporated by reference as
Exhibit 10.38 to Form 10-K for the year ended December 31, 2009. (2)

Subsidiaries of SJW Corp. filed as Exhibit 21.1 to Form 10-K for the year ended December 31, 2009.

Consent of Independent Registered Public Accounting Firm. (1)

Certification Pursuant to Rule 13a-14(a)/15d-14(a) by President and Chief Executive Officer. (1)

Certification Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial Officer and Treasurer. (1)

Certification Pursuant to 18 U.S.C. Section 1350 by President and Chief Executive Officer, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)

Certification Pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer and Treasurer, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002. (1)

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

(1)   Filed currently herewith.

(2)   Management contract or compensatory plan or agreement.

77

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Date: February 25, 2016

By

/s/ W. Richard Roth

SJW CORP.

W. RICHARD ROTH,
President, Chief Executive Officer
and Chairman of the Board
(Principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following 

persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

Date: February 25, 2016

By

By

By

By

By

By

By

By

By

By

By

78

/s/ W. Richard Roth

W. RICHARD ROTH,
President, Chief Executive Officer
and Chairman of the Board
(Principal executive officer)

/s/ James P. Lynch

JAMES P. LYNCH,
Chief Financial Officer and Treasurer
(Principal financial officer)

/s/ Wendy Avila-Walker

WENDY AVILA-WALKER,
Controller
(Principal accounting officer)

/s/ Katharine Armstrong

KATHARINE ARMSTRONG,
Member, Board of Directors

/s/ Walter J. Bishop

WALTER J. BISHOP,
Member, Board of Directors

/s/ Mark L. Cali

MARK L. CALI,
Member, Board of Directors

/s/ Douglas R. King

DOUGLAS R. KING,
Member, Board of Directors

/s/ Daniel B. More

DANIEL B. MORE,
Member, Board of Directors

/s/ Ronald B. Moskovitz
RONALD B. MOSKOVITZ,
Member, Board of Directors

/s/ George E. Moss

GEORGE E. MOSS,
Member, Board of Directors

/s/ Robert A. Van Valer
ROBERT A. VAN VALER,
Member, Board of Directors

 
 
Consent of Independent Registered Public Accounting Firm 

Exhibit 23

The Board of Directors

SJW Corp.:

We consent to the incorporation by reference in the registration statements (Nos. 333-105010 and 333-195796) on Form 
S-8 of SJW Corp. of our report dated February 25, 2016, with respect to the consolidated balance sheets of SJW Corp 
as of December 31, 2015 and 2014, and the related consolidated statements of comprehensive income, changes in 
shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2015, and the 
related financial statement schedule and the effectiveness of internal control over financial reporting as of December 
31, 2015, which report appears in the December 31, 2015 annual report on Form 10-K of SJW Corp.

Santa Clara, California
February 25, 2016

/s/ KPMG LLP

CERTIFICATIONS

Exhibit 31.1

I, W. Richard Roth, certify that:

1.    I have reviewed this Annual Report on Form 10-K of SJW Corp. (the “registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a 
material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly 

present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the 
periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls 
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as 
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 

designed under our supervision, to ensure that material information relating to the registrant, including its consolidated 
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being 
prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial 

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting 
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 

our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this 
report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has 
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control 

over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons 
performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over 

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and 
report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant 

role in the registrant’s internal control over financial reporting.

Date: February 25, 2016

/s/ W. Richard Roth
W. RICHARD ROTH
President, Chief Executive Officer
and Chairman of the Board
(Principal executive officer)

CERTIFICATIONS

Exhibit 31.2

I, James P. Lynch, certify that:

1.    I have reviewed this Annual Report on Form 10-K of SJW Corp. (the “registrant”);

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a 
material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly 

present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the 
periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls 
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as 
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 

designed under our supervision, to ensure that material information relating to the registrant, including its consolidated 
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being 
prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial 

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting 
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 

our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this 
report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has 
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control 

over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons 
performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over 

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and 
report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant 

role in the registrant’s internal control over financial reporting.

Date: February 25, 2016

/s/ James P. Lynch
JAMES P. LYNCH
Chief Financial Officer and Treasurer
(Principal financial officer)

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1

In connection with the Annual Report of SJW Corp. (the “Company”) on Form 10-K for the year ended December 31, 
2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, W. Richard Roth, President, 
Chief Executive Officer and Chairman of the Board of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted 
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge on the date hereof:

(1) 

(2) 

the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 
1934; and

the information contained in the Report fairly presents, in all material respects, the financial condition and 
results of operations of the Company.

/s/ W. Richard Roth
W. RICHARD ROTH
President, Chief Executive Officer
and Chairman of the Board
(Principal executive officer)
February 25, 2016

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

In connection with the Annual Report of SJW Corp. (the “Company”) on Form 10-K for the year ended December 31, 

2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James P. Lynch, Chief 
Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 
Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge on the date hereof:

(1) 

(2) 

the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 
1934; and

the information contained in the Report fairly presents, in all material respects, the financial condition and 
results of operations of the Company.

/s/ James P. Lynch
JAMES P. LYNCH
Chief Financial Officer and Treasurer
(Principal financial officer)
February 25, 2016

FINANCIA L HIGHLI GHTS

(cid:53)(cid:44)(cid:57)(cid:2)(cid:37)(cid:81)(cid:84)(cid:82)(cid:16)(cid:2)(cid:67)(cid:80)(cid:70)(cid:2)(cid:85)(cid:87)(cid:68)(cid:85)(cid:75)(cid:70)(cid:75)(cid:67)(cid:84)(cid:75)(cid:71)(cid:85)

15.2

0.69

0.71

0.73

0.75

0.78

8.0

8.3

7.4

10.2

2.56

1.86

1.12

1.20

1.13

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

1
1
0
2

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

Rate of return on average equity (% ) 

Divid en ds   pa id  per   sh a re  ($)

B a s ic   e ar n in g s   p er   s h are  ($ )

SH AREHOLDERS’ CALENDAR

(cid:53)(cid:69)(cid:74)(cid:71)(cid:70)(cid:87)(cid:78)(cid:71)(cid:2)(cid:81)(cid:72)(cid:2)(cid:67)(cid:80)(cid:86)(cid:75)(cid:69)(cid:75)(cid:82)(cid:67)(cid:86)(cid:71)(cid:70)(cid:2)(cid:70)(cid:75)(cid:88)(cid:75)(cid:70)(cid:71)(cid:80)(cid:70)(cid:2)(cid:70)(cid:71)(cid:69)(cid:78)(cid:67)(cid:84)(cid:67)(cid:86)(cid:75)(cid:81)(cid:80)(cid:14)(cid:2)(cid:84)(cid:71)(cid:69)(cid:81)(cid:84)(cid:70)(cid:14)(cid:2)(cid:67)(cid:80)(cid:70)(cid:2)(cid:82)(cid:67)(cid:91)(cid:79)(cid:71)(cid:80)(cid:86)(cid:2)(cid:70)(cid:67)(cid:86)(cid:71)(cid:85)(cid:2)(cid:72)(cid:81)(cid:84)(cid:2)(cid:20)(cid:18)(cid:19)(cid:24)

            DECLARATION DATES   

      RECORD DATES 

               PAYMENT DATES

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:44)(cid:67)(cid:80)(cid:87)(cid:67)(cid:84)(cid:91)(cid:2)(cid:20)(cid:25)(cid:2)

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:35)(cid:82)(cid:84)(cid:75)(cid:78)(cid:2)(cid:20)(cid:25)(cid:2) (cid:2)

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:44)(cid:87)(cid:78)(cid:91)(cid:2)(cid:20)(cid:25)(cid:2) (cid:2)

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:49)(cid:69)(cid:86)(cid:81)(cid:68)(cid:71)(cid:84)(cid:2)(cid:20)(cid:24)(cid:2)

(cid:2)

(cid:2)(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:40)(cid:71)(cid:68)(cid:84)(cid:87)(cid:67)(cid:84)(cid:91)(cid:2)(cid:26)(cid:2)

(cid:2)

(cid:2)(cid:2)(cid:47)(cid:67)(cid:91)(cid:2)(cid:27)(cid:2) (cid:2)

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:35)(cid:87)(cid:73)(cid:87)(cid:85)(cid:86)(cid:2)(cid:26)(cid:2)

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:48)(cid:81)(cid:88)(cid:71)(cid:79)(cid:68)(cid:71)(cid:84)(cid:2)(cid:25)(cid:2)

(cid:2)

(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)(cid:2)

(cid:2)

(cid:2)

(cid:2)(cid:2)(cid:2)(cid:47)(cid:67)(cid:84)(cid:69)(cid:74)(cid:2)(cid:19)

(cid:2)(cid:2)(cid:2)(cid:44)(cid:87)(cid:80)(cid:71)(cid:2)(cid:19)

(cid:2)(cid:2)(cid:2)(cid:53)(cid:71)(cid:82)(cid:86)(cid:71)(cid:79)(cid:68)(cid:71)(cid:84)(cid:2)(cid:19)

(cid:2)(cid:2)(cid:2)(cid:38)(cid:71)(cid:69)(cid:71)(cid:79)(cid:68)(cid:71)(cid:84)(cid:2)(cid:19)

TRANSFER AGENT (f or inquiries an d cha n ges in  sh ar eho ld er  ac c ounts )

(cid:35)(cid:79)(cid:71)(cid:84)(cid:75)(cid:69)(cid:67)(cid:80)(cid:2)(cid:53)(cid:86)(cid:81)(cid:69)(cid:77)(cid:2)(cid:54)(cid:84)(cid:67)(cid:80)(cid:85)(cid:72)(cid:71)(cid:84)(cid:2)(cid:8)(cid:2)(cid:54)(cid:84)(cid:87)(cid:85)(cid:86)(cid:2)(cid:37)(cid:81)(cid:79)(cid:82)(cid:67)(cid:80)(cid:91)(cid:14)(cid:2)(cid:46)(cid:46)(cid:37)

(cid:53)(cid:74)(cid:67)(cid:84)(cid:71)(cid:74)(cid:81)(cid:78)(cid:70)(cid:71)(cid:84)(cid:2)(cid:53)(cid:71)(cid:84)(cid:88)(cid:75)(cid:69)(cid:71)(cid:85)(cid:2)(cid:38)(cid:75)(cid:88)(cid:75)(cid:85)(cid:75)(cid:81)(cid:80)

(cid:24)(cid:20)(cid:18)(cid:19)(cid:2)(cid:19)(cid:23)(cid:86)(cid:74)(cid:2)(cid:35)(cid:88)(cid:71)(cid:80)(cid:87)(cid:71)(cid:14)(cid:2)(cid:36)(cid:84)(cid:81)(cid:81)(cid:77)(cid:78)(cid:91)(cid:80)(cid:14)(cid:2)(cid:48)(cid:59)(cid:2)(cid:2)(cid:19)(cid:19)(cid:20)(cid:19)(cid:27)

(cid:54)(cid:71)(cid:78)(cid:71)(cid:82)(cid:74)(cid:81)(cid:80)(cid:71)(cid:28)(cid:2)(cid:10)(cid:26)(cid:18)(cid:18)(cid:11)(cid:2)(cid:27)(cid:21)(cid:25)(cid:15)(cid:23)(cid:22)(cid:22)(cid:27)

(cid:57)(cid:71)(cid:68)(cid:85)(cid:75)(cid:86)(cid:71)(cid:28)(cid:2)(cid:2)(cid:89)(cid:89)(cid:89)(cid:16)(cid:67)(cid:79)(cid:85)(cid:86)(cid:81)(cid:69)(cid:77)(cid:16)(cid:69)(cid:81)(cid:79)

ANNU AL MEETING

(cid:54)(cid:74)(cid:71)(cid:2)(cid:35)(cid:80)(cid:80)(cid:87)(cid:67)(cid:78)(cid:2)(cid:47)(cid:71)(cid:71)(cid:86)(cid:75)(cid:80)(cid:73)(cid:2)(cid:81)(cid:72)(cid:2)(cid:53)(cid:74)(cid:67)(cid:84)(cid:71)(cid:74)(cid:81)(cid:78)(cid:70)(cid:71)(cid:84)(cid:85)(cid:2)(cid:81)(cid:72)(cid:2)(cid:53)(cid:44)(cid:57)(cid:2)(cid:37)(cid:81)(cid:84)(cid:82)(cid:16)(cid:2)(cid:75)(cid:85)(cid:2)(cid:85)(cid:69)(cid:74)(cid:71)(cid:70)(cid:87)(cid:78)(cid:71)(cid:70)(cid:2)(cid:72)(cid:81)(cid:84)(cid:2)(cid:57)(cid:71)(cid:70)(cid:80)(cid:71)(cid:85)(cid:70)(cid:67)(cid:91)(cid:14)(cid:2)(cid:35)(cid:82)(cid:84)(cid:75)(cid:78)(cid:2)(cid:20)(cid:25)(cid:14)(cid:2)(cid:20)(cid:18)(cid:19)(cid:24)(cid:14)(cid:2)(cid:67)(cid:86)(cid:2)(cid:27)(cid:28)(cid:18)(cid:18)(cid:2)(cid:35)(cid:47)(cid:2)(cid:75)(cid:80)(cid:2)(cid:86)(cid:74)(cid:71)(cid:2)

(cid:37)(cid:81)(cid:84)(cid:82)(cid:81)(cid:84)(cid:67)(cid:86)(cid:75)(cid:81)(cid:80)(cid:111)(cid:85)(cid:2)(cid:82)(cid:84)(cid:75)(cid:80)(cid:69)(cid:75)(cid:82)(cid:67)(cid:78)(cid:2)(cid:81)(cid:72)(cid:386)(cid:69)(cid:71)(cid:2)(cid:67)(cid:86)(cid:2)(cid:19)(cid:19)(cid:18)(cid:2)(cid:57)(cid:16)(cid:2)(cid:54)(cid:67)(cid:91)(cid:78)(cid:81)(cid:84)(cid:2)(cid:53)(cid:86)(cid:84)(cid:71)(cid:71)(cid:86)(cid:14)(cid:2)(cid:53)(cid:67)(cid:80)(cid:2)(cid:44)(cid:81)(cid:85)(cid:71)(cid:14)(cid:2)(cid:37)(cid:67)(cid:78)(cid:75)(cid:72)(cid:81)(cid:84)(cid:80)(cid:75)(cid:67)(cid:2)(cid:2)(cid:27)(cid:23)(cid:19)(cid:19)(cid:18)(cid:16)
(cid:57)(cid:71)(cid:68)(cid:85)(cid:75)(cid:86)(cid:71)(cid:28)(cid:2)(cid:2)(cid:89)(cid:89)(cid:89)(cid:16)(cid:85)(cid:76)(cid:89)(cid:69)(cid:81)(cid:84)(cid:82)(cid:16)(cid:69)(cid:81)(cid:79)

(cid:41)(cid:71)(cid:80)(cid:71)(cid:84)(cid:67)(cid:78)(cid:2)(cid:49)(cid:72)(cid:386)(cid:69)(cid:71)(cid:28)(cid:2)(cid:10)(cid:22)(cid:18)(cid:26)(cid:11)(cid:2)(cid:27)(cid:19)(cid:26)(cid:15)(cid:25)(cid:20)(cid:21)(cid:19)

(cid:43)(cid:80)(cid:88)(cid:71)(cid:85)(cid:86)(cid:81)(cid:84)(cid:2)(cid:52)(cid:71)(cid:78)(cid:67)(cid:86)(cid:75)(cid:81)(cid:80)(cid:85)(cid:28)(cid:2)(cid:10)(cid:26)(cid:18)(cid:18)(cid:11)(cid:2)(cid:20)(cid:23)(cid:18)(cid:15)(cid:23)(cid:19)(cid:22)(cid:25)

DIR ECTORS
(cid:45)(cid:67)(cid:86)(cid:74)(cid:67)(cid:84)(cid:75)(cid:80)(cid:71)(cid:2)(cid:35)(cid:84)(cid:79)(cid:85)(cid:86)(cid:84)(cid:81)(cid:80)(cid:73)(cid:14)(cid:2)President(cid:14)(cid:2)(cid:48)(cid:67)(cid:86)(cid:87)(cid:84)(cid:67)(cid:78)(cid:2)(cid:52)(cid:71)(cid:85)(cid:81)(cid:87)(cid:84)(cid:69)(cid:71)(cid:85)(cid:2)(cid:53)(cid:81)(cid:78)(cid:87)(cid:86)(cid:75)(cid:81)(cid:80)(cid:85)(cid:14)(cid:2)(cid:46)(cid:46)(cid:37)
(cid:57)(cid:67)(cid:78)(cid:86)(cid:71)(cid:84)(cid:2)(cid:44)(cid:16)(cid:2)(cid:36)(cid:75)(cid:85)(cid:74)(cid:81)(cid:82)(cid:14)(cid:2)Principal(cid:14)(cid:2)(cid:57)(cid:67)(cid:78)(cid:86)(cid:71)(cid:84)(cid:2)(cid:36)(cid:75)(cid:85)(cid:74)(cid:81)(cid:82)(cid:2)(cid:37)(cid:81)(cid:80)(cid:85)(cid:87)(cid:78)(cid:86)(cid:75)(cid:80)(cid:73)
(cid:47)(cid:67)(cid:84)(cid:77)(cid:2)(cid:46)(cid:16)(cid:2)(cid:37)(cid:67)(cid:78)(cid:75)(cid:14)(cid:2)Court Attorney(cid:14)(cid:2)(cid:53)(cid:87)(cid:82)(cid:71)(cid:84)(cid:75)(cid:81)(cid:84)(cid:2)(cid:37)(cid:81)(cid:87)(cid:84)(cid:86)(cid:2)(cid:81)(cid:72)(cid:2)(cid:37)(cid:67)(cid:78)(cid:75)(cid:72)(cid:81)(cid:84)(cid:80)(cid:75)(cid:67)(cid:14)(cid:2)(cid:37)(cid:81)(cid:87)(cid:80)(cid:86)(cid:91)(cid:2)(cid:81)(cid:72)(cid:2)(cid:53)(cid:67)(cid:80)(cid:2)(cid:46)(cid:87)(cid:75)(cid:85)(cid:2)(cid:49)(cid:68)(cid:75)(cid:85)(cid:82)(cid:81)
(cid:38)(cid:81)(cid:87)(cid:73)(cid:78)(cid:67)(cid:85)(cid:2)(cid:52)(cid:16)(cid:2)(cid:45)(cid:75)(cid:80)(cid:73)(cid:14)(cid:2)Retired Audit Partner(cid:14)(cid:2)(cid:39)(cid:84)(cid:80)(cid:85)(cid:86)(cid:2)(cid:8)(cid:2)(cid:59)(cid:81)(cid:87)(cid:80)(cid:73)(cid:2)(cid:46)(cid:46)(cid:50)
(cid:38)(cid:67)(cid:80)(cid:75)(cid:71)(cid:78)(cid:2)(cid:36)(cid:16)(cid:2)(cid:47)(cid:81)(cid:84)(cid:71)(cid:14)(cid:2)Retired Managing Director and Global Head of Utility Mergers & Acquisitions(cid:14)(cid:2)(cid:47)(cid:81)(cid:84)(cid:73)(cid:67)(cid:80)(cid:2)(cid:53)(cid:86)(cid:67)(cid:80)(cid:78)(cid:71)(cid:91)
(cid:52)(cid:81)(cid:80)(cid:67)(cid:78)(cid:70)(cid:2)(cid:36)(cid:16)(cid:2)(cid:47)(cid:81)(cid:85)(cid:77)(cid:81)(cid:88)(cid:75)(cid:86)(cid:92)(cid:14)(cid:2)Counsel(cid:14)(cid:2)(cid:47)(cid:81)(cid:84)(cid:73)(cid:67)(cid:80)(cid:14)(cid:2)(cid:46)(cid:71)(cid:89)(cid:75)(cid:85)(cid:2)(cid:8)(cid:2)(cid:36)(cid:81)(cid:69)(cid:77)(cid:75)(cid:87)(cid:85)(cid:2)(cid:46)(cid:46)(cid:50)
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  SJW Corp. Mission
  SJW Corp. Mission

•   Maximize shareholder value by achieving strong earnings,

sustainable growth, and competitive total returns.

•   Provide high quality, low cost water and exceptional

service to customers.

•   Capitalize on water sector growth opportunities through

constructive business partnerships, disciplined management,

  and innovative applications of technology.

•   Foster a dynamic work environment that encourages
  personal and professional growth, embraces diversity,
  and promotes mutual trust and respect.

•   Conduct business with strict adherence to responsible
corporate governance and high ethical standards.

•   Be a committed corporate citizen through community
involvement, steadfast environmental stewardship,

  and an enduring dedication to excellence.

S J W C o r p .

110 W. Taylor Street, San Jose CA 95110 | (408) 918-7231 | www.sjwcorp.com