SJW (US:SJW)2025-10-28 21:28Financial Performance - H2O America's consolidated net income for Q3 2025 was $45,132, a 17% increase from $38,652 in Q3 2024[107]. - For the nine months ended September 30, 2025, consolidated net income reached $86,358, up approximately 22% from $71,047 in the same period of 2024[107]. - Total operating revenue for H2O America in Q3 2025 was $240,550, up 7% from $225,063 in Q3 2024; for the nine months, it was $606,404, a 10% increase from $550,619[108][109]. - H2O America generated cash flows from operations of $181,283 for the nine months ended September 30, 2025, an increase of $27,217 from the same period in 2024[151]. Revenue and Expenses - Operating revenue for Water Utility Services in Q3 2025 was $236,222, a 7% increase from $220,938 in Q3 2024; for the nine months, it was $596,052, a 10% increase from $537,899[108][109]. - Operating expenses for Water Utility Services in Q3 2025 were $172,178, a 6.9% increase from $161,929 in Q3 2024; for the nine months, they were $449,185, up 8.9% from $411,959[111]. - Water production expenses increased by $2,614 (1%) in Q3 2025 compared to Q3 2024, and by $20,186 (4%) for the nine months[111]. - The effective consolidated income tax rates were 11% for Q3 2025, compared to 5% for Q3 2024, reflecting a higher pre-tax income in 2025[130]. Capital Expenditures and Investments - Water Utility Services' estimated capital expenditures for 2025 are approximately $473,000, with 74% or $351,069 already invested as of September 30, 2025[155]. - H2O America expects to incur approximately $1,900,000 in capital expenditures over the next five years, including $300,000 for PFAS treatment[156]. - The company is set to acquire regulated systems from Quadvest L.P. for $483,600 and systems from Quadvest Wholesale LLC for $56,400, enhancing operational scale in Houston, TX[102]. Rate Changes and Charges - SJWC filed for a rate increase of $21,318 or 3.91% effective January 1, 2025, as part of its General Rate Case[132]. - CWC's cumulative Water Infrastructure Conservation Adjustment (WICA) surcharge as of April 1, 2025, is 4.90%, collecting $6,000 annually[138]. - TWC's System Improvement Charge (SIC) increased annual water revenue by $3,915 and annual sewer revenue by $195, effective May 15, 2025[145]. - SJWC's groundwater extraction charge increased by 10% effective July 1, 2025, following a previous increase of approximately 13% in 2024[125]. - MWC's approved rate increase of $865 represents a 13.00% rise in annual revenues for the Camden Rockland division, effective July 1, 2025[148]. Water Supply and Production - The company serves approximately 407,000 water and wastewater service connections, serving a combined population of over 1.6 million people[96]. - Water supply conditions in California improved, with the State Water Project allocation increasing from 35% to 50% during 2025[113]. - As of September 30, 2025, SJWC's Lake Elsman was at 73% capacity with 1.5 billion gallons of water, which is approximately 168.1% of the five-year seasonal average[114]. - SJWC's Montevina Water Treatment Plant treated 1.8 billion gallons of water through Q3 2025, representing 103.4% of the five-year average[114]. - The total water supply for SJWC consists of 60% surface water and 40% from wells, with existing agreements to supplement supply until 2058[116]. - TWC expects to meet customer demand for the remainder of 2025 despite ongoing drought conditions, supported by a diversified water supply portfolio[118]. Stock and Debt - H2O America issued and sold 2,076,352 shares of common stock for net proceeds of $108,138 under the Equity Distribution Agreement for the nine months ended September 30, 2025[168]. - The average cost of borrowing on lines of credit decreased to 5.42% for the nine months ended September 30, 2025, compared to 6.53% in the same period in 2024[163]. - MWC issued a promissory note for $25,000 at a fixed interest rate of 6.70%, due on July 20, 2055[166]. - TWC issued a promissory note for $40,000 at a fixed interest rate of 6.68%, due on September 1, 2055[167]. Outlook and Ratings - Standard & Poor's revised the outlook for H2O America from stable to negative following the announcement of the Quadvest acquisition[170].