SJW (US:SJW)2021-07-30 21:45Financial Data and Key Metrics Changes - Second quarter revenue was $152.2 million, a $5 million or 3.4% increase over the second quarter of 2020 revenue of $147.2 million [25] - Net income for the second quarter was $20.8 million or $0.69 per diluted share, compared to $19.7 million or $0.69 per diluted share for the second quarter of 2020 [26] - Year-to-date revenue was $267 million, a 2% increase over the same period last year, with net income of $23.4 million or $0.79 per diluted share compared to $22.1 million or $0.77 per diluted share during the same period a year ago [32] Business Line Data and Key Metrics Changes - Increases in customer usage in California and Texas and authorized rate increases contributed to quarterly operating results, partially offset by decreased availability of surface water supplies in California [24] - Water production expenses increased by $2.8 million in the second quarter, primarily due to the purchase of additional water supply necessary to replace low California surface water [27] - Other operating expenses increased by $5.6 million during the second quarter, mainly due to a rise in general and administrative expenses [29] Market Data and Key Metrics Changes - In California, a water shortage emergency was declared, prompting a request for a 15% mandatory conservation [16] - In Connecticut, the Public Utilities Regulatory Authority approved a conservation rate design, allowing for higher tariffs for residential customers using more than an average of 200 gallons per day [21] - The Connecticut PURA also approved a $5.2 million increase in annual revenues, representing about a 5.1% increase [44] Company Strategy and Development Direction - The company continues to execute its core growth strategy of investing in high-quality water systems to provide safe and reliable water service [41] - A capital program of approximately $100 million is anticipated for advanced metering infrastructure deployment over the next four years [43] - The company plans to file for interim rates effective January 1, 2022, pending the final decision on the general rate case [43] Management's Comments on Operating Environment and Future Outlook - Management noted the impact of extreme weather conditions on water resources, emphasizing the importance of conservation efforts [7][10] - The company expects to deliver authorized revenues for the rest of the year, providing a solid floor for conservation-related reductions in consumption [71] - Forecasted earnings remain within guidance of $1.85 to $2.05 per share, trending towards the lower half of the range due to regulatory outcomes [52] Other Important Information - The company is forming partnerships with community organizations to protect land and promote environmental sustainability [14][15] - A total of $53.4 million was added in company-funded utility plant in the second quarter of 2021, with total funded additions for the first half of the year reaching $100.1 million [36] - The company has $121.5 million available on bank lines of credit for short-term financing of utility plant additions and operating activities [39] Q&A Session Summary Question: Guidance clarification regarding earnings - Management confirmed that the guidance range of $1.85 to $2.05 per share is based on all earnings, not just ongoing [70] Question: Impact of Connecticut rate case outcome on regulatory strategy - Management indicated a potential shift towards more frequent filings for lower amounts in Connecticut, rather than waiting longer periods [80]