On this page of StockholderLetter.com we present the latest annual shareholder letter from SJW GROUP — ticker symbol SJW. Reading current and past SJW letters to shareholders can bring important insights into the investment thesis.

 •  4/26/2024 Letter Continued (Full PDF)
 •  3/9/2023 SJW Stockholder Letter
 •  4/3/2023 SJW Stockholder Letter
 •  More "Water Utilities" Category Stockholder Letters
 •  SJW Benford's Law Stock Score = 94

SJW Shareholder/Stockholder Letter Transcript:

Connecticut Water   s Shenipsit Lake Reservoir in Tolland, Connecticut
ANNUAL REPORT
2023
Serving, Protecting, and Delivering Quality Water and Reliable Service

Dear Stockholder,
I am pleased to share that in 2023, SJW Group achieved
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weather patterns in our service areas. We exceeded our
initial 2023 guidance range for diluted earnings per share
(EPS), surpassed our ambitious 2023 capital expenditure
goals, and experienced notable customer growth. These
accomplishments are a testament to our talented team   s
ability to prepare for and constructively address challenges,
develop strong and trusted relationships with key
stakeholders, and successfully execute our proven growth and
investment strategy. Some of our 2023 milestones include:
    Investing $272 million in capital expenditures for initiatives
that improve reliability of service and quality of water while
also reducing future operating expenses.
    Strategically positioned the company to meet future
customer needs by adding ~3,000 new residential water
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new water supply for Texas Water. We continue to
experience accelerated growth in Texas, which had 12%
year-over-year growth in 2023 alone.
    Securing a Water Cost of Capital Mechanism-adjusted
return on equity of 10.01% for 2024 in California, less
20 basis points for the reimplementation of the Water
Conservation Memorandum Account (WCMA).
    Receiving requested reauthorizations of the WCMA and
Water Conservation Expense Memorandum Account from
the California Public Utilities Commission (CPUC) after
the end of the declared drought emergency in California,
resulting in nearly uninterrupted revenue protection in
2023. The reauthorized revenue protection mechanisms
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requested by our water wholesaler because of variability
in California precipitation and water storage restrictions
related to a seismic project at its largest reservoir. As a
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nearly uninterrupted revenue protection in 2023.
    Securing water infrastructure and conservation
adjustment increases of 4.29% in Connecticut, resulting in
a $4.6 million increase in annualized revenue. Connecticut
also remained a critical hub for our environmental, social,
and governance (ESG) activity, serving as a primary site
for our expanding solar initiatives as well as earning
prominent awards for being a top workplace and leader in
construction safety.
    Obtaining an annualized revenue increase of $2.6 million
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award-winning Saco Drinking Water Resource Center,
which went into service in 2022.
As climate change continues to drive more unpredictable and
extreme weather, SJW Group   s diversity of operations across
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helps balance risk and enables continued growth.
We value the trust you have placed in us to leverage our
business model and continue to execute against our proven
long-term growth strategy of investing in infrastructure,
pursuing opportunistic and accretive acquisitions, and
fostering constructive regulatory environments while seeking
timely rate recovery across our operations.
Investing Strategically
With the $272 million invested in 2023, we pursued
opportunities that best aligned with our values, including
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being a force for good in the community, and delivering the
highest-quality water and reliability to our customers and
local communities.
In 2023, we replaced 47 miles, or approximately 250,000
feet, of pipe across our operations to improve reliability
and reduce costly unscheduled repairs. We also reduced
our carbon footprint by deploying solar energy, increasing
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reduce water loss. Approximately 70% of these investments
will be recovered through forward-looking ratemaking or
infrastructure recovery mechanisms.
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about $1.6 billion in drinking water and wastewater
infrastructure, pending regulatory approval. Among other
initiatives, these investments will support:
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(PFAS)-impacted water sources to meet new U.S.
Environmental Protection Agency (EPA) standards;
    installation of smart meters in California to enhance
customer transparency, detect leaks earlier, and promote
water conservation;
    generation of solar power to reduce both greenhouse gas
emissions (GHG) and operating expenses; and
    upgrades of aging infrastructure to ensure generations of
our customers and communities have reliable service and
high-quality water.

A Force for Good
Expanding the Leadership Bench
SJW Group was recently recognized in the Newsweek
Excellence 1000 Index 2024. The venerable magazine   s
index ranks a select group of 1,000 companies globally,
spanning more than 25 industries and 100 categories, which
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responsibility. SJW Group is the highest-ranking water utility
company on the index.
At SJW Group, we owe our success to our dedicated
professionals across the business who work hard daily
to deliver on our mission of being a best-in-class water
utility for our customers, communities, environment,
employees, and you     our stockholders. This commitment
to our mission is necessary across all levels, including the
executive leadership team and the Board of Directors, which
is why I am pleased that we added three new talented
leaders to the bench: Denise Kruger joined the SJW Group
Board of Directors, Aundrea Williams joined as President of
the Texas Water Company, and we recently welcomed
Tanya Moniz-Witten as President of San Jose Water and
Nazan Riahei as Vice President of Corporate Communications.
We recently published an updated SJW Group Corporate
Sustainability Report, available at sjwgroup.com, which
details our progress across our ESG initiatives. Here, I
would like to highlight our work toward reducing carbon
emissions by 50% in 2030 (using a baseline of 2019), as this
commitment underscores our environmental stewardship
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each subsidiary is actively working to reduce their GHG
emissions through various measures including minimizing
energy use through identifying and implementing
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use of biodiesel fuel, and installing solar generation.
In addition to being a clean energy source, solar
generation is a critical element in our strategy to invest in
infrastructure that reduces operating costs for customers.
A 463-megawatt hour (MWh) photovoltaic solar installation
was recently completed at the company   s New England
headquarters in Clinton, Connecticut. Additional solar
projects are projected to be online in the coming years.
SJW Group is on track to have approximately 6,200 MWh
of solar generation capacity online by the end of 2024.
In 2024, we estimate that our state operations will use a
minimum of 40% and up to 100% renewable energy.
Delivering Value
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Group exceeded guidance expectations with $2.68 diluted
EPS in 2023, which was higher than the initial 2023 guidance
of $2.40 to $2.50, and exceeds diluted EPS in 2022 by 10%.
We delivered a 30% total return to shareholders over the
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coupled with a compound annual growth rate of 6.3% in our
annual cash dividend over the same period. In January 2024,
our board raised the quarterly dividend by an additional 5.3%
to $0.40, or $1.60 on an annualized basis. We have now paid
a dividend for more than 80 consecutive years.
Denise has been a leader in the drinking water industry for 30
years and has extensive water utility experience in business
expansion, environmental stewardship, asset management,
water resources, operations, regulatory compliance, and
corporate governance. Aundrea   s deep experience focusing
on a vast array of initiatives aimed primarily at developing
and executing regulatory and legislative strategy makes her
a true asset to our growing Texas service area. Tanya has
more than 20 years of utility experience and has led highperforming teams in California and Massachusetts, with a
strong commitment to employee safety and engagement.
Nazan has more than 17 years of legal and strategic
communications experience and possesses the skills to
enhance SJW Group   s communications, build upon our
meaningful connections with stakeholders, and elevate
the brand nationally. With the additions of Denise, Aundrea,
Tanya, and Nazan we have reinforced the breadth and depth
of our strong leadership bench.
I am proud of what we have accomplished as a company
together this past year. On behalf of the board and our
leadership team, we thank our employees, who are the
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in our future because of our ability to deliver value and
reliability and our commitment to protect and build
upon our trusted relationships with our customers, local
communities, and stockholders.
Sincerely,
Eric W. Thornburg
Chair, President, and CEO, SJW Group

SJW Group
Large National Pure-Play Water/Wastewater Provider With Deep Local Expertise,
Committed to Sustainably Serving Our Communities
2023 AT A GLANCE
Operations in
California, Connecticut,
Maine, and Texas
Serving
~1.5M
people
~406,000
service connections
808
water professionals
across 4 states
OUR CAPITAL AND CUSTOMERS
$272M
infrastructure
investment
47
miles of pipeline
replaced/installed
$5.5M
invested in solar
generation
~12%
YOY customer
growth in Texas
OUR COMMITMENT TO ESG
20%
GHG reduction achieved
2019 to 2022
$63M
spent with
diverse suppliers
56%
of Board of Directors
are women
$400K
charitable
donations
OUR FINANCIAL HIGHLIGHTS
80
years of
dividend payments
3
56
years of dividend
increases
21%
increase in
net utility plant
10.3%
earnings per share
increase

Financial Highlights
2023
2022
2021
$670,363
$84,987
$620,698
$73,828
$573,686
$60,478
$190,831
$166,199
$130,040
32,023
31,575
31,663
$2.69
$2.68
$1.52
30,802
30,305
30,424
$2.44
$2.43
$1.44
30,181
29,601
29,736
$2.04
$2.03
$1.36
$4,345
$1,527
$1,233
$272
$3,755
$1,492
$1,111
$219
$3,492
$1,493
$1,035
$234
(in thousands, except per share amounts and where otherwise noted)
Operating Results
Total operating revenues
Net income
Cash Flow Data
Net cash provided by operating activities
Common Stock Data
Shares of common stock outstanding
Year-end
Weighted average     basic
Weighted average     diluted
Basic earnings per share
Diluted earnings per share
Dividends paid per share
Balance Sheet Data (in millions)
Total assets
Long-term debt, less current maturities
Total SJW Group stockholders    equity
Capital expenditures
Net Utility Plant
Dividends Declared
Capital Expenditures
Diluted Earnings Per Share
(in millions)
(per share)
(dollars in millions)
(per share)
$3,171
$272
$2,630
2023
2022
$2,497
$1.52
2021
2023
$1.44
2022
$219
$1.36
2021
$2.68
$2.43
$234
$2.03
2023
2022
2021
2023
2022
2021
4



 4/26/2024 Letter Continued (Full PDF)