H2o America (HTO) risk factors, FY2024 10-K

Risks Relating To Regulatory and Legal Matters

1. 01Our business is regulated and may be adversely affected by changes to the regulatory environment
2. 02cover Water Utility Services’ operating expenses, capital requirements and SJW Group’s historical dividend rate. In addition, delays in approving rate increases may negatively affect our operating results and operating cash flows
3. 03Recovery of regulatory assets is subject to adjustment by regulatory agencies and could impact the operating results of Water Utility Services
4. 04Water Utility Services is subject to litigation risks concerning water quality and contamination
5. 05Water Utility Services is subject to possible litigation or regulatory enforcement action concerning water discharges to Waters of the United States (“WOTUS”)
6. 06Streamflow regulations in Connecticut could potentially impact our ability to serve our customers
7. 07New 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 expenditures
8. 08The impact of climate change and climate change laws and regulations have been passed and are being proposed that require compliance with greenhouse gas emissions standards, as well as other climate change initiatives, which could increase Water Utility Services’ operating costs and affect our business
9. 09We may be at risk for litigation under the principle of inverse condemnation for activities in the normal course of business that have a damaging effect on private property
10. 10Our water utility property and systems are subject to condemnation and other proceedings through eminent domain
11. 11Regulatory agencies may disagree with our valuation and characterization of certain of our assets

Risks Relating To Business Operations

1. 12The adequacy of our water supplies depends upon a variety of factors beyond our control. Interruption in the water supply may adversely affect our reputation and earnings
2. 13The concentration of our business in California and Connecticut makes us susceptible to adverse developments affecting these two states
3. 14We face competition from other utilities and service providers which might hinder our growth opportunities and mitigate our future profitability
4. 15Fluctuations in customer demand for water due to seasonality, restrictions of use, weather, and lifestyle can adversely affect operating results
5. 16A 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
6. 17Operating under contract water and waste systems subject us to risks
7. 18The necessity for ongoing physical and technological security has resulted, and may continue to result, in increased operating costs
8. 19A failure of our reservoirs, storage tanks, mains or distribution networks could result in losses and damages that may adversely affect our financial condition and reputation
9. 20Our business and financial performance may be adversely affected by high inflation
10. 21Work stoppages and other labor relations matters could adversely affect our business and operating results
11. 22If we fail to maintain safe work sites, we can be exposed to not only people impacts but also to financial losses such as penalties and other liabilities

Risks Relating To Our Finances and Corporate Matters

1. 23We may not have sufficient cash flow or capital resources to fund capital expenditures of our business, and our access to liquidity through the capital markets may be limited
2. 24We have incurred substantial additional indebtedness that may reduce our business and operational flexibility and increase our borrowing costs
3. 25SJW Group has committed to certain “ring-fencing” measures which will enhance CTWS’s separateness from SJW Group, which may limit SJW Group’s ability to influence the management and policies of CTWS (beyond the limitations included in other existing governance mechanisms)
4. 26Our 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
5. 27An impairment in the carrying value of our goodwill could negatively impact our consolidated results of operations and financial condition
6. 28Adverse investment returns and other factors may increase our pension costs and pension plan funding requirements
7. 29SJW Group’s dividend policy is subject to the discretion of our board of directors and may be limited by legal and contractual requirements
8. 30SJW Group is a holding company that depends on cash flow from its subsidiaries to meet its financial obligations and pay dividends on its common stock
9. 31Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also make it more difficult for stockholders to influence our policies or may reduce the rights of stockholders
10. 32We may not be able to maintain adequate insurance coverage at reasonable costs, or at all, to cover all losses incurred in our operations
11. 33We operate in areas subject to natural disasters, and we may be the target of terrorist activities and other physical threats
12. 34Our operations, liquidity, and earnings may be adversely affected by wildfires and risk of fire hazards
13. 35If our surface water supply is compromised, we may have to interrupt the use of that water supply until we are able to substitute the flow of water from an alternative water source
14. 36The price of our common stock may be volatile and may be affected by market conditions beyond our control
15. 37We must continue to attract and retain qualified technical and managerial personnel in order to succeed