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SJW Corp. Announces Second Quarter Financial Results

July 23, 2008

SJW Corp. (NYSE:SJW) today reported operating revenue for the second quarter ended June 30, 2008 of $60.1 million versus $55.1 million for the same period in 2007, an increase of $5.0 million. The increase in revenue was primarily attributable to cumulative rate increases and increased demand for water.

Net income was $6.3 million for the quarter. Diluted earnings per common share were $0.34, compared to $0.29 per share for the second quarter in 2007.

Water production costs for the second quarter of 2008 were $25.6 million versus $24.1 million for the same period in 2007, an increase of $1.5 million. Higher per-unit costs for purchased water and groundwater extraction charges contributed $1.6 million to the increase and higher demand contributed $488,000. These expenses were partially offset by $589,000 which was attributable to lower spending on purchased water due to increased surface water supply compared to a year ago.

Non-water production costs for the second quarter of 2008 were $20.6 million versus $19.1 million for the same period in 2007, an increase of $1.5 million. This was attributable to increases of $441,000 in other operating expenses, $383,000 in administrative and general expenses, $312,000 in depreciation expense, $277,000 in maintenance expenses and $67,000 in other expenses. Income tax expense increased $474,000 in the second quarter to $4.3 million in 2008 from $3.8 million in 2007 as a result of higher pre-tax income.

Year-to-date operating revenue increased by $7.2 million to $101.3 million from $94.1 million in the first six months of 2007. The increase was attributable to $5.9 million in cumulative rate increases, $646,000 in increased customer demand, $450,000 from new customers, and $122,000 from other sources.

Year-to-date net income was $9.0 million, compared to $7.5 million in 2007. Diluted earnings per common share were $0.48 in the first six months of 2008, compared to $0.41 per share for the same period in 2007.

Year-to-date water production costs increased to $39.1 million from $37.9 million in 2007. The increase was primarily attributable to $2.5 million in higher costs for groundwater extraction and purchased water, offset by $1.5 million due to increased surface water supply. Non-water production costs increased $2.3 million to $40.8 million from $38.5 million. Components of the increase included $762,000 in depreciation expense, $529,000 in maintenance expenses, $503,000 in other operating expenses, $432,000 in administrative and general expenses, and $75,000 in other expenses. Income tax expense increased $854,000 year-to-date due to higher income.

The Directors of SJW Corp. today declared a quarterly dividend on common stock of $0.16125 per share. The dividend is payable on September 1, 2008 to shareholders of record on August 4, 2008.

SJW Corp. is a publicly traded holding company headquartered in San Jose, California. SJW Corp. is the parent company of San Jose Water Company, SJWTX, Inc. and SJW Land Company. Together, San Jose Water Company and SJWTX, Inc. provide regulated and nonregulated water service to more than one million people in San Jose, California and nearby communities and in Canyon Lake, Texas. SJW Land Company owns and operates commercial buildings, has a majority interest in a real estate partnership, and has properties in the states of California, Florida, Connecticut, Texas, Arizona and Tennessee.

This press release may contain certain forward-looking statements including but not limited to statements relating to SJW Corp.’s plans, strategies, objectives, expectations and intentions, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of SJW Corp. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The results for a quarter are not indicative of results for a full year due to seasonality. Certain factors that may cause actual results, performance or achievements to materially differ are described in SJW Corp.’s most recent reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. SJW Corp. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 SJW Corp. Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (thousands of dollars, except per share data)  THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30,          JUNE 30, 2008     2007      2008     2007 ------------------------------------  OPERATING REVENUE                 $60,058   55,135   101,311   94,152 OPERATING EXPENSE: Operation: Purchased water                14,176   13,287    21,172   22,613 Power                           2,010    2,264     3,076    3,176 Groundwater extraction charge   9,417    8,555    14,833   12,121 Total production costs         25,603   24,106    39,081   37,910  Administrative and general      5,648    5,265    11,487   11,055 Other                           4,069    3,628     7,752    7,249 Maintenance                       3,272    2,995     6,316    5,787 Taxes, other than income          1,641    1,574     3,231    3,156 Depreciation & amortization       5,984    5,672    12,047   11,285 Income taxes                      4,309    3,835     6,095    5,241 --------- -------- -------- --------  Total operating expense        50,526   47,075    86,009   81,683 --------- -------- -------- --------  OPERATING INCOME                    9,532    8,060    15,302   12,469  Interest on long-term debt and other                        (3,254)  (2,654)   (6,306)  (4,941) --------- -------- -------- --------  NET INCOME                        $ 6,278    5,406     8,996    7,528 ========= ======== ======== ========  Other comprehensive income (loss), net                      (3,491)   ( 539)   (2,758)  (1,889) --------- -------- -------- --------  COMPREHENSIVE INCOME              $ 2,787    4,867     6,238    5,639 ========= ======== ======== ========   Earnings per share -Basic                         $  0.34     0.30      0.49     0.41 -Diluted                       $  0.34     0.29      0.48     0.41  Dividend per share                $  0.16     0.15      0.32     0.30  Weighted average shares outstanding - Basic                          18,403   18,325    18,390   18,313 - Diluted                        18,596   18,539    18,594   18,528 

 SJW Corp. Condensed Consolidated Balance Sheets (Unaudited) (thousands of dollars)  June 30   December 31 2008        2007 --------- ------------ ASSETS UTILITY PLANT: Land                                         $    5,704        5,695 Depreciable plant and equipment                 820,732      778,277 Construction in progress                         11,208       24,298 Intangible assets                                 8,040        8,040 --------- ------------ Total utility plant                          845,684      816,310 Less accumulated depreciation and amortization    265,194      255,025 --------- ------------ Net utility plant                            580,490      561,285 NONUTILITY PROPERTY:                               88,029       88,029 Less accumulated depreciation and amortization      4,672        3,834 --------- ------------ Net nonutility property                       83,357       84,195 CURRENT ASSETS: Cash and cash equivalents                         1,836        2,354 Accounts receivable and accrued unbilled utility revenue                        35,243       26,823 Prepaid expenses and other                        2,021        2,414 --------- ------------ Total current assets                           39,100       31,591 OTHER ASSETS: Investment in California Water Service Group     36,045       40,720 Unamortized debt issuance and reacquisition costs                             3,257        3,345 Regulatory assets                                44,088       44,712 Other                                             1,609        1,478 --------- ------------ 84,999       90,255 --------- ------------ $  787,946      767,326 ========= ============ CAPITALIZATION AND LIABILITIES CAPITALIZATION: Common stock                                 $    9,592        9,564 Additional paid-in capital                       19,738       18,723 Retained earnings                               198,302      195,331 Accumulated other comprehensive income           10,558       13,316 --------- ------------ Shareholders' equity                            238,190      236,934 Long-term debt, less current portion            217,033      216,312 --------- ------------ Total capitalization                          455,223      453,246 CURRENT LIABILITIES: Line of credit                                   15,500        5,000 Current portion of long-term debt                   643          622 Accrued groundwater extraction charge and purchased water                                 9,065        5,595 Purchased power                                   1,499          514 Accounts payable                                  6,194        9,268 Accrued interest                                  4,567        4,522 Accrued taxes                                       395          791 Other current liabilities                         7,154        6,642 --------- ------------ Total current liabilities                        45,017       32,954 DEFERRED INCOME TAXES AND CREDITS                  77,414       76,378 ADVANCES FOR CONSTRUCTION AND CONTRIBUTIONS IN AID OF CONSTRUCTION                          179,081      175,167 POSTRETIREMENT BENEFIT PLANS                       24,816       23,357 OTHER NONCURRENT LIABILITIES                        6,395        6,224 --------- ------------ $  787,946      767,326 ========= ============ 



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