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<ACCESSION-NUMBER>0000950005-04-000264
<TYPE>10-K
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20031231
<FILING-DATE>20040312
<FILER>
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<CONFORMED-NAME>SJW CORP
<CIK>0000766829
<ASSIGNED-SIC>4941
<IRS-NUMBER>770066628
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
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<FILM-NUMBER>04667036
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<STREET1>374 W SANTA CLARA ST
<CITY>SAN JOSE
<STATE>CA
<ZIP>95196
<PHONE>4082797800
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<TYPE>10-K
<SEQUENCE>1
<FILENAME>p18246_form10k.txt
<DESCRIPTION>FORM 10-K
<TEXT>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             ---------------------

                                   FORM 10-K

|X|   ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
      ACT OF 1934

                   For the fiscal year ended December 31, 2003

                                      or

| |   TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

                 For the transition period          to

                         Commission file number 1-8966

                                    SJW CORP.
             (Exact name of registrant as specified in its charter)

          California                                        77-0066628
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)

374 West Santa Clara Street, San Jose, California             95196
    (Address of principal executive offices)                (Zip Code)

         Registrant's telephone number, including area code 408-279-7800

           Securities Registered Pursuant to Section 12(b) of the Act:

          Title of each class         Name of each exchange on which registered
          -------------------         -----------------------------------------
  Common Stock, Par Value $1.042             American Stock Exchange

        Securities Registered Pursuant to Section 12(g) of the Act: None
                                (Title of Class)

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during the  preceding  12 months,  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.

                               Yes |X|  No | |

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

      Indicate by check mark  whether  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No | |

      The aggregate market value of the common stock held by  non-affiliates  of
the registrant on June 30, 2003 was $183,036,524.

      Shares of common stock outstanding on March 7, 2004 - 9,135,441.

                       Documents Incorporated by Reference

      Portions of the Registrant's  Proxy Statement relating to the Registrant's
2004  Annual  Meeting  of  Shareholders,  to be  held on  April  29,  2004,  are
incorporated by reference into Part III of this Form 10-K where indicated.

================================================================================
<PAGE>

                                  EXHIBIT INDEX

      The Exhibit Index to this Form 10-K is located in Part IV, Item 15 of this
document.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                        Page
                                                                                                       -----
<S>      <C>                                                                                           <C>
                                                PART I

Forward-Looking Statements .........................................................................     2
Item 1.  Business ..................................................................................     2
         a. General Development of Business ........................................................     2
         b. Financial Information About Industry Segments ..........................................     3
         c. Narrative Description of Business ......................................................     4
            General ................................................................................     4
            Water Supply ...........................................................................     4
            Franchises .............................................................................     5
            Seasonal Factors .......................................................................     5
            Competition and Condemnation ...........................................................     5
            Environmental Matters ..................................................................     6
            Employees ..............................................................................     6
         d. Financial Information About Foreign and Domestic Operations and Export Sales ...........     8
Item 2.  Properties ................................................................................     8
Item 3.  Legal Proceedings .........................................................................     8
Item 4.  Submission of Matters to a Vote of Security Holders .......................................     8

                                               PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters .....................     9
         a. Market Information .....................................................................     9
         b. Holders ................................................................................     9
         c. Dividends ..............................................................................     9
Item 6.  Selected Financial Data ...................................................................    10
Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations .....    10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ................................    26
Item 8.  Financial Statements and Supplementary Data ...............................................    27
Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ......    47
Item 9A. Controls and Procedures ...................................................................    47

                                               PART III

Item 10. Directors and Executive Officers of the Registrant ........................................    47
Item 11. Executive Compensation ....................................................................    48
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
         Matters ...................................................................................    48
Item 13. Certain Relationships and Related Transactions ............................................    48

                                               PART IV

Item 14. Principal Accountant Fees and Services ....................................................    48
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ..........................    48
Exhibit Index ......................................................................................    50
Signatures .........................................................................................    53
</TABLE>


                                       1
<PAGE>

                                    PART I

Forward-Looking Statements

      This report contains forward-looking  statements within the meaning of the
federal  securities  laws  relating to future  events and future  results of SJW
Corp. and its subsidiaries  that are based on current  expectations,  estimates,
forecasts,  and projections about the industries in which SJW Corp. operates and
the beliefs and assumptions of the management of SJW Corp. Such  forward-looking
statements are identified by words such as "expect",  "estimate",  "anticipate",
"intends",  "seeks", "plans",  "projects",  variation of such words, and similar
expressions.  These  forward-looking  statements  are only  predictions  and are
subject to risks, uncertainties,  and assumptions that are difficult to predict.
Therefore,  actual  results  may  differ  materially  and  adversely  from those
expressed in any forward-looking statements.  Important factors that could cause
or  contribute  to such  differences  include,  but are not  limited  to,  those
discussed in this report  under the section  entitled  "Factors  That May Affect
Future Results" under Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of  Operations"  and  elsewhere,  and in other reports SJW
Corp. files with the Securities and Exchange Commission (SEC),  specifically the
most recent  reports on Form 10-Q and Form 8-K,  each as it may be amended  from
time to time.

      SJW Corp.  undertakes no  obligation  to update or revise the  information
contained in this  report,  including  the  forward-looking  statements  for any
reason.

Item 1. Business

(a) General Development of Business

      SJW Corp. (the  Corporation) was incorporated in California on February 8,
1985. SJW Corp. is a holding company with three subsidiaries.

      San Jose Water Company,  a wholly owned  subsidiary,  with headquarters at
374 West  Santa  Clara  Street in San Jose,  California  95196,  was  originally
incorporated  under the laws of the State of California in 1866. The company was
later reorganized and reincorporated as the San Jose Water Works. San Jose Water
Works was  reincorporated  in 1985 as San Jose Water Company,  with SJW Corp. as
the parent  holding  company.  San Jose Water Company is a public utility in the
business of providing water service to a population of approximately one million
people in an area comprising about 138 square miles in the metropolitan San Jose
area.  San Jose Water  Company's  web site can be accessed  via the  Internet at
http://www.sjwater.com.

      SJW Land Company, a wholly owned subsidiary, was incorporated in 1985. SJW
Land Company owns and operates parking facilities, which are located adjacent to
San  Jose  Water  Company's  headquarters  and  the HP  Pavilion  in  San  Jose,
California.  SJW Land Company also owns commercial buildings,  other undeveloped
land primarily in the San Jose Metropolitan  area, some properties in the states
of Florida and Connecticut,  and a 70% limited partnership  interest in 444 West
Santa Clara Street, L.P.

      Crystal Choice Water Service LLC, a 75%  majority-owned  limited liability
subsidiary  formed in  January  2001,  engages  in the sale and  rental of water
conditioning and purification equipment.

      SJW Corp.  also owns 1,099,952  shares of California  Water Service Group,
which represents  approximately 7% of its outstanding  shares as of December 31,
2003.

      Regulation and Rates

      San Jose Water Company's  rates,  service and other matters  affecting its
business are subject to regulation by the California Public Utilities Commission
(CPUC).

      Ordinarily,  there are two types of rate  increases,  general  and offset.
General rate case decisions  usually authorize an initial rate increase followed
by two annual  step  increases  designed to maintain  the  authorized  return on
equity over a three-year  period.  General rate  applications are normally filed
and  processed  during the last year  covered by the most recent rate case in an
attempt to avoid regulatory lag.


                                       2
<PAGE>

      The purpose of an offset  rate  increase is to  compensate  utilities  for
increases in specific  expenses,  such as those for purchased water, pump tax or
purchased power.

      Pursuant to Section  792.5 of the  California  Public  Utilities  Code,  a
balancing  account must be  maintained  for each expense item for which  revenue
offsets have been authorized  (e.g.,  purchased water,  purchased power and pump
tax).  The purpose of a balancing  account is to track the  under-collection  or
over-collection  associated with expense  changes and the revenue  authorized by
the CPUC to offset those expense  changes.  At December 31, 2003,  the balancing
account  had  a  net  over-collected   balance  of  $7,000,  which  included  an
under-collection  of  $382,000  accrued  prior  to  November  29,  2001  and  an
over-collection  of  $389,000  accrued  for the period  from  November  30, 2001
through  December 31, 2003.  The net  under-collected  balance of $262,000 as of
December 31, 2002 included the aforementioned  under-collection  of $382,000 and
an  over-collection  of $120,000  accrued for the period from  November 30, 2001
through December 31, 2002.

      On September  30, 2002,  the interim rate relief bill  (AB2838) was signed
into law.  The bill  allows for the  implementation  of interim  water  rates in
general rate cases when the CPUC fails to establish new rates in accordance with
the established rate case schedule.  The interim rates would be based on a water
company's  existing rates  increased for the amount of inflation  since the last
approved rate adjustment. The bill also allows for revenue true-up from the time
of the  implementation  of the interim rates to the time of the CPUC's  ultimate
decision in the rate case. In principle, this mechanism is designed to eliminate
the adverse  financial impact on water utilities caused by regulatory  delays in
general rate cases. The bill was codified as Public Utilities Code Section 455.2
and became  effective on January 1, 2003. Since a CPUC decision on the requested
rates on the General Rate Case  application  filed with the CPUC on May 23, 2003
has not been issued as of December 31, 2003, the CPUC has allowed San Jose Water
Company an interim rate increase of approximately 2% effective January 1, 2004.

      Please also see the heading "Factors That May Affect Future Results" under
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations".

(b) Financial Information about Industry Segments

      SJW Corp.  is a holding  company with three  subsidiaries:  San Jose Water
Company (SJWC),  a water utility  operation with both regulated and nonregulated
businesses,  SJW Land Company (SJW Land),  which operates parking facilities and
commercial  building  rentals,  and Crystal  Choice Water Service LLC (CCWS),  a
water  conditioning  and purification  equipment sale and rental  business.  The
tables below set forth information  relating to SJW Corp.'s operating  segments.
Included in the amounts set forth,  certain  assets,  revenue and expenses  have
been allocated. The total assets are net of accumulated depreciation.

<TABLE>
<CAPTION>
                                                 Year Ended December 31, 2003
                                                        (in thousands)
                                --------------------------------------------------------------
                                                 SJW                                    SJW
                                    SJWC        Land         CCWS         Corp.        Corp.
                                -----------   --------   ------------   ---------   ----------
<S>                             <C>           <C>        <C>            <C>         <C>
  Operating revenue .........    $146,132       2,374        1,226            -      149,732
  Net income (loss) .........      16,979       1,096         (182)*        784       18,677
  Total assets ..............     450,796      28,108          840       31,973      511,717
</TABLE>

<TABLE>
<CAPTION>
                                                 Year Ended December 31, 2002
                                                        (in thousands)
                                --------------------------------------------------------------
                                                 SJW                                    SJW
                                    SJWC        Land         CCWS         Corp.        Corp.
                                -----------   --------   ------------   ---------   ----------
<S>                             <C>           <C>        <C>            <C>         <C>
  Operating revenue .........    $143,092       1,860          700            -      145,652
  Net income (loss) .........      13,295         674         (350)*        613       14,232
  Total assets ..............     411,787      12,640          780       28,016      453,223
</TABLE>


                                       3
<PAGE>

<TABLE>
<CAPTION>
                                                 Year Ended December 31, 2001
                                                        (in thousands)
                                --------------------------------------------------------------
                                                 SJW                                    SJW
                                    SJWC        Land         CCWS         Corp.        Corp.
                                -----------   --------   ------------   ---------   ----------
<S>                             <C>           <C>        <C>            <C>         <C>
  Operating revenue .........    $134,047       1,752          284            -      136,083
  Net income (loss) .........      12,721         680         (483)*      1,099       14,017
  Total assets ..............     388,147      11,911          707       30,252      431,017
</TABLE>

------------
*     Before minority interest.

(c) Narrative Description of Business

      General

      The  principal  business  of  San  Jose  Water  Company  consists  of  the
production,  purchase,  storage,  purification,  distribution and retail sale of
water. San Jose Water Company provides water service to customers in portions of
the  cities  of  Cupertino  and San Jose and in the  cities of  Campbell,  Monte
Sereno,  Saratoga  and  the  Town  of Los  Gatos,  and  adjacent  unincorporated
territory,  all in the  County  of Santa  Clara in the State of  California.  It
distributes  water to  customers  in  accordance  with  accepted  water  utility
methods, which include pumping from storage and gravity feed from high elevation
reservoirs.

      San Jose Water Company also provides  nonregulated  water related services
under agreements with municipalities.  These nonregulated  services include full
water system operations, billings and cash remittances.

      In October 1997, San Jose Water Company commenced operation of the City of
Cupertino  municipal water system under terms of a 25-year lease.  The system is
adjacent  to  the  existing  San  Jose  Water  Company   service  area  and  has
approximately  4,200  service  connections.  Under terms of the lease,  San Jose
Water Company paid an up-front $6.8 million  concession  fee to the City that is
being  amortized  over the contract  term. San Jose Water Company is responsible
for all aspects of system operation including capital improvements.

      The operating results from the water business fluctuates  according to the
demand for water,  which is often  influenced  by seasonal  conditions,  such as
summer  temperatures or the amount and timing of precipitation in San Jose Water
Company's service area. Revenue, production costs and income are affected by the
changes in water sales and availability of surface water supply. Overhead costs,
such as payroll  and  benefits,  depreciation,  interest on  long-term  debt and
property taxes, remain fairly constant despite variations in the amount of water
sold. As a result,  earnings are highest in the higher use, warm weather  summer
months and lowest in the cool winter months.

     Water Supply

      San Jose Water Company's water supply consists of groundwater  from wells,
surface water from watershed run-off and diversion, and imported water purchased
from the Santa Clara Valley Water  District  (SCVWD) under the terms of a master
contract with SCVWD expiring in 2051. Purchased water provides approximately 40%
to 45% of San Jose Water Company's  annual  production.  Surface  supply,  which
during a year of  normal  rainfall  satisfy  about  6% to 8% of San  Jose  Water
Company's current annual needs, provides approximately 1% of its water supply in
a dry year and  approximately  14% in a wet year. In dry years,  the decrease in
water from surface  run-off and  diversion,  and the  corresponding  increase in
purchased and pumped water, increases production costs substantially.

      The pumps and motors at San Jose Water  Company's  groundwater  production
facilities are propelled by electric  power.  Over the last few years,  San Jose
Water  Company has  installed  standby  power  generators at 18 of its strategic
water  production  sites.  In addition,  the  commercial  office and  operations
control  centers  are  equipped  with  standby  generators  that allow  critical
distribution and customer service  operations to continue during a power outage.
The SCVWD has informed  San Jose Water  Company  that its filter  plants,  which
deliver  purchased  water to San Jose  Water  Company,  are also  equipped  with
standby  generators.  In the event of a power  outage,  San Jose  Water  Company
believes it will be able to prevent an  interruption of service to customers for
a limited  period by pumping water with its standby  generators and by using the
purchased water from SCVWD.


                                       4
<PAGE>

      Except  in a  few  isolated  cases  before  1989  when  service  had  been
interrupted or curtailed  because of power or equipment  failures,  construction
shutdowns,  or other operating  difficulties,  San Jose Water Company had not at
any prior time in its history  interrupted or imposed  mandatory  curtailment of
service to any type or class of  customer.  During  the  summer of 1989  through
March 1993, rationing was imposed intermittently on all customers at the request
of SCVWD.

      Groundwater in 2003 remained  comparable to the 30-year  normal level.  On
January  29,  2004,  the  SCVWD's  ten  reservoirs  were 46.7% full with  79,163
acre-feet of water in storage.  The rainfall  from July 2003 to January 2004 was
about the same in comparison to the 30-year average.  The delivery of California
and Federal  contract water to the SCVWD is expected to be met for the season to
date. San Jose Water Company  believes that its various  sources of water supply
are sufficient to meet customer demand for the remainder of the year.

      Rainfall at San Jose Water  Company's  Lake  Elsman was  measured at 19.71
inches for the season from July 1 through  December 31, 2003,  which is slightly
above the five-year average.

      While  the  water  supply  outlook  for  2004 is  good,  California  faces
long-term water supply  challenges.  San Jose Water Company  actively works with
SCVWD to meet the  challenges by continuing to educate  customers on responsible
water use practices and to conduct long-range water supply planning. Please also
see further discussion at "Factors That May Affect Future Results" under Item 7,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations".

      Franchises

      San Jose Water Company holds franchise rights, water rights, and necessary
rights-of-way in the communities it serves as it judges necessary to operate and
maintain its facilities in the public streets.

      Seasonal Factors

      Water sales are seasonal in nature.  The demand for water,  especially  by
residential customers, is generally influenced by weather conditions. The timing
of precipitation and climatic conditions can cause seasonal water consumption by
residential customers to vary significantly.

      Competition and Condemnation

      San Jose  Water  Company  is a public  utility  regulated  by the CPUC and
operates  within a service area  approved by the CPUC.  The laws of the State of
California  provide that no other  investor-owned  public utility may operate in
San Jose Water  Company's  service area without first  obtaining from the CPUC a
certificate of public  convenience and necessity.  Past experience  shows such a
certificate  will be issued only after  demonstrating  San Jose Water  Company's
service in such area is inadequate.

      California  law also provides  that  whenever a public  agency  constructs
facilities to extend  utility  service to the service area of a privately  owned
public utility (like San Jose Water Company), such an act constitutes the taking
of property and is conditioned upon payment of just  compensation to the private
utility.

      Under  the   constitution   and  statutes  of  the  State  of  California,
municipalities,  water  districts and other public agencies have been authorized
to engage in the  ownership and  operation of water  systems.  Such agencies are
empowered to condemn  properties  operated by privately  owned public  utilities
upon  payment of just  compensation  and are further  authorized  to issue bonds
(including  revenue  bonds) for the purpose of acquiring or  constructing  water
systems. To the company's  knowledge,  no municipality,  water district or other
public  agency has  pending  any  action to  condemn  any part of San Jose Water
Company's system.

      In January 2002, SJW Land Company entered into an Agreement for Possession
and Use (Agreement) with the Valley Transportation Agency (VTA) whereby SJW Land
Company has granted VTA an irrevocable right to possession and use of 1.23 acres
of the  company's  parking  lot  property  for the  development  of a light rail
station. VTA has adopted a resolution  authorizing a condemnation  proceeding to
acquire the land and has  deposited  $3.7  million in an escrow  account as fair
market  compensation.  SJW Land  Company  waived  the right to  challenge  VTA's
possession and use in any subsequent  eminent domain proceeding but reserved the
right to assert, and has disputed, the fair market value placed on the


                                       5
<PAGE>

land.  According  to  the terms of the Agreement, if a settlement is not reached
within  three  months of the execution of the Agreement, VTA can file an eminent
domain  complaint  to  acquire  title  to the parking lot property. On April 11,
2003,  VTA  filed  the eminent domain lawsuit. As a part of the proceedings, VTA
has  transferred  funds  from the escrow account into a court deposit account to
secure  its  ongoing  right  of  possession  for  construction of the light rail
station  pending  final litigation. Compensation for the taking of property will
be  determined by the court or by way of settlement between SJW Land Company and
VTA.  This  transaction  will  be  recorded  and  it is expected to result in an
increase  to  net income when the compensation issue is settled or a final court
order is rendered.

      Environmental Matters

      San Jose Water Company  maintains  procedures to produce  potable water in
accordance with all applicable county, state and federal environmental rules and
regulations.  Additionally,  San Jose Water Company is subject to  environmental
regulation by various other governmental authorities.

      In December 1998, the United States Environmental  Protection Agency (EPA)
established more stringent surface water treatment performance standards and new
drinking water standards for disinfection byproducts.  San Jose Water Company is
currently in compliance with both regulations, which became effective January 1,
2002.

      In January  2001,  EPA  finalized  new  regulations  revising  the primary
maximum contaminant level (MCL) for arsenic from 50 parts per billion (ppb) down
to 10 ppb. San Jose Water  Company has  monitored  its water supply  sources for
arsenic and is  currently in  compliance  with the new  regulations,  which will
become effective in 2006.

      Other state and local  environmental  regulations  apply to San Jose Water
Company's  operations and facilities.  These regulations relate primarily to the
handling, storage and disposal of hazardous materials. San Jose Water Company is
currently in compliance  with state and local  regulations  governing  hazardous
materials,  point and non-point source discharges, and the warning provisions of
the California  Safe Drinking Water and Toxic  Enforcement  Act of 1986.  Please
also see Part II, Item 7,  "Management's  Discussion  and  Analysis of Financial
Condition and Results of Operations".

      Employees

      As of December 31, 2003, San Jose Water Company had 301 employees, of whom
80 were executive, administrative or supervisory personnel, and of whom 221 were
members  of  unions.  San Jose  Water  Company  reached  a  two-year  collective
bargaining  agreement  with the  Utility  Workers of America,  representing  the
majority of  employees,  and the  International  Union of  Operating  Engineers,
representing  certain  employees  in the  engineering  department,  covering the
period  from  January  1, 2004  through  December  31,  2005.  Both  groups  are
affiliated with the AFL-CIO.  The agreement  includes  approximately 3% and 3.5%
wage   adjustments   for  union  workers  for  calendar  years  2004  and  2005,
respectively, with minor benefit modifications.


                                       6
<PAGE>

Executive Officers of the Registrant

<TABLE>
<CAPTION>
           Name              Age                        Offices and Experience
-------------------------   -----   -------------------------------------------------------------
<S>                         <C>     <C>
W.R. Roth ...............    51     SJW Corp. - President and Chief Executive Officer of the
                                    Corporation. Prior to becoming Chief Executive Officer in
                                    1999, he was President from October 1996, Vice President
                                    from April 1992 until October 1996. Mr. Roth has served as
                                    a director of SJW Corp., San Jose Water Company and SJW
                                    Land Company since 1994.
R.J. Balocco ............    54     San Jose Water Company - Vice President, Corporate
                                    Communications. Prior to becoming Vice President,
                                    Corporate Communications in 1995, he was Vice President,
                                    Administration from April 1992. Mr. Balocco has been with
                                    San Jose Water Company since 1982.
G.J. Belhumeur ..........    58     San Jose Water Company - Senior Vice President,
                                    Operations. Prior to becoming Sr. Vice President of
                                    Operations, he was Vice President of Operations since 1996.
                                    Mr. Belhumeur has been with San Jose Water Company since
                                    1970.
D. Drysdale .............    48     San Jose Water Company - Vice President, Information
                                    Services. Prior to becoming Vice President, Information
                                    Services in 1999, he was Director of Information Services
                                    from 1998 and Data Processing Manager since 1994. Mr.
                                    Drysdale joined San Jose Water Company in 1992.
J. Johansson ............    58     San Jose Water Company - Vice President, Human
                                    Resources. Prior to becoming Vice President, Human
                                    Resources in 1999, he was Director of Human Resources in
                                    1998. Prior to 1998 he was Personnel Manager. Mr.
                                    Johansson has been with San Jose Water Company since
                                    1976.
R.J. Pardini ............    58     San Jose Water Company - Vice President, Chief Engineer.
                                    Prior to becoming Vice President, Chief Engineer in 1996, he
                                    was Chief Engineer. Mr. Pardini has been with San Jose
                                    Water Company since 1987.
A. Yip ..................    50     SJW Corp. - Chief Financial Officer and Treasurer since
                                    October 1996, and Vice President, Finance of San Jose Water
                                    Company as of January 1999. Prior to Vice President,
                                    Finance, Ms. Yip served as Chief Financial Officer and
                                    Treasurer from October 1994 until December 1999. Ms. Yip
                                    has been with San Jose Water Company since 1986.
R.S. Yoo ................    53     San Jose Water Company - Senior Vice President,
                                    Administration from April 2003. Prior to April 2003, he was
                                    Vice President, Water Quality. Mr. Yoo has been with San
                                    Jose Water Company since 1985.
R.A. Loehr ..............    57     SJW Corp. and San Jose Water Company - Secretary. He
                                    has served as Secretary since March 1, 1998 and has been
                                    with San Jose Water Company since 1987 and serves as its
                                    attorney.
V.K. Wong ...............    34     San Jose Water Company - Controller. He has been with
                                    San Jose Water Company since December 16, 2002. He
                                    served as Director of Finance for Golden State Warriors
                                    from October 1998 until October 2002 and prior to October
                                    1998, Mr. Wong was a senior auditor for KPMG LLP.
</TABLE>


                                       7
<PAGE>

(d) Financial Information About Foreign and Domestic Operations and Export Sales

      Substantially,  all of SJW Corp.'s  revenue  and expense are derived  from
operations located in the County of Santa Clara in the State of California.

      SJW Corp.'s  Annual Reports on Form 10-K,  Quarterly  Reports on Form 10-Q
and Current  Reports on Form 8-K,  and  amendments  to these  reports,  are made
available free of charge through SJW Corp.'s website at  http://www.sjwater.com,
as soon as reasonably  practicable  after the Corporation  electronically  files
such material  with, or furnish such  material to, the  Securities  and Exchange
Commission.

Item 2. Properties

      The  properties of San Jose Water Company  consist of a unified  system of
water production,  storage,  purification and distribution located in the County
of Santa Clara in the State of California. In general, the property is comprised
of franchise rights, water rights, necessary rights-of-way,  approximately 7,000
acres  of land  held in fee  (which  is  primarily  non-developable  watershed),
impounding  reservoirs with a capacity of  approximately  2.256 billion gallons,
diversion facilities,  wells,  distribution storage of approximately 240 million
gallons and all water  facilities,  equipment  and other  property  necessary to
supply its customers.

      San Jose Water Company  maintains all of its  properties in good operating
condition in accordance  with customary  practice for a water utility.  San Jose
Water   Company's   well  pumping   stations  have  a  production   capacity  of
approximately  255 million  gallons per day and the present  capacity for taking
purchased water is approximately  172 million gallons per day. The gravity water
collection  system has a physical  delivery capacity of approximately 29 million
gallons per day.  During 2003, a maximum and average of 211 million  gallons and
132  million  gallons  of water per day,  respectively,  were  delivered  to the
system.

      San Jose Water Company holds all its principal  properties in fee, subject
to current tax and assessment liens, rights-of-way, easements, and certain minor
defects in title which do not materially affect their use.

      SJW Land Company owns  approximately  eight acres of property  adjacent to
San Jose Water Company's  general office  facilities,  approximately 28 acres of
property  in the states of  Florida  and  Connecticut,  and  approximately  five
undeveloped  acres of land and commercial  properties  primarily in the San Jose
metropolitan  area.  The majority of the land adjacent to San Jose Water Company
is used as surface  parking  facilities and generates  approximately  31% of SJW
Land Company's  revenue.  Under a ten-year  lease expiring  January 1, 2010, San
Jose Water Company  leased half of the office space of SJW Land  Company's  1265
South Bascom Avenue building as its engineering headquarters.  Approximately 20%
of SJW Land Company's  revenue is generated from this commercial  building.  SJW
Land Company has sold San Tomas station, a nonutility property in March 2003 and
subsequently  in April 2003,  reinvested the property sale proceeds by acquiring
two income  producing  properties  in the  States of  Connecticut  and  Florida.
Approximately  32% of SJW  Land's  revenue  is  generated  from these two income
producing  properties.  SJW Land  Company  also owns a 70%  limited  partnership
interest in 444 West Santa Clara Street, L.P., a real estate limited partnership
that owns and operates an office building.

Item 3. Legal Proceedings

      SJW Corp.  is subject to ordinary  routine  litigation  incidental  to its
business.  Other than as disclosed  regarding the eminent  domain  proceeding in
"Competition  and  Condemnation"  under Item 1,  "Business",  there are no other
pending legal proceedings to which the Corporation or any of its subsidiaries is
a party or to which any of its  properties  is the subject  that are expected to
have a  material  effect on the  Corporation's  financial  position,  results of
operations or cashflows.

Item 4. Submission of Matters to a Vote of Security Holders

      None.


                                       8
<PAGE>

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

(a) Market Information

      Exchange

      SJW Corp.'s  common stock is traded on the American  Stock  Exchange under
the symbol "SJW".

      Stock Split

      On  March  1,  2004,  SJW  Corp.  effected  a  three-for-one  split on the
Corporation's common stock for holders of record on February 10, 2004. The share
and  per  share  data  presented   herein  has  been  adjusted  to  reflect  the
aforementioned stock split.

      High and Low Sales Prices

      The information  required by this item as to the high and low sales prices
for SJW Corp.'s  common stock for each quarter in the 2003 and 2002 fiscal years
is  contained  in the  section  captioned  "Market  Price Range of Stock" in the
tables set forth in Note 15 of "Notes to Consolidated  Financial  Statements" in
Part II, Item 8.

(b) Holders

      There were 700 record  holders of SJW Corp.'s common stock on December 31,
2003.

(c) Dividends

      Quarterly  dividends  have been paid on SJW Corp.'s and its  predecessor's
common  stock  for 241  consecutive  quarters  and the  quarterly  rate has been
increased  during each of the last 36 years.  The  information  required by this
item as to the cash dividends paid on common stock in 2003 and 2002 is contained
in the section  captioned  "Dividends per share" in the tables set forth in Note
15 of "Notes to  Consolidated  Financial  Statements" in Part II, Item 8. Future
dividends will be determined by the Board of Directors  after  consideration  of
various financial, economic and business factors.


                                       9
<PAGE>

Item 6. Selected Financial Data

                          FIVE YEAR STATISTICAL REVIEW

                           SJW CORP. AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                              2003          2002         2001         2000         1999
                                                         -------------- ------------ ------------ ------------ -----------
<S>                                                      <C>            <C>          <C>          <C>          <C>
Consolidated Results of Operations (in thousands)
Operating revenue ......................................   $  149,732      145,652      136,083      123,157     117,001
Operating expense:
 Operation .............................................       88,241       89,137       84,156       76,622      69,264
 Maintenance ...........................................        7,724        7,866        7,090        6,881       6,638
 Taxes .................................................       15,588       14,078       11,770       11,496      12,713
 Depreciation and amortization .........................       15,225       14,013       13,240       11,847      10,235
                                                           ----------      -------      -------      -------     -------
   Total operating expense .............................      126,778      125,094      116,256      106,846      98,850
                                                           ----------      -------      -------      -------     -------
Operating income .......................................       22,954       20,558       19,827       16,311      18,151
Interest expense, other income and deductions ..........        4,277        6,326        5,810        5,646       2,267
                                                           ----------      -------      -------      -------     -------
Net income .............................................       18,677       14,232       14,017       10,665      15,884
Dividends paid .........................................        8,861        8,405        7,834        7,491       7,379
                                                           ----------      -------      -------      -------     -------
Invested in the business ...............................   $    9,816        5,827        6,183        3,174       8,505
                                                           ==========      =======      =======      =======     =======
Consolidated Per Share Data
Net income .............................................   $     2.04         1.56         1.53         1.17        1.73
Dividends paid .........................................   $     0.97         0.92         0.86         0.82        0.80
Shareholders' equity at year-end .......................   $    18.21        16.80        16.35        15.80       15.75
Consolidated Balance Sheet (in thousands)
Utility plant and intangible assets ....................   $  583,709      541,919      507,227      462,892     432,262
Less accumulated depreciation and amortization .........      174,985      161,576      149,721      139,396     129,828
                                                           ----------      -------      -------      -------     -------
   Net utility plant ...................................      408,724      380,343      357,506      323,496     302,434
                                                           ----------      -------      -------      -------     -------
Nonutility property ....................................       27,629       10,487       10,309        9,979      10,133
Total assets ...........................................      511,717      453,223      431,017      391,930     372,427
Capitalization:
 Shareholders' equity ..................................      166,368      153,499      149,354      144,325     143,894
 Long-term debt ........................................      139,614      110,000      110,000       90,000      90,000
                                                           ----------      -------      -------      -------     -------
   Total capitalization ................................   $  305,982      263,499      259,354      234,325     233,894
                                                           ==========      =======      =======      =======     =======
Other Statistics - San Jose Water Company
Customers at year-end ..................................      220,100      219,400      219,000      218,500     217,200
Average revenue per customer ...........................   $   664.99       652.79       612.78       556.99      534.98
Investment in utility plant per customer ...............   $    2,652        2,470        2,316        2,118       1,990
Miles of main at year-end ..............................        2,430        2,422        2,419        2,419       2,409
Water production (million gallons) .....................       49,593       52,068       52,122       52,021      51,166
Maximum daily production (million gallons) .............          211          216          199          217         207
Population served (estimate) ...........................      992,000      989,000      988,000      985,000     979,000
</TABLE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Description of the Business:

      SJW Corp. is a holding company with three subsidiaries.

      San Jose Water Company, a wholly owned subsidiary,  is a public utility in
the business of providing  water  service to a population of  approximately  one
million people in an area comprising  about 138 square miles in the metropolitan
San Jose area.

      San  Jose  Water  Company  is  a  publicly  traded   investor-owned  water
utilities. The United States water utility industry is largely fragmented and is
dominated by the municipal-owned water systems. Unlike


                                       10
<PAGE>

many   other  industries,  the  water  utility  is  regulated,  and  provides  a
life-sustaining  product.  This  makes  the  water  utilities  subject  to lower
business  cycle  risks  than non-regulated industries. Throughout the years, the
company  continued  to  invest  in utility plant, which reflected a diligent and
disciplined  approach  to  stewardship  of  the  water system. Additionally, the
company  has  continued  to expand its existing portfolio of non-regulated water
service contracts.

      SJW Land Company, a wholly owned subsidiary, owns and operates a 750-space
surface  parking  facility,  which is  located  adjacent  to the San Jose  Water
Company's  headquarters  and the HP Pavilion in San Jose,  California.  SJW Land
Company also owns commercial buildings,  other undeveloped land primarily in the
San Jose  Metropolitan  area, some other properties in the states of Florida and
Connecticut,  and a 70%  limited  partnership  interest  in 444 West Santa Clara
Street, L.P.

      SJW Land Company continued to develop its asset base into a relatively low
risk, moderately leveraged, diversified portfolio of income-producing properties
through  tax-advantaged  exchanges.  This provides  consistent  and  sustainable
earnings to the company.

      Crystal Choice Water Service LLC, a 75% owned limited liability subsidiary
formed in January 2001, engages in the sale and rental of water conditioning and
purification equipment.

      SJW Corp.  also owns 1,099,952  shares or  approximately  7% of California
Water Service Group as of December 31, 2003.

      On Janurary  29,  2004,  the Board of  Directors  of SJW Corp.  approved a
three-for-one split of its common stock. The trading price has subsequently been
adjusted  for three for one on March 2,  2004.  All share and per share data has
been adjusted to reflect the three-for-one stock split.

Critical Accounting Policies:

      SJW Corp.  has  identified  accounting  policies  delineated  below as the
policies  critical  to its  business  operations  and the  understanding  of the
results  of  operations.   The  preparation  of  financial  statements  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements, and revenues and
expenses  during  the  reporting  period.  SJW  Corp.  bases  its  estimates  on
historical  experience and on various other  assumptions that are believed to be
reasonable under the circumstances.  The impact and any associated risks related
to  these  policies  on  the  Corporation's  business  operations  is  discussed
throughout  "Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations" where such policies affect the Corporation's reported and
expected  financial  results.  For a detailed  discussion on the  application of
these  and other  accounting  policies,  see Note 1 of  "Notes  to  Consolidated
Financial  Statements".  The Corporation's  critical  accounting policies are as
follows:

      Balancing Account

      The California Public Utilities  Commission (CPUC) establishes a balancing
account  mechanism within its regulatory  regime. A separate  balancing  account
must be  maintained  for  each  offset  expense  item  (e.g.,  purchased  water,
purchased  power and pump tax).  The purpose of a balancing  account is to track
the under-collection or over-collection  associated with expense changes and the
revenue  authorized by the CPUC to offset those expense changes.  Since balances
are  being  tracked  and  have to be  approved  by the CPUC  before  they can be
incorporated into rates, San Jose Water Company has not recognized the balancing
account in its financial  statements.  The balancing account balance varies with
the seasonality of the water utility business such that during the summer months
when the demand for water is at its peak, the balancing account tends to reflect
an  under-collection,  while  during the winter  months when demand for water is
relatively lower, the balancing account tends to reflect an over-collection. Had
the  balancing  account been  recognized in San Jose Water  Company's  financial
statements, San Jose Water Company's retained earnings would be increased by the
amount of balancing account over-collection, as the case may be, or decreased by
the amount of balancing  account  under-collection,  less  applicable  taxes. At
December 31, 2003,  the balancing  account had a net  over-collected  balance of
$7,000, which included an under-collection of $382,000 accrued prior to November
29, 2001 and an over-collection of $389,000 accrued for the period from November
30, 2001 through December 31, 2003. The net-under-collected


                                       11
<PAGE>

balance  of  $262,000  as  of  December  31,  2002  included  the aforementioned
under-collection  of $382,000 and an over-collection of $120,000 accrued for the
period  from  November  30,  2001  through  December  31,  2002. Please also see
"Factors That May Affect Future Results".

      Accrued Unbilled Revenue

      San Jose Water  Company reads the majority of its  customers'  meters on a
bi-monthly  basis and records its revenue  based on its meter  reading  results.
Revenues  from the meter  reading  date to the end of the  accounting  period is
estimated based on historical usage patterns,  production  records and effective
tariff  rates.  The  estimate of the unbilled  revenue is a management  estimate
utilizing certain sets of assumptions and conditions which include the number of
days between  meter reads for each billing  cycle,  the  customers'  consumption
changes,  and San Jose Water  Company's  experiences in  unaccounted-for  water.
Actual results will differ from those estimates, which would result in operating
revenue  being  adjusted in the period  that the  revision to the San Jose Water
Company's  estimates is  determined.  As of December 31, 2003 and 2002,  accrued
unbilled  revenue was $6,205,000 and $6,605,000,  respectively.  Unaccounted for
water for 2003, 2002 and 2001 approximated 6.9%, 6.6% and 6.7%, respectively, as
a  percentage  of  production.  The  estimate  is based on the  results  of past
experience,  the trend and efforts in reducing  the  company's  unaccounted  for
water through mains replacement and lost water reduction programs. A 0.1% change
in unaccounted for water affects unbilled revenue by approximately $100,000.

      Recognition of Regulatory Assets and Liabilities

      Generally accepted  accounting  principles for water utilities include the
recognition  of regulatory  assets and  liabilities as permitted by SFAS No. 71,
"Accounting for the Effects of Certain Types of Regulation".  In accordance with
SFAS No. 71, San Jose Water Company  records  deferred  costs and credits on the
balance  sheet as  regulatory  assets and  liabilities  when it is probable that
these costs and credits will be recovered in the ratemaking  process in a period
different  from when the costs and credits were  incurred.  Accounting  for such
costs and credits is based on  management's  judgments  that it is probable that
these costs and credits are  recoverable  in the future  revenue of the San Jose
Water  Company  through  the  ratemaking  process.  The  regulatory  assets  and
liabilities  recorded  by  San  Jose  Water  Company  primarily  relate  to  the
recognition  of  deferred  income  taxes for  ratemaking  versus tax  accounting
purposes. The disallowance of any asset in future ratemaking purposes, including
the  deferred  regulatory  assets,  would  require  San Jose  Water  Company  to
immediately  recognize the impact of the costs for financial reporting purposes.
No disallowance had to be recognized at December 31, 2003 and December 31, 2002.
The net regulatory assets recorded by San Jose Water Company were $7,976,000 and
$6,013,000  as of December  31, 2003 and 2002,  respectively.  The  increase was
primarily due to recognition of asset retirement  obligations in accordance with
Statement of Financial  Accounting  Standards  (SFAS) No. 143,  "Accounting  for
Asset Retirement Obligations", which was adopted on January 1, 2003.

      Income Taxes

      SJW Corp.  estimates  its  federal and state  income  taxes as part of the
process of preparing the financial  statements.  The process involves estimating
the actual current tax exposure  together with assessing  temporary  differences
resulting  from different  treatment of items for tax and  accounting  purposes,
including  the  evaluation  of the  treatment  acceptable  in the water  utility
industry and its regulatory  agency.  These  differences  result in deferred tax
assets and  liabilities,  which are included within the balance sheet. If actual
results, due to changes in the regulatory  treatment,  or significant changes in
tax-related  estimates or assumptions or changes in law, differ  materially from
these estimates, the provision for income taxes will be materially impacted.

      Pension Accounting

      San  Jose  Water  Company  offers a  defined  benefit  plan,  Supplemental
Executive  Retirement  Plan and  certain  post-retirement  benefits  other  than
pensions to employees  retiring with a minimum level of service.  Accounting for
pensions  and  other  post-retirement  benefits  requires  an  extensive  use of
assumptions about the discount rate, expected return on plan assets, the rate of
future compensation increase received by the employees,  mortality, turnover and
medical costs. See assumptions and disclosures  detailed in Note 11 of "Notes to
Consolidated Financial Statements".


                                       12
<PAGE>

      San  Jose  Water  Company,  through  its  Retirement  Plan  Administrative
Committee  managed  by  the  representatives  from  the  unions  and  management
establishes  investment  guidelines with  specification that at least 30% of the
investments  are in bonds or cash.  As of  December  31,  2003,  the plan assets
consist of  approximately  22% bonds,  11% cash and 67%  equities.  Furthermore,
equities  are to be  diversified  by  industry  groups to  balance  for  capital
appreciation and income. In addition,  all investments are publicly traded.  San
Jose Water  Company uses an expected  rate of return on plan assets of 8% in its
actuarial  computation.  The  distributions of assets are not considered  highly
volatile  and  sensitive  to changes in market  rates and  prices.  Furthermore,
foreign assets are not included in the investment  profile and thus risk related
to foreign exchange fluctuation is eliminated.

      The  market  values  of the  plan  assets  are  marked  to  market  at the
measurement date. The investment trust assets suffered  unrealized market losses
in the three years prior to 2003.  As a result of this,  the pension  expense in
2003 included the  amortization  of unrealized  market losses on pension assets.
Unrealized  market  losses on  pension  assets are  amortized  over 14 years for
actuarial expense calculation purposes.  Market losses in 2002 increased expense
by approximately $1,131,000 in 2003, and similar market losses in 2001 increased
expense by approximately $700,000 in 2002.

      The  company  utilizes  Moody's  'A' and 'Aa' rated  bonds in  industrial,
utility and financial  sectors with an outstanding  amount of $1 million or more
in  determining  the discount rate used in  calculating  the  liabilities at the
measurement date. The composite discount rates used were 6.25% and 6.75% for the
years  ending  December  31,  2003 and  2002,  respectively.  As a result of the
decrease in discount rate used, the pension liability of SJW Corp. increased.

      Stock-Based Compensation Plans

         SJW Corp.  has a  stockholder-approved  long-term  incentive  plan that
allows granting of nonqualified  stock options,  performance shares and dividend
units.  Under the plan,  a total of 900,000  common  shares are  authorized  for
option awards and grants.  The  Corporation  has adopted  Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based  Compensation",
utilizing the  Black-Scholes  option-pricing  model to compute the fair value of
options at grant date as basis for the  stock-based  compensation  for financial
reporting purposes. The weighted-average  assumptions utilized include: expected
dividend  yield - 3.4%,  expected  volatility - 27%,  risk-free  interest rate -
2.86%, expected holding period - five years.

      In addition to the option grants,  SJW Corp. has granted  restricted stock
units to a key employee of the Corporation, which were valued at market price at
the date of grant.  The  Corporation  is  correspondingly  recognizing  the fair
market value of the restricted stock granted as compensation  expense,  over the
vesting period of three years.

      Additionally, the restricted stock units granted to the non-employee Board
members from the conversion of cash pension benefits were valued at market price
at the date of grant.  The Corporation is  correspondingly  recognizing the fair
market value of the unvested restricted stock granted as compensation  expenses,
over the vesting period of three years.


                                       13
<PAGE>

Results of Operations:

      Overview

      SJW Corp.'s  consolidated net income for twelve months ending December 31,
2003 was  $18,677,000,  compared to $14,232,000 for the same period in 2002. The
increase of $4,445,000 or 31% includes an after-tax gain of $3,030,000  from the
sale of a SJW Land  Company  property  in the first  quarter of 2003.  Favorable
weather conditions brought greater availability of the less costly surface water
supply to SJW Corp.  in 2003  resulting in reduced  water  production  costs and
increased net income.

      Operating Revenue

                         Consolidated Operating Revenue

<TABLE>
<CAPTION>
                                                      2003         2002        2001
                                                  -----------   ---------   ----------
                                                             (in thousands)
<S>                                               <C>           <C>         <C>
     San Jose Water Company ...................    $146,132      143,092     134,047
     SJW Land Company .........................       2,374        1,860       1,752
     Crystal Choice Water Service LLC .........       1,226          700         284
                                                   --------      -------     -------
                                                   $149,732      145,652     136,083
                                                   ========      =======     =======
</TABLE>

      The change in  consolidated  operating  revenue  was due to the  following
factors:

<TABLE>
<CAPTION>
                                                      2003 vs 2002           2002 vs 2001
                                                  Increase/(decrease)      Increase/(decrease)
                                                ------------------------   ------------------
                                                               (in thousands)
<S>                                             <C>            <C>         <C>           <C>
Utility:
   Consumption changes ......................     $ (5,117)        (3%)      $  (198)     -
   New customers increase ...................          353          -             89      -
   Rate increases ...........................        7,804          5%         9,154      7%
   Parking and lease ........................          514          -            108      -
   Crystal Choice Water Service LLC .........          526          1%           416      -
                                                  --------         --        -------     ---
                                                  $  4,080          3%       $ 9,569      7%
                                                  ========         ==        =======     ===
</TABLE>

2003 vs. 2002

      The revenue  increase  consists of $3,040,000 from San Jose Water Company,
and  $1,040,000  from SJW Land Company and Crystal Choice Water Service LLC. The
increase in revenue in San Jose Water Company was mainly due to cumulative  rate
increases  from  January  through  July 2003,  which was  partially  offset by a
decrease in customer  consumption.  The rate  increases  resulted  from San Jose
Water Company's latest general rate case application and an offset rate increase
for production costs  adjustments in July 2003. SJW Land Company's lease revenue
increased $514,000 primarily due to the addition of two commercial properties in
March  2003  to its  portfolio.  Crystal  Choice  Water  Service  LLC's  revenue
increased $526,000 over 2002 due to an improved marketing strategy.

2002 vs. 2001

      Consolidated operating revenue for 2002 increased by $9,569,000 or 7% over
2001 mainly due to two rate  increases  during the period from  January  through
July  2002.  This  resulted  from San Jose  Water  Company's  general  rate case
application  in April 2001 and an offset  rate  increase  for  production  costs
adjustments in July 2002. SJW Land Company's parking revenue increased  slightly
and is largely  due to the level of events and  activities  at the HP  Pavilion.
Crystal Choice Water Service LLC's revenue  increased  $416,000 over 2001 due to
an improved marketing strategy.


                                       14
<PAGE>

      The following table represents  operating revenues and number of customers
by customer group of San Jose Water Company:

                       Operating Revenue by Customer Group

                                              2003         2002        2001
                                          -----------   ---------   ----------
                                                     (in thousands)
     Residential and Business .........    $134,121      130,784     122,345
     Industrial .......................         980        1,060       1,017
     Public Authorities ...............       7,856        8,174       7,827
     Others ...........................       3,175        3,074       2,858
                                           --------      -------     -------
                                           $146,132      143,092     134,047
                                           ========      =======     =======


                               Number of Customers

                                             2003        2002        2001
                                          ---------   ---------   ----------
     Residential and Business .........    215,029     214,378     214,133
     Industrial .......................         91          92          98
     Public Authorities ...............      1,689       1,664       1,653
     Others ...........................      3,291       3,266       3,116
                                           -------     -------     -------
                                           220,100     219,400     219,000
                                           =======     =======     =======

Operating Expense

                         Operating Expense by Subsidiary

<TABLE>
<CAPTION>
                                                      2003         2002        2001
                                                  -----------   ---------   ----------
                                                             (in thousands)
<S>                                               <C>           <C>         <C>
     San Jose Water Company ...................    $123,422      122,074     114,285
     SJW Land Company .........................       1,463        1,318       1,303
     Crystal Choice Water Service LLC .........       1,408        1,052         778
     SJW Corp. ................................         485          650        (110)
                                                   --------      -------     -------
                                                   $126,778      125,094     116,256
                                                   ========      =======     =======
</TABLE>

      Operating expense increased $1,684,000 or 1% in 2003 compared to 2002, and
$8,838,000 or 8% in 2002 compared to 2001.


                                       15
<PAGE>

      The change in operating expense was due to the following:

<TABLE>
<CAPTION>
                                                                 2003 vs 2002           2002 vs 2001
                                                             Increase/(decrease)      Increase/(decrease)
                                                           ------------------------   ------------------
                                                                          (in thousands)
<S>                                                        <C>            <C>         <C>           <C>
Water Production costs:
   Increased surface water supply ......................     $ (3,879)        (3%)      $  (250)    -
   Usage and new customers .............................       (3,742)        (3%)         (382)    -
   Pump tax and purchased water price increase .........        4,269          4%         1,910     1%
   Energy prices .......................................         (696)        (1%)          344     -
                                                             --------         --        -------     ---
   Total water production costs ........................       (4,048)        (3%)        1,622     1%
Administrative and general .............................        2,736          2%         2,218     2%
Other operating expense ................................          416          -          1,141     1%
Maintenance ............................................         (142)         -            776     1%
Property taxes and other non-income taxes ..............          645          -             41     -
Depreciation and amortization ..........................        1,212          1%           773     1%
Income taxes ...........................................          865          1%         2,267     2%
                                                             --------         --        -------     ---
                                                             $  1,684          1%       $ 8,838     8%
                                                             ========         ==        =======     ===
</TABLE>

      The various components of operating expenses are discussed below.

      Water production costs

2003 vs. 2002

      Total water production costs decreased $4,048,000 in 2003 in comparison to
2002. The decrease in water production  costs was primarily  attributable to the
greater  availability  of the less costly surface water supply and a decrease in
customer consumption,  partially offset by increases in rates of purchased water
and pump tax from Santa Clara Valley Water District  (SCVWD) which  commenced in
July  2003.  Water  production  was  lower  than in 2002 by  2,475  MG  (million
gallons), and was consistent with the changes in customer consumption.

2002 vs. 2001

      The  increase  in  production  costs  in 2002 as  compared  to  2001,  was
primarily  due to an  increase  in SCVWD  water  production  rates (pump tax and
purchased  water)  effective  in July 2002,  and energy  cost  increases.  Water
production, however, was similar to 2001, and was consistent with the changes in
customer  consumption.  Additional  energy  costs were also  incurred due to the
scheduled  maintenance  of a SCVWD  treatment  plant,  altering  San Jose  Water
Company's distribution mix and optimal pumping pattern for 2002.

                                Sources of Supply

<TABLE>
<CAPTION>
                                                         2003       2002        2001
                                                      ---------   --------   ---------
                                                             (million gallons)
<S>                                                   <C>         <C>        <C>
     Purchased water ..............................     27,376     30,566     27,833
     Ground water .................................     16,168     18,430     21,368
     Surface water ................................      5,670      2,661      2,515
     Reclaimed water ..............................        379        411        406
                                                        ------     ------     ------
                                                        49,593     52,068     52,122
                                                        ======     ======     ======
     Average water production cost per MG .........    $ 1,209      1,229      1,196
                                                       =======     ======     ======
</TABLE>

      San Jose Water Company's water supply consists of groundwater  from wells,
surface water from watershed run-off and diversion, and imported water purchased
from the SCVWD. Surface water is the


                                       16
<PAGE>

least  expensive  source of water and increased reliance on surface water due to
its   greater   availability   in   2003   reduced  water  production  costs  by
approximately  $3,879,000.  In  2002,  however, San Jose Water Company purchased
more  imported  water than pumped water, which became more expensive as a result
of an increase in energy costs.

      Water production in 2003 decreased 2,475 million gallons from 2002. During
2003, the  availability of the surface water was  significantly  greater than in
2002.  Water  production  in 2002  decreased 54 million  gallons over 2001.  The
changes are consistent with the related operating expenses.

      Administrative, General and Other Operating Expense

      The following table represents  components of administrative,  general and
other operating expense:


               Administrative, General and Other Operating Expense

                                                  2003        2002       2001
                                               ----------   --------   --------
                                                        (in thousands)
     Source of supply ......................    $   704         732        757
     Water treatment and quality ...........      1,541       1,539      1,516
     Pumping ...............................      1,394       1,407      1,296
     Transmission and distribution .........      2,979       2,877      2,796
     Customer accounts .....................      4,403       4,186      3,599
     Administrative and general ............     16,202      13,466     11,248
     Others ................................      1,083         947        583
                                                -------      ------     ------
                                                $28,306      25,154     21,795
                                                =======      ======     ======

2003 vs. 2002

      Administrative,  general and other  operating  expense  included  expenses
incurred in maintaining the water system,  delivering the water supply,  testing
the  water  quality,  providing  customer  service  and  general  administration
functions.

      Administrative,  general  and other  operating  expense in 2003  increased
$3,152,000 or 13% compared to 2002.  The increases  consisted  primarily of: (1)
$1,326,000  in  salaries  and  wages in  accordance  with  bargaining  unit wage
escalation  which was incurred in all  departments,  (2)  $1,131,000  in pension
costs  primarily  as a result of the decline in the market  value of  retirement
trust assets, and (3) $980,000 in business and employee insurance costs.

2002 vs. 2001

      Administrative,  general and other  operating  expense in 2002,  increased
$3,359,000 or 15% compared to 2001. The increases included $1,273,000 in pension
costs  primarily  as a result of the decline in the market  value of  retirement
trust assets,  $1,308,000 in salaries and wages in  accordance  with  bargaining
unit wage escalation and new hires, $598,000 in additional professional fees and
$723,000 in business and employee insurance costs.

      Maintenance Expense

      Maintenance expense decreased $142,000 or 2% in 2003 compared to 2002, and
increased  $776,000 or 11% in 2002  compared to 2001.  The level of  maintenance
expense  varied  with the  level  of  public  work  projects  instituted  by the
government,  weather  condition  and the  timing  and  nature of the  facilities
failure occurrence.

      Property Taxes and Other Non-Income Taxes

      Property taxes and other non-income  taxes for 2003 increased  $645,000 in
comparison  to 2002 due  primarily  to the  receipt  of  $299,000  property  tax
adjustments in 2002 for the taxes on properties paid in prior years.


                                       17
<PAGE>

      Depreciation

      Depreciation  expense  increased  $1,212,000 and $773,000 in 2003 and 2002
respectively, due to higher investments in utility plants.

      Income Tax Expense

      Income tax expense for 2003 excluding taxes on gain on sale of property of
$2,105,000,  was  $10,523,000  compared to $9,658,000 for 2002,  representing an
increase of $865,000 or 9% due to higher earnings in 2003.

      The effective  consolidated income tax rates for 2003, 2002, and 2001 were
41%, 40%, and 35%, respectively. The 2001 effective tax rate was below the rates
for  the  subsequent   years  due  to  tax  benefits   associated  with  certain
merger-related  expenses.  Refer to Note 5 of "Notes to  Consolidated  Financial
Statements" for the  reconciliation of income tax expense to the amount computed
by applying the federal statutory rate to income before income taxes.

      Other Income and Expense

      Other income for the year ended  December  31, 2003  included an after-tax
gain of  $3,030,000  on the sale of a nonutility  property.  In April 2003,  SJW
Corp.  reinvested  the sale  proceeds in two income  properties in the states of
Connecticut and Florida.  Please refer to Note 13 "Sale of Nonutility  Property"
under Notes to Consolidated Financial Statements.

      Interest expense increased $668,000,  or 9%, due to the issuance of Senior
Notes Series G in September 2003,  execution of two mortgages in connection with
the purchases of two income properties in the states of Connecticut and Florida,
and higher average borrowing in 2003. SJW Corp.'s consolidated  weighted average
cost of long-term  debt,  including the two  mortgages  acquired in 2003 and the
amortization  of debt issuance  costs,  was 7.5% for the year ended December 31,
2003 and 7.9% for the years ended December 31, 2002 and 2001.

      Other  comprehensive  income  in 2003 was  $2,035,000  which  included  an
unrealized  gain  adjustment  of $2,434,000 on the upturn in the market value of
investment in California Water Service Group,  offset by an increase of $399,000
in  comprehensive  loss  associated  with  the  Corporation's   minimum  pension
liability.

Liquidity and Capital Resources:

      San Jose Water Company's budgeted capital expenditures for 2004, exclusive
of capital expenditures financed by customer  contributions and advances, are as
follows:

                                               Budgeted Capital
                                                 Expenditures
                                                     2004
                                             --------------------
                                                (in thousands)
       Water treatment ..................... $   668          2%
       Reservoirs and tanks ................   1,943          6%
       Pump stations and equipment .........   2,434          8%
       Distribution system .................  17,926         58%
       Equipment and other .................   8,187         26%
                                             -------        ---
                                             $31,158        100%
                                             =======        ===

      The 2004 capital expenditures budget is concentrated in main replacements.
Approximately  $12,000,000  will be spent to replace  San Jose  Water  Company's
pipes and mains which is funded through working capital.

      Starting   in  1997,   San  Jose  Water   Company   began  a   four-phased
Infrastructure  Study establishing a systematic  approach to replace its utility
facilities.  Phase I and II of the  Infrastructure  Study analyzed the company's
pipes and mains.  Phase III and IV examined all other  utility  facilities.  The
Infrastructure  Study was  completed in July,  2002 and is being used as a guide
for future capital improvement  programs,  and will serve as the master plan for
the company's replacement program for the next 20 years.


                                       18
<PAGE>

      San Jose Water Company's  capital  expenditures are incurred in connection
with normal  upgrading and expansion of existing  facilities  and to comply with
environmental   regulations.   The  company   expects  to  incur   approximately
$176,000,000 in capital  expenditures,  which includes  replacement of pipes and
mains,  and maintaining  water systems,  over the next five years,  exclusive of
customer  contributions and advances.  The company's actual capital expenditures
may vary  from  its  projections  due to  changes  in the  expected  demand  for
services,  weather  patterns,  actions  by  governmental  agencies  and  general
economic   conditions.   Total   additions  to  utility  plant  normally  exceed
company-financed  additions  by several  million  dollars  because  certain  new
facilities are constructed  using advances from developers and  contributions in
aid of construction.

      A substantial portion of San Jose Water Company's  distribution system was
constructed during the period from 1945 to 1980.  Expenditure levels for renewal
and  modernization of this part of the system will grow at an increasing rate as
these components reach the end of their useful lives. In most cases, replacement
cost will  significantly  exceed the original  installation  cost of the retired
assets due to increases in the costs of goods and services.

      In 2003, SJW Corp.  invested an additional $75,000 in Crystal Choice Water
Service LLC related to its 75% share of capital  investment.  SJW Corp. does not
expect to make a significant  cash  contribution in Crystal Choice Water Service
LLC in 2004.

      In 2003, there was an increase in the common  dividends  declared and paid
on SJW  Corp.'s  common  stock  representing  47% of the net  income  for  2003.
Historically,   SJW  Corp.  has   maintained  its  dividend   payment  ratio  at
approximately 50% of its earnings.

      Historically,  San  Jose  Water  Company's  write-offs  for  uncollectible
accounts represent less than 1% of its total revenue. Management believes it can
continue  to  collect  its  accounts   receivable  balances  at  its  historical
collection rate.

Sources of Capital:

San Jose Water Company

      San Jose Water Company's ability to finance future  construction  programs
and  sustain  dividend  payments  depends on its  ability  to  attract  external
financing  and maintain or increase  internally  generated  funds.  The level of
future earnings and the related cash flow from operations is dependent, in large
part, upon the timing and outcome of regulatory proceedings.

      San Jose Water  Company's  financing  activity  is  designed  to achieve a
capital  structure  consistent with regulatory  guidelines of approximately  50%
debt and 50% equity.

      Company   internally-generated   funds,   which  includes   allowance  for
depreciation and deferred income taxes,  have provided  approximately 50% of the
future cash requirements for San Jose Water Company's capital  expenditure.  Due
to its strong cash position and low financial  leverage  condition,  funding for
its future  capital  expenditure  program  will be  provided  primarily  through
long-term  debt.  San Jose  Water  Company  and its  parent,  SJW  Corp.  do not
anticipate  the  issuance  of  any  common  equity  to  finance  future  capital
expenditure.

      San Jose Water Company has outstanding  $130,000,000  of unsecured  senior
notes as of December  31,  2003.  The senior note  agreements  of San Jose Water
Company  generally  have terms and  conditions  that  restrict  the company from
issuing  additional  funded debt if (1) the funded debt would  exceed 66 2/3% of
total capitalization,  and (2) net income available for interest charges for the
trailing  twelve  calendar  month  period  would be less than  175% of  interest
charges. As of December 31, 2003, San Jose Water Company's funded debt was 48.6%
of total  capitalization  and the net income  available for interest charges was
391% of interest charges.

      San Jose Water  Company  issued  $20,000,000  of Senior  Notes Series G on
September  2, 2003.  Proceeds  from the sales of the Senior  Notes Series G were
used to repay short-term borrowings and to fund construction expenditures.


                                       19
<PAGE>

      In  2002,  the  Department  of Water  Resources  approved  San Jose  Water
Company's application for an approximately  $2,500,000 Safe Drinking Water State
Revolving Fund twenty-year loan at an interest rate of 2.39%. Funds in the above
amount  will be received  for the  retrofit  of San Jose Water  Company's  water
treatment plant. As of December 31, 2003, the loan has not been funded. San Jose
Water  Company  will  request  the  funding  in 2004  as  soon  as all the  loan
documentation and contract requirements are met.

SJW Land Company

      In March 2003, SJW Land Company sold nonutility  property and recognized a
gain of $3,030,000,  net of tax.  Subsequently,  SJW Land Company reinvested the
proceeds from the sale of nonutility property by acquiring two properties in the
states of Connecticut and Florida. In connection with the acquisition,  SJW Land
Company  executed  mortgages  in the amount of  $9,900,000  in April  2003.  The
mortgage loans are due in ten years and amortize over  twenty-five  years with a
fixed interest rate of 5.96%. The loan agreements generally restrict the company
from  prepayment  in the first five years and  requires  submission  of periodic
financial reports as part of the loan covenants. The properties were leased to a
multinational company for twenty years.

SJW Corp.

      SJW Corp.'s consolidated long-term debt was 46% of total capitalization as
of December 31, 2003 which is below the industry  average  published in the C.A.
Turner's  Utilities  Report.  SJW  Corp.  enjoys a low debt  burden  and  strong
liquidity,  is fully  capable  of  providing  financial  flexibility  to  future
regulated  and  nonregulated   growth   opportunities  and  capital  expenditure
requirements.

      SJW Corp. and its subsidiaries  have an unsecured line of credit available
allowing  aggregate  short-term  borrowings of up to  $30,000,000  at rates that
approximate  the bank's prime or reference rate. At December 31, 2003, SJW Corp.
and its  subsidiaries  had available  unused  short-term  bank line of credit of
$30,000,000. Cost of borrowing averaged 2.57% for the twelve months of 2003. The
line of credit expires on July 1, 2005.

      SJW Corp.'s contractual obligation and commitments as of December 31, 2003
are as follows:

<TABLE>
<CAPTION>
                                                           Contractual Obligations
                                                           (dollars in thousands)
                                                                   Due in
                                               -----------------------------------------------
                                                             Less than     1-5         After
                                                  Total       1 year      Years       5 Years
                                               -----------   --------   ---------   ----------
<S>                                            <C>           <C>        <C>         <C>
Senior notes ...............................    $130,000          -           -      130,000
Mortgages ..................................       9,799        184       1,101        8,514
Advance for construction ...................      79,311      2,024       9,158       68,129
Other ......................................         891        431         460            -
                                                --------      -----      ------      -------
Total contractual cash obligations .........    $220,001      2,639      10,719      206,643
                                                ========      =====      ======      =======
</TABLE>

      In addition to all the  obligations  listed above,  San Jose Water Company
purchases water from Santa Clara Valley Water District  (SCVWD) under terms of a
master  contract  expiring  in  2051.  Based on  current  prices  and  estimated
deliveries,  San Jose Water Company  expects to purchase a minimum of 90% of the
delivery schedule,  or 19,300 million gallons ($27,300,000) of water, from SCVWD
in the contract year ending June 30, 2004.

Off Balance Sheet Arrangement:

      SJW Corp.'s financial statements include the accounts of SJW Corp. and its
wholly owned and majority-owned subsidiaries. SJW Land Company has a 70% limited
partnership  interest in a real estate  investment  partnership,  444 West Santa
Clara  Street,  L.P.  The limited  partnership  obtained a mortgage  loan in the
amount of  $4,500,000  in 2001 with an  outstanding  balance of $4,333,000 as of
December 31, 2003 which was secured by the  partnership  property.  The mortgage
loan is non-recourse to SJW Land Company.


                                       20
<PAGE>

Related Party Transactions:

      SJW Land Company has a 70% limited  partnership  interest in a real estate
limited partnership, 444 West Santa Clara Street, L.P. A real estate development
firm, which is partially owned by an individual who also serves as a director of
SJW Corp.,  owns the remaining 30% limited  partnership  interest.  A commercial
building  is  constructed  on  the  partnership  property  and is  leased  to an
international  real estate firm under a twelve-year  lease.  The  partnership is
being accounted for under the equity method of accounting.

Factors That May Affect Future Results:

      The business of SJW Corp. and its subsidiaries  may be adversely  affected
by new and changing legislation, policies and regulations.

      New legislation and changes in existing legislation by federal,  state and
local governments and  administrative  agencies can affect the operations of SJW
Corp.  and  its  subsidiaries.  San  Jose  Water  Company  is  regulated  by the
California Public Utilities Commission (CPUC).  Almost all the operating revenue
of San Jose Water Company results from the sale of water at rates  authorized by
the CPUC. The CPUC sets rates that are intended to provide  revenues  sufficient
to recover operating  expenses and produce a reasonable return on common equity.
San Jose Water Company files and processes  general rate  applications  with the
CPUC on a periodic  basis.  The most recent rate  decision  relating to San Jose
Water Company,  approved in April 2001,  authorized a return on common equity in
2001, 2002, and 2003 of 9.95%. This rate of return is within the range of recent
rates of return  authorized  by the CPUC for  water  utilities.  San Jose  Water
Company  received a step rate  increase  in January  2003  totaling  about 3% to
recover projected operating cost increase for 2003. Additionally, San Jose Water
Company  received  offset rate increases in March and July 2003,  totaling about
$6,000,000  or  approximately  4%,  to  recover  the  increased  cost  primarily
associated with the transfer of the maintenance responsibility for approximately
12,000 fire  hydrants  from the City of San Jose to San Jose Water  Company,  as
well as the increased cost of purchased water and higher pump tax charged to San
Jose Water Company by the SCVWD. On May 23, 2003, San Jose Water Company filed a
General Rate Case  application with the CPUC to increase rates by $25,793,000 or
18.2% in 2004,  $5,434,000 or 3.2% in 2005,  and $5,210,000 or 3.0% in 2006. San
Jose Water Company is seeking these proposed  increases to cover higher costs of
providing water service,  including higher costs of power, purchased water, pump
tax,  labor,  security,  water quality  testing and reporting,  and to allow for
necessary  improvements  to the water  system.  San Jose  Water  Company is also
requesting  rate  recovery  of the  current  balance  of  $71,000  in its  Water
Contamination  Memorandum Account, as well as recovery of an under-collection of
$382,000 accrued in its pre-November 29, 2001 Balancing  Account.  Finally,  San
Jose  Water  Company is  requesting  a rate of return on equity of 11.5% for the
years 2004 through 2006. A CPUC decision on the application is expected in early
2004.

      On September  30, 2002,  the interim rate relief bill (AB 2838) was signed
into law.  The bill  allows for the  implementation  of interim  water  rates in
general rate cases when the CPUC fails to establish new rates in accordance with
the established rate case schedule.  The interim rates would be based on a water
company's  existing rates  increased for the amount of inflation  since the last
approved rate adjustment. The bill also allows for revenue true-up from the time
of the  implementation  of the interim rates to the time of the CPUC's  ultimate
decision in the rate case. In principal, this mechanism is designed to eliminate
the adverse  financial impact on water utilities caused by regulatory  delays in
general rate cases.  The bill went into effect on January 1, 2003.  Since a CPUC
decision on the requested rates on the General Rate Case application  filed with
the CPUC on May 23, 2003 has not been issued as of December 31,  2003,  the CPUC
has allowed San Jose Water Company an interim rate increase of  approximately 2%
effective January 1, 2004.

      Although the company  believes that the rates  currently in effect provide
it with a reasonable  rate of return,  there is no guarantee  such rates will be
sufficient  to provide a  reasonable  rate of return in the future.  There is no
guarantee  that the  company's  future  rate  filings  will be able to  obtain a
satisfactory rate of return in a timely manner.

      In addition,  San Jose Water  Company  relies on policies and  regulations
promulgated by the CPUC in order to, for example,  recover capital expenditures,
maintain favorable treatment on gains from the sale


                                       21
<PAGE>

of  real  property,  offset its production and operating costs, recover the cost
of  debt, maintain an optimal equity structure without over-leveraging, and have
financial  and operational flexibility to engage in non-regulated operations. If
the  CPUC  implements  policies and regulations that do not allow San Jose Water
Company  to  accomplish  some  or  all of the items listed above, San Jose Water
Company's future operating results may be adversely affected.

      Pursuant to Section  792.5 of the  California  Public  Utilities  Code,  a
balancing  account must be kept for each expense item for which revenue  offsets
have been authorized (i.e.,  purchased water, purchased power and pump tax). The
purpose  of  a   balancing   account  is  to  track  the   under-collection   or
over-collection  associated with expense  changes and the revenue  authorized by
the CPUC to offset those expense changes.  On November 29, 2001, the CPUC issued
Resolution  W-4294   (Resolution)   implementing   significant  changes  in  the
long-established  offset rate increase and balancing account recovery procedures
applicable to water utilities.  These changes could have a significant impact on
the risk profile of the water industry.

      As required by the Resolution,  in December 2001, the CPUC opened an Order
Instituting  Rulemaking (OIR) to evaluate existing  balancing account and offset
rate  practices and policies.  On December 17, 2002,  the CPUC issued an interim
OIR  decision  authorizing  water  utilities  to recover the  balancing  account
balances  accrued prior to November 29, 2001 if the utility is not  over-earning
as  measured  on a  pro-forma  basis.  San Jose  Water  Company  had  accrued an
under-collection  of $382,000 in its  balancing  account  prior to November  29,
2001.  San Jose Water  Company  requested  rate  recovery of the  aforementioned
under-collection of $382,000 in its General Rate Case application filed with the
CPUC on May 23,  2003.  At this  time,  it is  unclear  whether  San Jose  Water
Company's ability to recover the  aforementioned  balancing account balance will
be impacted.  This  under-collection of $382,000 is the component of the balance
of balancing account as of December 31, 2003 and 2002, respectively.

      Furthermore,  it is uncertain how any future CPUC regulation  dealing with
balancing  account balances accrued after November 29, 2001 will affect San Jose
Water Company's ability to collect such balance or to receive future offset rate
relief.  For the period  from  November  29,  2001 to  December  31,  2003,  the
balancing  account  accumulated an  over-collection  of $7,000.  At December 31,
2002, the balancing  account,  including the balances  accrued prior to November
29, 2001, had an under-collection of $262,000.

      On June 19, 2003 the CPUC issued its final OIR decision  (D.03-06-072)  in
which the CPUC revised the existing procedures for recovery of under-collections
and  over-collections  in balancing  accounts  existing on or after November 29,
2001 as follows:  (1) If a utility is within its rate case cycle and is not over
earning,   the  utility  shall  recover  its   balancing   account   subject  to
reasonableness  review;  and (2) If a utility is either within or outside of its
rate case cycle and is over earning, the utility's recovery of expenses from the
balancing  accounts  will be reduced by the  amount of the over  earning,  again
subject to  reasonableness  review.  Utilities  shall use the  recorded  rate of
return means test to evaluate  earnings for all years.  The CPUC is currently in
the process of scheduling workshops to determine how these new requirements will
ultimately be implemented.

      As of December 31, 2003 San Jose Water Company has received all its offset
rate requests.  Any future impact on San Jose Water Company's ability to recover
balancing   account  balances  and  receive  offset  rate  increases  cannot  be
determined  until San Jose Water  Company's  next offset rate  increase  request
scheduled for July, 2004.

      Changes in water  supply,  water  supply  costs or the mix of water supply
could  adversely  affect the  operating  results and  business of San Jose Water
Company.

      San Jose Water Company's  supply of water primarily relies upon three main
sources:  water  purchased  from the  SCVWD,  surface  water from its Santa Cruz
Mountains  Watershed,  and pumped underground  water.  Changes and variations in
quantities from each of these three sources affects the overall mix of the water
supply, therefore affecting the cost of water supply. Surface water is the least
costly source of water. If there is an adverse change to the mix of water supply
and San Jose Water Company is not allowed to recover the additional or increased
water supply costs, its operating results may be adversely affected.


                                       22
<PAGE>

      The SCVWD  receives an  allotment  of water from state and  federal  water
projects.  If San Jose Water Company has  difficulties  obtaining a high quality
water supply from the SCVWD due to availability and legal  restrictions,  it may
not be able to satisfy  customer  demand in its service  area and its  operating
results and business may be adversely affected.  Additionally,  the availability
of water from San Jose Water Company's Santa Cruz Mountains Watershed depends on
the weather and  fluctuates  with each season.  In a normal year,  surface water
supply  provides  6-8% of the total water supply of the system.  In a dry season
with little  rainfall,  water  supply  from  surface  water  sources may be low,
thereby causing San Jose Water Company to increase the amount of water purchased
from  outside  sources at a higher cost than surface  water and thus  increasing
water production costs.

      In  addition,  San Jose Water  Company's  ability to use surface  water is
subject to regulations  regarding water quality and volume  limitations.  If new
regulations  are  imposed  or  existing  regulations  are  changed  or given new
interpretations,  the availability of surface water may be materially reduced. A
reduction in surface water could result in the need to procure more costly water
from other sources,  thereby increasing the water production costs and adversely
affecting the operating results of San Jose Water Company.

      Because  the  extraction  of water  from  the  groundwater  basin  and the
operation of the water  distribution  system  requires a  significant  amount of
energy, increases in energy prices could increase operating expenses of San Jose
Water Company.

      San Jose Water Company  continues to utilize Pacific Gas & Electric's time
of use rate  schedules  to  minimize  its overall  energy  costs  primarily  for
groundwater  pumping.  During the winter  months,  typically  90% or more of the
groundwater  is produced  during  off-peak hours when  electrical  energy is the
cheapest.  Optimization and energy management efficiency is achieved through the
implementation  of  Supervisory  Control  and Data  Acquisition  (SCADA)  system
software  applications that control pumps based on demand and cost of energy. In
the aftermath of the attempt to deregulate the California energy market,  energy
costs still remain in flux, with resulting  uncertainty in the company's ability
to contain energy costs into the future.

      Fluctuations in customer demand for water due to seasonality, restrictions
of use, weather and lifestyle can adversely affect operating results.

      San  Jose  Water  Company  operations  are  seasonal.   Thus,  results  of
operations  for one  quarter  do not  indicate  results to be  expected  in next
quarter. Rainfall and other weather conditions also affect the operations of San
Jose Water Company.  Most water  consumption  occurs during the third quarter of
each  year  when  weather  tends to be warm  and dry.  In  drought  seasons,  if
customers  are  encouraged  and required to conserve  water due to a shortage of
water supply or restriction  of use,  revenue tends to be lower.  Similarly,  in
unusually wet seasons, water supply tends to be higher and customer demand tends
to be lower, again resulting in lower revenues.  Furthermore,  certain lifestyle
choices  made  by  customers  can  affect  demand  for  water.  For  example,  a
significant  portion of residential water use is for outside irrigation of lawns
and  landscaping.  If there is a  decreased  desire  by  customers  to  maintain
landscaping for their homes,  residential water demand could decrease, which may
result in lower revenues. Conservation efforts, construction codes which require
the use of low-flow plumbing fixtures could affect water consumption.

      A  contamination  event or other  decline in source  water  quality  could
affect the water supply of San Jose Water Company and therefore adversely affect
the business and operating results.

      San Jose Water Company is subject to certain water quality risks  relating
to environmental  regulations.  Through water quality compliance  programs,  San
Jose Water Company  continually  monitors for contamination and pollution of its
sources of water. In the event of a  contamination,  San Jose Water Company will
likely  have to procure  water from more  costly  sources  and  increase  future
capital  expenditures.  Although the costs would likely be recovered in the form
of higher  rates,  there can be no  assurance  that  CPUC  would  approve a rate
increase to recover the costs.

      San Jose Water Company is subject to  litigation  risks  concerning  water
quality and contamination.

      Although  San Jose  Water  Company  has not been and is not a party to any
environmental and  product-related  lawsuits,  it believes such lawsuits against
other water utilities have increased in frequency


                                       23
<PAGE>

in  recent  years.  If  San Jose Water Company is subject to an environmental or
product-related  lawsuit,  it  might  incur  significant  legal  costs and it is
uncertain  whether  it  would be able to recover the legal costs from ratepayers
or  other third parties. In addition, if current California law regarding CPUC's
preemptive  jurisdiction  over  regulated  public  utilities  for  claims  about
compliance   with   Department   of  Health  Services  (DHS)  and  Environmental
Protection  Agency  (EPA) water quality standards changes, the legal exposure of
San Jose Water Company may be significantly increased.

      New or more stringent  environmental  regulations  could increase San Jose
Water Company's operating costs and affect its business.

      San Jose Water  Company's  operations  are  subject to water  quality  and
pollution  control  regulations  issued by the EPA,  the DHS and the  California
Regional Water Quality Control Board. It is also subject to  environmental  laws
and regulations administered by other state and local regulatory agencies.

      Stringent  environmental and water quality  regulations could increase San
Jose Water  Company's  water  quality  compliance  costs,  hamper San Jose Water
Company's available water supplies, and increase future capital expenditure.

      Under the federal Safe Drinking  Water Act (SDWA),  San Jose Water Company
is  subject  to  regulation  by the EPA of the  quality  of water  it sells  and
treatment  techniques  it uses to make the water  potable.  The EPA  promulgates
nationally applicable standards, including maximum contaminant levels (MCLs) for
drinking  water.  San Jose Water Company is currently in compliance  with all of
the 87 primary MCLs promulgated to date. There can be no assurance that San Jose
Water  Company  will be able to  continue  to  comply  with  all  water  quality
requirements.

      San Jose Water Company has implemented monitoring activities and installed
specific water treatment  improvements  enabling it to comply with existing MCLs
and plan for compliance with future drinking water regulations. However, the EPA
and DHS have  continuing  authority to issue  additional  regulations  under the
SDWA. It is possible that new or more stringent environmental standards could be
imposed  that will  raise  San Jose  Water  Company's  operating  costs.  Future
drinking  water  regulations  may  require  increased   monitoring,   additional
treatment of underground  water  supplies,  fluoridation  of all supplies,  more
stringent  performance  standards for treatment plants and procedures to further
reduce levels of disinfection  byproducts.  San Jose Water Company  continues to
seek to establish mechanisms for recovery of  government-mandated  environmental
compliance  costs.  There  are  currently  limited  regulatory   mechanisms  and
procedures available to the company for the recovery of such costs and there can
be no assurance that such costs will be fully recovered.

      Costs  associated with security  precautions may have an adverse effect on
the operating results of San Jose Water Company.

      Water utility companies have generally been on a heightened state of alert
since the threats to the nation's  health and security in the fall of 2001.  San
Jose Water  Company has taken steps to  increase  security at its water  utility
facilities and continues to implement a comprehensive  security  upgrade program
for production and storage facilities,  pump stations and company buildings. San
Jose Water  Company also  coordinates  security and  planning  information  with
SCVWD,  other  Bay  Area  water  utilities  and  various  governmental  and  law
enforcement agencies.

      San Jose Water Company conducted a system-wide vulnerability assessment in
compliance  with  federal  regulations  Public Law 107-188  imposed on all water
utilities.  The assessment  report was filed with the EPA on March 31, 2003. San
Jose Water Company has also actively participated in the security  vulnerability
assessment  training  offered by the American Water Works  Association  Research
Foundation and the EPA.

      The vulnerability  assessment identified system security enhancements that
impact  water  quality,  health,  safety  and  continuity  of  service  totaling
approximately  $2,300,000,  exclusive  of the years  2001 to 2002  expenditures.
These improvements were incorporated into the capital budgets to be completed by
2005.  For the year  ended  December  31,  2003  $540,000  was spent on  capital
projects to improve and enhance  security.  San Jose Water  Company has and will
continue  to bear costs  associated  with  additional  security  precautions  to
protect its water  utility  business and other  operations.  While some of these
costs


                                       24
<PAGE>

are  likely  to  be  recovered  in  the  form  of  higher rates, there can be no
assurance  that the CPUC will approve a rate increase to recover such costs, and
as  a  result,  the  company's  operating  results and business may be adversely
affected.

      Other factors that could  adversely  affect the  operating  results of SJW
Corp. and its subsidiaries include the following:

      *     The level of labor and non-labor operating and maintenance  expenses
            as affected by inflationary  forces and collective  bargaining power
            could adversely affect the operating and maintenance expenses of SJW
            Corp.

      *     The City of Cupertino's lease operation could be adversely  affected
            by capital  requirements,  the ability of San Jose Water  Company to
            raise rates  through the Cupertino  City  Council,  and the level of
            operating and maintenance expenses.

      *     The wide acceptance of recycled water as substitute to potable water
            and the ability of San Jose Water  Company to retain its legal right
            to serve its  customers  recycled  water  would  impact  its  sales,
            revenue and operating results.

      *     SJW Land  Company's  expenses  and  operating  results also could be
            adversely affected by the parking lot activities, the HP Pavilion at
            San  Jose  events,   ongoing  local,  state  and  federal  land  use
            development activities and regulations,  future economic conditions,
            and the development and  fluctuations in the sale of the undeveloped
            properties.

      Other trends and development

      *     Pension accruals  increased  $1,113,000 in 2003 primarily due to the
            decline  in  valuation  of the  retirement  plan  portfolio.  Market
            conditions,  not changes in operating risk or loss  experience,  was
            the primary reason for the average liability insurance cost increase
            of 25% in 2003. Employee medical insurance  increased  approximately
            8%. Medical, liability and pension expenses are expected to continue
            to have similar increases in 2004.

      Nonregulated Operations

      In January 2002, SJW Land Company entered into an Agreement for Possession
and Use (Agreement) with the Valley Transportation Agency (VTA) whereby SJW Land
Company has granted VTA an irrevocable right to possession and use of 1.23 acres
of the  company's  parking  lot  property  for the  development  of a light rail
station. VTA has adopted a resolution  authorizing a condemnation  proceeding to
acquire the land and has  deposited  $3.7  million in an escrow  account as fair
market  compensation.  SJW Land  Company  waived  the right to  challenge  VTA's
possession and use in any subsequent  eminent domain proceeding but reserved the
right to assert,  and has  disputed  the fair market  value  placed on the land.
According to the terms of the  Agreement,  if a settlement is not reached within
three months of the execution of the  Agreement,  VTA can file an eminent domain
complaint to acquire title to the parking lot property.  On April 11, 2003,  VTA
filed  the  eminent  domain  lawsuit.  As a part  of the  proceedings,  VTA  has
transferred funds from the escrow account into a court deposit account to secure
its ongoing  right of  possession  for  construction  of the light rail  station
pending  final  litigation.  Compensation  for the  taking of  property  will be
determined  by the court or by way of  settlement  between SJW Land  Company and
VTA.  This  transaction  will be  recorded  and it is  expected  to result in an
increase to net income when the  compensation  issue is settled or a final court
order is rendered.

      Impact of Recent Accounting Pronouncements

      In January 2003, the Financial  Accounting  Standards  Board (FASB) issued
Interpretation   No.  46,   "Consolidation  of  Variable   Interest   Entities".
Subsequently in December 2003, the FASB issued revised Interpretation No. 46(R).
This interpretation provides guidance for determining when a primary beneficiary
should  consolidate a variable  interest  entity or equivalent  structure,  that
functions  to support the  activities  of the primary  beneficiary.  The revised
interpretation  is effective  for the periods  ending after March 15, 2004.  The
adoption  of this  statement  will not have a  material  impact  on SJW  Corp.'s
financial condition or results of operations.


                                       25
<PAGE>

      Effective  January 1,  2003,  SJW Corp.  adopted  Statement  of  Financial
Accounting   Standards   (SFAS)  No.  143,   "Accounting  for  Asset  Retirement
Obligations",  which requires businesses to record the fair value of a liability
for a legal  obligation  to retire an asset in the period in which the liability
is  incurred.  A legal  obligation  is a  liability  that a party is required to
settle  as a result  of an  existing  or  enacted  law,  statute,  ordinance  or
contract.  SJW Corp.'s legal obligations for retirement reflect  principally the
retirement of wells, which by law need to be disposed of at removal.  Retirement
cost has historically been recovered through rates at the time of retirement. As
a result,  the  cumulative  effect upon  adoption was  reflected as a regulatory
asset, in the amount of $1,200,000 as of December 31, 2003.

      In December  2003,  the FASB issued  SFAS No. 132  (revised),  "Employers'
Disclosures  about Pensions and Other  Postretirement  Benefits",  which revises
employers'  disclosures  about  pension plans and other  postretirement  benefit
plans.  This revised  statement  retains and revises the disclosure  requirement
contained  in the  original  SFAS  No.  132 and  does  not  change  the  current
measurement or recognition  requirements for such plans.  The revised  statement
also requires additional disclosures about the assets, obligations,  cash flows,
and net  periodic  benefit  cost of  defined  benefit  pension  plans  and other
postretirement benefit plans. SJW Corp. has adopted SFAS No. 132 (revised) as of
December 31, 2003.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

      SJW Corp.  is subject to market  risks in the normal  course of  business,
including  changes in interest rates and equity prices.  The exposure to changes
in interest rates is a result of financings  through the issuance of fixed-rate,
long-term debt.

      SJW Corp. also owns 1,099,952 shares of California Water Service Group and
is exposed to the risk of changes in equity prices.  SJW Corp. has no derivative
financial instruments,  financial instruments with significant off-balance sheet
risks, or financial  instruments with concentrations of credit risk. There is no
material sensitivity to changes in market rates and prices.


                                       26
<PAGE>

Item 8. Financial Statements and Supplementary Data

                          Independent Auditors' Report

The Shareholders and Board of Directors
SJW Corp.

      We have audited the accompanying  consolidated balance sheets of SJW Corp.
and subsidiaries (the Company) as of December 31, 2003 and 2002, and the related
consolidated   statements  of  income  and  comprehensive  income,   changes  in
shareholders'  equity,  and cash  flows for each of the years in the  three-year
period  ended  December  31,  2003.  In  connection   with  our  audits  of  the
consolidated  financial  statements,  we  also  have  audited  the  accompanying
financial  statement  schedule.  These  consolidated  financial  statements  and
financial statement schedule are the responsibility of the Company's management.
Our  responsibility  is to express an  opinion on these  consolidated  financial
statements and financial statement schedule based on our audits.

      We conducted our audits in accordance  with auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

      In our opinion,  the consolidated  financial  statements referred to above
present fairly, in all material  respects,  the financial  position of SJW Corp.
and  subsidiaries  as of December  31,  2003 and 2002,  and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended  December 31, 2003, in conformity  with  accounting  principles  generally
accepted  in the United  States of  America.  Also in our  opinion,  the related
financial  statement  schedule,   when  considered  in  relation  to  the  basic
consolidated  financial  statements taken as a whole,  presents  fairly,  in all
material respects, the information set forth therein.

                                    KPMG LLP

Mountain View, California
January 29, 2004


                                       27
<PAGE>

                           SJW CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                 (in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                               December 31,
                                                                         -------------------------
                                                                             2003          2002
                                                                         ------------   ----------
<S>                                                                      <C>            <C>
ASSETS
UTILITY PLANT ........................................................    $ 575,869      534,079
INTANGIBLE ASSETS ....................................................        7,840        7,840
                                                                          ---------      -------
                                                                            583,709      541,919
LESS ACCUMULATED DEPRECIATION AND AMORTIZATION .......................      174,985      161,576
                                                                          ---------      -------
                                                                            408,724      380,343
                                                                          ---------      -------
NONUTILITY PROPERTY, NET .............................................       27,629       10,487
CURRENT ASSETS:
 Cash and equivalents ................................................       10,036          324
 Accounts receivable:
  Customers ..........................................................        7,505        7,309
  Other ..............................................................        1,333        2,807
 Accrued unbilled utility revenue ....................................        6,205        6,605
 Materials and supplies ..............................................          485          499
 Prepaid expenses ....................................................        1,534        1,155
                                                                          ---------      -------
                                                                             27,098       18,699
                                                                          ---------      -------
OTHER ASSETS:
 Investment in California Water Service Group ........................       30,139       26,014
 Investment in joint venture .........................................        1,110        1,144
 Unamortized debt issuance and reacquisition costs ...................        3,447        3,493
 Regulatory assets ...................................................        7,976        6,013
 Other ...............................................................        5,594        7,030
                                                                          ---------      -------
                                                                             48,266       43,694
                                                                          ---------      -------
                                                                          $ 511,717      453,223
                                                                          =========      =======
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
 Shareholders' equity:
  Common stock, $1.042 par value; authorized 18,000,000 shares; issued
   and outstanding 9,135,441 shares ..................................    $   9,516        9,516
  Additional paid-in capital .........................................       13,375       12,357
  Retained earnings ..................................................      138,058      128,242
  Accumulated other comprehensive income .............................        5,419        3,384
                                                                          ---------      -------
 Total shareholders' equity ..........................................      166,368      153,499
 Long-term debt, less current portion ................................      139,614      110,000
                                                                          ---------      -------
                                                                            305,982      263,499
                                                                          ---------      -------
 CURRENT LIABILITIES:
 Line of credit ......................................................            -       11,450
 Current portion of long-term debt ...................................          184            -
 Accrued pump taxes and purchased water ..............................        3,224        3,144
 Purchased power .....................................................          864        1,219
 Accounts payable ....................................................        2,217          381
 Accrued interest ....................................................        3,619        3,244
 Accrued taxes .......................................................          467          634
 Accrued payroll .....................................................          759          566
 Work order deposit ..................................................        1,511          834
 Other current liabilities ...........................................        2,231        2,128
                                                                          ---------      -------
                                                                             15,076       23,600
                                                                          ---------      -------
DEFERRED INCOME TAXES ................................................       36,232       27,670
UNAMORTIZED INVESTMENT TAX CREDITS ...................................        1,975        2,034
ADVANCES FOR CONSTRUCTION ............................................       79,311       70,597
CONTRIBUTIONS IN AID OF CONSTRUCTION .................................       61,811       56,117
DEFERRED REVENUE .....................................................        1,327        1,350
OTHER NONCURRENT LIABILITIES .........................................       10,003        8,356
COMMITMENTS AND CONTINGENCIES ........................................
                                                                          ---------      -------
                                                                          $ 511,717      453,223
                                                                          =========      =======
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       28
<PAGE>

                           SJW CORP. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

     Years ended December 31 (in thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                                      2003            2002            2001
                                                                  ------------   -------------   -------------
<S>                                                               <C>            <C>             <C>
OPERATING REVENUE .............................................    $  149,732        145,652         136,083
OPERATING EXPENSE:
 Operation:
   Purchased water ............................................        36,708         38,228          33,500
   Power ......................................................         5,296          6,805           7,814
   Pump taxes .................................................        17,931         18,950          21,047
   Administrative and general .................................        16,202         13,466          11,248
   Other ......................................................        12,104         11,688          10,547
 Maintenance ..................................................         7,724          7,866           7,090
 Property taxes and other nonincome taxes .....................         5,065          4,420           4,379
 Depreciation and amortization ................................        15,225         14,013          13,240
 Income taxes .................................................        10,523          9,658           7,391
                                                                   ----------      ---------       ---------
                                                                      126,778        125,094         116,256
                                                                   ----------      ---------       ---------
OPERATING INCOME ..............................................        22,954         20,558          19,827
OTHER (EXPENSE) INCOME:
 Interest expense .............................................        (8,471)        (7,803)         (6,737)
 Gain on sale of nonutility property, net .....................         3,030              -               -
 Dividends ....................................................         1,237          1,232           1,226
 Other, net ...................................................           (73)           245            (299)
                                                                   ----------      ---------       ---------
   NET INCOME .................................................    $   18,677         14,232          14,017
                                                                   ==========      =========       =========
OTHER COMPREHENSIVE INCOME/(LOSS):
 Unrealized income/(loss) on investment, net of taxes of $1,691
   in 2003, ($947) in 2002, and ($564) in 2001 ................         2,434         (1,363)           (811)
 Minimum pension liability adjustment, net of taxes of $276 in
   2003, $220 in 2002, and $236 in 2001 .......................          (399)          (319)           (343)
                                                                   ----------      ---------       ---------
   Other comprehensive income/(loss) ..........................         2,035         (1,682)         (1,154)
                                                                   ----------      ---------       ---------
    COMPREHENSIVE INCOME ......................................    $   20,712         12,550          12,863
                                                                   ==========      =========       =========
EARNINGS PER SHARE ............................................
  - Basic .....................................................    $     2.04           1.56            1.53
  - Diluted ...................................................    $     2.04           1.56            1.53
                                                                   ==========      =========       =========
COMPREHENSIVE INCOME PER SHARE
  - Basic .....................................................    $     2.27           1.37            1.41
  - Diluted ...................................................    $     2.26           1.37            1.41
                                                                   ==========      =========       =========
WEIGHTED AVERAGE SHARES OUTSTANDING
  - Basic .....................................................     9,135,441      9,135,441       9,135,441
  - Diluted ...................................................     9,148,476      9,135,441       9,135,441
                                                                   ==========      =========       =========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       29
<PAGE>

                           SJW CORP. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                     Accumulated
                                                       Additional                       Other             Total
                                           Common        Paid-in       Retained     Comprehensive     Shareholders'
                                            Stock        Capital       Earnings     Income/(loss)        Equity
                                         ----------   ------------   -----------   ---------------   --------------
<S>                                      <C>          <C>            <C>           <C>               <C>
BALANCES, DECEMBER 31, 2000 ............  $ 9,516        12,357        116,232           6,220          144,325
 Net income ............................        -             -         14,017               -           14,017
 Other comprehensive loss
   Unrealized loss on investment, net of
    tax effect of $564 .................        -             -              -            (811)            (811)
   Minimum pension liability adjustment,
    net of tax effect of $236 ..........        -             -              -            (343)            (343)
                                                                                                        -------
 Comprehensive income ..................        -             -              -               -           12,863
 Dividends paid ........................        -             -         (7,834)              -           (7,834)
                                          -------        ------        -------          ------          -------
BALANCES, DECEMBER 31, 2001 ............    9,516        12,357        122,415           5,066          149,354
 Net income ............................        -             -         14,232               -           14,232
 Other comprehensive loss
   Unrealized loss on investment, net of
    tax effect of $947 .................        -             -              -          (1,363)          (1,363)
   Minimum pension liability adjustment,
    net of tax effect of $220 ..........        -             -              -            (319)            (319)
                                                                                                        -------
 Comprehensive income ..................        -             -              -               -           12,550
 Dividends paid ........................        -             -         (8,405)              -           (8,405)
                                          -------        ------        -------          ------          -------
BALANCES, DECEMBER 31, 2002 ............    9,516        12,357        128,242           3,384          153,499
 Net income ............................        -             -         18,677               -           18,677
 Other comprehensive loss
   Unrealized gain on investment, net of
    tax effect of $1,691 ...............        -             -              -           2,434            2,434
   Minimum pension liability adjustment,
    net of tax effect of $276 ..........        -             -              -            (399)            (399)
                                                                                                        -------
 Comprehensive income ..................        -             -              -               -           20,712
 Stock-based compensation ..............        -         1,018              -               -            1,018
 Dividends paid ........................        -             -         (8,861)              -           (8,861)
                                          -------        ------        -------          ------          -------
BALANCES, DECEMBER 31, 2003 ............  $ 9,516        13,375        138,058           5,419          166,368
                                          =======        ======        =======          ======          =======
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       30
<PAGE>

                           SJW CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     Years ended December 31 (in thousands)

<TABLE>
<CAPTION>
                                                                   2003          2002          2001
                                                               -----------   -----------   -----------
<S>                                                            <C>           <C>           <C>
OPERATING ACTIVITIES:
 Net income ................................................    $  18,677       14,232        14,017
 Adjustments to reconcile net income to net cash provided
   by operating activities:
   Depreciation and amortization ...........................       15,225       14,013        13,240
   Deferred income taxes ...................................        6,398        2,998         1,993
   Stock-based compensation ................................          492            -             -
   Gain on sale of nonutility property, net of taxes .......       (3,030)           -             -
   Changes in operating assets and liabilities:
    Accounts receivable and accrued utility revenue ........        1,678       (2,623)         (973)
    Accounts payable, purchased power and other current
      liabilities ..........................................        1,584         (134)          742
    Accrued pump taxes and purchased water .................           80           53        (1,538)
    Accrued taxes ..........................................         (167)        (548)          916
    Accrued interest .......................................          375          108           347
    Accrued payroll ........................................          193          145           (54)
    Work order deposits ....................................          677          398           101
    Other noncurrent assets and noncurrent liabilities .....       (1,984)       2,446           685
    Accrued employee compensation ..........................            -            -        (3,024)
    Refund due to customers ................................            -         (531)         (541)
    Other changes, net .....................................        1,789       (1,466)         (457)
                                                                ---------      -------       -------
NET CASH PROVIDED BY OPERATING ACTIVITIES ..................       41,987       29,091        25,454
                                                                ---------      -------       -------
INVESTING ACTIVITIES:
 Additions to utility plant ................................      (44,467)     (37,119)      (47,672)
 Additions to nonutility property ..........................      (17,875)        (477)         (330)
 Cost to retire utility plant, net of salvage ..............         (780)      (1,352)       (1,302)
 Proceeds from sale of nonutility property .................        5,370            -             -
                                                                ---------      -------       -------
NET CASH USED IN INVESTING ACTIVITIES ......................      (57,752)     (38,948)      (49,304)
                                                                ---------      -------       -------
FINANCING ACTIVITIES:
 Borrowings from line of credit ............................       14,000       50,763        61,375
 Repayments of line of credit ..............................      (25,450)     (50,813)      (61,075)
 Long-term borrowings ......................................       29,900            -        20,000
 Repayments of long-term borrowings ........................         (102)           -             -
 Dividends paid ............................................       (8,861)      (8,405)       (7,834)
 Receipts of advances and contributions in aid of
   construction ............................................       17,694       15,242        17,246
 Refunds of advances for construction ......................       (1,704)      (1,627)       (1,624)
                                                                ---------      -------       -------
NET CASH PROVIDED BY FINANCING ACTIVITIES ..................       25,477        5,160        28,088
                                                                ---------      -------       -------
NET CHANGE IN CASH AND EQUIVALENTS .........................        9,712       (4,697)        4,238
CASH AND EQUIVALENTS, BEGINNING OF YEAR ....................          324        5,021           783
                                                                ---------      -------       -------
CASH AND EQUIVALENTS, END OF YEAR ..........................    $  10,036          324         5,021
                                                                =========      =======       =======
Cash paid during the year for:
 Interest ..................................................    $   9,148        7,782         7,730
 Income taxes ..............................................    $   7,720        8,800         4,188
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       31
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  Years ended December 31, 2003, 2002, and 2001
                    (Dollars in thousands, except share data)

Note 1. Summary of Significant Accounting Policies

      The accompanying consolidated financial statements include the accounts of
SJW Corp. and its wholly owned and majority-owned subsidiaries. All intercompany
transactions and balances have been eliminated on consolidation. A subsidiary in
which SJW Corp.  has a  controlling  interest is  consolidated  in the financial
statements with the minority  interest  included as "other" in the  Consolidated
Statements  of  Income  and  Comprehensive   Income  and  in  "other  noncurrent
liabilities" in the Balance Sheet.

      SJW Corp.'s principal  subsidiary,  San Jose Water Company, is a regulated
California water utility providing water service to the greater metropolitan San
Jose  area.  San  Jose  Water  Company's  accounting  policies  comply  with the
applicable  uniform  system of  accounts  prescribed  by the  California  Public
Utilities  Commission  (CPUC)  and  conform  to  generally  accepted  accounting
principles for  rate-regulated  public utilities.  Approximately 92% of San Jose
Water  Company's  revenue is derived from the sale of water to  residential  and
business customers.

      SJW Land Company owns and operates a 750-space  surface  parking  facility
adjacent to the HP Pavilion,  commercial  properties,  several  undeveloped real
estate,  some  properties  in the states of Florida and  Connecticut,  and a 70%
limited  partnership  interest in 444 West Santa Clara  Street,  L.P.,  which is
accounted for under the equity method.

      Crystal Choice Water Service LLC, a 75%  majority-owned  limited liability
subsidiary  formed in  January  2001,  engages  in the sale and  rental of water
conditioning equipment in the metropolitan San Jose area.

      Use of Estimates

      The  preparation of the  consolidated  financial  statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities  at the  date  of the  consolidated  financial  statements  and  the
reported  amounts of revenues and expenses during the reporting  period.  Actual
results could differ from those estimates.

      Utility Plant

      The cost of additions,  replacements  and  betterments to utility plant is
capitalized.  The amount of interest  capitalized  in 2003,  2002,  and 2001 was
$266, $603, and $617, respectively. Construction in progress was $4,000, $5,720,
and $9,303, at December 31, 2003, 2002, and 2001, respectively.

      Depreciation is computed using the straight-line method over the estimated
service  lives of the assets,  ranging  from 5 to 75 years.  For the years 2003,
2002, and 2001 the aggregate  provisions  for  depreciation  approximated  3.2%,
3.3%, and 3.3%,  respectively,  of the beginning of the year depreciable  plant.
The cost of utility plant retired, including retirement costs (less salvage), is
charged  to  accumulated  depreciation  and  no  gain  or  loss  is  recognized.
Depreciation  expense for the years ended December 31, 2003,  2002, and 2001 was
$14,435, $13,480, and $12,659, respectively.

      Rate-regulated  enterprises  are required to charge a regulatory  asset to
earnings if and when that asset no longer meets the criteria for being  recorded
as a regulatory asset. The company  continually  evaluates the recoverability of
utility  plant by  assessing  whether the  amortization  of the balance over the
remaining  life can be recovered  through the expected and  undiscounted  future
cash flows.

      Intangible Assets

      All  intangible  assets are recorded at cost and are  amortized  using the
straight-line  method over the legal or  estimated  economic  life of the asset,
whichever is shorter, not to exceed 40 years. The company


                                       32
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

continually  evaluates  the  recoverability  of  intangible  assets by assessing
whether  the  amortization  of  the  balance  over  the  remaining  life  can be
recovered through the expected and undiscounted future cash flows.

      Nonutility Property

      Nonutility  property is recorded at cost and  consists  primarily of land,
buildings and parking  facilities.  Depreciation  is computed using  accelerated
depreciation methods over the estimated useful lives of the assets, ranging from
5 to 39 years.

      Cash and Equivalents

      Cash and  equivalents  include  certain  highly  liquid  investments  with
remaining  maturities of three months or less.  Cash  equivalents  are stated at
cost  plus  accrued  interest,  which  approximates  fair  value.  The  cash and
equivalents  balances as of December 31, 2003 are $10,036 which included  $4,036
cash  deposited  in  bank  and  $6,000  short-term  investment.   The  cash  and
equivalents  balances as of December  31, 2002 are $324 which  represented  cash
deposited in bank.

      Financial Instruments

      The carrying amount of SJW Corp.'s current assets and liabilities that are
considered  financial  instruments  approximates  their  fair  value as of dates
presented due to the short maturity of these instruments.

      Investment in California Water Service Group

      SJW Corp.'s  investment in California Water Service Group is considered an
available-for-sale marketable security and reported at quoted market price, with
the unrealized gain or loss reported as other comprehensive income.

      Comprehensive Income

      The accumulated balance of other  comprehensive  income is reported in the
equity section of the financial  statements and includes the unrealized  gain or
loss, net of taxes, on the California  Water Service Group  investment,  and the
net of tax  additional  minimum  pension  liability  adjustment  related  to the
company sponsored retirement plans.

      Other Assets

      Debt issuance costs are amortized  over the lives of the  respective  debt
issues.  Debt  reacquisition  costs  paid on the  early  redemption  of debt and
unamortized  original issuance costs are deferred and amortized over the life of
the new debt.

      Income Taxes and Regulatory Assets

      Income  taxes are  accounted  for using  the asset and  liability  method.
Deferred tax assets and  liabilities  are recognized for the effect of temporary
differences  between  financial  and tax  reporting.  Deferred  tax  assets  and
liabilities are measured using tax rates expected to apply in future years.

      To the extent that the tax  benefits  of the  temporary  differences  have
previously  been  passed  through  to  customers   through  lower  water  rates,
management  anticipates that the payment of the future tax liabilities resulting
from the  reversal of the  temporary  differences  will be  recoverable  through
rates.  Therefore,  a regulatory  asset has been recorded for the portion of net
deferred tax  liabilities,  which are expected to be  recovered  through  future
rates.  The  temporary  differences  are  primarily  related to the  differences
between  federal  and state  book and tax  depreciation  on  property  placed in
service  before the adoption by the CPUC of full  normalization  for rate making
purposes.  Although  realization is not assured,  management believes it is more
likely than not that all of the regulatory asset will be realized. To


                                       33
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

the  extent permitted by the CPUC, investment tax credits resulting from utility
plant  additions  are  deferred and amortized over the estimated useful lives of
the related property.

      Advances for Construction and Contributions in Aid of Construction

      Advances for  construction  received after 1981 are being refunded ratably
over 40 years.  Prior  customer  advances are  refunded  based on 22% of related
revenues. Estimated refunds for 2004 are $2,024.

      Contributions  in  aid  of  construction  represent  funds  received  from
developers  that  are  not  refundable  under  CPUC  regulations.   Depreciation
applicable to utility plant  constructed with these  contributions is charged to
contributions in aid of construction.

      Customer  advances  and  contributions  in  aid of  construction  received
subsequent  to 1986 and prior to June 12,  1996  generally  must be  included in
federal taxable income.  Taxes paid relating to advances and  contributions  are
recorded  as  deferred  tax  assets for  financial  reporting  purposes  and are
amortized over 40 years for advances,  and over the tax depreciable  life of the
related  asset  for  contributions.  Receipts  subsequent  to June 12,  1996 are
generally  exempt  from  federal  taxable  income.  Advances  and  contributions
received  subsequent  to 1991 and prior to 1997 are  included  in state  taxable
income.

      Asset Retirement Obligations

      Effective  January 1,  2003,  SJW Corp.  adopted  Statement  of  Financial
Accounting   Standards   (SFAS)  No.  143,   "Accounting  for  Asset  Retirement
Obligations,"  which requires businesses to record the fair value of a liability
for a legal  obligation  to retire an asset in the period in which the liability
is  incurred.  A legal  obligation  is a  liability  that a party is required to
settle  as a result  of an  existing  or  enacted  law,  statute,  ordinance  or
contract.   SJW  Corp.'s  legal  obligations  for  asset   retirements   reflect
principally  the  retirement  of wells,  which by law need to be  disposed of at
removal.  Retirement costs have historically been recovered through rates at the
time of  retirement.  As a result,  the  cumulative  effect  upon  adoption  was
reflected as a regulatory asset. For the year ended December 31, 2003, SJW Corp.
recorded the cumulative  effect of an asset  retirement  obligation of $4,700 at
its net present  value of $1,200 as a  regulatory  asset,  with a  corresponding
liability in other non-current liabilities.

      Revenue

      Revenue of San Jose Water Company includes amounts billed to customers and
unbilled  amounts based on estimated  usage from the latest meter reading to the
end of the year.  Operating  revenue in 2003,  2002,  and 2001 includes  $3,339,
$3,257,  and $2,912  respectively,  from the  operation of the City of Cupertino
municipal water system.

      Balancing Account

      The  CPUC  establishes  the  balancing  account  mechanism  to  track  the
under-collection  and over-collection of CPUC authorized revenue associated with
expense  changes for purchased  water,  purchased  power and pump tax. Since the
balances  have to be approved by the CPUC before they can be  incorporated  into
rates,  San Jose Water Company does not  recognize the balancing  account in its
revenue until the CPUC authorizes the change in customers' rates. As of December
31, 2003 and 2002,  the balancing  account had a net  over-collected  balance of
$7,000 and an under-collected balance of $262,000, respectively.

      Stock-Based Compensation

      SJW Corp. follows Statement of Financial  Accounting  Standards (SFAS) No.
123, "Accounting for Stock-Based  Compensation",  which established a fair value
based method of accounting for stock-based  compensation  plans. The Corporation
utilized  the  Black-Scholes  option-pricing  model to compute the fair value of
options at grant date as basis for the  stock-based  compensation  for financial
reporting purposes.


                                       34
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

      Earnings per Share

      Basic earnings per share and comprehensive income per share are calculated
using  income  available  to  common  shareholders  and  comprehensive   income,
respectively,  divided  by the  weighted  average  number of shares  outstanding
during the year.  Diluted earnings per share and comprehensive  income per share
are based upon the  weighted  average  number of common  shares  including  both
shares  outstanding  and  shares  potentially  issued in  connection  with stock
options and  restricted  common stock units granted under SJW Corp.'s  Long-Term
Incentive Plan, and income available to common  shareholders  and  comprehensive
income, respectively, adjusted for recognized stock compensation expense.

      On  January  29,  2004,  the Board of  Directors  of SJW Corp.  approved a
three-for-one  stock split of common  stock.  The  three-for-one  stock split is
effective on March 2, 2004. Basic and diluted earnings and comprehensive  income
per share reflect the impact of this stock split.

      Business Segment Information

      SJW Corp. and its  subsidiaries  operate  predominantly  in one reportable
business segment of providing water utility service to its customers. Nonutility
revenue,  assets  and net income do not have a  material  effect on SJW  Corp.'s
financial condition and results of operations.

      Reclassification

      Certain  prior year  amounts  have been  reclassified  to conform with the
current year's presentation.

Note 2. Capitalization

      SJW Corp.  is authorized  to issue  18,000,000  shares of $1.042 par value
common stock.  At December 31, 2003 and 2002,  9,135,441  shares of common stock
were issued and outstanding.

      At December 31, 2003 and 2002,  176,407 shares of $25 par value  preferred
stock were authorized. At December 31, 2003 and 2002, none were outstanding.

Note 3. Line Of Credit

      SJW Corp.  and its  subsidiaries  have available an unsecured bank line of
credit,  allowing aggregate short-term borrowings of up to $30,000. This line of
credit  bears  interest  at  variable  rates and  expires on July 1,  2005.  The
following table represents borrowings under this bank line of credit:

<TABLE>
<CAPTION>
                                                         2003          2002         2001
                                                     ------------   ----------   ----------
<S>                                                  <C>            <C>          <C>
         Maximum short-term borrowing ............     $ 13,950       11,500       26,100
         Average amount outstanding ..............        6,251        7,219       12,650
         Weighted average interest rate ..........          2.6%         3.1%         5.3%
         Interest rate at December 31 ............          3.0%         3.3%         3.8%
         Balance as of December 31 ...............     $      -       11,450       11,500
</TABLE>


                                       35
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

Note 4. Long-Term Debt

      Long-term debt as of December 31 was as follows:

Description                               Due Date        2003         2002
--------------------------------------   ----------   -----------   ---------
  Senior notes:
  A 8.58% ............................     2022        $  20,000      20,000
  B 7.37% ............................     2024           30,000      30,000
  C 9.45% ............................     2020           10,000      10,000
  D 7.15% ............................     2026           15,000      15,000
  E 6.81% ............................     2028           15,000      15,000
  F 7.20% ............................     2031           20,000      20,000
  G 5.93% ............................     2033           20,000           -
                                                       ---------      ------
  Total senior notes .................                 $ 130,000     110,000
                                                       ---------     -------
  Mortgage loan 5.96% ................     2013        $   9,798           -
                                                       ---------     -------
  Total debt .........................                 $ 139,798     110,000
  Less: Current portion ..............                       184           -
                                                       ---------     -------
  Total long-term debt ...............                 $ 139,614     110,000
                                                       =========     =======

      Senior notes held by institutional  investors are unsecured obligations of
San Jose Water Company and require  interest-only  payments until  maturity.  To
minimize  issuance  costs,  all of the  company's  debt  has  historically  been
privately placed.

      The senior note agreements of San Jose Water Company  generally have terms
and conditions that restrict the company from issuing  additional funded debt if
(1) the funded debt would  exceed 66 2/3% of total  capitalization,  and (2) net
income  available for interest  charges for the trailing  twelve  calendar month
period would be less than 175% of interest charges.

      The mortgage  loans are the  obligations  of SJW Land Company,  are due in
2013  and  amortize  over  twenty-five  years  and  are  secured  by  two  lease
properties;  carry a fixed interest rate with 120 monthly principal and interest
payments.  The loan agreement generally restricts the company from prepayment in
the first five years and requires  submission of periodic  financial  reports as
part of the loan covenants. An amortization schedule of the mortgage loans is as
follows:

                                 Amortization Schedule
                       -----------------------------------------
Year                    Total Payment     Interest     Principal
---------------------- ---------------   ----------   ----------
  2004 ...............     $   763         $  579       $  184
  2005 ...............         763            568          195
  2006 ...............         763            556          207
  2007 ...............         763            543          220
  2008 ...............         763            530          233
  Thereafter .........      10,917          8,761        2,156

      The fair value of  long-term  debt as of  December  31,  2003 and 2002 was
approximately $161,981 and $119,032,  respectively, using a discounted cash flow
analysis,  based on the current rates for similar  financial  instruments of the
same duration.


                                       36
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

Note 5. Income Taxes

      The following table  reconciles  income tax expense to the amount computed
by applying the federal statutory rate of 35% to income before income taxes:

<TABLE>
<CAPTION>
                                                                      2003         2002        2001
                                                                   ----------   ---------   ---------
<S>                                                                <C>          <C>         <C>
     "Expected" federal income tax .............................    $10,957       8,361       7,492
     Increase (decrease) in taxes attributable to:
       State taxes, net of federal income tax benefit ..........      1,799       1,373       1,229
       Dividend received deduction .............................       (303)       (302)       (300)
       Merger related expense deduction ........................          -           -        (937)
       Other items, net ........................................        176         226         (93)
                                                                    -------       -----       -----
                                                                    $12,629       9,658       7,391
                                                                    =======       =====       =====
</TABLE>

      The components of income tax expense were:

                               2003        2002      2001
                            ----------   -------   --------
Current:
  Federal ...............    $ 4,199      4,740     3,946
  State .................      2,374      1,986     1,274
Deferred:
  Federal ...............      6,129      2,838     1,795
  State .................        (73)        94       376
                             -------      -----     -----
                             $12,629      9,658     7,391
                             =======      =====     =====

<TABLE>
<CAPTION>
                                                                2003        2002      2001
                                                             ----------   -------   --------
<S>                                                          <C>          <C>       <C>
     Income taxes included in operating expense ..........    $10,523      9,658     7,391
     Income taxes included in gain on sale of nonutility
       property ..........................................      2,106          -         -
                                                              -------      -----     -----
                                                              $12,629      9,658     7,391
                                                              =======      =====     =====
</TABLE>


                                       37
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

      The components of the net deferred tax liability as of December 31 were as
follows:

<TABLE>
<CAPTION>
                                                                2003         2002
                                                             ----------   ---------
<S>                                                          <C>          <C>
         Deferred tax assets:
            Advances and contributions ...................    $14,291      14,121
            Unamortized investment tax credit ............      1,063       1,095
            Pensions and postretirement benefits .........      2,784       2,061
            California franchise tax .....................        628         524
            Other ........................................        575         567
                                                              -------      ------
         Total deferred tax assets .......................    $19,341      18,368
         Deferred tax liabilities:
            Utility plant ................................    $39,596      33,891
            Investment ...................................     10,102       8,411
            Deferred gain-property transfer ..............      3,537           -
            Debt reacquisition costs .....................        991       1,041
            Other ........................................      1,347       2,695
                                                              -------      ------
         Total deferred tax liabilities ..................     55,573      46,038
                                                              -------      ------
         Net deferred tax liabilities ....................    $36,232      27,670
                                                              =======      ======
</TABLE>

      Based upon the level of  historical  taxable  income and  projections  for
future  taxable  income  over the  periods  which the  deferred  tax  assets are
deductible,  management  believes  it is more  likely  than not SJW  Corp.  will
realize the benefits of these deductible differences.

Note 6. Intangible Assets

      Intangible  assets  consist  of a  concession  fee  paid  to the  City  of
Cupertino of $6,800 for operating the City of Cupertino  municipal water system,
and other intangibles of $1,040 primarily incurred in conjunction with the Santa
Clara Valley Water District (SCVWD) water contracts  related to the operation of
San Jose Water  Company.  All  intangible  assets are  recorded  at cost and are
amortized using the  straight-line  method over the legal or estimated  economic
life of the asset, whichever is shorter, not to exceed 40 years.

      Amortization  expense for the intangible  assets was $288,  $288, and $289
for  the  years  ended  December  31,  2003,   2002,  and  2001,   respectively.
Amortization  expense for 2004,  2005, 2006, 2007, and 2008 is anticipated to be
$288 per year.

      The costs of  intangible  assets as of  December  31, 2002 and 2001 are as
follows:

Dollars in thousands                           2003        2002
-----------------------------------------   ---------   ---------
  Concession fees .......................    $6,800      $6,800
  Other intangibles .....................     1,040       1,040
                                             ------      ------
  Intangible assets .....................    $7,840      $7,840
  Less: Accumulated amortization
         Concession fees ................     1,700       1,428
         Other intangibles ..............       283         267
                                             ------      ------
  Net intangible assets .................    $5,857      $6,145
                                             ======      ======

Note 7. Commitments

      San Jose Water  Company  purchases  water from Santa  Clara  Valley  Water
District (SCVWD). Delivery schedules for purchased water are based on a contract
year beginning July 1, and are negotiated


                                       38
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

every  three years under terms of a master contract with SCVWD expiring in 2051.
Based  on  current  prices  and  estimated  deliveries,  San  Jose Water Company
expects  to  purchase  a  minimum  of  90%  of  the delivery schedule, or 19,300
million  gallons ($27,300) of water, from SCVWD in the contract year ending June
30, 2004.

      In 1997, San Jose Water Company entered into a 25-year contract  agreement
with the City of Cupertino to operate the City's  municipal water system.  Under
the  terms  of  the  contract   agreement,   San  Jose  Water  Company   assumed
responsibility for all maintenance, operating and capital costs, while receiving
all payments for water  service.  Water service rates are subject to approval by
the Cupertino City Council.

Note 8. Contingency

      In January 2002, SJW Land Company entered into an Agreement for Possession
and Use  (Agreement)  with Valley  Transportation  Agency (VTA) whereby SJW Land
Company has granted VTA an irrevocable right to possession and use of 1.23 acres
of the  company's  parking  lot  property  for the  development  of a light rail
station. VTA has adopted a resolution  authorizing a condemnation  proceeding to
acquire the land and has  deposited  $3.7  million in an escrow  account as fair
market  compensation.  SJW Land  Company  waived  the right to  challenge  VTA's
possession and use in any subsequent  eminent domain proceeding but reserved the
right to assert,  and has  disputed  the fair market  value  placed on the land.
According to the terms of the  Agreement,  if a settlement is not reached within
three months of the execution of the  Agreement,  VTA can file an eminent domain
complaint to acquire title to the parking lot property.  On April 11, 2003,  VTA
filed  the  eminent  domain  lawsuit.  As a part  of the  proceedings,  VTA  has
transferred funds from the escrow account into a court deposit account to secure
its ongoing  right of  possession  for  construction  of the light rail  station
pending  final  litigation.  Compensation  for the  taking of  property  will be
determined  by the court or by way of  settlement  between SJW Land  Company and
VTA.  This  transaction  will be  recorded  and it is  expected  to result in an
increase to net income when the  compensation  issue is settled or a final court
order is rendered.

      SJW Corp. is also subject to ordinary routine litigation incidental to its
business.  Other  than as  disclosed  above,  there are no other  pending  legal
proceedings to which the Corporation or any of its subsidiaries is a party or to
which any of its  properties is the subject that are expected to have a material
effect  on the  Corporation's  financial  position,  results  of  operations  or
cashflows.  The Corporation  maintains a reserve for litigation and claims which
had a balance of $648 and $609 as of December 31, 2003 and 2002, respectively.

Note 9. Joint Venture

      In September  1999,  SJW Land Company  formed 444 West Santa Clara Street,
L.P., a limited  partnership,  with a real estate  development  firm whereby SJW
Land Company contributed real property in exchange for a 70% limited partnership
interest.  The real estate  development firm is partially owned by an individual
who also serves as a director of SJW Corp. A commercial building was constructed
on the partnership  property and is leased to an international  real estate firm
under a twelve-year  long-term  lease.  The  partnership is being  accounted for
under the equity method of accounting.  Included in the Consolidated  Statements
of  Income  and  Comprehensive  Income  is  SJW  Land  Company's  share  of  the
partnership   earnings  of  $169,  $147,  and  $165  in  2003,  2002,  and  2001
respectively.

Note 10. Crystal Choice Water Service LLC

      In January  2001,  SJW Corp.  formed  Crystal  Choice Water Service LLC, a
limited  liability  company,  with  Kinetico,   Incorporated,  a  leading  water
conditioning equipment manufacturer. Crystal Choice Water


                                       39
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

Service  LLC engages in the sale and rental of water conditioning equipment. SJW
Corp.  owns approximately 75% of the joint venture and has invested $75 and $287
in  2003  and  2002,  respectively. The consolidated financial statements of SJW
Corp.  at  December  31,  2003 and 2002 include the operating results of Crystal
Choice  Water  Service  LLC.  Inter-company  balances  were eliminated. Minority
interest  in  the  losses  of  Crystal Choice Water Service LLC of $55, $87, and
$121  was  included in other losses in the Consolidated Statements of Income and
Comprehensive  Income  at  December  31,  2003,  2002,  and  2001, respectively.
Included  in  other  noncurrent  liabilities  of  SJW  Corp.'s  Balance Sheet is
minority  interest of $157 and $187 at December 31, 2003 and 2002, respectively.

Note 11. Employee Benefit Plans

      Pension Plans

      San Jose Water Company  sponsors  noncontributory  defined benefit pension
plans.  Benefits under the plans are based on an employee's years of service and
highest consecutive three years of compensation. Company policy is to contribute
the net periodic pension cost to the extent it is tax deductible.

      The Pension  Plan is  administered  by a Committee  that is composed of an
equal number of company and Union  representatives.  Investment  decisions  have
been delegated by the Committee to an Investment Manager,  presently U.S. Trust.
Investment  guidelines  provided to the Investment Manager require that at least
30% of plan assets be invested in bonds or cash. Furthermore, equities are to be
diversified by industry  groups and selected to achieve  preservation of capital
coupled  with  long-term   growth  through  capital   appreciation  and  income.
Additionally,  Prudential  Securities Inc. has been retained by the Committee as
an advisor to monitor the performance of the Investment Manager based on written
plan performance goals and criteria.  Generally it is expected of the Investment
Manager  that the  performance  of the  Pension  Plan Fund,  computed on a total
annual  rate of  return  basis,  should  meet  or  exceed  specific  performance
standards  over a five-year  period  and/or full market cycle.  These  standards
include  a  specific  rate of  return,  a return  of four  percent  in excess of
inflation and performance  better than a similarly  balanced fund using Standard
and Poor 500 and Salomon Bros.  Indexes.  Satisfactory  performance will also be
achieved if the total return  compared to an appropriate  balanced fund universe
is:

      a. in rising markets: in the second quartile of the universe

      b. declining markets: in the first quartile of the universe

      c. full market cycle: in the first quartile of the universe

      General  restrictions have been placed on the Investment  Manager.  He may
not acquire any security  subject to any  restriction:  write,  or sell any put,
naked call or call option;  acquire any security on margin; or otherwise utilize
borrowed funds for the acquisition of any security;  sell any security not owned
by the Fund;  acquire  more than 10% of any class of  securities  or any  single
issuer; generally, acquire a security of any single issuer whose cost exceeds 6%
of  the  fund  value;  securities  of the  San  Jose  Water  Company;  trade  in
commodities;   or  acquire  foreign  stocks  except  those  traded  as  American
depository receipts on a U.S. Stock Exchange.

      San Jose Water Company has a Supplemental Executive Retirement Plan, which
is a defined benefit plan under which the company will pay supplemental  pension
benefits  to key  executives  in  addition  to the  amounts  received  under the
retirement  plan.  The  annual  cost of  this  plan  has  been  included  in the
determination  of the net periodic  benefit cost shown below. The plan, which is
unfunded, had a projected benefit obligation of $5,008, $4,583, and $5,399 as of
December 31, 2003, 2002, and 2001,  respectively,  and net periodic pension cost
of $583, $606, and $616 for 2003, 2002, and 2001, respectively.


                                       40
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

      Deferral Plan

      San Jose  Water  Company  sponsors  a salary  deferral  plan  that  allows
employees  to defer and  contribute  a portion  of their  earnings  to the plan.
Contributions,  not to exceed set limits,  are matched by the  company.  Company
contributions were $708, $671, and $639, in 2003, 2002, and 2001, respectively.

      Other Postretirement Benefits

      In addition to  providing  pension  and savings  benefits,  San Jose Water
Company provides health care and life insurance  benefits for retired employees.
The plan is a flat dollar plan which is  unaffected by variations in health care
costs.

      Net periodic cost for the defined  benefit plans and other  postretirement
benefits was calculated utilizing the following assumptions:

<TABLE>
<CAPTION>
                                                    Pension Benefits                      Other Benefits
                                            ---------------------------------   -----------------------------------
                                               2003        2002        2001        2003         2002         2001
                                            ---------   ---------   ---------   ----------   ----------   ---------
<S>                                         <C>         <C>         <C>         <C>          <C>          <C>
Weighted-Average
 Assumptions as of December 31                      %           %           %           %            %            %
 Discount rate ..........................       6.25        6.75        7.25        6.25         6.75         7.25
 Expected return on plan assets .........       8.00        8.00        8.00        8.00         8.00         8.00
 Rate of compensation increase ..........       4.00        4.00        4.00        n.a.         n.a.         n.a.
                                                ----        ----        ----       -----        -----       ------
</TABLE>

      The  company  utilizes  Moody's  'A' and 'Aa' rated  bonds in  industrial,
utility and financial  sectors with outstanding  amount of $1 million or more in
determining the discount rate for actuarial expense calculation  purposes.  Both
rates reflect the appropriate economic conditions at time of measurement.

      Net periodic cost for the defined  benefit plans and other  postretirement
benefits was:

<TABLE>
<CAPTION>
                                                       Pension Benefits                        Other Benefits
                                            ---------------------------------------   --------------------------------
                                                2003          2002          2001        2003       2002        2001
                                            -----------   -----------   -----------   --------   --------   ----------
<S>                                         <C>           <C>           <C>           <C>        <C>        <C>
Components of Net Periodic Benefit Cost
 Service cost .............................  $  1,413      $  1,148           926      $  46         41         40
 Interest cost ............................     2,741         2,640         2,421        122        118        118
 Expected return on assets ................    (2,191)       (2,659)       (2,940)       (41)       (40)       (33)
 Amortization of transition obligation ....        56            54             3         56         56         56
 Amortization of prior service cost .......       286           354           258         16         16         16
 Recognized actuarial loss/(gain) .........       412            57          (346)         -          -         (6)
                                             --------      --------        ------      -----        ---        ---
 Net periodic benefit cost ................  $  2,717         1,594           322      $ 199        191        191
                                             ========      ========        ======      =====        ===        ===
</TABLE>


                                       41
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

      The actuarial  present value of benefit  obligations and the funded status
of San Jose Water Company's  defined  benefit  pension and other  postretirement
plans as of December 31 were as follows:

<TABLE>
<CAPTION>
                                                             Pension Benefits                       Other Benefits
                                                   ------------------------------------- ------------------------------------
                                                        2003         2002        2001        2003         2002        2001
                                                   ------------- ----------- ----------- ------------ ----------- -----------
<S>                                                <C>           <C>         <C>         <C>          <C>         <C>
Change in Benefit Obligation
 Benefit obligation at beginning of year .........   $  41,466      37,021      36,385     $  1,821       1,709       1,569
 Service cost ....................................       1,413       1,148         926           46          41          40
 Interest cost ...................................       2,741       2,640       2,421          122         118         118
 Amendments ......................................           -         424       1,275        1,711           -           -
 Actuarial loss/(gain) ...........................       3,516       1,931      (2,019)         152          66         101
 Benefits paid ...................................      (1,857)     (1,698)     (1,967)        (113)       (113)       (119)
                                                     ---------      ------      ------     --------       -----       -----
 Benefit obligation at end of year ...............   $  47,279      41,466      37,021     $  3,739       1,821       1,709
                                                     =========      ======      ======     ========       =====       =====
Change in Plan Assets
 Fair value of assets at beginning of year;
   Debt securities ...............................   $   8,653       9,488       9,873            -           -           -
                                                          31.1%       27.9%       26.4%           -           -           -
   Equity securities .............................   $  16,461      23,682      25,979            -           -           -
                                                          59.1%       69.6%       69.4%           -           -           -
   Cash & Equivalents ............................   $   2,718         840       1,570     $    507         394         483
                                                           9.8%        2.5%        4.2%         100%        100%        100%
                                                     ---------      ------      ------     --------       -----       -----
                                                     $  27,832      34,010      37,422     $    507         394         483
 Actual return on plan assets ....................       4,344      (4,713)     (1,766)           -           7          18
 Employer contributions ..........................       2,000         233         321          114         206           -
 Benefits paid ...................................      (1,843)     (1,698)     (1,967)        (100)       (100)       (107)
                                                     ---------      ------      ------     --------       -----       -----
                                                     $  32,333      27,832      34,010          521         507         394
                                                     =========      ======      ======     ========       =====       =====
 Fair value of assets at end of year;
   Debt securities ...............................   $   7,116       8,653       9,488            -           -           -
                                                          22.0%       31.1%       27.9%           -           -           -
   Equity securities .............................   $  21,677      16,461      23,682            -           -           -
                                                          67.0%       59.1%       69.6%           -           -           -
   Cash & Equivalents ............................   $   3,540       2,718         840     $    521         507         394
                                                          11.0%        9.8%        2.5%         100%        100%        100%
                                                     ---------      ------      ------     --------       -----       -----
   Total .........................................   $  32,333      27,832      34,010     $    521         507         394
                                                     =========      ======      ======     ========       =====       =====
Funded Status
 Plan assets less benefit obligation .............   $ (15,047)    (13,633)     (3,010)    $ (3,218)     (1,313)     (1,315)
 Unrecognized transition obligation ..............          96         152         206          453         509         565
 Unamortized prior service cost ..................       1,985       2,270       3,387        1,735          39          54
 Unrecognized actuarial(gain) loss ...............      10,665       9,388      (1,045)         229          20         (94)
                                                     ---------     -------      ------     --------      ------      ------
 Accrued benefit cost ............................   $  (2,301)     (1,823)       (462)    $   (801)       (745)       (790)
                                                     =========     =======      ======     ========      ======      ======
</TABLE>

      In 2004, the company  expects to make a contribution of $1,341 and $114 to
the pension plan and other post retirement benefit plan, respectively.


                                       42
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

      Amounts recognized on the balance sheet consist of:

<TABLE>
<CAPTION>
                                                       Pension Benefits                         Other Benefits
                                           ----------------------------------------   ----------------------------------
                                               2003           2002          2001         2003         2002        2001
                                           ------------   -----------   -----------   ----------   ---------   ---------
<S>                                          <C>            <C>            <C>          <C>           <C>         <C>
Accrued benefit costs ....................   $ (2,301)       (1,823)         (462)      $ (801)       (745)       (790)
Additional minimum liability .............     (4,874)       (4,541)       (2,580)           -           -           -
Intangible asset .........................      2,080         2,423         1,001            -           -           -
Accumulated other comprehensive loss .....      2,794         2,118         1,579            -           -           -
                                             --------        ------        ------       ------        ----        ----
Net amount recognized ....................   $ (2,301)       (1,823)         (462)      $ (801)       (745)       (790)
                                             ========        ======        ======       ======        ====        ====
</TABLE>

      In December 2003,  federal  legislation was passed reforming  Medicare and
introducing  the  Medicare  Part D  prescription  drug  program.  San Jose Water
Company has not yet determined  the effects,  if any, the new  legislation  will
have on its post retirement  benefit plan or calculation that are required under
SFAS No. 106  "Employers'  Accounting  for  Postretirement  Benefits  Other Than
Pensions",  as disclosed  in this Note.  The  legislation  may provide a special
subsidy to San Jose Water  Company  which may affect the  actuarial  assumptions
used in determining the utilization  rates and medical cost trends. In addition,
the FASB may take further action that could affect the  accounting  treatment of
the legislation.

Note 12. Long-Term Incentive Plan and Stock-Based Compensation

      On April 29,  2003,  SJW  Corp.'s  shareholders  executed  and  approved a
technical  amendment to its Long-Term Incentive Plan (Incentive Plan), which was
originally  adopted on April 18, 2002. Under the Incentive Plan,  900,000 common
shares have been  reserved for issuance.  The  amendment to the  Incentive  Plan
includes allowing non-employee directors to receive awards, authorizing the plan
administrator to grant stock appreciation rights, and listing of the performance
criteria for  performance  shares.  The amended plan allows SJW Corp. to provide
key employees,  including officers, and non-employee directors,  the opportunity
to acquire a meaningful equity interest in the Corporation.  In no event may any
one participant in the Incentive Plan receive awards under the Incentive Plan in
any calendar  year  covering an aggregate  of more than 300,000  common  shares.
Additionally,  awards granted under the Incentive  Plan may be conditioned  upon
the attainment of specified  performance  goals. The types of awards included in
the Incentive Plan are stock options, dividend units, performance shares, rights
to acquire  restricted  stock and stock  bonuses.  As of December 31,  2003,  no
securities  were issued  pursuant to the equity  awards made and 127,407  shares
will be issued upon the exercise of outstanding  options and deferred restricted
stock.  The remaining shares available for issuance under the Incentive Plan are
772,593.  The total compensation cost charged to income under all plans was $492
for  2003.  The  total  benefits,  including  non-employee  directors  converted
post-retirement benefits,  recorded in shareholders' equity under all plans were
$1,018. No awards were granted under the Incentive Plan in 2002 and 2001.

      Stock Options

      Awards in the form of stock option  agreements  under the  Incentive  Plan
allow  executives to purchase  common shares at a specified  price.  Options are
granted at an exercise price that is not less than the per share market price on
the date of grant. The options vest at a 25% rate on their anniversary date over
their first four years and are exercisable over a ten-year  period.  At December
31, 2003, 28,929 options were issued and outstanding under the Incentive Plan at
an  exercise  price of $28.00,  with a weighted  average  remaining  life of 9.3
years, and the weighted average fair value of $5.33, at the date of grant.

      SJW Corp. has adopted Statement of Financial  Accounting  Standards (SFAS)
No. 123, "Accounting for Stock-Based Compensation",  utilizing the Black-Scholes
option-pricing model to compute the fair value of options at the grant date as a
basis for determining  stock-based  compensation  costs for financial  reporting
purposes.  The assumptions  utilized  include:  expected  dividend yield - 3.4%,
expected  volatility - 27%,  risk-free  interest rate - 2.86%,  expected holding
period - five years.


                                       43
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

      For the year ended December 31, 2003, the Corporation has recognized stock
compensation  expense of $26, for the 28,929 options  granted to its executives.
No options were granted in 2002 and 2001.

Stock Options

<TABLE>
<CAPTION>
                                                                     2003
                                                        -------------------------------
                                                                       Weighted-Average
                                                           Shares       Exercise Price
                                                        -----------   -----------------
<S>                                                     <C>           <C>
Outstanding at beginning of year ....................           -                -
Granted .............................................      28,929          $ 28.00
Exercised ...........................................           -                -
Forfeited ...........................................           -                -
Outstanding at end of year ..........................      28,929          $ 28.00
Options exercisable at year-end .....................           -                -
Weighted-average fair value of options granted during
 the year ...........................................    $   5.33                -
</TABLE>

Options Exercisable

<TABLE>
<CAPTION>
                   Options Outstanding                         Options Exercisable
---------------------------------------------------------   -------------------------
                                  Weighted
                                  Average
                                 Remaining      Weighted                     Weighted
  Range of         Number       Contractual      Average        Number       Average
  Exercise      Outstanding         Life        Exercise     Exercisable     Exercise
   Prices       at 12/31/03       (years)         Price      at 12/31/03      Price
------------   -------------   -------------   ----------   -------------   ---------
<S>            <C>             <C>             <C>          <C>             <C>
  $  28.00        28,929             9.3        $ 28.00          -              -
</TABLE>

Deferred Restricted Stock Plans

      As of December 31, 2003,  41,670  restricted stock units have been granted
to a key  employee of the  Corporation,  which vest over a period of three years
and are payable upon  retirement.  Following SFAS No. 123, the restricted  stock
units were valued at the market  price of $28.10 per share at the date of grant,
which is being recognized as compensation  expense over the vesting period.  For
the  year  ended  December  31,  2003,  the  Corporation  has  recognized  stock
compensation  expense of $234 related to these restricted stock units. SJW Corp.
has a Deferred  Restricted Stock Program for non-employee  Board members whereby
members can elect to receive their existing and future cash pension benefit, and
annual retainer fees in restricted stock units under the program.

      Directors who elect to  participate  in the program will receive an annual
grant of the right to receive  Deferred  Restricted Stock in lieu of receiving a
cash pension  benefit,  an amount  equivalent  to the annual  retainer fee, upon
retirement.  The number of shares of each annual Deferred Restricted Stock award
will equal to the amount of the  aggregate  annual  retainer,  as of the date of
grant, divided by the fair market value of one share of the Corporation's common
stock on the date of grant. Directors can receive a maximum number of ten awards
for ten full years of  service.  With  respect  to the  conversion  of  existing
pension  benefits  that were accrued  before the grant date,  20,487 shares were
fully vested at the time of grant and the  remaining  35,037  shares vest over a
period of three years. As of December 31, 2003,  55,524 shares have been granted
to the  directors  under the program at a market  price of $28.40 per share.  In
accordance with SFAS No. 123, the Corporation has recognized stock  compensation
expense of $141 for the year ended December 31, 2003.

      Directors  who elect to convert the annual  retainer fee receive  Deferred
Restricted  Stock in an amount  equal to the annual  retainer fee divided by the
fair market value of one share of common stock


                                       44
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

on  the last business day before the date of grant, which will vest on a monthly
basis.  For  the  year  ended  December 31, 2003 the Corporation has granted 428
deferred  restricted  shares  in  lieu  of  cash  retainer  fees  at  $28.07 and
recognized  stock  compensation expense of $36. No Deferred Restricted Stock was
granted in 2002 and 2001.

Deferred Restricted Shares Outstanding

                                                  Weighted
                                                Average Issue
                                                    Price         Shares
                                               --------------   ---------
  Outstanding at 12/31/2002 .........                 -               -
         Issued .....................           $ 28.27          98,478
         Forfeited ..................                 -               -
  Outstanding at 12/31/2003 .........           $ 28.27          98,478
  Shares vested .....................                 -          35,661

Dividend Equivalent Rights

      SJW  Corp.  also has a  Dividend  Equivalent  Rights  Agreement  providing
holders of options to receive  dividend  rights  each time a dividend is paid on
common shares after the option grant date,  for a maximum  period of four years.
Dividend   Equivalent  Rights  for  restricted  stock  units  allow  holders  of
restricted stock units to receive dividend rights,  each time a dividend is paid
on common shares after the grant date,  until the stock is issued to the holder.
The accumulated dividends of the holders will be used to purchase stock units on
behalf of the holders at the beginning of the  following  year using the average
fair  market  value  of  common  shares  on each of the  dividend  dates  in the
immediately preceding year. The dividend equivalent units shall be vested in the
same manner as the options and restricted stock. For the year ended December 31,
2003, the Corporation has recognized compensation expense for dividend rights of
$55.

Note 13. Sale of Nonutility Property

      On March  11,  2003,  SJW  Corp.  sold San  Tomas  station,  a  nonutility
property,  to Santa Clara Valley Water District  (SCVWD) for a contract price of
$5,400.  SJW Corp.  recognized a gain on sale of nonutility  property of $3,030,
net of tax of $2,106 in connection with the sale. In April 2003, the Corporation
reinvested the property sale proceeds by acquiring two income  properties in the
states of Connecticut  and Florida,  at a total  purchase  price of $15,400.  In
connection with the purchases,  the Corporation executed mortgages in the amount
of $9,900. The mortgage loans are due in ten years with a fixed interest rate of
5.96%.  The  mortgages  are secured by the same  properties  that SJW Corp.  has
purchased in the states of Connecticut and Florida.

Note 14. Subsequent events

      On  January  29,  2004,   SJW  Corp.'s  Board  of  Directors   approved  a
three-for-one stock split of common stock for shareholders of record on February
10, 2004 and the issued shares were split on a  three-for-one  basis on March 1,
2004.  Share and per share  computations  provided herein reflect the changes in
the number of shares due to the stock split.


                                       45
<PAGE>

                           SJW CORP. AND SUBSIDIAIRES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           Years ended December 31, 2003, 2002, and 2001 - (Continued)
                    (Dollars in thousands, except share data)

Note 15. Unaudited Quarterly Financial Data

      Summarized quarterly financial data is as follows:

<TABLE>
<CAPTION>
                                                 2003 Quarter ended
                                 ---------------------------------------------------
                                     March         June       September     December
                                 ------------   ----------   -----------   ---------
<S>                                <C>            <C>          <C>          <C>
Operating revenue ............     $ 27,791       37,968       49,334       34,639
Operating income .............        3,976        6,256        7,887        4,835
Net income ...................        5,282        4,426        5,967        3,002
Comprehensive income .........        6,645        5,964        4,468        3,635
Earnings per share
   - Basic ...................         0.58         0.48         0.65         0.33
   - Diluted .................         0.58         0.48         0.65         0.33
Comprehensive income per share
   - Basic ...................         0.73         0.65         0.49         0.40
   - Diluted .................         0.72         0.65         0.49         0.40
Market price range of stock:
   High ......................        28.08        29.15        29.42        29.90
   Low .......................        25.13        25.65        27.25        28.47
Dividends per share ..........         0.25         0.24         0.24         0.24
</TABLE>

<TABLE>
<CAPTION>
                                                 2002 Quarter ended
                                 ---------------------------------------------------
                                     March         June       September     December
                                 ------------   ----------   -----------   ---------
<S>                              <C>            <C>          <C>           <C>
Operating revenue ............     $ 27,718       38,696       46,153       33,085
Operating income .............        3,372        5,720        7,397        4,069
Net income ...................        1,749        3,991        5,776        2,716
Comprehensive income .........        1,652        3,731        5,990        1,177
Earnings per share
   - Basic ...................         0.19         0.44         0.63         0.30
   - Diluted .................         0.19         0.44         0.63         0.30
Comprehensive income per share
   - Basic ...................         0.18         0.41         0.66         0.13
   - Diluted .................         0.18         0.41         0.66         0.13
Market price range of stock:
   High ......................        29.67        29.40        27.13        27.95
   Low .......................        26.08        25.68        25.67        25.93
Dividends per share ..........         0.23         0.23         0.23         0.23
</TABLE>


                                       46
<PAGE>

                                    SJW CORP.
                          FINANCIAL STATEMENT SCHEDULE

                                                                     Schedule II

                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                     Years ended December 31, 2003 and 2002


Description                                            2003            2002
-----------------------------------------------   -------------   -------------
Allowance for doubtful accounts
   Balance, beginning of period ...............    $  120,000         100,000
   Charged to expense .........................       307,628         397,860
   Accounts written off .......................      (344,231)       (405,030)
   Recoveries of accounts written off .........        46,603          27,170
                                                   ----------        --------
   Balance, end of period .....................    $  130,000         120,000
                                                   ==========        ========
Reserve for litigation and claims
   Balance, beginning of period ...............    $  609,292         579,698
   Charged to expense .........................       105,000          90,000
   Payments ...................................       (66,067)        (60,406)
                                                   ----------        --------
   Balance, end of period .....................    $  648,225         609,292
                                                   ==========        ========

Item 9. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure

      None.

Item 9A. Controls and Procedures

      (a)  The   Corporation's   management,   with  the  participation  of  the
Corporation's Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the Corporation's  disclosure controls and procedures as of the
end of the period covered by this report.  Based on that  evaluation,  the Chief
Executive  Officer and Chief Financial  Officer concluded that the Corporation's
disclosure  controls  and  procedures  (as  defined  in  Rules  13(a)-14(c)  and
15d-14(c) under the Securities Exchange Act of 1934) as of the end of the period
covered by this report have been  designed and are  functioning  effectively  to
provide  reasonable  assurance that the information  required to be disclosed by
the  Corporation in reports filed under the  Securities  Exchange Act of 1934 is
recorded,  processed,  summarized and reported within the time periods specified
in the Securities and Exchange  Commission's  rules and forms.  The  Corporation
believes that a control system, no matter how well designed and operated, cannot
provide  absolute  assurance  that the objectives of the control system are met,
and no evaluation of controls can provide  absolute  assurance  that all control
issues and instances of fraud, if any, within a company have been detected.

      (b)  Changes in  internal  controls.  There has been no change in internal
control  over  financial  reporting  during the fourth  fiscal  quarter that has
materially  affected,  or is reasonably likely to materially affect the internal
controls over financial reporting of SJW Corp.

                                    PART III

Item 10. Directors and Executive Officers of the Registrant

      The  information  required  by this item is  contained  in part  under the
caption  "Executive  Officers of Registrant"  in Part I of this report,  and the
remainder  is  contained  in SJW  Corp.'s  Proxy  Statement  for its 2004 Annual
Meeting  of  Shareholders  to be  held  on  April  29,  2004  (the  "2004  Proxy
Statement")  under the captions  "Proposal 1 - Election of Directors",  "Section
16(a) Beneficial Ownership Reporting  Compliance," and "Corporate Governance and
Board Matters" and is incorporated herein by reference.


                                       47
<PAGE>

      Code of Ethics

      SJW Corp.  has adopted a code of ethics that applies to SJW Corp.'s  Chief
Executive  Officer,  Chief Financial Officer and Chief Accounting  Officer.  The
text of the code of ethics is posted on SJW Corp.'s  internet  website under web
address  http://www.sjwater.com.  SJW Corp.  intends to satisfy  the  disclosure
requirements  under Item 10 of Form 8-K  regarding an amendment  to, or a waiver
from,  a  provision  of its code of ethics by posting  such  information  on its
website.

Item 11. Executive Compensation

      The  information  required  by this item is  contained  in the 2004  Proxy
Statement   under  the  captions   "Compensation   of   Directors,"   "Executive
Compensation," "Employment Arrangements," and "Compensation Committee Interlocks
and Insider Participation" and is incorporated herein by reference.

Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters

      The  information  required  by this item is  contained  in the 2004  Proxy
Statement under the caption "Security Ownership of Certain Beneficial Owners and
Management"  and "Securities  Authorized for Issuance under Equity  Compensation
Plans," and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

      The  information  required  by this item is  contained  in the 2004  Proxy
Statement under the caption "Certain  Relationships  and Related  Transactions,"
and is incorporated herein by reference.

                                     PART IV

Item 14. Prinicipal Accountant Fees and Services

      The  information  required  by this item is  contained  in the 2004  Proxy
Statement  under the caption  "Principal  Accountant  Fees and  Services" and is
incorporated herein by reference.

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

(1) Financial Statements

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                     -----
<S>                                                                                  <C>
Independent Auditors' Report .....................................................    27
Consolidated Balance Sheets as of December 31, 2003 and 2002 .....................    28
Consolidated Statements of Income and Comprehensive Income for the years ended
 December 31, 2003, 2002, and 2001 ...............................................    29
Consolidated Statements of Changes in Shareholders' Equity for the years ended
 December 31, 2003, 2002, and 2001 ...............................................    30
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002,
 and 2001 ........................................................................    31
Notes to Consolidated Financial Statements .......................................    32
</TABLE>

(2) Financial Statement Schedule

<TABLE>
<CAPTION>
Schedule
Number II
---------
<S>                                                                                   <C>
Valuation and Qualifying Accounts and Reserves,
Years ended December 31, 2003 and 2002 ...........................................    47
</TABLE>

      All  other   schedules  are  omitted  as  the  required   information   is
inapplicable  or the  information  is presented in the  financial  statements or
related notes.


                                       48
<PAGE>

(3) Exhibits required to be filed by Item 601 of Regulation S-K

      See Exhibit Index located immediately following paragraph (b) of this Item
15.

      The exhibits  filed  herewith are  attached  hereto  (except as noted) and
those  indicated  on the  Exhibit  Index  which  are  not  filed  herewith  were
previously filed with the Securities and Exchange Commission as indicated.

            (b) Report on Form 8-K. SJW Corp. filed a current report on Form 8-K
      with the Securities and Exchange Commission on October 29, 2003 to furnish
      its press  release  that  announced  the  financial  results for the third
      quarter ended September 30, 2003 under Item 12 thereof.


                                       49
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
   No.                                         Description
--------   -----------------------------------------------------------------------------------
<S>        <C>
 2         Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession:
 2.1       Registration Rights Agreement entered into as of December 31, 1992 among SJW
           Corp., Roscoe Moss, Jr. and George E. Moss. Filed as Exhibit 4.1 to Form 8-K
           January 11, 1993. S.E.C. File No. 1-8966.(1)
 3         Articles of Incorporation and By-Laws:
 3.1       Restated Articles of Incorporation and By-Laws of SJW Corp., defining the rights
           of holders of the equity securities of SJW Corp. Filed as Exhibit 3.1 to Form 10-K
           for the year ended December 31, 2001.
 4         Instruments Defining the Rights of Security Holders, including Indentures: No
           current issue of the registrant's long-term debt exceeds 10 percent of its total
           assets. SJW Corp. hereby agrees to furnish upon request to the Commission a copy
           of each instrument defining the rights of holders of unregistered senior and
           subordinated debt of the company.
10         Material Contracts:
10.1       Water Supply Contract dated January 27, 1981 between San Jose Water Works and
           the Santa Clara Valley Water District, as amended. Filed as Exhibit 10.1 to Form
           10-K for the year ended December 31, 2001.
10.3       San Jose Water Company Executive Supplemental Retirement Plan adopted by San
           Jose Water Company Board of Directors.(2)
10.4       First Amendment to San Jose Water Company Executive Supplemental Retirement
           Plan adopted by San Jose Water Company Board of Directors.(2)
10.5       Second Amendment to San Jose Water Company Executive Supplemental
           Retirement Plan adopted by San Jose Water Company Board of Directors. Filed as
           an Exhibit to Annual Report on Form 10-K for the year ended December 31, 1998.
           S.E.C. File No. 1-8966.(2)
10.6       Third Amendment to San Jose Water Company Executive Supplemental
           Retirement Plan adopted by San Jose Water Company Board of Directors. Filed as
           an Exhibit to Annual Report on Form 10-K for the year ended December 31, 1998.
           S.E.C. File No. 1-8966.(2)
10.7       Fourth Amendment to San Jose Water Company Executive Supplemental
           Retirement Plan adopted by San Jose Water Company Board of Directors. Filed as
           an Exhibit to Annual Report on Form 10-K for the year ended December 31, 1998.
           S.E.C. File No. 1-8966.(2)
10.8       Fifth Amendment to San Jose Water Company Executive Supplemental Retirement
           Plan adopted by San Jose Water Company Board of Directors. Filed as an Exhibit
           to Annual Report on Form 10-K for the year ended December 31, 1998. S.E.C.
           File No. 1-8966.(2)
10.9       SJW Corp. Executive Severance Plan adopted by SJW Corp. Board of Directors.
           Filed as an Exhibit to Annual Report on Form 10-K for the year ended December
           31, 1998. S.E.C. File No. 1-8966.(2)
10.10      Sixth Amendment to San Jose Water Company's Executive Supplemental
           Retirement Plan. Filed as an Exhibit to Form 10-Q for the period ending
           September 30, 1999. S.E.C. File No. 1-8966.(2)
10.11      Amendment to SJW Corp.'s Executive Severance Plan. Filed as an Exhibit to Form
           10-Q for the period ending September 30, 1999. S.E.C. File No. 1-8966.(2)
</TABLE>


                                       50
<PAGE>

<TABLE>
<CAPTION>
  Exhibit
    No.                                           Description
----------   -------------------------------------------------------------------------------------
<S>          <C>
10.12        Resolution for Directors' Retirement Plan adopted by SJW Corp. Board of
             Directors as amended on September 22, 1999. Filed as an Exhibit to Form 10-Q for
             the period ending September 30, 1999. S.E.C. File No. 1-8966.(2)
10.13        Resolution for Directors' Retirement Plan adopted by San Jose Water Company's
             Board of Directors as amended on September 22, 1999. Filed as an Exhibit to
             Form 10-Q for the period ending September 30, 1999. S.E.C. File No. 1-8966.(2)
10.14        Resolution for Directors' Retirement Plan adopted by SJW Land Company Board
             of Directors on September 22, 1999. Filed as an Exhibit to Form 10-Q for the
             period ending September 30, 1999. S.E.C. File No. 1-8966.(2)
10.15        SJW Corp. Long-Term Incentive Plan, adopted by SJW Corp. Board of Directors
             March 6, 2002. Filed as an Exhibit to Form 10-Q for the period ended June 30,
             2002.(2)
10.16        Seventh Amendment to San Jose Water Company's Executive Supplemental
             Retirement Plan, adopted by San Jose Water Company Board of Directors. Filed
             as an Exhibit to Form 10-Q for the period ended June 30, 2002.(2)
10.17        Limited Partnership Agreement of 444 West Santa Clara Street, L. P. executed
             between SJW Land Company and Toeniskoetter & Breeding, Inc. Development.
             Filed as an Exhibit to Form 10-Q for the period ending September 30, 1999. S.E.C.
             File No. 1-8966.
10.18        San Jose Water Company Executive Supplemental Retirement Plan adopted by San
             Jose Water Company Board of Directors, as restated to reflect amendments made
             through May 1, 2003. Filed as an Exhibit to Form 10-Q for the period ended June
             30, 2003. S.E.C. File No. 1-8966.(2)
10.19        SJW Corp. Executive Severance Plan adopted by SJW Corp. Board of Directors, as
             restated to reflect amendments made through May 1, 2003. Filed as an Exhibit to
             Form 10-Q for the period ended June 30, 2003. S.E.C. File No. 1-8966.(2)
10.20        SJW Corp. Long-Term Incentive Plan, adopted by SJW Corp. Board of Directors,
             as amended on March 3, 2003. Filed as an Exhibit to Form 10-Q for the period
             ended June 30, 2003. S.E.C. File No. 1-8966.(2)
10.21        Chief Executive Officer Employment Agreement, as restated on June 27, 2003.
             Filed as an Exhibit to Form 10-Q for the period ended June 30, 2003. S.E.C. File
             No. 1-8966.(2)
10.22        Standard Form of Stock Option Agreement-subject to changes per Employment
             Agreement, as adopted by the SJW Corp. Board of Directors on April 29, 2003.
             Filed as an Exhibit to Form 10-Q for the period ended June 30, 2003. S.E.C. File
             No. 1-8966.(2)
10.23        Chief Executive Officer SERP Deferred Restricted Stock Award, as restated on
             June 27, 2003. Filed as an Exhibit to Form 10-Q for the period ended June 30,
             2003. S.E.C. File No. 1-8966.(2)
10.24        Form of Stock Option Agreement with Dividend Equivalent Agreement as
             adopted by the Board of Directors on April 29, 2003. Filed as an Exhibit to Form
             10-Q for the period ended June 30, 2003. S.E.C. File No. 1-8966.(2)
10.25        Form of Directors Deferred Restricted Stock Program as adopted by SJW Corp.
             Board of Directors on July 29, 2003. Filed as an Exhibit to Form 10-Q for the
             period ending September 30, 2003. S.E.C. File No. 1-8966.(2)
10.26        Form of Directors Annual Retainer Fee Deferred Election Agreement, as adopted
             by SJW Corp. Board of Directors on July 29, 2003. Filed as an Exhibit to Form
             10-Q for the period ending September 30, 2003. S.E.C. File No. 1-8966.(2)
</TABLE>


                                       51
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
   No.                                           Description
--------   --------------------------------------------------------------------------------------
<S>        <C>
31.1       Certification Pursuant to Rule 13a-14(a)/15d-14(a) by President and Chief
           Executive Officer.(1)
31.2       Certification Pursuant to Rule 13a-14(a)/15d-14(a) by Chief Financial Officer and
           Treasurer.(1)
32.1       Certification Pursuant to 18 U.S.C. Section 1350 by President and Chief Executive
           Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)
32.2       Certification Pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer and
           Treasurer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1)
</TABLE>

------------
(1)   Filed currently herewith.
(2)   Management contract or compensatory plan or agreement.

      In accordance with the Securities and Exchange Commission's  requirements,
SJW Corp.  will furnish  copies of any exhibit upon payment of 30 cents per page
fee.

      To order any exhibit(s),  please advise the Secretary, SJW Corp., 374 West
Santa Clara Street, San Jose, CA 95196, as to the exhibit(s) desired.

      On receipt of your request,  the Secretary will provide to you the cost of
the specific exhibit(s).  The Secretary will forward the requested exhibits upon
receipt of the required fee.


                                       52
<PAGE>

                                   SIGNATURES

     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange  Act  of  1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                        SJW CORP.

Date: January 29, 2004                  By /s/ DREW GIBSON
                                          -----------------------------------
                                          Drew Gibson,
                                          Chairman, Board of Directors

Pursuant  to  the  requirements  of  the  Securities  Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  in the capacities and on the dates indicated.

Date: January 29, 2004                  By /s/ W. RICHARD ROTH
                                           ----------------------------------
                                           W. Richard Roth,
                                           President, Chief Executive Officer
                                           and Member, Board of Directors

Date: January 29, 2004                  By /s/ ANGELA YIP
                                           ----------------------------------
                                           Angela Yip,
                                           Chief Financial Officer

Date: January 29, 2004                  By /s/ VICTOR K. WONG
                                           ----------------------------------
                                           Victor K. Wong,
                                           Controller (Chief Accounting Officer)

Date: January 29, 2004                  By /s/ MARK L. CALI
                                           ----------------------------------
                                           Mark L. Cali,
                                           Member, Board of Directors

Date: January 29, 2004                  By /s/ J. PHILIP DINAPOLI
                                           ----------------------------------
                                           J. Philip Dinapoli,
                                           Member, Board of Directors

Date: January 29, 2004                  By /s/ DREW GIBSON
                                           ----------------------------------
                                           Drew Gibson,
                                           Member, Board of Directors

Date: January 29, 2004                  By /s/ RONALD R. JAMES
                                           ----------------------------------
                                           Ronald R. James,
                                           Member, Board of Directors

Date: January 29, 2004                  By /s/ GEORGE E. MOSS
                                           ----------------------------------
                                           George E. Moss,
                                           Member, Board of Directors


                                       53
<PAGE>

Date: January 29, 2004                  By /s/ ROSCOE MOSS, JR.
                                           ----------------------------------
                                           Roscoe Moss, JR.,
                                           Member, Board of Directors

Date: January 29, 2004                  By /s/ CHARLES J.TOENISKOETTER
                                           ----------------------------------
                                           Charles J. Toeniskoetter,
                                           Member, Board of Directors

Date: January 29, 2004                  By /s/ FREDERICK ULRICH
                                           ----------------------------------
                                           Frederick Ulrich,
                                           Member, Board of Directors


                                       54

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>3
<FILENAME>p18246_ex2-1.txt
<DESCRIPTION>REGISTRATION RIGHTS AGREEMENT
<TEXT>

                                                                     Exhibit 2.1

                          REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT  ("Agreement") is entered into as of December
__, 1992, among SJW CORP., a California corporation (the "Company"),  and ROSCOE
MOSS, JR. and GEORGE E. MOSS, each an individual  (collectively,  the "Principal
Shareholders" and individually, a "Principal Shareholder").

This  Agreement is made  pursuant to the Stock  Exchange  Agreement  dated as of
August 20, 1992 (as  amended  October 21,  1992) by and among the  Company,  the
Principal  Shareholders,  Roscoe Moss Company, a California  corporation ("RMC")
and the  other RMC  shareholders  (the  "Exchange  Agreement").  To  induce  the
Principal  Shareholders  to enter into the Exchange  Agreement,  the Company has
agreed to  provide  the  registration  rights set forth in this  Agreement.  The
execution of this  Agreement  is a condition  to the closing  under the Exchange
Agreement.

         The parties hereto hereby agree as follows:

     1.  Definitions.

         1.1 "Holder" or "Holders".  The term  "Holder" or "Holders"  shall mean
(i) the Principal Shareholders,  for as long as they hold shares of Common Stock
(as  defined  below)  issued  pursuant  to the  Exchange  Agreement,  and (ii) a
transferee or  transferees  of any of such Common Stock entitled to the benefits
of this Agreement pursuant to Section 7 below.

         1.2 "Common  Stock".  The term "Common  Stock" shall mean the Company's
common stock, par value $3.125 per share.

         1.3 "Registrable  Securities".  The term "Registrable Securities" shall
mean (i) the Common Stock issued pursuant to the Exchange Agreement and (ii) any
other equity  securities  of the Company  issued in exchange for any such Common
Stock (including upon recapitalizations)  which cannot be publicly resold by the
Holder thereof without  restriction  except  pursuant to registration  under the
Securities Act of 1933, as amended ("Securities Act"), or an available exemption
thereunder.  For the  purposes  of this  Agreement,  securities  subject to this
Agreement  will  cease to be  Registrable  Securities  when (a) they  have  been
registered  under the Securities Act, the  registration  statement in connection
therewith has been declared effective and they have been disposed of pursuant to
such effective  registration  statement by the Holders, (b) they are distributed
to the public  pursuant  to Rule 144 (or any  similar  provision  then in force)
under the  Securities Act or (c) they have been  otherwise  transferred  and new
certificates  or other evidences of ownership for them not bearing a restrictive
legend  and not  subject  to any stop  transfer  order or other  restriction  on
transfer  have been  delivered  by the  Company in  compliance  with  applicable
securities laws.

     2.  Demand Registration.

         2.1 Registration  Rights.  The Holders of Registrable  Securities shall
have the right  upon the  affirmative  vote of at least  40% of the  Registrable
Securities to require that the Company register,  using a registration statement
in such form as is then available to the Company under the  Securities  Act, the
Registrable  Securities and the Company shall use its reasonable best efforts to
have such Registrable  Securities registered by the Company under the Securities
Act. In  addition,  the Company  shall be  obligated to file and cause to become
effective,  when  requested  by any Holder or  Holders  and at such time as such
registration  is  available,  a  registration  statement in such form as is then
available to the Company under the  Securities  Act, with respect to at least an
aggregate of 85,000 shares of Registrable  Securities.  The managing underwriter
of any  offering  pursuant to this  Section  2.1, if any,  shall be a nationally
recognized  investment  banking  firm  selected  by the  affirmative  vote  of a
majority of Registrable  Securities held by participating Holders and reasonably
acceptable  to the  Company.  If, in the  reasonable  judgment  of the  managing
underwriter,  if  any,  the  inclusion  of  all of  the  participating  Holders'
Registrable  Securities  would  interfere  with the  successful  marketing  of a
smaller offering, then the total number of Registrable Securities to be included
in the registration statement shall be reduced pro rata among such participating
Holders,  based  upon the  dollar  amount of  Registrable  Securities  that each
participating  Holder had  requested  initially to be included in the  offering,
until the required level is obtained.

         2.2 Terms and  Conditions.  All  registrations  pursuant to Section 2.1
shall be made in accordance with the following terms and conditions:

                  (a) Notice.  The  participating  Holders  shall furnish to the
     Company  written notice stating:  (i) the number of Registrable  Securities
     desired to be registered;  (ii) the proposed plan of distribution  for such
     securities;  (iii) the  approximate  date on which such Holders  desire the
     registration statement for such Registrable Securities to become effective;


<PAGE>

                  (b) Information to Be Provided by the  Participating  Holders.
     Each  participating  Holder  shall  furnish to the Company all  information
     regarding  both  itself  and the  proposed  plan of  distribution  which is
     required for inclusion in the registration statement;

                  (c) Filing  Under State  Securities  Laws.  The Company  shall
     effect all  filings  under  state  securities  laws that any  participating
     Holder  may   reasonably   request  and  take  such  other  action  as  any
     participating  Holder may  reasonably  request to facilitate  the offer and
     sale of the  Registrable  Securities;  provided,  that such action does not
     require the Company to register as a dealer in such state;

                  (d) Expenses. The Company shall pay all reasonable fees, costs
     and expenses  incurred in connection with all registration or qualification
     of  Registrable  Securities  under  the  Securities  Act  and  under  state
     securities laws pursuant to Section 2.1, including, without limitation, all
     reasonable  registration,  filing and  qualification  fees,  printers'  and
     accounting  fees, fees and  disbursements  of counsel for the Company,  and
     reasonable  fees  and   disbursements   of  one  Special  Counsel  for  the
     participating Holders ("Special Counsel"); provided, that the participating
     Holders shall bear their pro rata share of the  underwriting  discounts and
     commissions,  if any,  based upon their share of the total number of shares
     offered and that each participating Holder shall bear all fees and expenses
     of its own counsel, other than the Special Counsel, if any;

                  (e) Number of Registrations. The Company shall be obligated to
     effect only one registration pursuant to Section 2.1 on Form S-1 or S-2 (or
     their  equivalent  successor forms) if such forms are then available to the
     Company under the Securities Act and shall be obligated to effect up to ten
     registrations  pursuant  to  Section  2.1 on Form  S-3  (or its  equivalent
     successor  form) if such form is then  available  to the Company  under the
     Securities Act; provided, that the Company shall not be obligated to file a
     registration statement on Form S-3 within 180 days of the effective date of
     any prior registration  statement on Form S-1, S-2 or S-3, and no more than
     three  registration  statements  on  Form  S-3  per  calendar  year.  If  a
     registration  statement fails to become  effective  pursuant to Section 2.1
     for any reason  other than a request for  withdrawal  by the  participating
     Holders,   then  such  registration  shall  not  be  counted  as  a  demand
     registration pursuant to Section 2.2(e) herein; and

                  (f) Exclusivity.  The Company agrees that it shall not, except
     with the  written  consent  of a  majority  of the  participating  Holders,
     include in any registration  statement filed at the participating  Holders'
     request any other offering or sale of shares by the Company or by the other
     shareholders of the Company if, in the reasonable  judgment of the managing
     underwriter,  if any, such inclusion would be materially prejudicial to the
     participating  Holders'  offering.  If the Company or other shareholders of
     the  Company do  include,  with the  participating  Holders'  consent,  the
     offering  of  their  shares  in any  registration  statement  filed  at the
     participating  Holders' request,  then all reasonable  expenses relating to
     such  registration  shall be borne pro rata  among the  Company,  the other
     shareholders  and the  participating  Holders  according  to the  number of
     shares offered by each  participant;  provided,  that the Company shall pay
     all reasonable  fees,  costs and expenses of the  participating  Holders as
     required by Section 2.2(d).

                  (g)  Termination  of Rights.  Notwithstanding  anything to the
     contrary contained in this Agreement,  the registration rights set forth in
     this Section 2 shall terminate with respect to each Holder who may sell his
     Registrable  Securities to the public without registration with the SEC (as
     defined below) and without volume limitations on such sale or sales.

     3.  Incidental Registration.

         3.1 Reasonable Efforts Obligation. The Company agrees that each time it
proposes to file a registration  statement (other than a registration  statement
relating  solely to the  issuance  of Company  securities  pursuant  to employee
benefit  plans  or  the  distribution  of  Company  securities  in a  merger  or
acquisition)  under the  Securities Act for the proposed sale for cash of shares
of its Common  Stock on a form that would also  permit the  registration  of the
Registrable  Securities,  the Company shall use all reasonable  efforts to cause
the Registrable Securities to be included in such registration statement.

         3.2 Terms and  Conditions.  All  registrations  pursuant to Section 3.1
shall be subject to the following terms and conditions:

                  (a)  Notice.  The Company  shall give to the  Holders  written
     notice of the proposed  registration prior to filing. To participate in the
     registration,  a Holder must  notify the Company in writing  within 20 days
     after  receipt of the notice from the Company  that such Holder  desires to
     participate  in the  registration  and indicate  the number of  Registrable
     Securities such Holder desires to sell;

                  (b) Number of Shares.  Each  participating  Holder agrees that
     the number of Registrable  Securities which the participating Holders shall
     have the  right to  register,  if any,  shall be  determined  solely by the
     reasonable


<PAGE>

     judgment  of the  managing  underwriter,  if  any.  If,  in the  reasonable
     judgment  of  the  managing  underwriter,  if  any,  the  inclusion  of the
     participating  Holders'  Registrable  Securities  would  interfere with the
     successful marketing of a smaller offering, then the total number of shares
     to be  included  in the  registration  statement  shall be  reduced  to the
     required level as follows:

                           (i)  First,  the  number of shares  held by all other
holders of  securities  which have rights of  incidental  registration  shall be
reduced pro rata among such other holders until the required  level is obtained;
and

                           (ii) Second, if the required level cannot be obtained
even though all of the shares held by such other holders are eliminated from the
offering,  then the number of Registrable  Securities held by the  participating
Holders shall be reduced pro rata among such participating  Holders according to
the percentage that the number of shares of Registrable  Securities held by each
participating  Holder  bears to the  aggregate  number of shares of  Registrable
Securities  held by the  participating  Holders,  until  the  required  level is
obtained.

         Those shares which are excluded from the  registration  statement shall
be withheld from the market by the holders thereof for the period, not to exceed
120 days, which the managing  underwriter,  if any, reasonably  determines to be
necessary to effect the offering;  provided,  that the principal officers of the
Company have also agreed to such restrictions;

                  (c) Expenses.  With respect to each  inclusion of  Registrable
Securities in a registration  statement  pursuant to Section 3.1, all reasonable
fees,  costs and expenses of and incidental to such inclusion  shall be borne by
the Company;  provided, that the participating Holders shall bear their pro rata
share of the  underwriting  discounts  and  commissions,  if any,  and that each
Holder shall bear the fees and  expenses of its own counsel  other than those of
one Special counsel, which shall be borne by the Company;

                  (d) Information to Be Furnished by the Participating  Holders.
The  participating  Holders  shall  furnish  to  the  Company  such  information
regarding the participating  Holders and the proposed plan of distribution as is
required to be included in the registration statement; and

                  (e) Right to Terminate  Registration.  The Company  shall have
the right to  terminate  or  withdraw  any  registration  initiated  by it under
Section 3.1 prior to the effectiveness of such  registration  whether or not the
participating Holders have elected to include securities in such registration.

                  (f)  Termination  of Rights.  Notwithstanding  anything to the
contrary  contained in this Agreement,  the incidental  registration  rights set
forth in this Section 3 shall terminate with respect to each Holder who may sell
his Registrable  Securities to the public without  registration with the SEC (as
defined below) and without volume limitations on such sale or sales.

     4.  Additional  Registration  Procedures.  If, at any time and from time to
time,  the Company is required by the  provisions  of either  Section 2.1 or 3.1
hereinabove to effect the registration of shares of Registrable Securities under
the Securities Act, then the Company shall:

         4.1  Filing  of  Registration  Statement.  Prepare  and  file  with the
Securities  and  Exchange  Commission  (the "SEC") the  applicable  registration
statement with respect to the Registrable Securities and use its reasonable best
efforts  to cause such  registration  statement  to become and remain  effective
until the Registrable  Securities  covered by such  registration  statement have
been sold,  and prepare and file with the SEC  amendments  to such  registration
statement  and  supplements  to  the  prospectus  contained  therein  as  may be
necessary to keep such  registration  statement  effective until the Registrable
Securities covered by such registration statement have been sold.

         4.2 Underwriting Agreement. Enter into a written underwriting agreement
in customary form and substance  reasonably  satisfactory to the Company and the
managing underwriter or underwriters, if any, of the offering of the Registrable
Securities.  The  Company  acknowledges  that such  underwriting  agreement  may
contain  restrictions on the Company's ability to offer equity securities but in
no event shall the Company be  obligated to refrain  from  marketing  its equity
securities for longer than 120 days after the effective date of any registration
statement filed by the Company.

         4.3 Copies of Documents.  Furnish to the  participating  Holders and to
the  underwriters of the securities  being  registered,  if any, such reasonable
number of copies of the registration statement,  preliminary  prospectus,  final
prospectus  and  such  other  documents  as such  Holders  or  underwriters  may
reasonably request.

         4.4  Notice  of  Effectiveness.   Notify  the  participating   Holders,
reasonably promptly after it shall receive notice thereof, of the time when such
registration  statement has become effective,  or a supplement to any prospectus
forming apart of such registration statement has been filed.

         4.5 Notice of Amendments.  Notify such Holders  reasonably  promptly of
any request by the SEC for the amending or  supplementing  of such  registration
statement or prospectus or for the provision of additional information.

         4.6 Filing of Amendments. Prepare and file reasonably promptly with the
SEC, and notify reasonably promptly such Holders of the filing of such amendment
or supplement to such  registration  statement or prospectus as may be necessary
to  correct  any  statements  or  omissions  if, at the time  when a  prospectus
relating to such  securities  is required to be delivered  under the  Securities
Act,  the  principal  officers  of the  Company are on notice that any event has
occurred as the result of which any such  prospectus or any other  prospectus as
then in effect  would  include an untrue  statement of fact or omit to state any
fact  necessary to make the  statements  therein not  misleading in light of the
circumstances in which they were made.


<PAGE>

         4.7 Amendment of Prospectus.  If, within 150 days of the  effectiveness
of the applicable registration statement, any such Holder or underwriter for any
such  Holder,  if any, is required  to deliver a  prospectus  at a time when the
prospectus  then in effect may no longer be used under the Securities  Act, then
prepare reasonably promptly upon written request such amendment or amendments to
such  registration  statement  and such  prospectus  or  prospectuses  as may be
necessary to permit compliance with the requirements of the Securities Act.

         4.8 Notice of Stop  Orders.  Advise such  Holders  reasonably  promptly
after it receives notice or obtains  knowledge  thereof,  of the issuance of any
stop  order  by the  SEC  suspending  the  effectiveness  of  such  registration
statement or the  initiation or  threatening  of any proceeding for that purpose
and reasonably  promptly use its reasonable best efforts to prevent the issuance
of any stop  order or to obtain  its  withdrawal  if such stop  order  should be
issued.

         4.9  Opinion of Counsel  and  Accountant's  Letter.  At the  reasonable
request of any such Holder,  furnish on the effective  date of the  registration
statement and, if such registration includes an underwritten public offering, at
the closing provided for in the underwriting:

                           (i)  an  opinion  of  the  counsel  representing  the
Company for the purposes of such registration, addressed to the underwriters, if
any, and to the Holders making such request,  covering such matters with respect
to the registration  statement,  the prospectus and each amendment or supplement
thereto,  proceedings  under state and federal  securities  laws,  other matters
relating to the Company, the securities being registered, and the offer and sale
of such  securities  as are  customarily  the  subject of  opinions  of issuer's
counsel provided to underwriters in underwritten public offerings; and

                           (ii) a letter  dated as of each such  date,  from the
independent  certified  public  accountants  of the  Company,  addressed  to the
underwriters,  if any, and to the Holders making such request, stating that they
are  independent   certified  public  accountants  within  the  meaning  of  the
Securities  Act  and  that in the  opinion  of such  accountants  the  financial
statements and other financial data of the Company  included in the registration
statement,  the prospectus or any amendment or supplement  thereto comply in all
respects with the applicable accounting  requirements of the Securities Act, and
additionally   covering  such  other  financial  matters,   including,   without
limitation, information as to the period ending not more than five calendar days
prior to the date of such letter with respect to the registration  statement and
prospectus,  as the  underwriters,  if  any,  or  such  requesting  Holders  may
reasonably request.

         4.10 Objectionable Amendments.  Not file any amendment or supplement to
each  registration  statement or  prospectus to which a majority of such Holders
has reasonably  objected on the grounds that such  amendment or supplement  does
not comply in all respects with the  requirements  of the  Securities Act or the
rules and  regulations  there under,  having been  furnished with a copy thereof
prior to the filing thereof.

     5.  Indemnification

         5.1  Indemnification  by Company.  The Company shall indemnify and hold
harmless the Holders, any underwriter (as defined in the Securities Act) for the
Holders,  and each person who  controls  any Holder or any  underwriter  for any
Holder within the meaning of the  Securities  Act,  from and against,  and shall
reimburse   such  persons  with  respect  to,  any  and  all  losses,   damages,
liabilities,  costs or  expenses  to which  they may  become  subject  under the
Securities  Act, or  otherwise,  insofar as such losses,  damages,  liabilities,
costs or expenses are caused by any untrue statement or alleged untrue statement
of any  fact  by the  Company  contained  in any  registration  statement  filed
pursuant to the provisions of this Agreement,  any prospectus contained therein,
or any  amendment or supplement  thereto,  or arise out of or are based upon the
omission or alleged  omission by the Company to state therein a fact required to
be stated  therein or necessary to make the statements therein,  in light of the
circumstances  in which  they were  made,  not  misleading;  provided,  that the
Company shall not be liable in any such case to the extent that any such losses,
damages, liabilities, costs or expenses arise out of or are based upon an untrue
statement or alleged  untrue  statement  or omission or alleged  omission by the
Company so made in strict  conformity with information  furnished by the Holders
or any such  underwriter  in  writing  specifically  for use in the  preparation
thereof;  provided,  that the indemnity  contained in this Section 5.1 shall not
apply to amounts paid in  settlement of any such losses,  damages,  liabilities,
costs or expenses  if such  settlement  is  effected  without the consent of the
Company.

         5.2 Indemnification by Holder. Each Holder,  severally but not jointly,
shall  indemnify  and hold  harmless  the Company  from and  against,  and shall
reimburse  the  Company,  any  underwriter  for the  Company  and any person who
controls  the  Company  or any such  underwriter  with  respect  to, any and all
losses, damages, liabilities,  costs or expenses to which the Company may become
subject under the Securities Act or otherwise,  insofar as such losses, damages,
liabilities,  costs or expenses  are caused by any untrue  statement  or alleged
untrue  statement of any fact  contained  in any  registration  statement  filed
pursuant to the provisions of this Agreement,  any prospectus contained therein,
or any  amendment or supplement  thereto,  or arise out of or are based upon the
omission or alleged  omission to state  therein a material  fact  required to be
stated  therein,  in light of the  circumstances  in which they were  made,  not
misleading; in each case to the extent, but only to the extent, that such untrue
statement, or alleged untrue statement, or omission, or alleged omission, was so
made  in  reliance  upon  and in  strict  conformity  with  written  information
furnished  by  such  Holder  specifically  for use in the  preparation  thereof;
provided,  that the  indemnity  contained in this Section 5.2 shall not apply to
amounts paid in settlement of any such losses,  damages,  liabilities,  costs or
expenses if such settlement is effected without the consent of such Holder.

         5.3 Conduct of Indemnification  Proceedings.  Reasonably promptly after
receipt  by an  indemnified  party of  notice,  pursuant  to the  provisions  of
Sections 5.1 and 5.2, of the  commencement  of any action  involving the subject
matter of the foregoing indemnity provisions, such indemnified party shall, if a
claim  thereof is to be made  against  the  indemnifying  party  pursuant to the
provisions  of  Sections  5.1 and  5.2,  notify  the  indemnifying  party of the
commencement


<PAGE>

thereof,  but the omission to notify the indemnifying party shall not relieve it
from any  liability it may have to any  indemnified  party  thereunder.  If such
action  is  brought  against  any  indemnified  party and it  notifies  the then
indemnifying  party of the commencement  thereof,  then the  indemnifying  party
shall have the right to  participate  in,  and,  to the extent that it may wish,
jointly with any other  indemnifying  party  similarly  notified,  to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party,
and, after notice from the indemnifying  party to such indemnified  party of its
election so to assume the defense thereof,  the indemnifying  party shall not be
liable to such  indemnified  party  pursuant to the provisions of Section 5.1 or
5.2, as  applicable,  for any legal or other expenses  subsequently  incurred by
such  indemnified  party in  connection  with the  defense  thereof,  other than
reasonable costs of investigation.

     6. Reporting  Requirements  Under the Securities  Exchange Act of 1934. The
Company shall timely file such information, documents and reports as the SEC may
require or prescribe under either Section 13 or 15(d)  (whichever is applicable)
of the Securities Exchange Act of 1934, as amended ("Exchange Act"). The Company
shall  thereafter,  whenever  reasonably  requested  by any Holder,  notify such
Holder in writing  whether the Company's  has, as of the date  specified by such
Holder,  complied  with the Exchange Act reporting  requirements  to which it is
subject for a period  prior to such date as shall be  specified  by such Holder.
The  Company  acknowledges  and agrees  that the  purposes  of the  requirements
contained  in this  Section 6 are:

                  (i) to  enable  any such  Holder to  comply  with the  current
public information  requirement contained in Paragraph (b) of Rule 144 under the
Securities  Act should such Holder ever wish to dispose of any of the securities
of the Company acquired by it without  registration  under the Securities Act in
reliance  upon Rule 144 (or any  equivalent  successor  provision);  and

                  (ii) to  qualify  the  Company  for  the  use of  registration
statements  on Form S-3,  or its  equivalent  successor  form,  with  respect to
secondary  distributions.  In  addition,  the  Company  shall  take  such  other
reasonable measures and file such other information,  documents,  and reports as
shall  hereafter  be required by the SEC as a condition to the  availability  of
Rule 144 under the Securities Act (or any equivalent successor provision).

     7.  Transferees.  The rights contained in this Agreement shall inure to the
benefit  of any  transferee  of a Holder  receiving  a number  of shares of such
Holders'  Registrable  Securities  equal to or greater  than ten  percent of the
Company's  then  outstanding  shares of  Common  Stock;  provided,  that (a) the
Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee and the Registrable Securities
with respect to which such registration  rights are being transferred as well as
a copy of a duly executed written instrument in form reasonably  satisfactory to
the  Company  by  which  such  transferee  assumes  all of the  obligations  and
liabilities  of its  transferor  hereunder and under the Affiliate  Agreement of
such  transferor  referred to in the Exchange  Agreement  and agrees to be bound
hereunder  and  thereunder;   and  (b)   immediately   following  such  transfer
disposition of such Registrable Securities by the transferee is restricted under
the Securities Act.

     8.  Stand-Off  Agreement.  The Holders shall refrain from making any public
sale or  distribution  of the  Company's  equity  securities  during  the period
commencing  7 days  prior  to,  and  expiring  120 days  after,  a  registration
statement has become  effective,  if, but only if, the managing  underwriter  or
underwriters, if any, determine it necessary in order to effect the offering and
the Company's principal officers are subject to the same restrictions.

     9.  Miscellaneous.

         9.1 No  Inconsistent  Agreements.  The Company will not hereafter enter
into any agreement with respect to its  securities  which  materially  adversely
affects the rights  granted to the  Holders of  Registrable  Securities  in this
Agreement.  The Company  has not  previously  entered  into any  agreement  with
respect to any of its equity securities  granting any registration rights to any
person.

         9.2 Amendments and Waivers.  Except as otherwise  provided herein,  the
provisions of this Agreement may not be amended,  modified or supplemented,  and
waivers or consents to departures  from the  provisions  hereof may not be given
unless the Company has agreed in writing  thereto and has  obtained  the written
consent of Holders of at least a majority  of the  Registrable  Securities  then
outstanding and the written consent of the parties hereto.  Notwithstanding  the
foregoing,  the addition of additional  parties hereto as "Holders"  pursuant to
Section 1.1 above shall not constitute an amendment,  modification or supplement
hereof.

         9.3 Notices.  All notices,  requests,  demands and other communications
required or  permitted  to be given  hereunder  shall be in writing and shall be
deemed to have been duly given (i) upon receipt, if delivered  personally,  (ii)
upon confirmation of receipt, if given by electronic  facsimile and (iii) on the
third business day following mailing,  if mailed  first-class,  postage prepaid,
registered or certified mail as follows:


<PAGE>

If to the Company:      SJW Corp.
                        374 West Santa Clara Street San Jose, CA 95196
                        Telecopier No.:(408) 279-7934
                        Attn:  W .R. Roth, Chief Financial Officer and Treasurer

With a copy to:         Brobeck, Phleger & Harrison One Market Plaza
                        Spear Street Tower
                        San Francisco, CA 94105
                        Telecopier No.: (415) 442-1010
                        Attn: Ronald B. Moskowitz, Esq.

If to the Shareholders: Roscoe Moss, Jr.
                        George E. Moss
                        c/o Roscoe Moss Company
                        4360 Worth Street
                        Los Angeles, CA 90063
                        Telecopier No.: (213) 263-4497

With a copy to:         Sheppard, Mullin, Richter & Hampton
                        333 South Hope Street, 48th Floor
                        Los Angeles, CA 90071
                        Telecopier No.: (213) 620-1398
                        Attn: John D. Hussey, Esq.

Any party may,  by notice  given to the other  parties in  accordance  with this
Section 9.4, designate another address,  telecopier number or person for receipt
of notice under this Agreement.

         9.4 Successors and Assigns.  Except as otherwise provided herein,  this
Agreement  shall inure to the benefit of and be binding upon the  successors and
assigns of each of the parties.

         9.5  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

         9.6 Headings.  The headings in this  Agreement are for  convenience  of
reference only and shall not limit or otherwise affect the meaning hereof.

         9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts made
and to be performed  wholly  within that State  without  regard to principles of
conflicts  of law.

         9.8  Severability.  In the event that anyone or more of the  provisions
contained  herein,  or the  application  thereof in any  circumstances,  is held
invalid, illegal or unenforceable,  the validity, legality and enforceability of
any such provision in every other respect and the remaining provisions contained
herein shall not be affected or impaired thereby.

         9.9  Entire  Agreement.  This  Agreement,  together  with the  Exchange
Agreement,  is intended by the parties as a final  expression of their agreement
and intended to be a complete and  exclusive  statement  of the,  agreement  and
understanding  of the parties hereto in respect of the subject matter  contained
herein.  This Agreement,  together with the Exchange  Agreement,  supersedes all
prior  agreements  and  understandings  between the parties with respect to such
subject matter.

         9.10  Attorneys'  Fees. In any action or proceeding  brought to enforce
any provision of this  Agreement,  or where any  provision  hereof or thereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.


     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                    SJW CORP.


                                    By:
                                         ------------------------------
                                           Title

                                    By:
                                         ------------------------------
                                           Roscoe Moss, Jr.

                                    By:
                                         ------------------------------
                                           George E. Moss


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>4
<FILENAME>p18246_ex31-1.txt
<DESCRIPTION>CERTIFICATIONS
<TEXT>

                                 CERTIFICATIONS

      I, W. Richard Roth, President and Chief Executive Officer, certify that:

      1. I have  reviewed  this  Annual  Report on Form  10-K of SJW Corp.  (the
"registrant");

      2.  Based on my  knowledge,  this  report  does  not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

      3. Based on my knowledge,  the financial  statements,  and other financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

      4. The registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

            a) designed such disclosure controls and procedures,  or caused such
      disclosure  controls and procedures to be designed under our  supervision,
      to ensure that material information relating to the registrant,  including
      its consolidated subsidiaries,  is made known to us by others within those
      entities,  particularly  during the  period in which this  report is being
      prepared;

            c)  evaluated  the  effectiveness  of  the  registrant's  disclosure
      controls and procedures presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures,  as of the end of
      the period covered by this report based on such evaluation;

            d) disclosed in this report any change in the registrant's  internal
      control over  financial  reporting that occurred  during the  registrant's
      fourth  fiscal  quarter that has  materially  affected,  or is  reasonably
      likely to  materially  affect,  the  registrant's  internal  control  over
      financial reporting; and

      5. The registrant's other certifying officers and I have disclosed,  based
on our most recent evaluation of internal control over financial  reporting,  to
the  registrant's  auditors  and the audit  committee of  registrant's  board of
directors (or persons performing the equivalent functions):

            a) all significant  deficiencies and material weakness in the design
      or  operation  of internal  control  over  financial  reporting  which are
      reasonably likely to adversely affect the registrant's  ability to record,
      process, summarize and report financial information; and

            b) any fraud,  whether or not material,  that involves management or
      other employees who have a significant role in the  registrant's  internal
      control over financial reporting.

Date: March 12, 2004

                                     /s/        W. RICHARD ROTH
                                     -------------------------------------
                                                W. Richard Roth
                                     President and Chief Executive Officer
                                         (Principal executive officer)


                                       55

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>p18246_ex31-2.txt
<DESCRIPTION>CERTIFICATIONS
<TEXT>

      I, Angela Yip, Chief Financial Officer and Treasurer, certify that:

      1. I have  reviewed  this  Annual  Report on Form  10-K of SJW Corp.  (the
"registrant");

      2.  Based on my  knowledge,  this  report  does  not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

      3. Based on my knowledge,  the financial  statements,  and other financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

      4. The registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

            a) designed such disclosure controls and procedures,  or caused such
      disclosure  controls and procedures to be designed under our  supervision,
      to ensure that material information relating to the registrant,  including
      its consolidated subsidiaries,  is made known to us by others within those
      entities,  particularly  during the  period in which this  report is being
      prepared;

            c)  evaluated  the  effectiveness  of  the  registrant's  disclosure
      controls and procedures presented in this report our conclusions about the
      effectiveness of the disclosure controls and procedures,  as of the end of
      the period covered by this report based on such evaluation;

            d) disclosed in this report any change in the registrant's  internal
      control over  financial  reporting that occurred  during the  registrant's
      fourth  fiscal  quarter that has  materially  affected,  or is  reasonably
      likely to  materially  affect,  the  registrant's  internal  control  over
      financial reporting; and

      5. The registrant's other certifying officers and I have disclosed,  based
on our most recent evaluation of internal control over financial  reporting,  to
the  registrant's  auditors  and the audit  committee of  registrant's  board of
directors (or persons performing the equivalent functions):

            a) all significant  deficiencies and material weakness in the design
      or  operation  of internal  control  over  financial  reporting  which are
      reasonably likely to adversely affect the registrant's  ability to record,
      process, summarize and report financial information; and

            b) any fraud,  whether or not material,  that involves management or
      other employees who have a significant role in the  registrant's  internal
      control over financial reporting.

Date: March 12, 2004

                                     /s/          ANGELA YIP
                                     -------------------------------------
                                                  Angela Yip
                                     Chief Financial Officer and Treasurer
                                         (Principal financial officer)


                                       56

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>p18246_ex32-1.txt
<DESCRIPTION>CERTIFICATION OF ROTH
<TEXT>
                                                                    Exhibit 32.1



                      CERTIFICATION PURSUANT TO
                        18 U.S.C. SECTION 1350
                        AS ADOPTED PURSUANT TO
               SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection  with the Annual Report of SJW Corp.  (the "Company") on Form 10-K
for the year ended  December 31, 2003 as filed with the  Securities and Exchange
Commission on the date hereof (the "Report"),  I, W. Richard Roth, President and
Chief Executive Officer of the Company,  certify,  pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to my knowledge:

         (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         (2) The  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.



/s/ W. Richard Roth
---------------------
W. RICHARD ROTH
President and Chief Executive Officer
(Principal executive officer)
March 12, 2004


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>7
<FILENAME>p18246_ex32-2.txt
<DESCRIPTION>CERTIFICATION OF YIP
<TEXT>

                                                                    Exhibit 32.2


                   CERTIFICATION PURSUANT TO
                    18 U.S.C. SECTION 1350
                    AS ADOPTED PURSUANT TO
        SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection  with the Annual Report of SJW Corp.  (the "Company") on Form 10-K
for the year ended  December 31, 2003 as filed with the  Securities and Exchange
Commission on the date hereof (the  "Report"),  I, Angela Yip,  Chief  Financial
Officer and  Treasurer of the Company,  certify,  pursuant to 18 U.S.C.  Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to my knowledge:

         (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         (2) The  information  contained in the Report fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.



/s/ Angela Yip
------------------
ANGELA YIP
Chief Financial Officer and Treasurer
(Principal financial officer)
March 12, 2004

</TEXT>
</DOCUMENT>
</SUBMISSION>
