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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to ________________
Commission file number 0-8176
[LOGO OF SOUTHWEST WATER COMPANY]
SOUTHWEST WATER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 95-1840947
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
225 NORTH BARRANCA AVENUE, SUITE 200 91791-1605
WEST COVINA, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 915-1551
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
(1) COMMON SHARES, $.01 PAR VALUE
(2) SERIES A, 5-1/4% PREFERRED SHARES, CUMULATIVE, $.01 PAR VALUE
(TITLE OF CLASSES)
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. [_]
On March 29, 1996, there were 2,583,254 common shares outstanding. The
aggregate market value of the Registrant's common shares held by non-affiliates
of Registrant (2,349,898 shares) was approximately $27,611,000 based upon the
average of the high and low stock prices as of March 15, 1996. Registrant is
unable to estimate the aggregate market value of its preferred shares held by
non-affiliates of Registrant because there is no public market for such shares.
DOCUMENTS INCORPORATED BY REFERENCE:
DOCUMENTS FORM 10-K REFERENCE
--------- -------------------
Portions of Registrant's 1995
Annual Report to Stockholders Parts II and IV
Proxy Statement dated April 10, 1996,
for Annual Meeting of Stockholders
on Tuesday, May 21, 1996 Part III
SEE PAGES 19 TO 21 FOR EXHIBIT INDEX FILED WITH THIS REPORT.
SOUTHWEST WATER COMPANY AND SUBSIDIARIES
INDEX
PART I. PAGE NO.
--------
Item 1: Business.................................................... 1 - 9
Item 2: Properties.................................................. 9 - 10
Item 3: Legal Proceedings........................................... 10 - 11
Item 4: Submission of Matters to a Vote of Security Holders......... 11
Item 4A: Executive Officers of the Registrant........................ 12
PART II.
Item 5: Market for the Registrant's Common Equity and Related
Stockholder Matters........................................ 13
Item 6: Selected Financial Data..................................... 13
Item 7: Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 13
Item 8: Financial Statements and Supplementary Data................. 13
Item 9: Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure................................... 13
PART III.
Item 10: Directors and Executive Officers of the Registrant.......... 14
Item 11: Executive Compensation...................................... 14
Item 12: Security Ownership of Certain Beneficial Owners and
Management................................................. 14
Item 13: Certain Relationships and Related Transactions.............. 14
PART IV.
Item 14: Exhibits, Financial Statement Schedules and Reports
on Form 8-K................................................ 15 - 18
Exhibit Index............................................... 19 - 21
Signatures.................................................. 22
SOUTHWEST WATER COMPANY AND SUBSIDIARIES
PART I
ITEM 1. BUSINESS
General Development of Business
Southwest Water Company (hereafter together with its subsidiaries referred to
as the "Company" or "Registrant") was incorporated under the laws of the State
of California on December 10, 1954. The Company reincorporated in the State of
Delaware on June 30, 1988. The Company is engaged in the water management
business, providing water and wastewater services to over half a million people
located throughout California, New Mexico, Texas, and Mississippi. All
regulated water utility operations of the Company are conducted through two
wholly-owned subsidiaries, Suburban Water Systems ("Suburban") and New Mexico
Utilities, Inc. ("NMUI"). The Company's wholly-owned subsidiary, ECO
Resources, Inc. ("ECO"), operates and manages water and wastewater treatment
facilities owned by cities, municipalities and private entities.
General Information
There have been no significant changes in the way the Company does business
during the year. The focus of the water management industry is customer
service, not technology or manufacturing processes; therefore, the Company
conducts no significant research or development activities and the Company has
no patents, trademarks or licenses. The Company does use certain commodities in
its daily operations, such as chemicals and supplies, which are readily
available from a number of different suppliers.
There are no individual customers of the Company who generated revenues that
exceeded 10 percent of the Company's consolidated revenues, or whose loss would
have a material adverse effect on the Company's consolidated operations. To
date, the Company has experienced no material adverse effects upon its
operations or capital expenditures resulting from compliance with governmental
regulations relating to protection of the environment. At December 31, 1995, the
Company employed 512 persons, none of whom are represented by an employee union.
A. REGULATED UTILITY OPERATIONS
SUBURBAN WATER SYSTEMS
Product and Business
Suburban is a public utility water company which produces and supplies water
for residential, business, industrial and public authority use, and for private
and public fire protection service under the regulation of the California Public
Utilities Commission (the "CPUC"). Suburban's service areas are located within
Los Angeles and Orange Counties, California.
Suburban or its predecessor entities have been engaged in supplying water
since approximately 1907. From the mid 1950s to the late 1960s, Suburban's
operations rapidly expanded as the transition from agricultural land use to
residential, business and industrial use occurred throughout its service areas.
Suburban has experienced moderate customer growth since the late 1960s,
primarily due to the population saturation of its existing service areas.
1
At December 31, 1995, Suburban served 66,019 customers, including 62,319
residential customers, 2,645 business and industrial customers, 264 public
authority customers and 791 fire protection service customers. During 1995,
Suburban's operating revenues were 75% from sales to residential customers, 18%
from sales to business and industrial customers, and 7% from sales to other
customers.
Suburban's business is subject to material fluctuations resulting, in large
measure, from seasonal temperature and rainfall variations. Since most of
Suburban's residential customers use more water in hot, dry weather conditions,
the first quarter of each year is usually the lowest in terms of customer
consumption, revenues and profitability.
Wells and Other Water Sources
Suburban owns 14 wells which pump water from two of the major groundwater
basins in the Southern California coastal watershed: the Central Basin and the
Main San Gabriel Basin (the "Main Basin"). The Main Basin is the source of
approximately 70% of Suburban's total water production. The rights to pump
water from these basins have been fully adjudicated under the laws of the State
of California. These adjudications have established Suburban's right to produce
water at levels prescribed each year by the Watermaster Boards which manage the
basins. As the water levels in the Main Basin increase or decrease, the
Watermaster Board adjusts the amount of water Suburban and other producers may
pump from this basin without paying an additional charge. When Suburban
produces water from either basin in excess of prescribed levels, an additional
payment is required to provide for the replenishment of the water supply.
Current levels of these basins are sufficient to eliminate any drought concerns;
however, there is no assurance that the current allowable pumping levels will
continue in the future. These two basins provide the lowest cost of water for
Suburban.
Since 1984, Suburban has voluntarily chosen to stop pumping water from several
older, shallower and/or less efficient wells because of the presence of nitrates
and certain contaminants. These wells have been replaced by new, deeper and
more efficient wells. In the past, Suburban has been successful in replacing
lost production capacity by shutting down certain old wells, by introducing new,
deeper wells and by blending water produced from different wells. However, no
assurance can be given that Suburban will be able to do so in the future.
Suburban also purchases water from two mutual water companies. Suburban's
ownership of shares in each of these mutual water companies has allowed Suburban
to increase its water entitlement and maintain a lower cost of water. In
addition, Suburban leases basin pumping rights from other parties which also
helps reduce Suburban's cost of water.
Supplementing this water supply is water occasionally purchased from external
sources, which is at a higher cost for Suburban. Suburban has a connection to
the "Lower Feeder" of the Metropolitan Water District of Southern California
("MWD") through which it purchases water to supplement the supply to its
Whittier/La Mirada Service Area. Additionally, Suburban has access to another
MWD connection which serves to supplement the supply of water in its San Jose
Hills Service Area. Suburban also has interconnections with other water
purveyors which can be used as supplemental and emergency sources of supply.
2
Water Quality Regulation
Water supplied by Suburban is subject to regulation by the United States
Environmental Protection Agency (the "EPA") acting pursuant to the Federal Safe
Drinking Water Act (the "US Act") and by the Office of Drinking Water of the
California Department of Health Services (the "Health Department") acting
pursuant to the California Safe Drinking Water Act (the "Cal Act"). The US Act
provides for establishment of uniform minimum national water quality standards,
as well as governmental authority to specify the type of treatment processes to
be used for public drinking water. The EPA has an ongoing directive to issue
regulations under the US Act and to require disinfection of drinking water,
specification of maximum contaminant levels ("MCLs") and filtration of surface
water supplies. The Cal Act and the mandate of the Health Department are
similar to the US Act and the mandate of the EPA, and in many instances MCLs and
other requirements of the Health Department are more restrictive than those of
the EPA.
Both the EPA and the Health Department have promulgated regulations and other
pronouncements which require periodic testing and sampling of water, and which
set MCLs for numerous contaminants. These regulations include permissible
levels of radio nuclides (including radon), regulations governing lead and
copper and mandating corrosion control studies and sampling, as well as
permissible levels of volatile organic compounds ("VOCs"), herbicides,
pesticides, and inorganic substances.
Suburban's water quality assurance department regularly monitors and samples
the quality of water being distributed. Samples of water from throughout
Suburban's system are tested regularly by independent, state-certified
laboratories for bacterial contamination, chemical contaminant content and for
the presence of pollutants and contaminants for which MCLs have been
promulgated. In addition, sampling and testing for certain pollutants such as
VOCs is conducted by independent engineers retained by the Boards of the Central
Basin and the Main Basin. The results of such sampling and testing are made
available to all producers, with the cost of such sampling and testing covered
by Board assessments to the producers. Testing, sampling and inspections are
conducted at the intervals, locations and frequencies required by EPA and Health
Department regulations. In addition, chlorination is currently performed only
to provide a chlorine residual required by the Health Department.
Water supplied by Suburban meets all current requirements of the US Act, the
Cal Act and the regulations promulgated under such legislation, and Suburban
anticipates no significant capital expenditures to comply with current
requirements. There can be no assurance, however, that water supplied by
Suburban would meet future EPA or Health Department requirements or that such
requirements will not require capital expenditures by Suburban.
Main San Gabriel Basin Contamination
In 1979, VOCs were discovered in the Main Basin. Most of the contamination
located in the Main Basin was found in areas not within Suburban's service
areas. Subsequently, underground water sampling resulted in the discovery of
four large areas of groundwater VOC contamination. The areas include Suburban's
Bartolo Well Field, which contains four of Suburban's producing wells and from
which Suburban produces approximately 25% of its total water production.
Currently, however, Suburban's wells do not contain VOCs in excess of MCLs.
The EPA has conducted numerous studies of underground water in the Main Basin
(including the Bartolo Well Field). In 1984, the EPA named the Main Basin as a
Superfund site and named as potentially
3
responsible parties ("PRPs") several large industrial companies that allegedly
caused the contamination. Suburban's facilities were not named as sources of
VOCs or other contamination in any portion of the Main Basin (i.e., Suburban's
operations do not discharge VOCs into the ground or groundwater). However, some
officials have suggested that the Main Basin water producers may have clean-up
liability with respect to contaminants in the Main Basin under applicable
environmental statutes on various theories by virtue of their pumping
operations. It is expected that the EPA will continue to identify sources of
contamination in order to establish legal responsibility for clean-up costs.
Currently, neither the EPA nor any governmental agency has targeted Suburban or
other water producers as PRPs.
Certain industrial companies identified as PRPs are working with their water
producers to build a $55 million water treatment facility in Baldwin Park,
California. An environmental impact report is currently being reviewed for this
project and, once clearance has been obtained, construction of the treatment
unit may begin. The treatment plant, if constructed, would treat 19 million
gallons per day of contaminated groundwater. Currently, funding for this
treatment facility would not be provided directly by Suburban.
To date, water produced from the Bartolo Well Field and other wells maintained
by Suburban in the Main Basin meets all applicable governmental requirements.
The treatment proposed by the EPA, and other measures taken by or available to
Suburban, are intended to ensure that Suburban continues to have an adequate
supply of potable water which meets all applicable governmental standards.
While technology exists to remove VOC contaminants from basin water, there can
be no assurance that either (i) such technology will in the future be adequate
to reduce the amounts of VOCs and other contaminants in water produced by
Suburban in the Main Basin to acceptable levels or (ii) the costs of such
removal will be fully recoverable from Suburban's customers. To date, Suburban
has been permitted to recover from its ratepayers all expenses associated with
water quality maintenance.
During 1992, a statute was passed by the State of California establishing a
Water Quality Authority (the "WQA") to oversee clean-up of water in the Main
Basin. Assessments for this purpose are levied against those who own
prescriptive pumping rights in the Main Basin, including Suburban. The amount
of Suburban's annual assessment is approximately $348,000. Pursuant to a
contract with the WQA, Suburban will operate a WQA-constructed water treatment
facility (Big Dalton Treatment Facility) and the third-party well to which the
facility is connected. This facility will treat approximately 1.3 billion
gallons of water annually which will be distributed to Suburban's customers.
Full operation by Suburban is expected to occur in 1996.
There can be no assurance that governmental authorities will not seek in the
future to recover clean-up costs from Suburban or that source polluters will not
seek contribution from water producers for clean-up costs which they may be
required to pay. If Suburban were required to pay any such clean-up costs,
Suburban would seek to recover such costs, and costs incurred in removing
contaminants from water produced, through increased rates to its customers as
has been permitted by the CPUC in the past. Moreover, there are over 100 water
producers in the Main Basin, and the Company believes that Suburban's share of
any clean-up costs assessed against the producers would only be a small a
fraction of the total. Due to the potential recovery of the clean-up costs
through higher rates, such costs are not expected to have a material impact on
Suburban's financial condition or results of operation.
4
Competition and Rate Relief
Suburban operates under long-term franchises and certificates of indefinite
duration granted by the CPUC and other governmental authorities having
jurisdiction over water service. The success of Suburban's water service
business is dependent upon maintaining these franchises and certificates and
upon various contracts and governmental and court decisions affecting Suburban's
water rights and service areas.
Under current CPUC practices, water rates may be increased by two methods:
general rate increases and offsets for certain expense increases. General rate
increases typically are for three years and include "step" increases in rates
for the second and third years. General rate increases are authorized after
formal proceedings with the CPUC in which the overall rate structure, expenses
and rate base are examined by CPUC staff, and public hearings are held. Formal
general rate proceedings require approximately 12 months from the filing of an
application to the authorization of new rates by the CPUC. Rates are based on
estimated expenses and capital costs for a forecasted two-year period and are
established for each of the two years based on these estimates, as approved by
the CPUC. Rates for the third year of the three-year rate period are set by
assuming that costs and expenses will increase in the same proportion over the
second year as the increase projected for the second year over the first. The
step rate increases for the second and third years are allowed to compensate for
projected cost increases, but are subject to later demonstration that earnings
levels in the service area do not exceed the rate of return authorized at the
general rate proceeding. In 1995, Suburban filed a general rate increase
application with the CPUC and negotiated with the CPUC staff a 4.25%
($1,100,000) rate increase, which is expected to be effective in the second
quarter of 1996. Step increases for inflation will occur in 1997 and 1998 after
CPUC approval is obtained.
Rate increases to offset increases in certain expenses such as cost of
purchased water and energy costs to pump water are accomplished through an
abbreviated "offset" proceeding that requires approximately two months from the
time of filing a request for rate increases to the authorization of new rates.
Suburban has been, and believes that it will continue to be, permitted to
increase its rates as necessary to achieve a reasonable rate of return.
However, any inability to increase rates would adversely affect Suburban's
results of operations. On occasion, Suburban has filed for a rate decrease when
actual water production costs incurred were less than CPUC-adopted water
production costs. As permitted by the CPUC, Suburban records the difference
between actual and CPUC-adopted water production costs in balancing accounts in
the income statement, with a corresponding adjustment on the balance sheet.
Future Development
In recent years, Suburban's growth has been limited to minor extensions into
new subdivisions along the periphery of its service areas. Because there is
little area available for new business or industrial construction and because of
recent low levels of residential growth, no significant increases in customers
are projected for the near future.
The laws of the State of California provide that no public agency can install
facilities within the service area of a public utility in order to compete with
it, except upon payment of just compensation for all damages incurred by the
public utility. Under California law, municipalities and certain other public
bodies have the right to acquire private water utility plants and systems within
their territorial limits by condemnation after proof of necessity is shown.
Suburban is not aware of any impending proceeding relating to the condemnation
of any portion of its facilities.
5
The water utility business requires substantial amounts of capital for the
construction, extension and replacement of water distribution facilities. This
capital is generated from Suburban's operations; from periodic debt financings
by Suburban; from lines of credit of the Company; from contributions in aid of
construction received from developers, governmental agencies, municipalities or
individuals; and from advances received by developers which are repaid under
rules of the CPUC. During 1995 and 1994, capital expenditures approximated
$4,095,000 and $3,647,000, respectively.
NEW MEXICO UTILITIES, INC.
Product and Business
In 1969, Suburban purchased NMUI. On June 1, 1987, the New Mexico Public
Utility Commission ("NMPUC") authorized Suburban to transfer by stock dividend
all of the stock of NMUI to Southwest Water Company which caused NMUI to become
a wholly-owned subsidiary of Southwest Water Company. NMUI is a New Mexico
regulated public water utility which provides water supply and sewage collection
services for residential, commercial, irrigation, and fire protection customers
under jurisdiction of the NMPUC. NMUI's service area is located in the northwest
part of the City of Albuquerque and in the northern portion of Bernalillo
County, New Mexico. NMUI's service area contains a population of approximately
14,000 persons and covers approximately 17 square miles, of which approximately
20% has been developed.
Since 1969, NMUI has grown from approximately 800 customers to over 4,000
customers. Most of this growth has come from extension of water services and
sewage collection services into new residential subdivisions and from the
development of commercial property. Continuing economic development in NMUI's
service area is expected to lead to increases in the number of customers in the
near future. NMUI believes that it has an adequate water capacity to serve its
current customer base as well as new customers in the foreseeable future.
At December 31, 1995, NMUI provided water service to 4,004 customers including
3,620 residential customers, 358 commercial and industrial customers, one golf
course with five service connections, and 21 private fire protection customers.
NMUI also provided sewer collection service to 3,701 customers including 3,502
residential customers and 199 commercial and industrial customers. During 1995,
NMUI's operating revenues were 41% from sales to residential customers and 59%
from sales to commercial and industrial customers.
NMUI's business is subject to material fluctuations resulting, in large
measure, from seasonal temperature and rainfall variations. Since most of
NMUI's residential customers use more water in hot, dry weather conditions, the
first quarter of each year is usually the lowest in terms of customer
consumption, revenues and profitability. The sewer operation revenues remain
relatively constant throughout the year.
Wells and Other Water Sources
NMUI supplies its customers from four wells it owns; one of the wells was
constructed and placed in service in 1995. Construction of a new, two-million
gallon water storage reservoir is expected to be completed early in 1996. If
customer growth continues in NMUI's service area as projected, NMUI may have to
increase its water supply capability through additional well construction. To
ensure the availability of an emergency supply of water, NMUI has one
interconnection with another water purveyor.
6
NMUI's wells produce water from the Rio Grande Underground Water Basin. Well
water produced by NMUI is of good quality. Chlorination is performed by NMUI to
provide an allowable chlorine residual as a safeguard against bacteriological
contamination. Samples of water from throughout the system are tested regularly
by independent, state-certified laboratories, and the results are sent to the
State of New Mexico Environmental Improvement Division. To date, NMUI has
experienced no material effects upon its operations or capital expenditures
resulting from compliance with governmental regulations relating to protection
of the environment.
Competition, Regulation and Future Development
NMUI operates under a long-term franchise and Certificate of Public
Convenience and Necessity granted by the NMPUC and is regulated by other state
and local governmental authorities having jurisdiction over water and wastewater
service and other aspects of its business.
Requests for rate increases are submitted to the NMPUC with the test year
typically being the previous year's actual results. In December 1995, NMUI was
granted an 8% general sewer rate increase by the NMPUC, effective January 1996.
NMUI has been, and believes that it will continue to be, permitted to increase
its rates as necessary to achieve a reasonable rate of return. However, any
inability to increase rates would adversely affect NMUI's results of
operations.
As the City of Albuquerque (the "City") has expanded its jurisdiction, it has
annexed to the City most of NMUI's service area; however, NMUI has continued to
serve the customers located in the annexed areas. Occasionally, representatives
of the City have indicated that the City may have an interest in acquiring
NMUI's assets and merging them with water and sewer systems currently operated
by the City. To date, no formal action has commenced or been approved by the
City, and NMUI does not know when, or if, such action will be taken by the City.
Under New Mexico law, municipalities and certain other public bodies have the
right to acquire private water utility plants and systems within their
territorial limits by condemnation. The laws of the State of New Mexico also
provide that no public agency can install facilities within the service area of
a public utility in order to compete with it, except upon payment of just
compensation for all damages incurred by the public utility. NMUI is not aware
of any impending proceeding relating to the condemnation of any portion of
NMUI's facilities.
NMUI's operations are capital intensive. This capital is generated from
NMUI's operations; from periodic debt financings by NMUI; from lines of credit
of NMUI and the Company; from contributions in aid of construction received from
developers; and from advances received by developers which are repaid under
rules of the NMPUC. During 1995 and 1994, capital expenditures approximated
$7,275,000 and $4,295,000, respectively.
7
B. CONTRACT OPERATIONS
ECO RESOURCES, INC.
Product, Business, and Regulation
In 1985, Southwest Water Company purchased all of the outstanding common
shares of ECO thereby diversifying into the management and operation of water
and wastewater systems owned by others. In addition to managing and operating
water and wastewater systems, ECO also performs associated specialized services,
such as equipment maintenance and repair, sewer pipeline cleaning, billing and
collection, and state-certified laboratory analysis.
ECO has two distinctive types of contractual relationships: municipal utility
district contracts and operations and maintenance contracts with cities and
municipalities.
Municipal Utility Districts (MUDs) Contracts
ECO has 121 contracts with MUDs in Houston and Austin, Texas. A MUD is a
utility district created by the Texas Natural Resource Conservation Commission
with an objective of providing water, wastewater and drainage services to areas
where municipal services are not available. ECO negotiates operating contracts
with each MUD's respective Board of Directors.
At December 31, 1995, ECO served 58,262 water service connections and 60,863
wastewater service connections through MUD contracts. Most MUD contracts
are short-term contracts and are cancelable on 30 or 60 days' notice by either
party. Twelve of the MUD contracts have been converted to longer term, three or
five-year contracts. In a typical MUD contract, a monthly base fee is charged
for which ECO provides the MUD with certain maintenance and operations services,
as well as billing, collection and customer services. Additional services
beyond those covered by the base fee typically generate revenues on a time and
material basis.
As the large Texas cities, such as Houston and Austin, expand their territory,
they periodically condemn the MUD-owned facilities and annex them to the city-
owned facilities. In 1995, four MUD contracts were canceled due to annexation,
three MUD contracts were canceled for competitive reasons, and three new MUD
contracts were added.
Operations and Maintenance (O&M) Contracts
ECO has 20 O&M contracts with cities, municipalities, or private entities
located in Texas, Mississippi, New Mexico and California. At December 31, 1995,
ECO served 59,342 water service connections and 63,882 wastewater service
connections through O&M contracts. A typical O&M contract tends to average three
to five years in duration and is generally cancelable only upon a specific
breach of the contract by either party. Typical O&M contracts provide for a
specified level of services with additional billings allowed if the owner of the
facilities requires special services. In 1995, four new O&M contracts were
added.
8
Competition and Future Development
ECO is operating in an industry undergoing significant and rapid changes.
Competition is based on both lowest cost and technical expertise. ECO's
competition in the O&M portion of its business includes four significantly
larger companies which provide O&M services on a national basis, as well as
several regional competitors, both smaller and larger than ECO. In the MUD
portion of the business, competitors include one large national company and at
least five smaller, local companies.
ECO intends to expand its current base business in Texas, Mississippi, New
Mexico and California. This expansion will require aggressive sales and
marketing efforts which may affect ECO's liquidity and results of operations.
ITEM 2. PROPERTIES
The Company leases approximately 5,500 square feet of office space for its
Corporate headquarters in West Covina, California.
A. REGULATED UTILITY OPERATIONS
The Company's regulated utility operations lease two office buildings for
their headquarters in Covina, California, and Albuquerque, New Mexico,
respectively. In addition, Suburban owns two buildings which house its district
operations, and NMUI owns a warehouse building that houses its field supplies
and equipment.
SUBURBAN WATER SYSTEMS
Suburban owns and operates water production and distribution systems
consisting of well pumping plants, booster pumping stations, reservoir storage
facilities, transmission and distribution mains, and service connections to
individual customers. Suburban also has rights-of-way and easements necessary
to provide its water services. At December 31, 1995, Suburban owned
approximately 704 miles of transmission and distribution mains, 26 storage
reservoirs with a total capacity of approximately 53 million gallons and 14
wells with a total pumping capacity of approximately 30,000 gallons per minute.
These facilities vary as to age and quality, but each is believed by Suburban to
be in good condition and adequate for current operations. Suburban has a master
plan which provides for periodic evaluation of the adequacy of system
operations. In accordance with this master plan, Suburban will continue its
capital expenditure program and construct and replace reservoirs, wells, and
transmission and distribution lines in future years, as needed. Normal
maintenance and construction work on these facilities is performed by employees
of Suburban, and major construction projects are performed by outside
contractors chosen through competitive bidding. Ongoing maintenance and repair
is performed by Suburban and constitutes a significant portion of its expenses
($1,630,000 in 1995).
Virtually all property of Suburban, other than 11.4 acres of vacant land in La
Puente, California, is subject to the lien of an Indenture of Mortgage and Deed
of Trust dated October 1, 1986 (the "Indenture"), as amended February 7, 1990,
and January 24, 1992, securing Suburban's first mortgage bonds. The Indenture
contains certain restrictions regarding the disposition of property and includes
various covenants and restrictions common to such types of instruments,
including limitations on the amount of cash dividends which Suburban may pay to
the Company.
9
NEW MEXICO UTILITIES, INC.
NMUI owns and operates a water production and distribution system consisting
of well pumping plants, reservoir storage facilities, booster pumping stations,
transmission and distribution mains, and service connections to individual
customers. At December 31, 1995, NMUI owned approximately 93 miles of
transmission and distribution mains and two storage reservoirs with a total
capacity in excess of five million gallons. The four wells operated by NMUI
have a total pumping capacity in excess of 7,425 gallons per minute. In
addition, NMUI owns and operates a sewer collection system consisting of one
lift station and approximately 71 miles of interceptor and collector lines.
These facilities vary as to age, and each is believed by NMUI to be adequate for
current and foreseeable operations. Normal maintenance and construction work on
these facilities is performed by employees of NMUI or outside contractors.
Maintenance and repair expenses of $143,000 were incurred in 1995. NMUI also
holds rights-of-way or easements in its service area necessary for its water and
sewer services.
Virtually all of NMUI's property is subject to the lien of an Indenture of
Mortgage dated February 14, 1992, securing NMUI's first mortgage bonds. The
bonds are subject to certain restrictions regarding the disposition of such
property, and include various covenants and other restrictions, including
limitations on the amount of cash dividends that NMUI may pay to the Company.
B. CONTRACT OPERATIONS
ECO RESOURCES, INC.
ECO owns 4.3 acres and a 17,000 square foot building that house fleet and
maintenance operations in the Houston, Texas, area. ECO also owns 10 acres and
a 10,000 square foot building in Austin, Texas that house office, fleet and
maintenance operations. In addition, ECO owns or leases 298 vehicles, and other
equipment used in daily operations. ECO leases approximately 34,000 square feet
of office, warehouse and lab space in nine facilities in the Houston, Texas
area; the Rio Grande Valley, Texas area; Mississippi; New Mexico; and
California.
ITEM 3. LEGAL PROCEEDINGS
As described previously in the Company's Form 10-K Reports for the years ended
December 31, 1992, 1993, and 1994, its Form 8-K Report filed in January 1994,
and its Form 10-Q Reports for the quarters ended March 31, 1995, June 30, 1995,
and September 30, 1995, Suburban was a defendant in three lawsuits arising from
a chlorine gas leak that occurred in October 1990 at a Suburban water
distribution facility. In January 1994, Suburban settled with all of the
plaintiffs for aggregate cash payments of approximately $1.5 million. These
settlements included releases of all claims against Suburban. At the time of
the chlorine gas incident, the Company and Suburban maintained liability
insurance coverage; however, the Company's primary and excess liability
insurance carrier declined to defend or indemnify Suburban on the basis of
applicable exclusions in the policies. In May 1994, the insurance carrier was
granted a summary judgment dismissing Suburban's action. Suburban appealed the
summary judgment and its appeal was denied by the court in 1995. Suburban and
the Company do not intend to pursue this matter any further.
As described in the Company's 1994 Form 10-K Report and Form 10-Q Reports for
the quarters ended March 31, 1995, June 30, 1995, and September 30, 1995, ECO
was named as a defendant in a lawsuit by certain homeowners and Pulte Home
Corporation of Texas. The plaintiffs allege that in 1989, ECO, as an
10
independent contractor for Municipal Utility District #81 ("MUD #8l") in
Houston, Texas, failed to change the treatment of the water supplied to
plaintiffs after the plaintiffs made MUD #8l and ECO aware of highly corrosive
elements in the water supplied. On June 14, 1995, the court granted ECO's
motion for summary judgment on all causes of action and granted MUD #8l's motion
for summary judgment on sovereign immunity grounds. On July 13, 1995,
plaintiffs filed a motion for new trial and a motion to reconsider and to vacate
the court's summary judgments. A date has not been set to hear the motion. As
of the date when damages are first alleged to have occurred (1989) and
thereafter, the Company and ECO maintained liability insurance coverage of $20
million. ECO's primary liability carrier is providing a defense for the primary
cause of action against ECO, but has reserved all rights as to allegations that
ECO knowingly committed intentional acts constituting "deceptive trade
practices" and "negligence." The Company believes the ultimate resolution of
this matter will not have a material adverse effect on its consolidated
financial condition or results of operations.
As described in the Company's 1994 Form 10-K Report, and Form 10-Q Reports for
the quarters ended March 31, 1995, June 30, 1995, and September 30, 1995,
Suburban is a defendant and cross-defendant in two actions filed in March 1994
and June 1994 in the Superior Court of Los Angeles County and arising out of a
slope slide or failure in 1992 in a hilly, residential development in West
Covina, California. In addition to Suburban, defendants in the actions include
the owners of the lot above and containing the failed slope, and an engineer and
a contractor who directed and conducted repair work to the slope after a prior
failure in 1978. Claims raised by the plaintiffs and certain cross-defendants
are described in the Company's 1994 Form 10-K Report, as is the consolidation of
the two cases. At the initiation of Suburban's defense counsel, one of the
plaintiffs dismissed his action against Suburban in March 1995, and defense
counsel is discussing a similar dismissal with the other plaintiff. Mediation
was held for both actions on November 6, 1995. A tentative settlement of
$31,000 was reached as to both actions. The settlement process is continuing
and the Company expects this settlement to be completed in 1996 with Suburban's
insurance carrier to fund any payment in excess of Suburban's deductible.
Accordingly, the Company believes this matter will not have a material adverse
effect on its consolidated financial condition or results of operations.
As described in the Company's 1994 Form 10-K Report and Form 10-Q Report for
the quarter ended March 31, 1995, ECO and Southbend Municipal Utility District
("Southbend") were named as defendants in two lawsuits filed in February and
March 1993, in Harris County, Texas, by homeowner customers. The plaintiffs
alleged that ECO, as an independent contractor for Southbend in Houston, Texas,
failed to adequately test the water delivered to residents to detect
contaminants that would cause harm to persons in the Southbend subdivision. In
early 1995, the plaintiffs filed motions requesting dismissal of these actions
against ECO. Such motion was granted without prejudice as to all plaintiffs
during 1995. As a result, the Company believes these matters will not have a
material adverse effect on its consolidated financial condition or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
11
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are elected each year by the Board of
Directors at its first meeting following the Annual Meeting of Stockholders.
There are no family relationships between any of the executive officers of the
Company, nor are there any agreements or understandings between any such officer
and another person pursuant to which he was elected an officer. There are no
legal proceedings of the types required to be disclosed pursuant to the
instructions to this item involving any executive officer. The executive
officers of the Company and its subsidiaries are as follows:
POSITIONS AND OFFICES CURRENTLY HELD
NAME AGE AND BUSINESS EXPERIENCE DATE ELECTED
---- --- -------------------------------------------- ------------
Anton C. Garnier 55 Chief Executive Officer and President of the
Company and Suburban November 1968
Peter J. Moerbeek 48 Vice President Finance and CFO August 1995
Director of Suburban and ECO October 1995
Secretary of Company, Suburban and ECO October 1995
Previously Executive Vice President
Finance and Operations of Pico Products,
Inc. and Pico Macom, Inc. (1989 - 1995)
James E. Furman 58 President and Chief Executive Officer of ECO April 1992
Director of ECO May 1993
Previously President of various operating
units of Baker-Hughes, Inc. (1977 - 1992)
Michael O. Quinn 49 Chief Operating Officer of Suburban April 1992
Director of Suburban May 1993
Previously President of ECO
(October 1985 - April 1992)
Robert L. Swartwout 54 President and General Manager of NMUI March 1992
Director of NMUI May 1993
Previously Consulting Associate, Robert
Witter & Associates, Inc. (1985 - 1992)
12
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information with respect to the market for and number of holders of the
Company's common shares as well as quarterly market and dividend information is
set forth under the caption "Market and Dividend Information" in the Company's
1995 Annual Report to Stockholders and is hereby incorporated by reference. The
number of holders of the Company's common shares was computed based on a count
of record holders as of December 31, 1995.
ITEM 6. SELECTED FINANCIAL DATA
The information included under the caption "Selected Financial Data" in the
Company's 1995 Annual Report to Stockholders is hereby incorporated by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information included under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's 1995
Annual Report to Stockholders is hereby incorporated by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated balance sheets indicating the financial position of the Company
at December 31, 1995 and 1994, consolidated financial statements reflecting the
results of its operations, and changes in its cash flows for the three-year
period ended December 31, 1995, together with the notes thereto and the report
thereon of KPMG Peat Marwick LLP, independent auditors, as well as selected
quarterly financial information under the caption "Unaudited Quarterly Financial
Information," are contained in the Company's 1995 Annual Report to Stockholders,
and are hereby incorporated by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the directors of the Company is set forth in the
Company's definitive Proxy Statement, dated April 10, 1996, and to be filed with
the Commission, under the caption "Information Regarding the Board of
Directors," and is hereby incorporated by reference. In addition, information
appearing under the heading "Compliance with Section 16(a) of the Securities
Exchange Act of 1934, As Amended" is in the Company's definitive Proxy
Statement, dated April 10, 1996, and is also hereby incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to executive compensation is contained in the Company's
definitive Proxy Statement, dated April 10, 1996, and to be filed with the
Commission, under the captions "Executive Compensation and Other Information,"
"Information Regarding the Board of Directors," and "Proposal 2: Adoption of a
Non-Employee Director Stock Option Plan," and is hereby incorporated by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to security ownership of certain beneficial owners
and management of the Company's voting securities is set forth in the Company's
definitive Proxy Statement, dated April 10, 1996, and to be filed with the
Commission, under the caption "Beneficial Ownership of the Company's
Securities," and is hereby incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to certain relationships and related transactions is
set forth in the Company's definitive Proxy Statement, dated April 10, 1996, and
to be filed with the Commission, and is hereby incorporated by reference.
14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) The financial statements listed below are incorporated from the
Company's 1995 Annual Report to Stockholders included as Exhibit 13.1
to this filing:
Consolidated Statements of Income for the years ended
December 31, 1995, 1994 and 1993
Consolidated Balance Sheets at December 31, 1995 and 1994
Consolidated Statements of Changes in Common Stockholders'
Equity for the years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Independent Auditors' Report
(a)(2) The supplementary financial statement schedules required to be filed
with this report are as follows:
Page
----
Independent Auditors' Report on Supplementary Note to
Consolidated Financial Statements and supporting
schedule................................................ 16
Supplementary Note to Consolidated Financial Statements... 17
Schedule II - Valuation and Qualifying Accounts........... 18
Schedules not listed above are omitted because of the absence of
conditions under which they are required, or because the information
required by such omitted schedules is included in the financial
statements or notes thereto.
(a)(3) Exhibit Index............................................... 19 - 21
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three months ended
December 31, 1995.
15
INDEPENDENT AUDITORS' REPORT
The Stockholders and Board of Directors
Southwest Water Company:
Under date of January 23, 1996, we reported on the consolidated balance sheets
of Southwest Water Company and subsidiaries as of December 31, 1995 and 1994,
and the related consolidated statements of income, changes in common
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1995, as contained in the 1995 annual report to
stockholders. These consolidated financial statements and our report thereon
are incorporated by reference in the annual report on Form 10-K for the year
1995. In connection with our audits of the aforementioned consolidated
financial statements, we also have audited the related supplementary note and
financial statement schedule as listed in the accompanying index. The
supplementary note and financial statement schedule is the responsibility of the
Registrant's management. Our responsibility is to express an opinion on the
supplementary note and financial statement schedule based on our audits.
In our opinion, such supplementary note and financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
Los Angeles, California
January 23, 1996
16
SOUTHWEST WATER COMPANY AND SUBSIDIARIES
SUPPLEMENTARY NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
NOTE 14. OPERATING REVENUES AND DIRECT OPERATING EXPENSES
Included in operating revenues and direct operating expenses are the following:
1995 1994 1993
----------- ----------- -----------
Utility operating revenues $31,089,000 $30,112,000 $29,304,000
Other operating revenues 25,718,000 20,820,000 18,914,000
----------- ----------- -----------
Total operating revenues $56,807,000 $50,932,000 $48,218,000
=========== =========== ===========
Utility direct operating expenses $18,865,000 $18,687,000 $18,224,000
Other direct operating expenses 24,506,000 20,131,000 17,737,000
----------- ----------- -----------
Total direct operating expenses $43,371,000 $38,818,000 $35,961,000
=========== =========== ===========
17
SOUTHWEST WATER COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
BALANCE PROVISION DEDUCTIONS - BALANCE
AT BEGINNING CHARGED ACCOUNTS AT END
OF YEAR TO WRITTEN OFF OF
INCOME YEAR
------------ ---------- ------------- ----------
1995
Allowance for doubtful accounts $141,000 $245,000 $(194,000) $192,000
======== ======== ========= ========
1994
Allowance for doubtful accounts $110,000 $207,000 $(176,000) $141,000
======== ======== ========= ========
1993
Allowance for doubtful accounts $116,000 $208,000 $(214,000) $110,000
======== ======== ========= ========
Other reserves $358,000 $250,000 $(608,000) $ --
======== ======== ========= ========
18
SOUTHWEST WATER COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
EXHIBIT NO. AND
APPLICABLE SECTION
OF ITEM 601 OF
REGULATION S-K
- ------------------
2 Agreement and Plan of Merger of Registrant dated May 25,
1988 (incorporated by reference to Exhibit 2 to
Registrant's Form 10-K Report for the year ended December
31, 1988).
3.1 Registrant's Restated Certificate of Incorporation dated
April 4, 1988 (incorporated by reference to Exhibit 3.1 to
Registrant's Form 8-B Report filed with the Commission on
July 5, 1988).
3.1B Certificate of Amendment of Article Fourth of Articles of
Incorporation dated March 30, 1995 (incorporated by
reference to Exhibit 3.1B to Registrant's Form 10-Q Report
for the quarter ended March 31, 1995).
3.2 Registrant's Bylaws as amended April 4, 1988 (incorporated
by reference to Exhibit 3.2 to Registrant's Form 8-B Report
filed with the Commission on July 5, 1988).
3.2A Amendment to Registrant's Bylaws dated March 15, 1991
(incorporated by reference to Exhibit 3.2A to Registrant's
Form 10-K Report for the year ended December 31, 1990).
3.2B Amendment to Registrant's Bylaws dated June 27, 1995
(incorporated by reference to Exhibit 3.2A to Registrant's
Form 10-Q Report for the quarter ended June 30, 1995).
4.1 Indenture dated as of August 15, 1975, between Registrant
and Bank of America, formerly Security Pacific National
Bank (incorporated by reference to Exhibit 6(g) to
Registrant's Form S-14 Registration Statement filed with
the Commission on June 19, 1975).
4.2 Indenture of Mortgage and Deed of Trust dated October 1,
1986, between Suburban Water Systems and Bank of America,
formerly Security Pacific National Bank (incorporated by
reference to Exhibit 4.3 to Registrant's Form 10-K Report
for the year ended December 31, 1986).
4.2A First Amendment and Supplement to Indenture of Mortgage and
Deed of Trust between Suburban Water Systems and Bank of
America, formerly Security Pacific National Bank, dated
February 7, 1990 (incorporated by reference to Exhibit 4.2A
to Registrant's Form 10-K Report for the year ended
December 31, 1989).
4.2B Second Amendment and Supplement to Indenture of Mortgage
and Deed of Trust between Suburban Water Systems and Bank
of America, formerly Security Pacific National Bank, dated
January 24, 1992 (incorporated by reference to Exhibit 4.2B
to Registrant's Form 10-K Report for the year ended
December 31, 1991).
4.3 Bond Purchase Agreement dated October 1, 1986, for Suburban
Water Systems (incorporated by reference to Exhibit 4.4 to
Registrant's Form 10-K Report for the year ended December
31, 1986).
19
EXHIBIT NO. AND
APPLICABLE SECTION
OF ITEM 601 OF
REGULATION S-K
- ------------------
4.3A Bond Purchase Agreement dated February 20, 1992, for
Suburban Water Systems (incorporated by reference to
Exhibit 4.3A to Registrant's Form 10-K Report for the year
ended December 31, 1991).
4.4 Indenture of Mortgage dated February 14, 1992, between New
Mexico Utilities, Inc., and Sunwest Bank of Albuquerque
(incorporated by reference to Exhibit 4.4 to Registrant's
Form 10-K Report for the year ended December 31, 1991).
4.5 Bond Purchase Agreement dated March 12, 1992, for New
Mexico Utilities, Inc. (incorporated by reference to
Exhibit 4.5 to Registrant's Form 10-K Report for the year
ended December 31, 1991).
4.6 Article Fourth of the Restated Certificate of Incorporation
of the Registrant as to the rights, preferences, privileges
and restrictions of all classes of stock (incorporated by
reference to Exhibit 3.1 to Registrant's Form 8-B Report
filed with the Commission on July 5, 1988.)
10.1 Thirteenth Amendment to the Utility Employees' Retirement
Plan dated December 31, 1989 (incorporated by reference to
Exhibit 10.16 to Registrant's Form 10-K Report for the year
ended December 31, 1990).
10.2 Amended and Restated Employee Qualified Stock Purchase Plan
dated November 11, 1991 (incorporated by reference to
Exhibit 10.7 to Registrant's Form 10-Q Report for the
quarter ended September 30, 1991).
10.3 Dividend Reinvestment and Stock Purchase Plan dated
December 1, 1992 (incorporated by reference to Registrant's
Form S-3 Registration Statement filed with the Commission
on December 1, 1992).
10.4 Line of Credit Agreement dated December 2, 1992, between
Registrant and Wells Fargo Bank (incorporated by reference
to Exhibit 10.6 to Registrant's Form 10-K Report for the
year ended December 31, 1992).
10.4A First Amendment to Credit Agreement dated December 1, 1993,
between Registrant and Wells Fargo Bank (incorporated by
reference to Exhibit 10.12 to Registrant's Form 10-K Report
for the year ended December 31, 1993).
10.4B Second Amendment to Credit Agreement dated December 1,
1994, between Registrant and Wells Fargo Bank (incorporated
by reference to Exhibit 10.4B to Registrant's Form 10-K
Report for the year ended December 31, 1994).
10.4C Third Amendment to Credit Agreement dated December 1, 1995,
between Registrant and Wells Fargo Bank, filed herewith.
10.5 Line of Credit Agreement dated December 2, 1992, between
Registrant and First Interstate Bank of California
(incorporated by reference to Exhibit 10.7 to Registrant's
Form 10-K Report for the year ended December 31, 1992).
10.5A First Amendment to Credit Agreement and Promissory Note
dated July 29, 1993, between Registrant and First
Interstate Bank (incorporated by reference to Exhibit 10.10
to Registrant's Form 10-K Report for the year ended
December 31, 1993).
20
EXHIBIT NO. AND
APPLICABLE SECTION
OF ITEM 601 OF
REGULATION S-K
- ------------------
10.5B Second Amendment to Credit Agreement and Promissory Note
dated June 24, 1994, between Registrant and First
Interstate Bank (incorporated by reference to Exhibit 10.16
to Registrant's Form 10-Q Report for the quarter ended June
30, 1994).
10.5C Third Amendment to Credit Agreement and Promissory Note
dated June 30, 1995, between Registrant and First
Interstate Bank (incorporated by reference to Exhibit 10.5C
to Registrant's Form 10-Q Report for the quarter ended June
30, 1995).
10.6 Amended and Restated Stock Option and Restricted Stock Plan
dated November 11, 1991, and First Amendment to the Amended
and Restated Stock Option and Restricted Stock Plan dated
March 21, 1993 (incorporated by reference to Registrant's
Form S-8 Registration Statement filed with the Commission
on December 21, 1993).
10.7 Stock Purchase Agreement and First Amendment to Stock
Purchase Agreement dated August 13, 1993, between ECO
Resources, Inc., and Robert E. Hebert (incorporated by
reference to Exhibit 10.11 to Registrant's Form 10-K Report
for the year ended December 31, 1993).
10.8 Utility Employees' 401(k) Plan dated January 7, 1994
(incorporated by reference to Exhibit 10.13 to Registrant's
Form 10-K Report for the year ended December 31, 1993).
10.8A Amendment One to Utility Employees' 401(k) Plan
(incorporated by reference to Exhibit 10.8A to Registrant's
Form 10-K Report for the year ended December 31, 1994).
10.9 Comprehensive Amendment to the Profit-Sharing 401(k) Plan
for the Southwest Water Company's Related Companies dated
March 10, 1994 (incorporated by reference to Exhibit 10.14
to Registrant's Form 10-K Report for the year ended
December 31, 1993).
10.9A Amendment One to the Profit Sharing 401(k) Plan for the
Southwest Water Company's Related Companies (incorporated
by reference to Exhibit 10.9A to Registrant's Form 10-K
Report for the year ended December 31, 1994).
10.10 Line of Credit Agreement dated January 25, 1995, between
New Mexico Utilities, Inc. and Sunwest Bank of Albuquerque
(incorporated by reference to Exhibit 10.10 to Registrant's
Form 10-K Report for the year ended December 31, 1994).
10.11 Form of Severance Compensation Agreement between Registrant
and certain executive officers approved by the Compensation
Committee of the Board of Directors on February 21, 1995
(incorporated by reference to Exhibit 10.11 to Registrant's
Form 10-Q Report for the quarter ended March 31, 1995).
13.1 Portions of Registrant's Annual Report to Stockholders for
the year ended December 31, 1995.
21.1 Listing of Registrant's subsidiaries.
23.1 Consent of KPMG Peat Marwick LLP.
27 Financial Data Schedule.
21
SOUTHWEST WATER COMPANY AND SUBSIDIARIES
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.
SOUTHWEST WATER COMPANY
By: /s/ ANTON C. GARNIER
--------------------
Anton C. Garnier
President and Chief Executive Officer
(Principal Executive Officer)
March 27, 1996
By: /s/ PETER J. MOERBEEK
---------------------
Peter J. Moerbeek
Vice President Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
March 27, 1996
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.
/s/ H. FREDERICK CHRISTIE /s/ DONOVAN D. HUENNEKENS
- ------------------------- -------------------------
H. Frederick Christie Donovan D. Huennekens
Director Director
March 27, 1996 March 27, 1996
/s/ MICHAEL J. FASMAN /s/ RICHARD KELTON
- --------------------- ------------------
Michael J. Fasman Richard Kelton
Director Director
March 27, 1996 March 27, 1996
/s/ ANTON C. GARNIER /s/ RICHARD NEWMAN
- -------------------- ------------------
Anton C. Garnier Richard Newman
Director Director
March 27, 1996 March 27, 1996
/s/ MONROE HARRIS
- -----------------
Monroe Harris
Director
March 27, 1996
22