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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended December 31, 1993 Commission file number 0-1121
SOUTHERN CALIFORNIA WATER COMPANY
------------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
California 95-1243678
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
630 East Foothill Boulevard, San Dimas, California 91773
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (909) 394-3600
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Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act:
Common Shares, $2.50 Par Value
------------------------------
Title of Each 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 a definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K [x]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant was approximately $136,770,000 on February 28, 1994. The closing
price per Common Share on that date, as quoted in the Western Edition of The
Wall Street Journal, was $17.38. Voting Preferred Shares, for which there is
no established market, were valued on February 28, 1994 based on a yield of
7.60%. As of February 28, 1994, the number of the Registrant's Common Shares,
$2.50 Par Value, outstanding was 7,845,092.
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DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Annual Report to Shareholders for the year ended
December 31, 1993 as to Part I, Item 1 and Part II, Items 5, 6, 7 and
8, in each case, as specifically referenced herein.
(2) Portions of the Proxy Statement to be filed with the Securities and
Exchange Commission on or about March 18, 1994 as to Part III,
Items 10, 11, 12 and 13, in each case, as specifically
referenced herein.
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SOUTHERN CALIFORNIA WATER COMPANY
INDEX
Page No.
Part I
Item 1: Business 1 - 4
Item 2: Properties 4 - 6
Item 3: Legal Proceedings 6 - 7
Item 4: Submission of Matters to a Vote of Security Holders 7
Part II
Item 5: Market for Registrant's Common Equity and Related
Stockholder Matters 7
Item 6: Selected Financial Data 7
Item 7: Management's Discussion and Analysis of Financial
Condition and Results of Operation 8
Item 8: Financial Statements and Supplementary Data 8
Item 9: Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 8
Part III
Item 10: Directors and Executive Officers of the Registrant 8
Item 11: Executive Compensation 9
Item 12: Security Ownership of Certain Beneficial Owners and Management 9
Item 13: Certain Relationships and Related Transactions 9
Part IV
Item 14: Exhibits, Financial Schedules and Reports on Form 8-K 9 - 20
Signatures 21
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PART I
Item 1. Business
General
Southern California Water Company (the "Registrant") is a
public utility company engaged principally in the purchase, production,
distribution and sale of water. The Registrant also distributes electricity in
one community. The Registrant, regulated by the California Public Utilities
Commission ("CPUC"), was incorporated in 1929 under the laws of the State of
California as American States Water Services Company of California as the
result of the consolidation of 20 water utility companies. From time to time
additional water companies and municipal water districts have been acquired and
properties in limited service areas have been sold. The Registrant's present
name was adopted in 1936.
At December 31, 1993, the Registrant provided service in 17
separate operating districts, 16 of which were water districts and one an
electric district, located in 75 communities in ten counties throughout the
State of California. Total population of the service areas on December 31,
1993 was approximately 1,000,000. As of that date, about 73% of the
Registrant's water customers were located in the greater metropolitan areas of
Los Angeles and Orange Counties. The Registrant provided electric service to
the City of Big Bear Lake and surrounding areas in San Bernardino County. All
electric energy sold is purchased from Southern California Edison Company
("SCE") on a resale rate schedule.
The Registrant served 236,985 water customers and 20,131
electric customers at December 31, 1993, or a total of 257,116 customers
compared with 255,966 total customers at December 31, 1992. For the year ended
December 31, 1993, approximately 90% of the Registrant's operating revenues
were derived from water sales and approximately 10% from the sale of
electricity, ratios which are generally consistent with prior years. Operating
income before taxes on income of the electric district was 9.2% of the
Registrant's total operating income before taxes. The material contained in
Note 12 of the Notes to Financial Statements included in the 1993 Annual Report
to Shareholders provides additional information on business segments while Note
13 provides information regarding the seasonal nature of the Registrant's
business. Page 15 of the 1993 Annual Report to Shareholders lists the
geographical distribution of customers.
During 1993, the Registrant supplied, from all sources, a
total of 178,196 acre feet of water compared with 172,500 acre feet for the
previous year. Of the total water supplied in 1993, approximately 43% was
purchased from others, principally from member agencies of the Metropolitan
Water District of Southern California ("MWD"), and 1% was furnished by the
Bureau of Reclamation under contract, at no cost, for the Registrant's
Arden-Cordova District and to the Registrant's Clearlake district by
prescriptive right to water extracted from Clear Lake. These amounts reflect a
continued reduction in reliance on imported water supplies.
The MWD is a water district organized under the laws of the
State of California for the purpose of delivering imported water to areas
within its jurisdiction which includes most of coastal Southern California from
the County of Ventura south to and including San Diego County. The Registrant
has 52 connections to the water distribution facilities of MWD and other
municipal water agencies. MWD imports water from two principal sources: the
Colorado River and the State Water Project ("SWP"). Available water supplies
from the Colorado River and the SWP have historically been sufficient to meet
most of MWD's requirements even though the State's major reservoirs were
significantly impacted by six years of drought. The drought officially ended
in February, 1993. The price of water purchased from MWD, however, is expected
to continue to increase. MWD announced a 7% rate adjustment on March 8, 1994,
effective for the 1994-1995 fiscal year.
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In those districts of the Registrant which pump groundwater,
overall groundwater conditions continue to maintain at adequate levels. The
Registrant drilled six new wells during 1993 in order to improve the
Registrant's ability to use more groundwater in its resource mix and further
decrease its dependence on purchased water.
The Registrant is continuing its efforts to become a
participant in the Coastal Aqueduct extension of the State Water Project (the
"Project"). The Registrant believes that participation in the Project is
necessary in order to provide another source of water for its Santa Maria water
district. Should the Registrant be allowed to participate in the Project at a
500 acre-foot level, the Registrant will prepare a filing with the CPUC in
order to recover costs associated with that participation under normal
rate-making methods. A final decision of the CPUC on the application would not
be anticipated until late 1994 or early 1995.
Rates and Regulation
The Registrant is subject to regulation by the CPUC as to its
water and electric business and properties. The CPUC has broad powers of
regulation over public utilities with respect to service and facilities, rates,
classifications of accounts, valuation of properties and the purchase,
disposition and mortgaging of properties necessary or useful in rendering
public utility service. It also has authority over the issuance of securities,
the granting of certificates of convenience and necessity as to the extension
of services and facilities and various other matters.
Water rates of the Registrant vary from district to district
due to differences in operating conditions and costs. Each operating district
is considered a separate entity for rate-making purposes. The Registrant
continuously monitors its operations in all of its districts so that
applications for rate changes may be filed, when warranted, on a
district-by-district basis in accordance with CPUC procedure. Under the CPUC's
practices, rates may be increased by three methods - general rate increases,
offsets for certain expense increases and advice letter filings related to
certain plant additions. General rate increases typically are for three year
periods and include "step" increases in rates for the second and third years.
General rate increases are established by formal proceedings
in which the overall rate structure, expenses and rate base of the district are
examined. Rates are based on estimated expenses and capital costs for a
forward two-year period. A major feature of the proceeding is the use of an
attrition mechanism for setting rates for the third of the three year test
cycle assuming that the costs and expenses will increase in the same proportion
over the second year as the increase projected for the second test year
increased over the first test year. The step rate increases for the second and
third years are allowed to compensate for the projected cost increases, but are
subject to tests including a demonstration that earnings levels in the district
did not exceed the latest rate of return authorized for the Registrant. Formal
general rate proceedings typically take about twelve months from the filing of
a Notice of Intent to increase rates to the authorization of new rates.
Rate increases to offset increases in certain expenses such as
costs of purchased water, energy costs to pump water, costs of power purchased
for resale and groundwater production assessments are accomplished through an
abbreviated "offset" procedure that typically takes about two months. CPUC
regulations require utilities to maintain balancing accounts which reflect
differences between specific offset cost increases and the rate increases
authorized to offset those costs. The balancing accounts are subject to
amortization through the offset procedure or through general rate decisions.
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An advice letter, or rate base offset, proceeding is generally
undertaken on an order of the CPUC in a general rate proceeding wherein the
inclusion of certain projected plant facilities in future rates is delayed
pending notification that such facilities have actually been placed in service.
The advice letter provides such notification and, after CPUC approval, permits
the Registrant to include the costs associated with the facilities in rates.
During 1993, 1992 and 1991, the Registrant's rates for all
water districts were increased, among other reasons, to directly offset
increases in certain expenses, principally purchased water, as well as
increased levels of capital improvements. The Registrant decreased rates in
its Bear Valley electric district by approximately 28% in November, 1991 as a
result of amortizing large refunds from the Registrant's wholesale power
supplier. The following table lists information related to the Registrant's
rate increases for the last three years:
General Supply Rate Base Other
and Cost Advice Advice
Step Offset Letter Letter
Year Increases Increases Increases Increases Total
---- --------- --------- --------- --------- -----
1993 $2,270,700 $ 37,600 $ 0 $ 50,000 $ 2,358,300
1992 $7,767,700 $2,540,200 $ 673,900 $ 18,400 $11,000,200
1991 $5,030,700 $2,483,100 $ 276,300 $ 212,700 $ 8,002,800
The Registrant filed an application for general rate increases
in six of its water operating districts in May, 1992. In June, 1993, the CPUC
issued its decision and the Registrant requested rehearing on two matters - the
rate of return on rate base and an authorized rate increase for the
Registrant's Bay Point water district. The CPUC granted the Registrant's
request for rehearing on the two issues and established an interim rate of
return on rate base of 9.5% applicable for certain attrition, step rate filings
and other earnings test filings with respect to the Registrant's other
operating districts. For further information, please see the caption "Rates
and Regulation" under Management's Discussion and Analysis herein and Note 10
of the Notes to Financial Statements in the 1993 Annual Report to Shareholders.
The Registrant has filed its case on the two matters set for
rehearing, which was held on March 15, 1994. Prior to commencement of
hearings, the Registrant and the Division of Ratepayer Advocates ("DRA") of the
CPUC had stipulated to a rate of return on common equity of 10.10%. In
addition, DRA had agreed that an increase in rates applicable to the
Registrant's Bay Point water district was appropriate with certain
modifications as to the level of rate base. A final decision on these matters,
however, is still subject to the CPUC and is not expected until the Summer of
1994.
The Registrant anticipates filing applications with the CPUC
in July, 1994 for rate increases, effective in 1995, in all of its operating
districts for certain cost-effective recommendations resulting from the
recently completed Management Audit of the Registrant conducted under the
auspices of the CPUC. In addition, the Registrant will file a general rate
case in one of its water operating districts. The requested annual
increase in rates will also seek step increases for 1996 and 1997. No
assurance can be given that the CPUC will authorize any or all of the rates for
which the Registrant applies.
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Industrial Relations
The Registrant had 486 paid employees as of December 31, 1993.
Seventeen employees in the Bear Valley Electric District were members of the
International Brotherhood of Electrical Workers. Their present labor agreement
is effective through June 30, 1994. Seventy-three of the Registrant's water
utility employees, unionized under the Utility Workers of America ("UWA"), are
covered by a contract which expires March 31, 1996. The Registrant has no other
unionized employees.
Environmental Matters
The Environmental Protection Agency ("EPA"), under provisions
of the Safe Drinking Water Act, as amended, is required to establish Maximum
Contaminant Levels ("MCL's") for the 83 potential drinking water contaminants
initially listed in the Act, and for an additional 25 contaminants every three
years thereafter. The California Department of Health Services ("DOHS"),
acting on behalf of the EPA, administers the EPA's program.
The Registrant continues to test its wells and water systems
for more than 90 contaminants. Water from wells found to contain levels of
contaminants above the established MCL's has either been treated or blended
before it is delivered to customers. Only 2 of the Registrant's 306 wells have
been permanently taken out of service due to high levels of contamination.
The Registrant is aware of two new rules pending
implementation by the EPA which may significantly affect the Registrant: the
Radon Rule and the Arsenic Rule. The EPA did not meet the October 1, 1993
deadline for establishing an MCL for radon. Because of this inaction, the rule
is presently in the hands of the United States Congress where it is believed
that an MCL will be established primarily to implement the regulation.
However, the 1994 budget as drafted by the Appropriations Committee has
specifically excluded funds for further work on radon regulation, basically
setting a moratorium on the regulation. The EPA is continuing its review of
data on the Arsenic Rule although the Registrant anticipates an MCL will be
proposed by September, 1994. The Registrant is unable to predict, until the
MCL's are established, what effects, if any, these new rules will have on its
financial condition or results of operation.
The Registrant has experienced increased operating costs for
testing to determine the levels (if any) of the contaminants in the
Registrant's source of supply and costs to lower the level of any contaminants
found to a level that meets standards. Such costs and the control of any other
pollutants may include capital costs as well as increased operating costs. The
rate-making process provides the Registrant with the opportunity to recover
capital and operating costs associated with water quality, and management
believes that such costs are properly recoverable.
Item 2 - Properties
Franchises, Competition, Acquisitions and Condemnation of Properties
The Registrant holds the required franchises from the
incorporated communities and the counties which it serves. The Registrant
holds certificates of public convenience and necessity granted by the CPUC in
each of the 17 districts it serves.
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The business of the Registrant is substantially free from
direct competition with other public utilities, municipalities and other public
agencies. The Registrant's certificates, franchises and similar rights are
subject to alteration, suspension or repeal by the respective governmental
authorities having jurisdiction over such matters.
The laws of the State of California provide for the
acquisition of public utility property by governmental agencies through their
power of eminent domain, also known as condemnation. The Registrant has been,
within the last three years, involved in activities related to the condemnation
of its Big Bear and Bay Point water districts. The Registrant continues to
oppose the condemnation actions with respect to its Bay Point water district
initiated by the Contra Costa Water District in 1992. Note 8 of the Notes to
Financial Statements contained in the 1993 Annual Report to Shareholders herein
describes condemnation actions related to the Registrant's properties in
greater detail.
Water Properties
As of December 31, 1993, the Registrant's physical properties
consisted of water transmission and distribution systems which included over
2,560 miles of pipeline together with services, meters and fire hydrants and
approximately 438 parcels of land (generally less than 1 acre each) on which
are located wells, pumping plants, reservoirs and other utility facilities.
The Registrant's operating properties have been maintained and improved in the
ordinary course of business. As of December 31, 1993, the Registrant owned and
operated 306 wells equipped with pumps with an aggregate capacity of 265.7
million gallons per day ("MGD"). Other production facilities include filter
plants with an aggregate capacity of 29.4 MGD and 52 connections to the water
distribution facilities of the MWD and other municipal water agencies. The
Registrant's storage reservoirs and tanks have an aggregate capacity of 156.6
million gallons. There are no dams in the Registrant's system.
Electric Properties
The Registrant's electric properties are all located in the
Big Bear area of San Bernardino County. As of December 31, 1993, the
Registrant operated 28.8 miles of overhead 34.5 KV transmission lines, 0.6
miles of underground 34.5 KV transmission lines, 172.7 miles of 4.16 KV or 2.4
KV distribution lines, 41.7 miles of underground cable and 14 sub-stations.
There are no generating plants in the Registrant's system.
Other Properties
The Registrant's general offices are housed in a single-story
office building located in San Dimas, California. The land and the building,
which was completed and occupied in early 1990, are owned by the Registrant.
Certain of the Registrant's district offices are housed in leased premises.
During 1993, the Registrant refinanced a significant portion
of its then outstanding debt in order to lower interest costs. In doing so,
the Registrant redeemed all outstanding First Mortgage Bonds. In early 1994,
the Trustee filed for release of the lien of an indenture securing the
previously outstanding First Mortgage Bonds. As of December 31, 1993, the
Registrant had no mortgage debt outstanding.
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Financing of Construction Expenditures
The Registrant's construction program is designed to ensure
its customers with high quality service. The Registrant has an ongoing
distribution main replacement program, throughout its service areas, based upon
the priority of leaks detected, fire protection enhancement and a reflection of
the underlying replacement schedule. In addition, the Registrant upgrades its
electric and water supply facilities and is aggressively scheduling meter
replacements. The Registrant anticipates gross capital expenditures of
$26,700,000, $17,500,000 and $34,500,000 in 1994, 1995 and 1996, respectively.
During 1993, the Registrant issued 1,107,000 Common Shares (on
a post-split basis) in two separate public offerings for aggregate net proceeds
of $23,935,000. The net proceeds were applied against then outstanding
short-term bank borrowing incurred to temporarily finance construction
expenditures.
The Registrant issued additional common equity through its
Dividend Reinvestment and Common Share Purchase Plan and its 401-k Plan. The
Registrant issued 47,828, 28,416 and 29,146 shares under the Dividend
Reinvestment and Common Share Purchase Plan in the three years ended December
31, 1993, 1992 and 1991, respectively. The Registrant issued 7,741 and 7,102
Common Shares under the 401-k Plan in the two years ended December 31, 1993 and
1992. The Registrant did not issue any Common Shares through its 401-k Plan in
the year ended December 31, 1991.
During 1993 and 1992, the Registrant did not undertake any
long-term debt financing to provide additional funds for construction. In
1993, however, the Registrant did refinance $37 million of its long-term debt,
in order to reduce interest expense, through its Medium Term Note Program. In
1992, the Registrant entered into a $2,247,000 fixed rate obligation due 2013
for financing construction of a new reservoir serving one of the Registrant's
water operating districts.
In May, 1991, the Registrant completed the sale of $28,000,000
in long-term Notes Due 2031, $13,500,000 of which was used to repay then
outstanding short-term bank loans which had been used to fund the Registrant's
construction program. In addition, in December, 1991, the Registrant redeemed,
at a premium, $6,000,000 principal amount of 11-3/4% Notes. The remainder of
the proceeds from the May, 1991 issue was utilized to fund the Registrant's
capital expansion program.
Item 3. Legal Proceedings
On October 20, 1993, the Registrant and the Internal Revenue
Service ("IRS") reached a tentative settlement on the results of the IRS
examination of the Registrant's 1987, 1988 and 1989 tax returns. Based on the
settlement, the Registrant remitted an additional $438,000 in taxes. The
Registrant anticipates signing the final agreement in late March, 1994.
On March 8, 1994, the Registrant and the Contra Costa County
Board of Supervisors (the "County") reached a tentative settlement of issues
related to the County's taking on the Registrant's Madison Treatment plant in
its Bay Point water district. The County's Highway Department had taken
possession of the property on June 24, 1993. The tentative settlement of
$2.3 million includes remuneration to the Registrant for the value of the
property taken, severance damages, if any, and reimbursement for treated water
purchased from the City of Pittsburg. The amount determined as remuneration
for the value of the property taken is to be applied against the value of the
Registrant's Bay Point district, currently under condemnation by the Contra
Costa Water District ("CCWD").
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The Registrant and CCWD, however, are continuing their
negotiations concerning the CCWD's condemnation of the Registrant's Bay Point
water district. At this time, however, the Registrant is unable to predict the
final outcome of these negotiations. In 1993, water revenues from the
Registrant's Bay Point water district were approximately $2.7 million or 2.75%
of its total annual water revenues.
There are no other material pending legal proceedings, other
than litigation incidental to the ordinary course of business, to which the
Registrant is a party or of which any of its properties is the subject.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders through the
solicitation of proxies or otherwise.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
(a) Market Price for Common Shares
Information responding to Item 5(a) is included in
the 1993 Annual Report to Shareholders, under the caption "Trading of Stock"
located on the inside back cover, filed herein by the Registrant with the
Commission pursuant to Regulation 14A and is incorporated herein pursuant to
General Instruction G(2).
(b) Approximate Number of Holders of Common Shares
As of February 28, 1994, there were 4,342 holders of
record of Common Shares.
(c) Frequency and Amount of Any Dividends Declared and
Dividend Restrictions
Information responding to Item 5(c) is included in
the 1993 Annual Report to Shareholders, under the caption "Trading of Stock"
located on the inside back cover, filed herein by the Registrant with the
Commission pursuant to Regulation 14A and is incorporated by reference herein
pursuant to General Instruction G(2). For the last three years, the Registrant
has paid dividends on its Common Shares on March 1, June 1, September 1 and
December 1.
Additional information responding to Item 5(c) is
included in the 1993 Annual Report to Shareholders, under Note 3 of the Notes
to Financial Statements captioned "Common Share Dividend Restriction" on page
31, filed herein by the Registrant with the Commission pursuant to Regulation
14A and is incorporated herein by reference pursuant to General Instruction
G(2).
Item 6. Selected Financial Data
Information responding to Item 6 is included in the
1993 Annual Report to Shareholders, in the section entitled "Financial
Information" under the caption "Statistical Review from 1989 to 1993" on Page
36, filed herein by the Registrant with the Commission pursuant to Regulation
14A and is incorporated herein by reference pursuant to General Instruction
G(2).
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation
Information responding to Item 7 is included in the 1993
Annual Report to Shareholders, under the caption "Management's Discussion and
Analysis" on Pages 17 through 23, filed herein by the Registrant with the
Commission pursuant to Regulation 14A and is incorporated herein by reference
pursuant to General Instruction G(2).
Item 8. Financial Statements and Supplementary Data
Information responding to Item 8 is included in the 1993
Annual Report to Shareholders, under the captions contained on Pages 24 through
35, filed herein by the Registrant with the Commission pursuant to Regulation
14A and is incorporated herein by reference pursuant to General Instruction
G(2).
Balance Sheets - December 31, 1993 and 1992
Statements of Capitalization - December 31,
1993 and 1992
Statements of Income for the years ended
December 31, 1993, 1992 and 1991
Statements of Changes in Common Shareholders'
Equity for the years ended December 31, 1993,
1992 and 1991
Statements of Cash Flows for the years ended
December 31, 1993, 1992 and 1991
Notes to Financial Statements
Report of Independent Public Accountants
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Information responding to Item 10 was included in the Proxy
Statement, under the caption "Executive Officers Experience and Compensation",
filed by the Registrant with the Commission on or about March 18, 1994 pursuant
to Regulation 14A and is incorporated by reference herein pursuant to General
Instruction G(3).
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Item 11. Executive Compensation
Information responding to Item 11 was included in the
Proxy Statement, under the captions "Executive Officers Experience and
Compensation" and "Board Report on Executive Compensation", filed by the
Registrant with the Commission on March 18, 1994 pursuant to Regulation 14A and
is incorporated by reference herein pursuant to General Instruction G(3).
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information responding to Item 12 was included in the
Proxy Statement, under the captions "Election of Directors" and "Executive
Officers Experience and Compensation", filed by the Registrant with the
Commission on March 18, 1994 pursuant to Regulation 14A and is incorporated by
reference herein pursuant to General Instruction G(3).
Item 13. Certain Relationships and Related Transactions
Information responding to Item 13 was included in the
Proxy Statement, under the caption "Election of Directors", filed by the
Registrant with the Commission on March 18, 1994 pursuant to Regulation 14A and
is incorporated by reference herein pursuant to General Instruction G(3).
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Reference is made to the Financial
Statements incorporated herein in
Item 8.
2. Schedules V, VI and VIII, not
included in the 1993 Annual Report
to Shareholders, and the related
report of independent public
accountants, are included after Item
14 in Part IV herein.
Information required for Schedule IX
and X has been included in the
financial statements in the 1993
Annual Report to Shareholders.
Expenses for advertising and
royalties represented less than 1%
of total revenues.
Schedules I, II, III, IV, VII, XI,
XII and XIII are omitted as they
are not applicable.
3. See (c) below.
(b) No events have been reported on Form 8-K
during the last quarter of the period covered
by this report.
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(c) Exhibits -
3.1 By-Laws of the Registrant as Amended
to April 30, 1991 (incorporated
herein by reference to Registrant's
Form 10-Q with respect to the quarter
ended March 31, 1991).
3.2 Restated Articles of Incorporation
of the Registrant as Amended to
December 4, 1990 (incorporated
herein by reference to Registrant's
Form 10-K with respect to the year
ended December 31, 1990).
3.3 Certificate of Ownership dated
August 10, 1978 (incorporated herein
by reference to Registrant's Form
10-K with respect to the year ended
December 31, 1990).
3.4 Certificate of Amendment of Articles
of Incorporation of the Registrant
dated December 3, 1992 (incorporated
herein by reference to Registrant's
Form 10-K with respect to the year
ended December 31, 1992).
*3.5 Certificate of Amendment of Articles
of Incorporation of the Registrant
dated February 17, 1994.
4.1 First Mortgage Indenture dated May 1,
1947 between the Registrant and Bank
of America, N.T. & S.A.
(incorporated herein by reference to
Registrant's Registration Statement
No. 2-68485 on Form S-7).
4.2 Supplemental Indenture dated July 1,
1982 between the Registrant and Bank
of America, N.T. & S.A. (incorporated
herein by reference to Registrant's
Registration Statement No. 33-5151
on Form S-7).
4.3 Schedule of Omitted Supplemental
Indentures (incorporated herein by
reference to Registrant's
Registration Statement No. 33-5151
on Form S-2).
4.4 Indenture, dated September 1, 1993
between the Registrant and Chemical
Trust Company of California, as
trustee, relating to the Registrant's
Medium Term Notes, Series A
(incorporated herein by reference to
Registrant's Form 8-K dated
September 1, 1993).
10.1 Deferred Compensation Plan for
Directors and Executives
(incorporated herein by reference
to Registrant's Registration
Statement No. 33-5151 on Form S-2).
10.2 Reimbursement Agreement dated
November 1, 1984 between the
Registrant and Barclays Bank
International Limited (incorporated
herein by reference to Registrant's
Registration Statement No. 33-5151
on Form S-2).
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10.3 First Amendment to Reimbursement
Agreement dated January 1, 1986
between the Registrant and Barclays Bank
PLC (incorporated herein by reference
to Registrant's Registration Statement
No. 33-5151 on Form S-2).
10.4 Second Amendment to Reimbursement
Agreement dated April 9, 1987 between
the Registrant and Barclays Bank PLC
(incorporated herein by reference to
Registrant's Form 10-K with respect to
the year ended December 31, 1990).
10.5 Third Amendment to Reimbursement
Agreement dated September 14, 1987
between the Registrant and Barclays Bank
PLC (incorporated herein by reference
to Registrant's Form 10-K with respect
to the year ended December 31, 1990).
10.6 Fourth Amendment to Reimbursement
Agreement dated September 22, 1988
between the Registrant Barclays Bank PLC
(incorporated herein by reference to
Registrant's Form 10-K with respect to
the year ended December 31, 1990).
10.7 Fifth Amendment to Reimbursement
Agreement dated March 9, 1990 between
the Registrant and Barclays Bank PLC
(incorporated herein by reference to
Registrant's Form 10-K with respect to
the year ended December 31, 1990).
10.8 Sixth Amendment to Reimbursement
Agreement dated November 29, 1990
between the Registrant and Barclays Bank
PLC (incorporated herein by reference
to Registrant's Form 10-K with respect
to the year ended December 31, 1990).
10.9 Second Sublease dated October 5, 1984
between the Registrant and Three
Valleys Municipal Water District
(incorporated herein by reference to
Registrant's Registration Statement
No. 33-5151 on Form S-2).
10.10 Note Agreement dated as of February 1,
1989 between the Registrant and First
Colony Life Insurance (incorporated
herein by reference to Registrant's
Form 10-K with respect to the year ended
December 31, 1990).
10.11 Schedule of Omitted Note Agreements
(incorporated herein by reference to
Registrant's Form 10-K with respect to
the year ended December 31, 1990).
10.12 Note Agreement dated as of May 15, 1991
between the Registrant and Transamerica
Occidental Life Insurance Company
(incorporated herein by reference to
Registrant's Form 10-Q with respect to
the quarter ended June 30, 1991).
10.13 Schedule of Omitted Note Agreements
(incorporated herein by reference to
Registrant's Form 10-Q with respect to
the quarter ended June 30, 1991).
11
15
10.14 Agreement for Financing Capital
Improvement dated as of June 2, 1992
between the Registrant and Three
Valleys Municipal Water District
(incorporated herein by reference to
Registrant's Form 10-K with respect to
the year ended December 31, 1992).
10.15 Retirement Plan for Non-Employee
Directors of Southern California
Water Company (incorporated herein by
reference to Registrant's Form 10-K
with respect to the year ended
December 31, 1992).
*13. Annual Report to Shareholders for
the year ended December 31, 1993
(except for those portions which
are expressly incorporated herein
by reference, such Annual Report
is furnished solely for the
information of the Commission and
is not deemed to be "filed" herein).
22. Subsidiaries of Registrant
Exhibit not included as subsidiaries
in the aggregate are not significant.
*24. Consent of Independent Public
Accountants.
28. Dividend Reinvestment and Common
Share Purchase Plan incorporated
herein by reference to Registrant's
Post-Effective Amendment No. 1 to
Form S-3 (Registration No. 33-42218).
(d) None.
_____________________
* Filed herewith
12
16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON THE SUPPLEMENTAL SCHEDULES
To the Shareholders and the Board of Directors
Of Southern California Water Company:
We have audited, in accordance with generally accepted auditing standards, the
financial statements included in Southern California Water Company's 1993
Annual Report to Shareholders incorporated by reference in this Form 10-K, and
have issued our report thereon dated February 15, 1994. Our audit was made for
the purpose of forming an opinion on those basic financial statements taken as
a whole. The supplemental schedules listed in Part IV of this Form 10-K, which
are the responsibility of the company's management, are presented for purposes
of complying with the Securities and Exchange Commission's rules and
regulations and are not part of the basic financial statements. These
supplemental schedules have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Los Angeles, California
February 15, 1994
13
17
SOUTHERN CALIFORNIA WATER COMPANY
SCHEDULE V - TANGIBLE & INTANGIBLE PROPERTY, PLANT & EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
Balance
at Additions Deductions
Beginning at for Sales and Balance at
Description of Year Cost(1) Retirements Transfers End of Year
----------- --------- --------- ----------- --------- -----------
(Dollars in Thousands)
Utility plant
Water department-
Intangible plant $ 8,536 $ 0 $ 0 $ 0 $ 8,536
Land and land rights 4,087 92 0 (692) 3,487
Source of supply plant 10,248 2,001 (103) 0 12,146
Pumping plant 26,401 5,308 (482) (515) 30,712
Water treatment plant 9,220 1,036 (70) (1,033) 9,153
Transmission & distribution plant 237,243 12,601 (790) (22) 249,032
General plant & undistributed
assets 24,122 4,362 (208) 96 28,372
-------- ------- ------- ------- --------
Total water department 319,857 25,400 (1,653) (2,166) 341,438
-------- ------- ------- ------- --------
Electric department-
Intangible plant 31 245 0 0 276
Transmission plant 1,914 56 (5) 0 1,965
Distribution plant 19,233 1,987 (340) 64 20,944
General plant 1,349 287 (1) 0 1,635
-------- ------- ------- ------- --------
Total electric department 22,527 2,575 (346) 64 24,820
-------- ------- ------- ------- --------
Construction work in progress (2) 13,014 0 0 526 13,540
-------- ------- ------- ------- --------
Total utility plant $355,398 $27,975 $(1,999) $(1,576) $379,798
======== ======= ======= ======= ========
Investment in other physical property $ 804 $ 80 $ (21) $ (273) $ 590
======== ======= ======= ======= ========
(1) Includes property added under install and convey contracts of $819,000.
(2) Additions to Construction Work in Progress are net of transfers to plant in
service which are shown as additions to the various operating plant
classifications.
14
18
SOUTHERN CALIFORNIA WATER COMPANY
SCHEDULE V - TANGIBLE & INTANGIBLE PROPERTY, PLANT & EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
Balance
at Additions Deductions
Beginning at for Sales and Balance at
Description of Year Cost(1) Retirements Transfers End of Year
----------- --------- --------- ----------- --------- -----------
(Dollars in Thousands)
Utility plant
Water department-
Intangible plant $ 6,262 $ 2,274 $ 0 $ 0 $ 8,536
Land and land rights 3,985 107 0 (5) 4,087
Source of supply plant 9,736 533 (2) (19) 10,248
Pumping plant 23,516 3,053 (196) 28 26,401
Water treatment plant 7,374 1,852 (6) 0 9,220
Transmission & distribution plant 224,621 12,613 (1,168) (9) 236,057
General plant & undistributed
assets 23,871 1,959 (521) 0 25,309
-------- ------- ------- ----- --------
Total water department 299,365 22,391 (1,893) (5) 319,858
-------- ------- ------- ----- --------
Electric department-
Intangible plant 29 2 0 0 31
Transmission plant 1,846 69 (1) 0 1,914
Distribution plant 17,453 1,821 (41) 0 19,233
General plant 1,296 202 (149) 0 1,349
-------- ------- ------- ----- --------
Total electric department 20,624 2,094 (191) 0 22,527
-------- ------- ------- ----- --------
Construction work in progress (2) 10,525 0 0 2,489 13,014
-------- ------- ------- ----- --------
Total utility plant $330,514 $24,485 ($2,084) $2,484 $355,399
======== ======= ======= ====== ========
Investment in other physical property $ 796 $ 8 $ 0 $ 0 $ 804
======== ======= ======= ====== ========
(1) Includes property added under install and convey contracts of $3,119,000.
(2) Additions to Construction Work in Progress are net of transfers to plant in
service which are shown as additions to the various operating plant
classifications.
15
19
SOUTHERN CALIFORNIA WATER COMPANY
SCHEDULE V - TANGIBLE & INTANGIBLE PROPERTY, PLANT & EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
Balance
at Additions Deductions
Beginning at for Sales and Balance at
Description of Year Cost(1) Retirements Transfers End of Year
----------- --------- --------- ----------- --------- -----------
(Dollars in Thousands)
Utility plant
Water department-
Intangible plant $ 6,262 $ 0 $ 0 $ 0 $ 6,262
Land and land rights 2,755 1,242 0 (12) 3,985
Source of supply plant 8,577 1,213 (61) 7 9,736
Pumping plant 21,105 2,835 (382) (42) 23,516
Water treatment plant 5,864 1,577 (67) 0 7,374
Transmission & distribution plant 210,859 14,677 (935) 20 224,621
General plant & undistributed assets 14,298 18,059 (211) (8,275) 23,871
-------- ------- ------- ------- --------
Total water department 269,720 39,603 (1,656) (8,302) 299,365
-------- ------- ------- ------- --------
Electric department-
Intangible plant 4 25 0 0 29
Transmission plant 1,447 415 (16) 0 1,846
Distribution plant 15,666 1,963 (176) 0 17,453
General plant 1,137 161 (2) 0 1,296
-------- ------- ------- ------- --------
Total electric department 18,254 2,564 (194) 0 20,624
-------- ------- ------- ------- --------
Construction work in progress (2) 11,950 0 0 (1,425) 10,525
-------- ------- ------- ------- --------
Total utility plant $299,924 $42,167 $(1,850) $(9,727) $330,514
======== ======= ======= ======= ========
Investment in other physical property $786 $10 $0 $0 $796
======== ======= ======= ======= ========
(1) Includes property added under install and convey contracts of $1,398,000.
(2) Additions to Construction Work in Progress are net of transfers to plant in
service which are shown as additions to the various operating plant
classifications.
16
20
SOUTHERN CALIFORNIA WATER COMPANY
SCHEDULE VI - RESERVES FOR ACCUMULATED DEPRECIATION
FOR THE YEAR ENDED DECEMBER 31, 1993
Other
Physical
Water Electric Total Property
------- -------- -------- --------
(Dollars in Thousands)
Balance at beginning of year $70,884 $6,990 $77,874 $34
Add - Depreciation (1):
Charged to expense 6,715 683 7,398 0
Charged to clearing and
other accounts 1,245 72 1,317 0
Charged to contributions in
aid of construction 512 21 533 0
------- ------ ------- ---
Subtotal 79,356 7,766 87,122 34
Less - Retirements, sales and
cost of removal, less salvage (1,848) (466) (2,314) 0
------- ------ ------- ---
Balance at end of year $77,508 $7,300 $84,808 $34
======= ====== ======= ===
(1) A remaining life method of calculating depreciation is used by the Company
with rates varying from a minimum of .01% to a maximum of 27.73%, for 1993.
The annual calculation is based on depreciable plant at the beginning of
each year.
17
21
SOUTHERN CALIFORNIA WATER COMPANY
SCHEDULE VI - RESERVES FOR ACCUMULATED DEPRECIATION
FOR THE YEAR ENDED DECEMBER 31, 1992
Other
Physical
Water Electric Total Property
------- -------- -------- --------
(Dollars in Thousands)
Balance at beginning of year $65,499 $6,457 $71,956 $34
Add - Depreciation (1):
Charged to expense 5,894 632 6,526 0
Charged to clearing and
other accounts 975 77 1,052 0
Charged to contributions
in aid of construction 532 20 552 0
------- ------ ------- ---
Subtotal 72,900 7,186 80,086 34
Less - Retirements, sales and
cost of removal, less salvage (2,016) (196) (2,212) 0
------- ------ ------- ---
Balance at end of year $70,884 $6,990 $77,874 $34
======= ====== ======= ===
(1) A remaining life method of calculating depreciation is used by the Company
with rates varying from a minimum of .05% to a maximum of 27.73%, for 1992.
The annual calculation is based on depreciable plant at the beginning of
each year.
18
22
SOUTHERN CALIFORNIA WATER COMPANY
SCHEDULE VI - RESERVES FOR ACCUMULATED DEPRECIATION
FOR THE YEAR ENDED DECEMBER 31, 1991
Other
Physical
Water Electric Total Property
------- -------- -------- --------
(Dollars in Thousands)
Balance at beginning of year $58,079 $6,133 $64,212 $33
Add - Depreciation (1):
Charged to expense 5,468 559 6,027 1
Charged to clearing and
other accounts 3,308 61 3,369 0
Charged to contributions
in aid of construction 450 18 468 0
------- ------ ------- ---
Subtotal 67,305 6,771 74,076 34
Less - Retirements, sales and
cost of removal, less salvage (1,806) (314) (2,120) 0
------- ------ ------- ---
Balance at end of year $65,499 $6,457 $71,956 $34
======= ====== ======= ===
(1) A remaining life method of calculating depreciation is used by the Company
with rates varying from a minimum of .05% to a maximum of 26.91%, for
1991. The annual calculation is based on depreciable plant at the
beginning of each year.
19
23
SOUTHERN CALIFORNIA WATER COMPANY
SCHEDULE VIII - RESERVES FOR UNCOLLECTIBLE ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
Description 1993 1992 1991
----------- ----- ----- -----
Balance at beginning of year $ 333 $ 261 $ 429
Add (deduct) -
Provisions charged to expense 706 489 291
Accounts written off, net of recoveries (669) (417) (459)
----- ----- -----
Balance at end of year $ 370 $ 333 $ 261
===== ===== =====
20
24
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.
SOUTHERN CALIFORNIA WATER COMPANY
By : s/ JAMES B. GALLAGHER .
-----------------------------
James B. Gallagher
Secretary, Treasurer and Chief Financial Officer
Date: March 25, 1994
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/ W. V. CAVENEY . Date: March 25, 1994
- -------------------------------------
W. V. Caveney
Chairman of the Board
and Director
s/ FLOYD E. WICKS . March 25, 1994
- -------------------------------------
Floyd E. Wicks
Principal Executive Officer:
President and Chief Executive
Officer and Director
s/ JAMES B. GALLAGHER . March 25, 1994
- -------------------------------------
James B. Gallagher
Principal Financial Officer
and Principal Accounting Officer:
Secretary, Treasurer and Chief Financial Officer
s/ DONALD E. BROWN . March 25, 1994
- -------------------------------------
Donald E. Brown, Director
s/ R. BRADBURY CLARK . March 25, 1994
- -------------------------------------
R. Bradbury Clark, Director
s/ N. P. DODGE, JR. . March 25, 1994
- -------------------------------------
N. P. Dodge, Jr., Director
s/ WILLIAM M. KIZER . March 25, 1994
- -------------------------------------
William M. Kizer, Director
21