<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended SEPTEMBER 30, 1994 Commission file number 0-1121
------------------ -------
SOUTHERN CALIFORNIA WATER COMPANY
------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
CALIFORNIA 95-1243678
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
630 EAST FOOTHILL BOULEVARD, SAN DIMAS, CALIFORNIA 91773
-------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (909) 394-3600
--------------
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of October 31, 1994, the number of shares outstanding
of the Registrant's Common Shares, Par Value $2.50,
was 7,845,092.
<PAGE> 2
SOUTHERN CALIFORNIA WATER COMPANY
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
PART I FINANCIAL INFORMATION
<S> <C> <C>
Item 1: Financial Statements 1
Balance Sheets as of September 30, 1994 and December 31, 1993 2 - 3
Statements of Income for the Three Months Ended
September 30, 1994 and September 30, 1993 4
Statements of Income for the Nine Months Ended
September 30, 1994 and September 30, 1993 5
Statements of Income for the Twelve Months Ended
September 30, 1994 and September 30, 1993 6
Statements of Cash Flows for the Nine Months Ended
September 30, 1994 and September 30, 1993 7
Notes to Financial Statements 8 - 11
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operation 12 - 20
PART II OTHER INFORMATION
Item 1: Legal Proceedings 20 - 21
Item 2: Changes in Securities 21
Item 3: Defaults Upon Senior Securities 21
Item 4: Submission of Matters to a Vote of Security Holders 21
Item 5: Other Information 21 - 22
Item 6: Exhibits and Reports on Form 8-K 22
FINANCIAL DATA SCHEDULE UT 23
</TABLE>
<PAGE> 3
PART I
ITEM 1. FINANCIAL STATEMENTS
The basic financial statements included herein have been prepared by
the Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
financial statements, prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules and
regulations, although the Registrant believes that the disclosures are adequate
to make the information presented not misleading. In the opinion of
management, all adjustments necessary for a fair statement of results for the
interim period have been made.
It is suggested that these financial statements be read in conjunction
with the financial statements and notes thereto in the Registrant's latest
Annual Report on Form 10-K.
1
<PAGE> 4
SOUTHERN CALIFORNIA WATER COMPANY
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------- ------------
(Unaudited)
(in thousands)
<S> <C> <C>
UTILITY PLANT, at cost
Water...................................... $349,725 $341,438
Electric................................... 25,826 24,820
-------- --------
375,551 366,258
Less - Accumulated depreciation............ (90,768) (84,808)
-------- --------
284,783 281,450
Construction work in progress.............. 22,732 13,540
-------- --------
307,515 294,990
-------- --------
OTHER PROPERTY AND INVESTMENTS............... 2,339 921
-------- --------
CURRENT ASSETS
Cash and cash equivalents ................. 3,924 1,726
Accounts receivable -
Customers, less reserves of $605
in 1994 and $370 in 1993............... 10,426 6,815
Other...................................... 2,799 1,520
Unbilled revenue........................... 10,794 8,106
Materials and supplies, at average cost.... 1,294 1,275
Supply cost balancing accounts............. 5,104 7,022
Prepayments and other...................... 6,889 6,787
Accumulated deferred income taxes - net.... 2,394 1,279
-------- --------
43,624 34,530
-------- --------
Regulatory tax-related assets................ 23,183 23,198
Other deferred charges....................... 4,336 4,894
-------- --------
27,519 28,092
-------- --------
$380,997 $358,533
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
SOUTHERN CALIFORNIA WATER COMPANY
BALANCE SHEETS
CAPITALIZATION AND LIABILITIES
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------- -------------
(Unaudited)
(in thousands)
<S> <C> <C>
CAPITALIZATION
Common shareholders' equity $118,703 $116,463
Preferred Shares ...................... 1,600 1,600
Preferred shares subject to mandatory
redemption requirements ............. 600 600
Long-term debt ........................ 97,114 84,286
-------- --------
218,017 202,949
-------- --------
CURRENT LIABILITIES
Notes payable to banks ................. 13,500 12,000
Long-term debt and preferred shares
due within one year .................. 416 417
Accounts payable ...................... 9,665 9,277
Taxes payable ......................... 6,657 2,950
Accrued interest ...................... 2,746 1,178
Other accrued liabilities ............. 7,552 6,846
-------- --------
40,536 32,668
-------- --------
OTHER CREDITS
Advances for construction .............. 53,952 55,295
Contributions in aid of construction ... 25,631 25,011
Accumulated deferred income taxes - net.. 36,117 34,969
Unamortized investment tax credits...... 3,603 3,664
Regulatory tax-related liability ....... 2,356 2,389
Other................................... 785 1,588
-------- --------
122,444 122,916
-------- --------
$380,997 $358,533
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
SOUTHERN CALIFORNIA WATER COMPANY
STATEMENTS OF INCOME
FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 1994 AND 1993
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1994 1993
------- -------
(in thousands, except
per share amounts)
<S> <C> <C>
OPERATING REVENUES
Water......................................................................... $36,351 $29,395
Electric...................................................................... 2,335 2,334
------- -------
38,686 31,729
------- -------
OPERATING EXPENSES
Water purchased........................................................... 10,181 8,949
Power purchased for pumping............................................... 2,631 2,582
Power purchased for resale................................................ 968 1,161
Groundwater production assessment......................................... 1,532 1,430
Supply cost balancing accounts............................................ 710 (2,711)
Other operating expenses.................................................. 3,069 1,429
Provision for State Water Project......................................... - 330
Administrative and general expenses....................................... 4,170 4,655
Depreciation.............................................................. 2,009 1,873
Maintenance............................................................... 1,855 1,490
Taxes on income........................................................... 3,566 3,046
Other taxes............................................................... 1,118 1,252
------- -------
31,809 25,486
------- -------
Operating income........................................................... 6,877 6,243
OTHER INCOME................................................................... 362 39
------- -------
Income before interest charges............................................. 7,239 6,282
INTEREST CHARGES............................................................... 2,031 1,943
------- -------
NET INCOME..................................................................... 5,208 4,339
DIVIDENDS ON PREFERRED SHARES.................................................. (25) (25)
------- -------
EARNINGS AVAILABLE FOR COMMON SHAREHOLDERS..................................... $ 5,183 $ 4,314
======= =======
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING.................................. 7,845 7,623
======= =======
Earnings Per Common Share...................................................... $0.66 $0.57
======= =======
Dividends Declared Per Common Share........................................... $0.300 $0.300
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
SOUTHERN CALIFORNIA WATER COMPANY
STATEMENTS OF INCOME
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1994 AND 1993
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1994 1993
------- -------
(in thousands, except
per share amounts)
<S> <C> <C>
OPERATING REVENUES
Water....................................................... $85,643 $74,982
Electric.................................................... 7,718 7,538
------- -------
93,361 82,520
------- -------
OPERATING EXPENSES
Water purchased............................................ 23,986 20,329
Power purchased for pumping................................ 5,396 5,943
Power purchased for resale................................. 3,199 3,546
Groundwater production assessment.......................... 3,865 4,494
Supply cost balancing accounts............................. 968 (5,608)
Other operating expenses................................... 9,081 8,282
Provision for State Water Project.......................... 263 1,280
Administrative and general expenses........................ 11,542 9,747
Depreciation............................................... 6,039 5,569
Maintenance................................................ 5,313 4,520
Taxes on income............................................ 6,060 5,960
Other taxes................................................ 3,613 3,470
------- -------
79,325 67,532
------- -------
Operating income........................................... 14,036 14,988
OTHER INCOME................................................. 357 -
------- -------
Income before interest charges............................. 14,393 14,988
INTEREST CHARGES............................................. 5,691 6,120
------- -------
NET INCOME................................................... 8,702 8,868
DIVIDENDS ON PREFERRED SHARES................................ (74) (75)
------- -------
EARNINGS AVAILABLE FOR COMMON SHAREHOLDERS................... $ 8,628 $ 8,793
======= =======
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING................ 7,841 6,980
======= =======
Earnings Per Common Share.................................... $1.10 $1.26
======= =======
Dividends Declared Per Common Share......................... $0.900 $0.8875
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 8
SOUTHERN CALIFORNIA WATER COMPANY
STATEMENTS OF INCOME
FOR THE TWELVE MONTHS
ENDED SEPTEMBER 30, 1994 AND 1993
(Unaudited)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1994 1993
-------- --------
(in thousands, except
per share amounts)
<S> <C> <C>
OPERATING REVENUES
Water......................................... $108,816 $ 97,536
Electric...................................... 10,531 10,374
-------- --------
119,347 107,910
-------- --------
OPERATING EXPENSES
Water purchased............................... 33,032 26,062
Power purchased for pumping................... 7,592 8,136
Power purchased for resale.................... 2,935 4,787
Groundwater production assessment............. 4,655 5,430
Supply cost balancing accounts................ (1,384) (7,847)
Other operating expenses...................... 11,722 10,889
Provision for State Water Project............. 844 1,280
Administrative and general expenses........... 15,297 12,609
Depreciation.................................. 7,868 7,109
Maintenance................................... 7,243 5,736
Taxes on income............................... 5,592 9,047
Other taxes................................... 4,854 4,568
-------- --------
100,250 87,806
-------- --------
Operating income.............................. 19,097 20,104
-------- --------
OTHER INCOME
Net gain on sale of operating properties...... 314 849
Other......................................... 397 19
-------- --------
711 868
-------- --------
Income before interest charges................ 19,808 20,972
INTEREST CHARGES................................ 7,949 8,132
-------- --------
NET INCOME...................................... 11,859 12,840
DIVIDENDS ON PREFERRED SHARES................... (99) (101)
-------- --------
EARNINGS AVAILABLE FOR COMMON SHAREHOLDERS...... $11,760 $12,739
======== ========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING... 7,829 6,895
======== ========
Earnings Per Common Share....................... $1.50 $1.85
======== ========
Dividends Declared Per Common Share............. $1.200 $1.175
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 9
SOUTHERN CALIFORNIA WATER COMPANY
CASH FLOW STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1994 1993
--------- ---------
(in thousands)
<S> <C> <C>
CASH FLOWS FROM -
Operating Activities:
Net income............................................................ $ 8,702 $ 8,868
Adjustments for non-cash items:
Depreciation and amortization........................................ 6,335 5,798
Deferred income taxes and
investment tax credits............................................. (46) 3,906
Other - net.......................................................... (1,941) (2,241)
Changes in assets and liabilities:
Customer receivables................................................ (4,890) (369)
Prepayments......................................................... (102) (842)
Supply cost balancing accounts...................................... 1,918 (1,313)
Rationing penalty reserve........................................... - (5,015)
Accounts payable.................................................... 388 1,442
Taxes payable....................................................... 3,706 2,956
Unbilled revenue.................................................... (2,688) (2,703)
Accrued interest.................................................... 1,568 638
Other............................................................... 1,047 2,685
-------- --------
Net Cash Provided 13,997 13,810
-------- --------
Financing Activities:
Issuance of securities.............................................. 13,000 24,780
Issuance of long-term debt and lease obligations.................... - 1,113
Receipt of advances and contributions............................... 1,980 1,353
Repayments of long-term debt and
redemption of preferred shares.................................... (173) (487)
Refunds on advances................................................. (2,687) (2,880)
Net change in notes payable to banks................................ 1,500 (13,168)
Common and preferred dividends paid................................. (7,120) (6,288)
-------- --------
Net Cash Provided 6,500 4,423
-------- --------
Investing Activities:
Construction expenditures.............................................. (18,299) (17,471)
-------- --------
Net Cash Used (18,299) (17,471)
-------- --------
Net Increase in Cash and Cash Equivalents............................... 2,198 762
Cash and Cash Equivalents, Beginning of period.......................... 1,726 442
-------- --------
Cash and Cash Equivalents, End of period................................ $ 3,924 $ 1,204
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 10
SOUTHERN CALIFORNIA WATER COMPANY
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. For a summary of significant accounting policies and other information
relating to these interim financial statements, reference is made to
pages 30 through 34 of the 1993 Annual Report to Shareholders under
the caption "Notes to Financial Statements."
2. Earnings per common share are based on the weighted average number of
Common Shares outstanding during each period and net income after
deducting preferred dividend requirements.
3. During 1993, the Registrant, on two separate occasions, requested that
the California Public Utilities Commission ("CPUC") authorize recovery
of costs associated with participation by the Registrant in the
construction of the Coastal Aqueduct Extension of the State Water
Project (the "Project"). On both occasions, the CPUC denied the
Registrant's request for recovery of costs on the terms contained in
the Registrant's applications.
Through September 30, 1994, the Registrant has incurred $1.8 million
in costs related to the Project and had deposited approximately $1.7
million against future costs of the Project.
In light of the CPUC actions and the uncertainty surrounding the
Registrant's participation in the Project, the Registrant has, since
June, 1993, established reserves totaling approximately $2.1 million
against its previously recorded investment in the Project. In June,
1994, the Registrant signed a Water Supply Agreement to become a
participant in the Project at a level of 500 acre-feet. The agreement
calls for the Registrant to contribute approximately $650,000 towards
the cost of construction of certain Project facilities and related
costs plus redesign costs of $190,000. This total cost is to be
deducted from the $1.7 million deposit and the balance, plus interest,
is to be refunded to the Registrant.
The Registrant intends to file an application with the CPUC in
November, 1994 seeking approval of its participation in the Project at
the 500 acre-foot level and authorizing recovery of costs associated
with that level of participation. No assurance can be given that the
CPUC will authorize participation in the Project or whether the CPUC
will deny or approve recovery through rates of all or any costs
associated with such participation.
The Registrant has entered negotiations for the sale of the remaining
2,500 acre-feet of its total 3,000 acre-foot entitlement in the
Project.
8
<PAGE> 11
4. The Registrant and the Contra Costa Water District ("CCWD") have
entered into an agreement to settle CCWD's condemnation action
regarding the Registrant's Bay Point water district. Under the terms
of the settlement, the Registrant will continue to own and operate the
Bay Point system and CCWD will withdraw its condemnation action. CCWD
will construct certain facilities which will be interconnected to the
Registrant's system in order to provide a long-term source of
supplemental supply for the system. The Registrant will reimburse
CCWD for approximately $2.6 million of the total cost of constructing
these facilities, currently estimated at $5.0 million. The Registrant
paid one-half, or $1.3 million, of its obligation to CCWD on September
2, 1994 with the balance due in seven equal annual installments
beginning with completion of the facilities, anticipated in 1996. The
settlement also calls for the Registrant to absorb approximately
$435,000 in its litigation costs in the condemnation proceeding. The
litigation costs were expensed in July, 1994.
The initial contribution of $1.3 million was provided from a portion
of the proceeds of $2.3 million received from the County of Contra
Costa for its condemnation of the Registrant's Madison Treatment
Plant. The remaining $1 million of proceeds from this action will be
credited to the Registrant's supply cost balancing account to offset a
portion of the higher cost of purchased water from the City of
Pittsburg immediately following the Registrant's loss of its Madison
plant capacity in 1993. The $1.3 million in proceeds resulting from
the condemnation of its Madison Treatment Plant resulted in a gain of
approximately $1 million which, pursuant to established CPUC
procedures, was recorded as a permanent reduction to the Registrant's
Bay Point rate base.
The terms of the settlement with CCWD are subject to CPUC approval. A
filing will be made with the CPUC during the last quarter of 1994.
The Registrant is unable to predict the outcome of the CPUC's
consideration of such an application.
5. Effective January 1, 1993, the Registrant adopted Statement of
Financial Accounting Standards ("SFAS") No. 106 - Employers'
Accounting for Postretirement Benefits Other Than Pensions, which
requires accrual of the expected costs of providing benefits such as
retiree health care over the employees' years of service. SFAS No.
106 also requires the recording, either immediately or on an amortized
basis for a period not exceeding 20 years, of a transition obligation
for benefits accumulated as a result of employee's past service up to
the date of adoption of the statement. Based on a study by the
Registrant's health care actuary, using an 8% discount rate and
an 8% health care cost trend rate, the transition obligation for
the Registrant's post-retirement medical plans is estimated to
be approximately $9.1 million. A one percent (1%) increase in
the anticipated health care cost trend assumption results
in an estimated increase of approximately $2.2 million in the
accumulated postretirement benefits obligation ("APBO"). The
Registrant estimates that its annual Net Periodic
9
<PAGE> 12
Postretirement Benefit Costs, under the current plans, would
approximate $1.7 million, including amortization of the transition
APBO over a 20-year period.
The Registrant, for the nine-month period ended September 30, 1994,
has capitalized an additional $1,125,000 of its anticipated Net
Periodic Postretirement Benefit Costs for 1994 and is continuing its
review of the funding aspects of SFAS No. 106. Since January 1, 1993,
the Registrant has capitalized a total of $2,625,000 in anticipated
Net Periodic Postretirement Benefit Costs.
The Registrant has deferred funding any of its SFAS No. 106 liability
pending final approval by the Board of Directors of possible changes
to the Registrant's post-retirement medical plans. However, before a
final recommendation is made to the Board of Directors, the Registrant
will schedule discussions, during the fourth quarter of 1994, with the
CPUC concerning recovery through rates of accrued post-retirement
medical plan expenses under alternative plans. Until those
discussions are finalized, the outcome of which cannot be predicted at
this point in time, the Registrant will continue to capitalize its
anticipated Net Periodic Post-retirement Benefit Costs. If recovery
through rates of accrued post-retirement medical plan expenses is not
allowed, all or a portion of the capitalized costs may need to be
expensed. To the extent that the accumulated post-retirement
liability is reduced by changes in the plans, the amount of the
regulatory asset will be reduced equally. The Registrant is unable to
predict what effects, if any, a national health care program would
have on its medical plans.
6. The Registrant has been undertaking efforts to implement a new
organizational structure designed to address a number of
recommendations in a recently completed management audit of the
Registrant's operations. The new organization will be more responsive
to customer and community concerns and places more direct
responsibility in three regional locations. As part of its
implementation program, the Registrant anticipates that although the
number of employees will be reduced, costs associated with employee
severance, early retirement and costs associated with curtailment of
post-retirement benefit programs (See Note 5) will be expensed during
1994. However, pending final determination of the number of people
involved in each of these programs, the Registrant is unable to
determine the magnitude of these costs.
10
<PAGE> 13
7. Effective January 1, 1993, the Registrant adopted SFAS No. 109 -
Accounting for Income Taxes, establishing new financial accounting
standards for income taxes, and requiring a change from the deferred
method to the asset and liability method of accounting for income
taxes. The effect of the new standard was an increase in assets and
liabilities of approximately $22 million, as of January 1, 1993, as
the result of recording additional deferred taxes which were offset by
the recording of a regulatory asset. The CPUC has consistently
permitted the recovery of previously flowed-through tax benefits.
Therefore the Registrant believes that adoption of SFAS No. 109 will
not have a significant impact on the Registrant's results of
operation.
8. Effective January 1, 1994, the Registrant is subject to the reporting
requirements of SFAS No. 112 - Employer's Accounting for Post-
employment Benefits and SFAS No. 115 - Accounting for Certain
Investments in Debt and Equity Securities. The Registrant has
determined that it has no reporting obligation under either of the
standards.
9. The Registrant filed applications with the CPUC in June, 1994 to
increase rates by approximately $2.3 million to cover the costs
associated with implementation of certain recommendations made in a
recently completed management audit authorized by the CPUC. In
September, the Division of Ratepayer Advocates ("DRA") of the CPUC
issued its report on the Registrant's application recommending
approximately $1.3 million in rate increases. The Registrant has
agreed with DRA's recommendations. The difference primarily relates
to costs which will be considered for recovery in general rate case
proceedings during 1995. The Registrant intends to continue to work
with the DRA to prove the necessity of implementing other management
audit recommendations, but will include requests for cost recovery in
the normal general rate case process.
11
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
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. The Registrant's
present name was adopted in 1936. From time to time, additional water
companies and municipal water districts have been acquired and properties in
limited service areas have been sold or have been the subject of condemnation
proceedings. The common shares of the Registrant are traded on the New York
Stock Exchange under the ticker symbol "SCW". At September 30, 1994, the
Registrant employed 476 persons.
At September 30, 1994, 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 in the State of California.
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 237,497 water customers and 20,158 electric
customers at September 30, 1994, or a total of 257,655 customers, compared with
a total of 256,637 water and electric customers at September 30, 1993.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant funds the majority of its operating expenses, interest
payments on its debt, dividends on its outstanding common and preferred shares
and makes its mandatory sinking fund payments through internal sources
primarily consisting of cash flows from retained earnings plus cash retained by
reason of non-cash charges such as deferred taxes, amortization of deferred
charges and depreciation. However, because of the seasonal nature of its water
and electric businesses, the Registrant utilizes its short-term borrowing
capacity on occasion to finance current operating expenses.
The Registrant continues to fund the majority of its construction
expenditures through external sources including short-term bank borrowing, the
receipt of contributions-in-aid-of-construction and advances for construction
and install-and-convey advances. For the quarter ended September 30, 1994, the
Registrant recorded receipts of contributions-in-aid-of-construction and
advances for construction of approximately $97,000 although refunds on such
advances were approximately $327,000 during the same period as compared to a
net amount of $204,000 for the
12
<PAGE> 15
quarter ending September 30, 1993. For the three months ended September 30,
1994, the Registrant recorded approximately $151,000 in install-and-convey
contracts as compared to $131,000 for the prior year quarter ended September
30, 1993.
The aggregate short-term borrowing capacity currently available to the
Registrant under its three bank lines of credit is $35,063,000. Of this
amount, $8,063,000 is available for use in standby letters of credit, with
unused amounts available for short-term borrowing. At September 30, 1994, the
Registrant had a total of $13,500,000 in borrowing outstanding under its bank
lines of credit, leaving an unused short-term borrowing capacity of
$21,563,000. In July, 1994, the Registrant sold the remaining $13 million in
principal amount authorized under its Medium-Term Note Program with the net
proceeds from the sale of these Notes used to repay then outstanding
short-term bank borrowing. It is anticipated that borrowing under the lines of
bank credit will continue to increase during the remainder of 1994 and 1995.
The Registrant employs short-term bank borrowing as an interim
financing source prior to executing either a long-term debt or equity issue.
The Registrant anticipates that it will be necessary, in order to continue to
finance its capital expenditure program while maintaining a debt-to-equity
ratio of approximately 1.0:1.0 in its capital structure, to issue additional
long-term debt in 1995. The Registrant anticipates selling such debt either
privately or in the public market through another Medium-Term Note Program,
although the Registrant is currently investigating funding a portion of its
qualifying capital through issuance of tax-exempt debt.
In March, 1994, prior to hearing on two matters related to the
Registrant's 1992 general rate case applications, the Registrant agreed to
stipulate to a return on common equity of 10.10%. The final decision, issued
in June, 1994, upheld the 10.10% return on equity. While this lower return on
equity is anticipated to produce both lower earnings and cash flow, the
Registrant received approval, in March, 1994, to increase rates by
approximately $12 million annually to recover previously under-recovered supply
costs. Due to the balancing account mechanism, these additional revenues are
not expected to increase earnings but will significantly increase cash flow.
See "Rates and Regulation" for more information.
RESULTS OF OPERATION
Earnings per common share for the three months ended September 30,
1994 increased by 15.8% to $0.66 per share as compared to $0.57 per share for
the comparable period last year. For the nine months ended September 30, 1994,
earnings per share were $1.10 as compared to $1.26 for the nine months ended
September 30, 1993. Earnings for the twelve months ended September 30, 1994
decreased by 18.9% to $1.50 per share as compared to $1.85 per share for the
twelve months ended September 30, 1993. Other income contributed approximately
$0.09 per share for the twelve months ended September 30, 1994 as compared to
$0.13 per share from other income for the twelve months ended September 30,
1993. In addition, all three periods ended September 30, 1993 include
approximately $0.04 per share related to the recovery of costs in the
Registrant's drought memorandum accounts for which there is no counterpart in
1994.
13
<PAGE> 16
As compared to the comparable periods last year, water sales volumes
for the three, nine and twelve months ended September 30, 1994 increased by
16.9%, 9.1% and 6.7%, respectively. However, water operating revenues increased
by 23.7%, 14.2% and 11.6%, in each of the three periods ended September 30,
1994 respectively, over the same periods of last year as a result of the full
impact of $2.3 million in general rate increases effective during 1993, partial
effects of step and attrition rate increases effective in early 1994 and the
partial effects of $12 million in supply cost offset rate increases effective
in March, 1994. In addition, the comparison between the nine and twelve month
periods is affected by the recording of approximately $467,000 and $950,000 in
income in February, 1993 and June, 1993, respectively, related to the
recoverability of net revenue losses caused by drought conditions and
extraordinary conservation expenses.
Kilowatt-hour sales of electricity increased by 2.0%, 5.7% and 2.9%
for the three, nine and twelve months ended September 30, 1994, respectively,
as compared to the same periods last year. Electric operating revenues for the
nine and twelve month periods ending September 30, 1994 increased by 2.4% and
1.5%, respectively, over the comparable periods last year as a result of the
increased kilowatt-hour sales volumes. Electric operating revenues for the
three months ended September 30, 1994 were essentially unchanged from the prior
period due primarily to a change in the composition of the revenues; a 4%
increase in residential and commercial sales was more than offset by an 8%
decline in industrial sales.
Purchased water costs increased by 13.8%, 18.0% and 26.7% over 1993,
respectively, for the three, nine and twelve months ended September 30, 1994.
These increases reflect increases in the amount of water volumes purchased as
well as increases in purchased water rates, the latest series of which were
effective July 1, 1994. Reduced water purchases generally, as a result of
voluntary and price-induced conservation during the drought, has caused
wholesale water rates in the State of California to increase significantly to
cover fixed costs of the wholesale water suppliers.
The costs of power purchased for pumping decreased by 9.2% and 6.7%,
respectively, for the nine and twelve months ended September 30, 1994 as
compared to the same periods ended September 30, 1993 due chiefly to the
effects of a decrease in the proportion of total water supplied which comes
from pumped sources. The costs of power purchased for pumping during the three
month period ended September 30, 1994 increased by 1.9% from the same period
last year as a result of a slight increase in the percentage of water supplied
from pumped sources.
As compared to the three, nine and twelve months ended September 30,
1993, the costs of power purchased for resale declined by 16.6%, 9.8% and 38.7%
for the three, nine and twelve months ended September 30, 1994, respectively.
The three and nine month ended comparisons are affected by approximately
$492,000 in refunds from SCE, which for the nine month comparison has been
partially offset by the increased kilowatt-hour sales. The twelve month
comparison is also affected by additional refunds from SCE of approximately $2
million included in the twelve months ended September 30, 1994.
14
<PAGE> 17
Groundwater production assessments are 7.1% higher for the three
months ended September 30, 1994 as compared to September 30, 1993 due primarily
to the effects of a 5.4% increase in the volume of pumped water in the
Registrant's resource mix. For the nine and twelve months ended September 30,
1994, groundwater production assessment decreased by 14.0% and 14.3%,
respectively, as compared to prior year periods due primarily to the effects of
recording, in February, 1993, approximately $621,000 in additional groundwater
assessments related to prior period deliveries. There were no such prior period
assessments during 1994.
A positive entry for the provision for supply cost balancing accounts
reflects recovery of previously under-collected supply costs. The positive
entries for both the three and nine months ended September 30, 1994 result from
approval by the CPUC in March, 1994 of rate increases to collect previously
under-collected supply costs. A credit for the provision for supply cost
balancing accounts reflects an undercollection of water and electric energy
supply costs. The credit in this category for the twelve months ended
September 30, 1994 results from higher purchased water supply costs, supply
costs for power purchased for pumping and resale and increased groundwater
production assessments which have not yet been collected through rates.
Other operating expenses increased by 11.9%, 9.6% and 7.6%,
respectively, for the three, nine and twelve months ended September 30, 1994 as
compared to the same periods ended September 30, 1993 due chiefly to a net
increase in personnel involved in various operating and customer service
functions.
During 1994, the Registrant reserved an additional $263,000 against
retention rights associated with the Registrant's 3000 acre-feet entitlement in
the State Water Project ("the Project"). As of September 30, 1994 the
Registrant has reserved a total of $2,124,000 against previously incurred costs
related to the Project due to denial by the CPUC of the Registrant's requests
for participation in the Project and recovery of costs related thereto. Of
this amount, $950,000 was reserved in June, 1993. See Note 3 of the Notes to
Financial Statements.
Administrative and general expenses increased by 24.8%, 18.4% and
21.3% for the three, nine and twelve months ended September 30, 1994,
respectively, as compared to the same periods ended September 30, 1993. These
periods are each affected by increased personnel necessitated by increased
regulatory, operational and administrative requirements as well as associated
personnel-related expenditures such as health insurance and increased customer
accounting costs. In addition, in 1994 the Registrant has reserved
approximately $110,000 against water rights litigation in its Barstow water
district as well as in July, 1994, expensed approximately $435,000 in legal
costs related to defense against the Bay Point condemnation. See Note 4 of the
Notes to Financial Statements.
Depreciation expense, increased by 7.3%, 8.4% and 10.7%, respectively,
for the three, nine and twelve months ended September 30, 1994 reflecting,
among other things, the effects of recording approximately $28 million in net
plant additions during 1993, depreciation on which is fully reflected in the
three and nine months ended September 30, 1994.
15
<PAGE> 18
Taxes on income increased by approximately 17.1% and 1.7%,
respectively, for the three and nine months ended September 30, 1994 as
compared to the three and nine months ended September 30, 1993 as a result of
higher pre-tax income. For the twelve months ended September 30, 1994, taxes
on income are 38.2% lower than the same period last year. The twelve month
comparison is affected by a reversal of approximately $1.3 million in
previously established tax reserves during the last quarter of 1993.
Maintenance expense increased by 24.5%, 17.5% and 26.3% for the three,
nine and twelve months ended September 30, 1994 as compared to the three, nine
and twelve months ended September 30, 1993. These increases are primarily a
result of work performed on the Registrant's water pumping equipment, emphasis
on hydrant maintenance and extensive main flushing and valve exercise programs.
The Registrant anticipates reducing discretionary maintenance expenditures
during the remainder of 1994 and into fiscal year 1995.
Interest expense for the three months ended September 30, 1994
increased by 4.5% over the same period last year primarily as a result of the
sale in July, 1994 of $13 million in 6.40% Notes due 1996. Interest expense
for the nine and twelve months ended September 30, 1994 decreased by 7.0% and
2.3%, respectively, over the comparable 1993 time periods primarily as a result
of the Registrant's refinancing, during the last quarter of 1993, of a
substantial portion of its outstanding long-term debt at lower interest rates.
In September, 1994 the Registrant included in other income a $357,000
net gain on sale of operating property taken by condemnation. This amount only
includes the gain associated with the sale of land. Capacity from the plant was
replaced, at no cost to the Registrant, with two new interconnections to the
Metropolitan Water District ("MWD").
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.
16
<PAGE> 19
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 in that
decision - the 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 9.50% applicable to certain attrition, step rate filings
and other earnings test filings with respect to the Registrant's other
operating districts. See Note 4 of Notes to Financial Statements.
Prior to commencement of hearing on these two matters, which hearing
was held March 15, 1994, the Registrant and the Division of Ratepayer Advocates
("DRA") of the CPUC stipulated to a rate of return on common equity of 10.10%.
In addition, DRA 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 two
matters was issued in June, 1994 which upheld the stipulated rate of return on
common equity and granted a small increase in water rates applicable to the
Registrant's Bay Point water district.
The reduced return on common equity may reduce future earnings and
cash flow could be significantly and adversely impacted. Consequently, the
Registrant may defer certain capital projects that have not been authorized by
the CPUC. The Registrant intends, however, to continue with capital projects
previously authorized by the CPUC in prior rate cases.
In March, 1994, the CPUC authorized an annualized increase in the
Registrant's revenues of approximately $12 million to recover previously
under-recovered supply costs, including purchased water, electric energy and
groundwater production assessments. While these increased revenues are not
expected to produce additional earnings, they will significantly increase the
Registrant's cash flow. Step and attrition year rate increases authorized in
previous general rate cases resulted in additional annualized revenues of
approximately $1.6 million.
The Registrant filed applications with the CPUC in June, 1994 to
increase rates by approximately $2.3 million to recover costs associated with
implementation of certain recommendations made in a recently completed
management audit authorized by the CPUC. On September 21, 1994, the DRA issued
its report on the Registrant's application and recommended an $1.1 million
increase in rates. After further review, the DRA amended its recommended
increase to approximately $1.3 million. The DRA is also providing the
opportunity for future recovery of the majority of requested amounts not
currently authorized in rates. The Registrant and DRA continue to discuss the
merits of the Registrant's application. A final decision on this application is
anticipated by the first quarter of 1995. See Note 9 of the Notes to Financial
Statements.
On July 29, 1994, the Registrant filed for an increase in rates in one
of its water operating districts. A final decision with respect to this filing
is expected during the first half of 1995. The Registrant anticipates filing
for general rate relief, including step and attrition year increases, in six of
its water operating districts and its electric district in January, 1995.
However, the Registrant does not anticipate significant rate relief from such
filings until early 1996 and, consequently, expects earnings to remain below
those levels experienced in recent years. No
17
<PAGE> 20
assurance can be given, however, that the CPUC will authorize any or all of
the rates for which the Registrant applies.
WATER SUPPLY
Total water supplied by the Registrant for the three months ended
September 30, 1994 increased by 6.2% to a total of 60,657 acre-feet of water as
compared to 57,125 acre-feet for the three months ended September 30, 1993. Of
the total 60,657 acre-feet of water supplied during the third quarter of 1994,
approximately 55.3% came from pumped sources and 41.6% was purchased from
others, principally the MWD. The remaining 3.1% came from the Bureau of
Reclamation (the "Bureau") under a no-cost contract.
For the nine months ended September 30, 1994, the Registrant supplied
143,879 acre-feet of water as compared to 137,189 acre-feet for the same period
last year, or an increase of 4.9%. Of this total amount supplied through
September 30, 1994, 54.5% came from pumped sources, 43.9% was supplied from
purchased sources and the 1.6% was supplied from the Bureau.
During the twelve months ended September 30, 1994, the Registrant
supplied 184,887 acre-feet of water. This amount represents a 4.6% increase
from the 176,753 acre-feet supplied during the twelve months ended September
30, 1993. During the twelve month period ended September 30, 1994, 53.5% of
total supply came from pumped sources, 45.2% was purchased and the remaining
1.3% was supplied by the Bureau.
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 with the exception of the recent six-year drought.
September 30, 1994 marked the end of the 1994 Water Year which began
October 1, 1993. The 1994 Water Year has been one of the drier years but would
have been worse had it not been for the 8 million acre-feet of reservoir
storage used during the year. Reservoir storage at September 30, 1994 stands
at 73 percent of average which is slightly above the drought-threshold level of
70 percent. The State of California has enjoyed only one year during the last
seven without drought conditions. For the 1994 Water Year, statewide
precipitation has averaged 65% of normal while seasonal runoff remains below
normal at 40% of average. By comparison, seasonal runoff for the 1993 Water
Year was about 120% of normal. The California Department of Water Resources
("DWR") had previously declared a drought watch warning in May, 1994. Although
a dry winter period may result in the imposition of water rationing during
1995, the Registrant believes that its water supplies are adequate to meet
projected current year demands.
18
<PAGE> 21
WATER QUALITY
The Registrant continues to implement the Lead and Copper rules as
promulgated by the United States Environmental Protection Agency ("USEPA").
The second round of sampling for small water systems was recently completed
with second annual reduced monitoring in effect for medium-sized and large
water systems. All 41 of the Registrant's water systems are in compliance with
the Lead and Copper Rules.
The Registrant will be subject to new rules pending implementation by
the USEPA with respect to radon and arsenic. With respect to the radon rule,
the USEPA did not meet its October 1, 1993 deadline for implementation of the
rule. As a result, the radon rule was to be considered as part of the
re-authorization of the Safe Drinking Water Act ("SDWA") presently before the
United States Congress. Congress adjourned prior to taking any action with
respect to the radon rule. Consequently, the Registrant believes the USEPA
will establish a minimum contaminant level ("MCL") of 200 pico-curies per
liter, which would affect nearly 75% of the Registrant's 309 wells. The
Registrant is currently conducting studies to determine the best treatment for
the affected systems which could range from simple aeration to filtration
through granulated activated carbon. Implementation of the MCL, however, is
postponed for at least a year pending budget appropriation of funds for the
USEPA to monitor compliance with the rule.
The USEPA continues to review data before implementation of the
arsenic rule, although a proposed rule is anticipated in April, 1995. If the
MCL is established near 2 to 5 micrograms per liter, as is presently
contemplated, nearly all of the Registrant's systems will be impacted.
Depending on the circumstances associated with each individual well and water
system, compliance with such a standard would cause the Registrant to implement
costly wellhead remedies such as ion exchange or, alternatively, to purchase
additional water supplies already in compliance for blending with well sources.
The Registrant will also be subject to the new USEPA rules concerning
Disinfection/Disinfection By-Products and the Enhanced Surface Water Treatment
Rule. Stage 1 of the Disinfection/Disinfection ByProducts rule has been
published with an effective date of June, 1998. This rule reduces
tri-halomethane contaminants from 100 micrograms per liter to 80 micrograms per
liter and effects only two of the Registrant's systems. The proposed
Information Collection Rule, originally expected in October, 1994 and which
will affect only two of the Registrant's systems with minor paperwork costs,
has been temporarily postponed.
The SDWA requires the USEPA to establish MCL's for twenty-five new
contaminants every three years. Another set of standards for contaminants will
be proposed in 1995 and will be referred to as "Phase IV". The Registrant
believes that the new MCL's will include a primary standard for manganese of
approximately 200 part per billion which will affect a majority of the
Registrant's systems.
19
<PAGE> 22
ACCOUNTING STANDARDS
Effective January 1, 1994, the Registrant is subject to the Financial
Accounting Standards Board's "Statement of Financial Accounting Standards
("SFAS") No. 112 - Employer's Accounting for Post-employment Benefits." The
Registrant has determined that, as of September 30, 1994, SFAS 112 does not
apply since there are no such benefits, other than those properly accounted for
under other reporting requirements. See Note 8 of the Notes to Financial
Statements.
The Registrant was, on January 1, 1994, subject to the reporting
requirements of SFAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." As of September 30, 1994, the Registrant has determined
that it has no debt security investments that are held-to-maturity or any debt
or equity investments that are either trading securities or available-for-sale
securities. See Note 8 of the Notes to Financial Statements.
PART II
ITEM 1. LEGAL PROCEEDINGS
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. On July 9, 1992 the Contra Costa Water
District ("CCWD") filed a condemnation action in Contra Costa County Superior
Court seeking to acquire the Registrant's Bay Point water district. A hearing
on the necessity of CCWD's actions was held in late October, 1993. A ruling on
that issue was issued on November 1, 1993 which upheld CCWD's actions as
necessary.
The Registrant and CCWD have entered into a settlement agreement
concerning CCWD's condemnation of the Registrant's Bay Point water district.
Under the terms of the settlement, the Registrant will continue to own and
operate the Bay Point system and CCWD will withdraw its condemnation action.
The Registrant is responsible for reimbursing CCWD for additional facilities to
provide for a long-term supplemental source of treated water supply for the
Registrant's system. The estimated cost of the Registrant's portion of these
facilities, based upon the Registrant's current capacity needs, is
approximately $2.6 million. One-half, or $1.3 million, was paid in September,
1994 with the balance payable in 84 monthly installments following completion
of the facilities, estimated to be in 1996. The terms of the agreement are
subject to approval by the CPUC which approval is not expected before mid 1995.
In addition to CCWD's actions, on May 4, 1993, the County Board of
Supervisors of Contra Costa County ("Board of Supervisors") adopted a
resolution of necessity to acquire the Registrant's Madison Plant and certain
other real property owned by the Registrant in its Bay Point district. The
Contra Costa Highway Department took possession of the property on September 1,
1993.
20
<PAGE> 23
On March 8, 1994, the Registrant and the Board of Supervisors reached
a settlement of issues related to their acquisition of the Registrant's Madison
Treatment Plant. The Registrant has received the settlement of $2.3 million,
which includes remuneration for the value of the real property taken and
reimbursement for treated water purchased from the City of Pittsburg. In
addition, the Board of Supervisors agreed to pay nearly $1 million for
relocation of certain pipelines owned by the Registrant.
The Registrant and the Internal Revenue Service ("IRS") have signed
the settlement agreement related to the IRS examination of the Registrant's
1987, 1988 and 1989 tax returns. As part of the settlement, the Registrant was
only required to remit $438,000 in additional taxes for those years out of
almost $5 million in assessments made by the IRS.
The Registrant is also subject to ordinary litigation incidental to
its business. Except as disclosed above and in previous filings with the SEC,
there are no other pending legal proceedings, other than such incidental
litigation, to which the Registrant is a party or of which any of its
properties is the subject which are believed by the Registrant to be material.
ITEM 2. CHANGES IN SECURITIES
As of September 30, 1994, earned surplus amounted to $44,717,000. Of
this amount, $28,647,000 was restricted, under the most restrictive of the
Registrant's credit agreements, as to payment of cash dividends on the common
shares of the Registrant.
As of September 30, 1994, authorized but unissued common shares
includes 109,454 and 92,259 common shares reserved for issuance under the
Registrant's Dividend Reinvestment and Common Shares Purchase Program and
Investment Incentive Program ("401-k"), respectively.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the third quarter of the fiscal year
covered by this report to a vote of security holders through the solicitation
of proxies or otherwise.
ITEM 5. OTHER INFORMATION
On October 24, 1994, the Board of Directors of the Registrant declared
a regular quarterly dividend of $0.30 per common share. The dividend will be
paid December 1, 1994 to shareholders of record as of the close of business on
November 14, 1994. In other actions, the Board of Directors declared regular
quarterly dividends of $0.25 per share, $0.265625 per share and $0.3125 per
share on its 4%, 4-1/4% and 5% Cumulative Preferred Shares, respectively.
21
<PAGE> 24
On July 25, 1994, the Board of Directors of the Registrant accepted
the resignation of William M. Kizer as a member of the Board. Mr. Kizer
indicated his desires were to concentrate on his personal endeavors. The Board
of Directors is currently interviewing possible candidates to fill the
remaining term of Mr. Kizer.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
22
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized officer and chief financial officer.
SOUTHERN CALIFORNIA WATER COMPANY
By: s/ JAMES B. GALLAGHER
----------------------------
James B. Gallagher
Vice President - Finance,
Chief Financial Officer and
Secretary
Date: November 10, 1994
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JUL-1-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 307,515
<OTHER-PROPERTY-AND-INVEST> 2,339
<TOTAL-CURRENT-ASSETS> 43,624
<TOTAL-DEFERRED-CHARGES> 4,336
<OTHER-ASSETS> 23,183
<TOTAL-ASSETS> 380,997
<COMMON> 19,613
<CAPITAL-SURPLUS-PAID-IN> 54,753
<RETAINED-EARNINGS> 44,337
<TOTAL-COMMON-STOCKHOLDERS-EQ> 118,703
600
1,600
<LONG-TERM-DEBT-NET> 95,863
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 13,500
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 90
40
<CAPITAL-LEASE-OBLIGATIONS> 1,251
<LEASES-CURRENT> 286
<OTHER-ITEMS-CAPITAL-AND-LIAB> 149,064
<TOT-CAPITALIZATION-AND-LIAB> 380,997
<GROSS-OPERATING-REVENUE> 38,686
<INCOME-TAX-EXPENSE> 3,566
<OTHER-OPERATING-EXPENSES> 28,243
<TOTAL-OPERATING-EXPENSES> 31,809
<OPERATING-INCOME-LOSS> 6,877
<OTHER-INCOME-NET> 362
<INCOME-BEFORE-INTEREST-EXPEN> 7,239
<TOTAL-INTEREST-EXPENSE> 2,031
<NET-INCOME> 5,208
(25)
<EARNINGS-AVAILABLE-FOR-COMM> 5,183
<COMMON-STOCK-DIVIDENDS> 30
<TOTAL-INTEREST-ON-BONDS> 222
<CASH-FLOW-OPERATIONS> 9,364
<EPS-PRIMARY> 0.66
<EPS-DILUTED> 0.66
</TABLE>
