<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, 1995 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, 1995, the number of shares outstanding
of the Registrant's Common Shares, Par Value $2.50,
was 7,845,092.
1
<PAGE> 2
SOUTHERN CALIFORNIA WATER COMPANY
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1: Financial Statements 1
Balance Sheets as of September 30, 1995 and December 31, 1994 2 - 3
Statements of Income for the Three Months Ended
September 30, 1995 and September 30, 1994 4
Statements of Income for the Nine Months Ended
September 30, 1995 and September 30, 1994 5
Statements of Income for the Twelve Months Ended
September 30, 1995 and September 30, 1994 6
Statements of Cash Flows for the Nine Months Ended
September 30, 1995 and September 30, 1994 7
Notes to Financial Statements 8 - 10
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operation 11 - 18
PART II OTHER INFORMATION
Item 1: Legal Proceedings 18
Item 2: Changes in Securities 18
Item 3: Defaults Upon Senior Securities 18
Item 4: Submission of Matters to a Vote of Security Holders 18
Item 5: Other Information 18
Item 6: Exhibits and Reports on Form 8-K 18
Signatures 19
</TABLE>
2
<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,
1995 1994
------------- ------------
(Unaudited)
(in thousands)
<S> <C> <C>
UTILITY PLANT, at cost
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $369,300 $356,666
Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,997 26,642
---------- ----------
397,297 383,308
Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . (100,358) (92,679)
---------- ----------
296,939 290,629
Construction work in progress . . . . . . . . . . . . . . . . . . . . . . . 30,244 24,250
---------- ----------
327,183 314,879
---------- ----------
OTHER PROPERTY AND INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . 970 921
---------- ----------
CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . 1,850 2,344
Accounts receivable -
Customers, less reserves of $229
in 1995 and $605 in 1994 . . . . . . . . . . . . . . . . . . . . . . 10,572 8,889
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,050 2,015
Unbilled revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,001 9,560
Materials and supplies, at average cost . . . . . . . . . . . . . . . . . 1,236 1,232
Supply cost balancing accounts . . . . . . . . . . . . . . . . . . . . . 7,167 7,008
Prepayments and other . . . . . . . . . . . . . . . . . . . . . . . . . . 7,285 6,578
Accumulated deferred income taxes - net . . . . . . . . . . . . . . . . . 2,436 2,461
---------- ----------
43,597 40,087
---------- ----------
Regulatory tax-related assets . . . . . . . . . . . . . . . . . . . . . . . 22,957 23,105
Other deferred charges . . . . . . . . . . . . . . . . . . . . . . . . . . 5,623 4,635
---------- ----------
28,580 27,740
---------- ----------
$400,330 $383,627
========== ==========
</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,
1995 1994
------------- ------------
(Unaudited)
(in thousands)
<S> <C> <C>
CAPITALIZATION
Common shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . $121,263 $118,962
Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,600 1,600
Preferred shares subject to mandatory
redemption requirements . . . . . . . . . . . . . . . . . . . . . . . . 560 560
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107,467 92,891
---------- ----------
230,890 214,013
---------- ----------
CURRENT LIABILITIES
Notes payable to banks . . . . . . . . . . . . . . . . . . . . . . . . . 4,500 19,500
Long-term debt and preferred shares
due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . 15,624 4,624
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,931 8,448
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,484 5,635
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,615 1,885
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . 7,218 6,504
---------- ----------
44,372 46,596
---------- ----------
OTHER CREDITS
Advances for construction . . . . . . . . . . . . . . . . . . . . . . . . 53,431 54,503
Contributions in aid of construction . . . . . . . . . . . . . . . . . . 26,949 25,567
Accumulated deferred income taxes - net . . . . . . . . . . . . . . . . . 38,228 36,252
Unamortized investment tax credits . . . . . . . . . . . . . . . . . . . 3,520 3,582
Regulatory tax-related liability . . . . . . . . . . . . . . . . . . . . 2,311 2,352
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 629 762
---------- ----------
125,068 123,018
---------- ----------
$400,330 $383,627
========== ==========
</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, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
---------------------------
1995 1994
--------- ---------
(in thousands, except
per share amounts)
<S> <C> <C>
OPERATING REVENUES
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37,062 $36,351
Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,471 2,335
--------- ---------
39,533 38,686
--------- ---------
OPERATING EXPENSES
Water purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,095 10,181
Power purchased for pumping . . . . . . . . . . . . . . . . . . . . . . . 2,594 2,631
Power purchased for resale . . . . . . . . . . . . . . . . . . . . . . . 1,131 968
Groundwater production assessment . . . . . . . . . . . . . . . . . . . . 1,793 1,532
Supply cost balancing accounts . . . . . . . . . . . . . . . . . . . . . (438) 710
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . . 3,087 3,069
Administrative and general expenses . . . . . . . . . . . . . . . . . . . 4,570 4,170
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,074 2,009
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,222 1,855
Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,582 3,566
Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,270 1,118
--------- ---------
31,980 31,809
--------- ---------
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,553 6,877
OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 362
--------- ---------
Income before interest charges . . . . . . . . . . . . . . . . . . . . . 7,667 7,239
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,377 2,031
--------- ---------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,290 5,208
DIVIDENDS ON PREFERRED SHARES . . . . . . . . . . . . . . . . . . . . . . . . (24) (25)
--------- ---------
EARNINGS AVAILABLE FOR COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . . $5,266 $5,183
========= =========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING . . . . . . . . . . . . . . . . 7,845 7,845
========= =========
Earnings Per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . . $0.67 $0.66
========= =========
Dividends Declared Per Common Share . . . . . . . . . . . . . . . . . . . . . $0.30 $0.30
========= =========
</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, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1995 1994
--------- ---------
(in thousands, except
per share amounts)
<S> <C> <C>
OPERATING REVENUES
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $88,857 $85,643
Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,025 7,718
--------- ---------
96,882 93,361
--------- ---------
OPERATING EXPENSES
Water purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,058 23,986
Power purchased for pumping . . . . . . . . . . . . . . . . . . . . . . 5,649 5,396
Power purchased for resale . . . . . . . . . . . . . . . . . . . . . . 3,682 3,199
Groundwater production assessment . . . . . . . . . . . . . . . . . . . 4,659 3,865
Supply cost balancing accounts . . . . . . . . . . . . . . . . . . . . (48) 968
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . 9,219 9,081
Provision for State Water Project . . . . . . . . . . . . . . . . . . . - 263
Administrative and general expenses . . . . . . . . . . . . . . . . . . 12,620 11,542
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,369 6,039
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,436 5,313
Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,627 6,060
Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,394 3,613
--------- ---------
80,665 79,325
--------- ---------
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,217 14,036
OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 357
--------- ---------
Income before interest charges . . . . . . . . . . . . . . . . . . . . 16,405 14,393
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,970 5,691
--------- ---------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,435 8,702
DIVIDENDS ON PREFERRED SHARES . . . . . . . . . . . . . . . . . . . . . . . (72) (74)
--------- ---------
EARNINGS AVAILABLE FOR COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . $9,363 $8,628
========= =========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING . . . . . . . . . . . . . . . 7,845 7,841
========= =========
Earnings Per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . $1.19 $1.10
========= =========
Dividends Declared Per Common Share . . . . . . . . . . . . . . . . . . . . $0.90 $0.90
========= =========
</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, 1995 AND 1994
(Unaudited)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1995 1994
--------- ---------
(in thousands, except
per share amounts)
<S> <C> <C>
OPERATING REVENUES
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $115,301 $108,816
Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,894 10,531
---------- ----------
126,195 119,347
---------- ----------
OPERATING EXPENSES
Water purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,840 33,032
Power purchased for pumping . . . . . . . . . . . . . . . . . . . . . . 7,837 7,592
Power purchased for resale . . . . . . . . . . . . . . . . . . . . . . 5,209 2,935
Groundwater production assessment . . . . . . . . . . . . . . . . . . . 6,251 4,655
Supply cost balancing accounts . . . . . . . . . . . . . . . . . . . . (516) (1,384)
Other operating expenses . . . . . . . . . . . . . . . . . . . . . . . 12,286 11,722
Provision for State Water Project . . . . . . . . . . . . . . . . . . . (456) 844
Administrative and general expenses . . . . . . . . . . . . . . . . . . 15,315 15,297
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,379 7,868
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,039 7,243
Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,432 5,592
Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,468 4,854
---------- ----------
105,084 100,250
---------- ----------
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,111 19,097
---------- ----------
OTHER INCOME
Net gain on sale of operating properties . . . . . . . . . . . . . . . - 314
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 397
---------- ----------
67 711
---------- ----------
Income before interest charges . . . . . . . . . . . . . . . . . . . . 21,178 19,808
INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,107 7,949
---------- ----------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,071 11,859
DIVIDENDS ON PREFERRED SHARES . . . . . . . . . . . . . . . . . . . . . . . (97) (99)
---------- ----------
EARNINGS AVAILABLE FOR COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . $11,974 $11,760
========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING . . . . . . . . . . . . . . . 7,845 7,829
========== ==========
Earnings Per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . $1.53 $1.50
========== ==========
Dividends Declared Per Common Share . . . . . . . . . . . . . . . . . . . . $1.20 $1.20
========== ==========
</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, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1995 1994
--------- ----------
(in thousands, except
per share amounts)
<S> <C> <C>
CASH FLOWS FROM -
Operating Activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,435 $8,702
Adjustments for non-cash items:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . 6,792 6,335
Deferred income taxes and
investment tax credits . . . . . . . . . . . . . . . . . . . . . . . 2,025 (46)
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,421) (1,941)
Changes in assets and liabilities:
Customer receivables . . . . . . . . . . . . . . . . . . . . . . . . . (719) (4,890)
Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (707) (102)
Supply cost balancing accounts . . . . . . . . . . . . . . . . . . . . (159) 1,918
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . 483 388
Taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849 3,706
Unbilled revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,441) (2,688)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . (270) 1,568
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427 1,047
--------- ---------
Net Cash Provided 14,294 13,997
--------- ---------
Financing Activities:
Issuance of securities . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 13,000
Receipt of advances and contributions . . . . . . . . . . . . . . . . . 2,649 1,980
Repayments of long-term debt and
redemption of preferred shares . . . . . . . . . . . . . . . . . . . . (4,425) (173)
Refunds on advances . . . . . . . . . . . . . . . . . . . . . . . . . . (2,503) (2,687)
Net change in notes payable to banks . . . . . . . . . . . . . . . . . . (15,000) 1,500
Common and preferred dividends paid . . . . . . . . . . . . . . . . . . (7,273) (7,120)
--------- ---------
Net Cash Provided 3,448 6,500
--------- ---------
Investing Activities:
Construction expenditures . . . . . . . . . . . . . . . . . . . . . . . (18,236) (18,299)
--------- ---------
Net Cash Used (18,236) (18,299)
--------- ---------
Net Increase in Cash and Cash Equivalents . . . . . . . . . . . . . . . . (494) 2,198
Cash and Cash Equivalents, Beginning of period . . . . . . . . . . . . . 2,344 1,726
--------- ---------
Cash and Cash Equivalents, End of period . . . . . . . . . . . . . . . . $1,850 $3,924
========= =========
</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 24 through 28 of the 1994 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. In June, 1994, the Registrant signed a Water Supply Agreement to
become a participant in the Coastal Aqueduct Extension of the State
Water Project (the "Project") at a level of 500 acre-feet. The
Registrant's current investment for this level of participation is
$935,000 and is included in utility plant.
The Registrant intends to file an application with the California
Public Utilities Commission ( the "CPUC") seeking approval of its
participation in the Project and authorizing recovery through rates of
costs associated with that 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 substantially completed negotiations for the sale
of the remaining 2,500 acre-feet of its total 3,000 acre-foot
entitlement in the Project, which sale is expected to be approved by
the CPUC.
4. The Registrant and the Contra Costa Water District ("CCWD") have
settled CCWD's condemnation action regarding the Registrant's Bay
Point water system. Under the terms of the settlement, the Registrant
will continue to own and operate the Bay Point system and CCWD
withdrew its condemnation action. CCWD is obligated to 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 partiallly reimburse CCWD for the
cost of constructing these facilities. The Registrant's portion of the
current estimated cost of the facilities is $2.6 million. One-half, or
$1.3 million, of this amount was paid to CCWD in September, 1994 with
the balance due in seven equal annual installments beginning with
completion of the facilities, anticipated in 1996. The total project
cost is estimated at $5 million.
The initial contribution of $1.3 million was made 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 the condemnation was 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 the Madison plant
capacity in 1993. The terms of the settlement with CCWD were approved
by the CPUC on August 11, 1995.
8
<PAGE> 11
5. The Registrant and the Division of Ratepayer Advocates of the CPUC
have entered into a settlement stipulation of all issues associated
with the Registrant's application for increased rates in six of its
water districts. The Registrant also filed an application for
increased rates in its electric operating district in September, 1995.
The Registrant does not anticipate significant rate relief from such
filings until early 1996. See the section entitled "Rates and
Regulation" for more information.
6. Effective January 1, 1993, the Registrant adopted 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. As
a result, the Registrant amended its retiree medical plan
substantially reducing benefits for those current employees retiring
after September 1, 1995. No such benefits will be available to
employees hired on or after February 1, 1995.
Based on a study performed by the Registrant's health care actuary,
using a 7.5% discount rate and a sliding scale for health care cost
trends starting at 12%, declining by 1% annually for the next six
years and remaining at 6% thereafter, the transition obligation for
the Registrant's post-retirement medical plan, after giving effect to
the changes discussed above, is estimated to be approximately $5.1
million. A one percent (1%) increase in the anticipated health care
cost trend assumption results in an estimated increase of
approximately $656,000 in the accumulated postretirement benefits
obligation ("APBO"). The Registrant estimates that its Net Periodic
Postretirement Benefit Costs for 1995, under the plan as amended,
would approximate $600,000, including amortization of the transition
APBO over a 20-year period.
The Registrant, for the nine-month period ended September 30, 1995,
has capitalized an additional $450,000 of its anticipated Net Periodic
Postretirement Benefit Costs for 1995. The CPUC has previously issued
a decision which provides for the recovery in rates of tax-deductible
contributions to a separately trusteed fund, which funds are
anticipated to be established by December, 1995. The Registrant is
evaluating presently available funding vehicles. Due to the
amendments to the Registrant's plans as described above, it is
estimated that substantially all of the SFAS No. 106 costs will
ultimately be currently recoverable in rates. As part of the
settlement stipulation in its most recent rate case, the Registrant
will be allowed to recover these costs through rates beginning in
1996. See the section entitled "Rates and Regulation" for more
information.
7. Effective January 1, 1995, the Registrant is subject to SFAS No. 119 -
Disclosure about Derivative Financial Instruments and Fair Value of
Financial Instruments. The Registrant has no derivative financial
instruments, financial instruments with off-balance sheet risk or
financial instruments with concentrations of credit risk and,
therefore, this standard will have no present impact on the
Registrant's results of operation or financial condition.
8. In March 1995, the FASB issued SFAS No. 121 - Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
Of. This Statement imposes stricter criteria for establishing and
maintaining regulatory assets by requiring that such assets be
probable of future recovery at each balance sheet date. The
Registrant anticipates adopting this standard on January 1, 1996 and
does not expect that adoption will have a material impact on the
financial position or results of operations of the Registrant based on
the current regulatory structure in which the Registrant operates.
9
<PAGE> 12
9. As permitted by the CPUC, the Registrant maintains water and electric
supply cost balancing accounts to account for under-collections and
over-collections of revenues designed to recover such costs.
Recoverability of such costs are recorded in income and charged to
balancing accounts when such costs are incurred. The balancing
accounts are credited when such costs are recovered through rate
adjustments. In October 1995, the Registrant identified and adjusted
for an error in the recording of offset revenue into its electric
balancing account. The error arose as a result of the input in August
1994 of an incorrect rate into a system which generates the amount of
offset revenue to be recorded. This resulted in a misstatement of the
overcollection in the balancing account and, thus, an understatement
in recorded income. For 1994, income was understated by approximately
$336,000 or $0.043 per common share. The impact of the adjustment for
1994 was not material and the cumulative effects of the adjustment
through March 31, 1995 were included in the first quarter results. The
error did not effect actual billings to electric customers.
10
<PAGE> 13
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 (SIC No. 4941). The Registrant also distributes
electricity in one community (SIC No. 4911). The Registrant, regulated by the
California Public Utilities Commission ("CPUC"), was incorporated on December
31, 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.
The Registrant is organized into three regions operating
within 75 communities in 10 counties throughout the State of California and
provides water service in 21 customer service areas. As of September 30, 1995,
about 73% of the Registrant's water customers were located in the greater
metropolitan areas of Los Angeles and Orange Counties. The Registrant also
provided electric service to the City of Big Bear Lake and surrounding areas in
San Bernardino County. All electric energy sold was purchased from Southern
California Edison Company ("SCE") on a resale rate schedule. The Registrant
served 238,213 water customers and 20,194 electric customers at September 30,
1995, or a total of 258,407 customers compared with 257,655 total customers
served at September 30, 1994.
RESULTS OF OPERATION
Earnings per common share for the three months ended September
30, 1995 increased by 1.5% to $0.67 per share as compared to $0.66 per share
for the comparable period last year. For the nine months ended September 30,
1995, earnings per share were $1.19 as compared to $1.10 for the nine months
ended September 30, 1994, an increase of 8.2%. Earnings for the twelve months
ended September 30, 1995 increased by 2.0% to $1.53 per share as compared to
$1.50 per share for the twelve months ended September 30, 1994.
Water sales volumes for the three, nine and twelve months
ended September 30, 1995 decreased by 1.8%, 4.9% and 3.5%, respectively, as
compared to the same periods ended September 30, 1994. Water operating
revenues, however, increased by 2.0%, 3.8% and 6.0%, in each of the three
periods ended September 30, 1995 respectively, over the same periods of the
prior year as a result of the impact of general, step and attrition rate
increases and the effects of $13 million in supply cost offset rate increases.
Electric operating revenues for the three, nine and twelve
month periods ending September 30, 1995 increased by 5.8%, 4.0% and 3.4%,
respectively, over the comparable periods ending September 30, 1994 as a result
of increased kilowatt-hour sales volumes. Kilowatt-hour sales of electricity
increased by 13.6%, 2.8% and 1.8% for the three, nine and twelve months ended
September 30, 1995, respectively, as compared to the same periods last year.
In addition, there was a slight shift in kilowatt-hour sales from the
residential class to lower cost commercial and industrial users during the
three months ended September 30, 1995.
Purchased water costs increased by 9.0% and 0.3% over 1994,
respectively, for the three and nine months ended September 30, 1995 due
principally to increases in purchased water rates, the latest
11
<PAGE> 14
series of which were effective July 1, 1995 offset, in part, for the nine
months ended, by lower purchased volumes. Reduced water purchases generally
have caused wholesale water rates in the State of California to increase
significantly to cover fixed costs of the wholesale water suppliers. For the
twelve months ended September 30, 1995, purchased water costs declined by 6.6%
from the same period last year due to reduced water purchases from the MWD.
Costs of power purchased for pumping increased by 4.7% and
3.2%, respectively, for the nine and twelve months ended September 30, 1995 as
compared to the same periods ended September 30, 1994 due chiefly to the
effects of an increase in the proportion of total water supplied which comes
from pumped sources. The costs of power purchased for pumping decreased
slightly by 1.4% for the three months ended September 30, 1995 as compared to
the same period last year.
As compared to the three, nine and twelve months ended
September 30, 1994, the costs of power purchased for resale increased by 16.8%,
15.1% and 77.5% for the three, nine and twelve months ended September 30, 1995,
respectively, due to increased kilowatt-hour sales. The comparisons for each
period are also affected by refunds from SCE received in 1994. There have been
no similar refunds.
Groundwater production assessments are 17.0%, 20.5% and 34.3%
higher for the three, nine and twelve months ended September 30, 1995 as
compared to the same periods ended September 30, 1994 due primarily to the
effects of increases in the volume of pumped water in the Registrant's resource
mix as well as increased assessment rates, the latest of which was effective on
July 1, 1995.
In October 1995, the Registrant identified and adjusted for an
error in the recording of offset revenue into its electric balancing account.
The error arose as a result of the input in August 1994 of an incorrect rate
into a system which generates the amount of offset revenue to be recorded.
This resulted in a misstatement of the overcollection in the balancing account
and, thus, an understatement in recorded income. For 1994, income was
understated by approximately $336,000 or $0.043 per common share. The impact
of the adjustment for 1994 was not material and the cumulative effects of the
adjustment through March 31, 1995 were included in the first quarter results.
The error did not affect actual billings to electric customers. A negative
entry for the provision for supply cost balancing accounts reflects recovery of
previously under-collected supply costs. Conversely, a positive entry in this
category would reflect recovery of previously under-collected supply costs.
The credit entries for three, six and twelve months ended September 30, 1995
reflects an undercollection through rates of purchased water supply costs,
supply costs for power purchased for pumping and resale and groundwater
production assessments. See Note 9 of the Notes to Financial Statements.
Other operating expenses increased by 0.6%, 1.5% and 4.8%,
respectively, for the three, nine and twelve months ended September 30, 1995 as
compared to the same periods ended September 30, 1994 due chiefly to a shift in
the number of personnel involved in various operating and customer service
functions.
The Registrant had reserved a maximum of $2.1 million against
previously incurred costs related to its participation in the Coastal Aqueduct
extension of the State Water Project (the "Project") due to denial by the CPUC
of the Registrant's requests for participation in the Project and recovery of
costs related thereto. Presently, the reserve is $1.7 million. The Registrant
has signed an agreement to participate in the Project at a level of 500
acre-feet and anticipates selling its remaining 2,500 acre-feet entitlement.
When it becomes final, the sale may result in a reversal of a portion of the
amounts previously reserved. See Note 3 of the Notes to Financial Statements.
12
<PAGE> 15
Administrative and general expenses increased by 9.6%, 9.3%
and 0.1% for the three, nine and twelve months ended September 30, 1995,
respectively, as compared to the same periods ended September 30, 1994. These
periods are each affected by increased personnel-related expenses such as
health insurance and employee savings plan contributions. In addition, in 1994
the Registrant has reserved approximately $110,000 against water rights
litigation in its Barstow water district and, 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 3.2%, 5.5% and 6.5%,
respectively, for the three, nine and twelve months ended September 30, 1995
reflecting, among other things, the effects of recording approximately $22
million in net plant additions during 1994, depreciation on which began in
1995.
Taxes on income increased by approximately 0.4%, 9.4% and
68.7%, respectively, for the three, nine and twelve months ended September 30,
1995 as compared to the same periods ended September 30, 1994 as a result of
higher pre-tax income. The twelve month comparison is also affected by a
reversal of approximately $1.3 million in previously established tax reserves
during the last quarter of 1993 for which there is no counterpart in the twelve
months ended September 30, 1995.
Maintenance expense decreased by 34.1%, 16.5% and 16.6% for
the three, nine and twelve months ended September 30, 1995 as compared to the
three, nine and twelve months ended September 30, 1994. These decreases are
primarily a result of work performed last year on the Registrant's water
pumping equipment, emphasis on hydrant maintenance and extensive main flushing
and valve exercise programs for which there is no direct counterpart in the
periods ending September 30, 1995.
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 City of Hawthorne's water system.
Interest expense for the three, nine and twelve months ended
September 30, 1995 increased by 17.0%, 22.5% and 14.6% over the same period
last year primarily as a result of the sale in July, 1994 of $13 million in
long-term debt and increased short-term borrowings during 1995 to support
construction expenditures.
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. Due to 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 funds 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.
For the quarter ended September 30, 1995, the Registrant recorded cash receipts
of contributions-in-aid-of-construction and advances for construction of
approximately $998,000 although refunds on such advances were approximately
$1,561,000 during the same period. For the quarter ending September 30, 1994,
the Registrant recorded approximately $1,980,000 in receipts of
13
<PAGE> 16
contributions-in-aid-of and advances for construction and refunded
approximately $2,700,000 against advance contracts. For the three months ended
September 30, 1995, the Registrant recorded approximately $254,000 in
install-and-convey contracts as compared to $151,000 for the prior year quarter
ended September 30, 1994.
The aggregate short-term borrowing capacity currently
available to the Registrant under its three bank lines of credit is
$37,063,000. At September 30, 1995, the Registrant had a total of $4,500,000
in borrowing outstanding under its bank lines of credit, leaving an unused
short-term borrowing capacity of $32,563,000. In September, 1995, the
Registrant sold $30 million in principal amount authorized under its
Medium-Term Note Program, Series B 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 1995 and throughout 1996.
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
common equity and long-term debt in 1996.
The Registrant has pending an application with the California
Pollution Control Financing Authority for $8 million in tax-exempt debt to
finance replacement of water mains in certain of the Registrant's customer
service areas.
ACCOUNTING STANDARDS
Effective January 1, 1995, the Registrant is subject to the
reporting requirements contained in the Financial Accounting Standards Board's
Statement of Financial Accounting Standards ("SFAS") No. 119 - "Disclosure
about Derivative Financial Instruments and Fair Value of Financial
Instruments." The Registrant has determined that SFAS 119 does not presently
apply since the Registrant has no derivative financial instruments, financial
instruments with off-balance sheet risk or financial instruments with
concentrations of credit risk. See Note 7 of the Notes to Financial Statements.
In March 1995, the FASB issued SFAS No. 121 - "Accounting for
the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of."
This Statement imposes stricter criteria for establishing and maintaining
regulatory assets by requiring that such assets be probable of future recovery
at each balance sheet date. The Registrant anticipates adopting this standard
on January 1, 1996 and does not expect that adoption will have a material
impact on the financial position or results of operations of the Registrant
based on the current regulatory structure in which the Registrant operates.
See Note 8 of the Notes to Financial Statements.
WATER SUPPLY
For the three months ended September 30, 1995, the Registrant
produced a total of 59,627 acre-feet of water as compared to 60,657 acre-feet
for the three months ended September 30, 1994. Of the total 59,627 acre-feet
of water produced during the third quarter of 1995, approximately 57.8% came
from pumped sources and 42% was purchased from others, principally the MWD.
The remaining 0.2% came from the Bureau of Reclamation (the "Bureau") under a
no-cost contract.
For the nine months ended September 30, 1995, the Registrant
produced 136,868 acre-feet of water as compared to 143,879 acre-feet for the
same period last year. Of this total amount
14
<PAGE> 17
produced, 58% came from pumped sources, 41% was produced from purchased sources
and the remaining amount was supplied from the Bureau.
During the twelve months ended September 30, 1995, the
Registrant produced 178,479 acre-feet of water of which 58% came from pumped
sources, 41% was purchased and the remaining was produced by the Bureau. The
Registrant produced 184,887 acre-feet produced during the twelve months ended
September 30, 1994.
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. 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. MWD's
water supplies continue to remain adequate through 1995. MWD's import of water
from the Colorado River is expected to decrease in future years due to the
requirements of the Central Arizona Project in the State of Arizona. In
response, MWD has taken steps to secure additional storage capacity as well as
effecting transfers of water rights from other sources.
While precipitation patterns have returned to more normal
conditions recently, the State of California experienced unusually heavy
precipitation during the first four months of 1995. As of September 30, 1995,
the Northern Sierra 8-station index has recorded seasonal precipitation 171% of
the average water year which began October 1, 1994 and storage in the State's 8
major reservoirs stands at almost 72% of capacity. In those customer service
areas of the Registrant which pump groundwater, overall groundwater conditions
remain at adequate levels. As such, the Registrant believes that its water
supplies are adequate to meet projected current year demands.
WATER QUALITY
The United States Environmental Protection Agency ("USEPA"),
under provisions of the Safe Drinking Water Act as amended (the "SDWA"), is
required to establish maximum contaminant levels ("MCLs") for 83 potential
drinking water contaminants initially listed in the SDWA, and for an additional
25 contaminants every three years thereafter. The California Department of
Health Services, acting on behalf of the USEPA, administers the USEPA's
program. The Registrant currently tests 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.
The Registrant, like any provider of water from surface
supplies, has a risk of contamination from Cryptosporidium, a microscopic
organism widely present in the environment, reaching the water supply. The
Registrant's risk is greatly reduced, however, due in part to the high quality
of source water where, according to the MWD, measured amounts of
Cryptosporidium are 100 to 1000 times less than the national average.
The Registrant is a voluntary member of the "Partnership for
Safe Water", a national program developed in conjunction with the USEPA, the
National Association of Water Companies and the American Water Works
Association to further protect the public from diseases caused by
Cryptosporidium and other organisms. As a volunteer in the program, the
Registrant has committed to go above and beyond current regulation governing
surface water treatment to ensure that its treatment facilities are performing
as efficiently as possible.
15
<PAGE> 18
The Registrant continues to implement the lead and copper
rules as promulgated by the USEPA. The first round of reduced annual sampling
for small water systems was 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 also be subject to new rules regarding
MCLs for radon and arsenic pending implementation by the USEPA. 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 SDWA presently before the United States
Congress. The Registrant believes the USEPA will consequently establish a MCL
of 3,000 pico-curies per liter, which would affect only one of the Registrant's
wells. The Registrant will, however, be required to conduct mandatory public
information and educational programs on radon. The Registrant is currently
conducting studies to determine the best treatment for the affected well which
could range from simple aeration to filtration through granular activated
carbon. The Registrant is currently unable to predict what ultimate effects,
if any, this rule will have on its financial condition or results of operation
until the MCL is established.
The USEPA is continuing its review of data before implementing
the arsenic rule. In January, 1995, the USEPA filed in U.S. District Court
for a delay of the arsenic rule. The SDWA amendments currently before Congress
delays the implementation of an arsenic rule until 2001. Although the
Registrant is unable to predict the actions that either the Court or Congress
may take, it is believed that, if required to do so without further research,
the USEPA will establish a MCL near 2 to 5 micrograms per liter. At this
level, nearly all of the Registrant's wells and water systems will be affected.
Depending on the circumstances associated with each individual well and water
system, compliance with such a standard could cause the Registrant to implement
costly wellhead remedies such as ion exchange or, alternatively, to purchase
additional, and more expensive, water supplies already in compliance for
blending with well sources. The Registrant is currently unable to predict what
ultimate effects, if any, this rule will have on its financial condition or
results of operation until the MCL is established.
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 By-Products 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 affects only two of the Registrant's systems. As part of its January,
1995 filing in U.S. District Court, the USEPA requested an extension of time to
complete this rule.
The proposed Information Collection Rule, originally expected
in October, 1994 and which will affect only two of the Registrant's water
systems with minor paperwork costs, is anticipated by the end of 1995. Recent
changes in the Rule, however, may allow for a variance from requirements for
the two affected systems. In addition, a set of primary standards, referred to
as "Phase VI," has been postponed indefinitely.
The Registrant is subject to California Assembly Bill 733
which requires fluoridation of water supplies for public water systems serving
greater than 10,000 service connections. Although, the bill requires that
affected systems install treatment facilities only when public funds have been
made available to cover capital and operating costs, the bill requires the CPUC
to authorize cost recovery through rates should public funds for operation of
the facilities, once installed, become unavailable in future years.
16
<PAGE> 19
Since promulgation of the SDWA, the Registrant has
experienced increased operating costs for testing to determine the levels, if
any, of the contaminants in the Registrant's sources of supply and additional
expense to lower the level of any contaminants found to a level that meets the
MCL standards. Such costs and the control of any other pollutants may cause
the Registrant to experience additional 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,
although no assurance can be given that the CPUC will authorize all or any of
such costs in rates.
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 among its 22 customer
service areas due to differences in operating conditions and costs. The
customer service areas are currently grouped into 16 water districts and one
electric district 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"
and "attrition" increases in rates for the second and third years.
Rates currently in effect include approximately $13.1 million
in increases authorized by the CPUC during the last twelve months for recovery
of previously uncollected supply costs including purchased water, electric and
natural gas costs for pumping, electric energy for resale and groundwater
production assessments. These increased revenues do not produce additional
earnings although they significantly increase the Registrant's cash flow. Step
and attrition year rate increases, authorized in previous general rate cases
and effective in 1995, are expected to result in additional annualized revenues
of approximately $1.2 million.
In May, 1995, the CPUC granted the Registrant a general rate
increase of approximately $936,000, including step and attrition year
increases, in its Arden-Cordova customer service area.
In March, 1995 the Registrant filed applications for general
rate relief, including step and attrition increases, in six of its water
rate-making districts. The March, 1995 filings included $2.2 million associated
with recovery of costs associated with implementation of recommendations
included in the management audit. In July, 1995 the Division of Ratepayer
Advocates ("DRA") of the CPUC issued its report on the Registrant's
applications. The Registrant has concluded settlement negotiations with the
DRA, with all issues, including establishing a return on common equity of
10.40%, being settled. The stipulation of the parties has been presented to
the administrative law judge ("ALJ") assigned to the case. The ALJ's proposed
decision is anticipated in November, 1995 although the Registrant is unable to
predict at this time whether or not the ALJ will accept the settlement
stipulation in total or in part. No assurance can be given that the CPUC will
ultimately authorize all or any of the rates for which the Registrant
17
<PAGE> 20
applied. However, given established CPUC procedure, the Registrant does not
anticipate significant rate relief from the rate filings made in 1995 until
early 1996.
The Registrant filed an application for general rate relief in its
electric customer service area on September 11, 1995. Rate relief from this
application is not anticipated until mid-1996.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Registrant is subject to ordinary routine litigation
incidental to its business. Except as discussed in Note 4 of the Notes to
Financial Statements and as disclosed 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, 1995, earned surplus amounted to
$46,897,000. Of this amount, $27,815,000 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, 1995, 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 23, 1995, the Board of Directors of the Registrant
declared a regular quarterly dividend of $0.305 per common share, an increase
of 1.7%. 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. The dividends will
be paid December 1, 1995 to shareholders of record as of the close of business
on November 13, 1995.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None.
18
<PAGE> 21
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 13, 1995
19
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) BALANCE
SHEETS AND STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1995 CONTAINED IN THIS REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH (B) FINANCIAL STATEMENTS IN THIS REPORT FILED ON FORM 10-Q FOR THE QUARTER
ENDED SEPTEMBER 30, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 327,183
<OTHER-PROPERTY-AND-INVEST> 970
<TOTAL-CURRENT-ASSETS> 43,597
<TOTAL-DEFERRED-CHARGES> 28,580
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 400,330
<COMMON> 19,613
<CAPITAL-SURPLUS-PAID-IN> 54,753
<RETAINED-EARNINGS> 46,897
<TOTAL-COMMON-STOCKHOLDERS-EQ> 121,263
560
1,600
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40
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24
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</TABLE>
