<PAGE> 1
FILED PURSUANT TO RULE 424(b)(2)
REGISTRATION NO. 33-60441
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 11, 1995)
$45,000,000
SOUTHERN CALIFORNIA WATER COMPANY
MEDIUM-TERM NOTES, SERIES B
DUE FROM NINE MONTHS TO 30 YEARS FROM DATE OF ISSUE
------------------------
Southern California Water Company (the "Company") may from time to time
offer its Medium-Term Notes, Series B (the "Notes"), in an aggregate principal
amount of up to $45,000,000. The Notes will be offered at varying maturities
from nine months to 30 years from their dates of issuance, may be subject to
redemption at the option of the Company and will, under certain limited
circumstances, be redeemable at par. Each Note will bear interest at a fixed
rate as set forth in a pricing supplement (the "Pricing Supplement") to this
Prospectus Supplement applicable to such Note. See "Description of Medium-Term
Notes, Series B."
The issue price, interest rate, maturity date, and redemption provisions,
if any, for each Note will be established at the time of issuance of such Note
and will be set forth therein and in the Pricing Supplement.
Each Note will be represented either by a global security registered in the
name of a nominee of The Depository Trust Company, or another depositary, as
Depositary (a "Book-Entry Note"), or a certificate in definitive form (a
"Certificated Note"). Interests in Book-Entry Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. See "Description of Medium-Term Notes, Series
B."
The authorized denominations of Notes will be $1,000 or any integral
multiple of $1,000.
Interest on each Note will accrue from its date of issuance and will be
payable semiannually on each June 1 and December 1 and at maturity or upon
earlier redemption, as described herein.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY
PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
====================================================================================================
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) THE COMPANY(2)(3)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note 100.000% .125%-.750% 99.875%-99.250%
----------------------------------------------------------------------------------------------------
Total $45,000,000 $56,250-$337,500 $44,943,750-$44,662,500
====================================================================================================
</TABLE>
(1) The Notes will be sold at 100% of their principal amount except as may be
provided in a Pricing Supplement hereto.
(2) The Company will pay a commission to Smith Barney Inc. or A.G. Edwards &
Sons, Inc., each as an Agent (collectively the "Agents"), in the form of a
discount, ranging from .125% to .750%, depending upon the maturity of the
Note, of the principal amount of any Note sold through such Agent. The
Company may also sell the Notes to any Agent for its own account or for
resale to one or more investors at varying prices relating to prevailing
market prices at the time of resale, as determined by such Agent, or for
resale to one or more dealers at a discount to be determined by such
Agent. See "Plan of Distribution of Notes."
(3) Before deducting other expenses payable by the Company estimated to be
$425,000, including reimbursement of certain of the Agents' expenses. The
Company has agreed to indemnify each Agent against certain civil
liabilities, including liabilities under the Securities Act of 1933.
------------------------
The Notes are being offered on a continuous basis by the Company through
the Agents, each of whom has agreed to use its reasonable efforts to solicit
purchases of the Notes. In addition, the Notes may be sold to any Agent, as
principal, for resale to investors or dealers. The Notes will not be listed on
any securities exchange, and there can be no assurance that the Notes offered by
this Prospectus Supplement will be sold or that there will be a secondary market
for any of the Notes. The Company reserves the right to withdraw, cancel or
modify the offer made hereby without notice. The Company or the Agent who
solicits the offer may reject such offer in whole or in part. See "Plan of
Distribution of Notes."
------------------------
SMITH BARNEY INC. A.G. EDWARDS & SONS, INC.
The date of this Prospectus Supplement is August 15, 1995.
<PAGE> 2
DESCRIPTION OF MEDIUM-TERM NOTES, SERIES B
The information herein concerning the Notes should be read in conjunction
with the statements under "Description of Debt Securities" in the accompanying
Prospectus. The Notes will be a series of Debt Securities as defined in the
Prospectus. The following description will apply to the Notes unless otherwise
specified in the applicable Pricing Supplement.
GENERAL
The Notes are to be issued as a series of Debt Securities under the
Company's Indenture, dated as of September 1, 1993, as amended and supplemented
("Indenture"), with Chemical Trust Company of California, as trustee
("Trustee"). The Notes are limited to an aggregate principal amount of
$45,000,000 and will constitute a single series of Debt Securities. All Debt
Securities, including the Notes, will be unsecured and unsubordinated
obligations of the Company and will rank on a parity among themselves and all
other unsecured and unsubordinated indebtedness of the Company. For information
concerning the status of the Notes in relation to the Company's outstanding
unsecured and unsubordinated indebtedness, see "Description of Debt
Securities -- Status of Debt Securities" in the accompanying Prospectus.
Each Note will be issued in fully registered form, either as a Book-Entry
Note or a Certificated Note, as set forth in the applicable Pricing Supplement
related thereto.
The Notes will be offered on a continuous basis and will mature on any day
that is not a Legal Holiday (as defined below) from nine months to 30 years from
the date of issue, as selected by the purchaser and agreed to by the Company.
Prior to maturity, the Notes may be subject to redemption by the Company at the
price or prices set forth in the applicable Pricing Supplement. Each Note will
bear interest at a rate specified in the applicable Pricing Supplement.
Unless otherwise provided in a Pricing Supplement, the authorized
denominations of the Notes will be $1,000 or any integral multiple of $1,000.
"Legal Holiday" means a Saturday or Sunday, or a day on which banking
institutions in California or New York are not required to be open.
The Pricing Supplement relating to each Note will describe the following
terms: (1) the price (expressed as a percentage of the aggregate principal
amount thereof) at which such Note will be issued (the "Issue Price"); (2) the
date on which such Note will be issued (the "Original Issue Date"); (3) the date
on which such Note will mature (the "Maturity Date"); (4) the rate per annum at
which such Note will bear interest; (5) provisions, if any, relating to the
optional redemption of such Note prior to the Maturity Date; and (6) any other
terms of such Note not inconsistent with the provisions of the Indenture.
The Indenture does not contain any covenant or provision designed to
require the Company to redeem the Notes in response to a highly leveraged
transaction. Holders of Notes will not be protected against a possible reduction
in the value of the Notes arising from such transactions.
PAYMENT OF PRINCIPAL AND INTEREST
Until the Notes are paid or payment thereof is provided for, the Company
will, at all times, maintain a paying agent (the "Paying Agent") in Los Angeles,
California capable of performing the duties described herein to be performed by
the Paying Agent. The Company has initially appointed Chemical Trust Company of
California as Paying Agent. The Company will notify the holders of the Notes in
accordance with the Indenture of any change in the Paying Agent or its address.
Any payment required to be made in respect of a Note on a date that is a
Legal Holiday for such Note need not be made on such date, but may be made on
the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on the payment amount for the intervening period.
Each Note will bear interest from its Original Issue Date at the rate per
annum stated on the face thereof until the principal amount thereof is paid or
made available for payment. Interest on each Note will be payable
S-2
<PAGE> 3
semiannually each June 1 and December 1 (each an "Interest Payment Date") and at
maturity or upon earlier redemption; provided, however, that the first payment
of interest on any Note with an Original Issue Date between a Record Date (as
defined below) and an Interest Payment Date will be made on the succeeding
Interest Payment Date to the registered holder. Each payment of interest in
respect of an Interest Payment Date will include interest accrued to but
excluding such Interest Payment Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
Interest payable on any Interest Payment Date will be paid to the person in
whose name a Note is registered at the close of business on the Record Date next
preceding such Interest Payment Date. The "Record Date" with respect to any
Interest Payment will be the fifteenth day of the calendar month next preceding
such Interest Payment Date (or if such fifteenth day is a Legal Holiday, the
next preceding day that is not a Legal Holiday).
REDEMPTION AND REPURCHASE
The Pricing Supplement relating to each Note will indicate whether and
under what circumstances such Note will be subject to redemption by the Company
prior to maturity and the redemption prices applicable thereto.
The Company will provide not less than 20 and not more than 60 days' notice
of redemption to each registered holder of Notes being redeemed.
The Company may at any time purchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company will be surrendered to the
Trustee for cancellation.
BOOK-ENTRY NOTES
The Notes may be issued in whole or in part in the form of one or more
Global Securities (each a "Global Security") that will be deposited with, or on
behalf of, the Depository Trust Company, New York, New York ("DTC") or such
other depositary as is specified in the Pricing Supplement ("Depositary"), and
registered in the name of a nominee of the Depositary ("Book-Entry Notes"),
which for DTC will be Cede & Co.
Upon issuance, all Book-Entry Notes having the same Original Issue Date,
Maturity Date, redemption provisions and interest rate will be represented by a
single Global Security. Book-Entry Notes will not otherwise be issuable in
definitive form.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Notes represented by such Global
Security. Such amounts shall be designated by the underwriters or agents with
respect to such Notes. Ownership of beneficial interests in a Global Security
will be limited to persons ("participants") that have accounts with the
Depositary for such Global Security or its nominee, or persons that may hold
interests through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depositary or its nominee (with respect
to interests of participants) for such Global Security and on the records of
participants (with respect to interests of persons other than participants).
So long as the Depositary for a Global Security or its nominee is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Book-Entry
Notes represented by such Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in a Global Security
will not be entitled to have Book-Entry Notes represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Book-Entry Notes in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Principal, premium, if any, and interest payments on Book-Entry Notes
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Security representing such Book-Entry Notes. Neither the Company, the
Trustee, nor the Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made
S-3
<PAGE> 4
on account of beneficial ownership interests in the Global Security for such
Book-Entry Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal, premium or interest, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interest in the principal amount of the Global Security for the Book-Entry Notes
represented by such Global Security as shown on the records of such Depositary
or its nominee. The Company also expects that payments by participants to owners
of beneficial interests in such Global Security held through such participants
will be governed by standing instructions and customary practices as is now the
case with securities registered in "street name" and will be the responsibility
of such participants.
Conveyance of notices and other communications by DTC to participants and
by participants to persons that may hold interests through participants will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices, if DTC is the Depositary, will be sent to Cede & Co. If
less than all of the Book-Entry Notes are being redeemed, DTC's practice is to
determine by lot the amount of the Book-Entry Notes of each participant to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Book-Entry Notes for which DTC is the Depositary. Under its usual procedures,
DTC would mail an Omnibus Proxy to the Company as soon as possible after the
relevant record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those participants to whose accounts the Book-Entry Notes are
credited on the record date (identified in a listing attached to the Omnibus
Proxy).
If the Depositary is at the time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Notes in definitive, registered form in exchange
for the Global Securities representing such Book-Entry Notes. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery in definitive form of the Notes represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Notes registered in its name. Notes so issued in definitive form
will be issued as registered securities in denominations of $1,000 or any
integral multiple of $1,000.
DTC has advised the Company and the Agents that it is a limited-purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities of its participants and to facilitate the clearance
and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers
(including the Agents), banks, trust companies, clearing corporations, and
certain other organizations, some of whom (and/or their representatives) own
DTC. Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly. The
rules applicable to DTC and its participants are on file with the Securities and
Exchange Commission.
PLAN OF DISTRIBUTION OF NOTES
The Notes are being offered on a continuous basis by the Company through
Smith Barney Inc. and A.G. Edwards & Sons, Inc. (the "Agents"), each of whom has
agreed to use its reasonable efforts to solicit purchases of the Notes. The
Company will pay an Agent a commission of .125% to .750% of the principal amount
of each Note sold through such Agent, depending upon the maturity of the Note.
The Company may sell Notes to any of the Agents acting as principal, at a
negotiated discount for resale to investors at varying prices related to
prevailing market prices at the time of resale to be determined by such Agent,
or for resale to one or more dealers at a discount to be determined by such
Agent. The Company has agreed to reimburse the Agents for certain expenses in
connection with the offering of the Notes.
S-4
<PAGE> 5
The Company has the sole right to accept offers to purchase Notes and may
reject any proposed purchase of Notes as a whole or in part. Each Agent has the
right, in its discretion reasonably exercised, to reject any offer to purchase
Notes received by it as a whole or in part.
The Notes will not have an established trading market when issued. The
Notes will not be listed on any securities exchange. Each Agent may make a
market in the Notes, but such Agent is not obligated to do so and may
discontinue any market-making at any time without notice. There can be no
assurance of a secondary market for any Notes, or that the Notes will be sold.
Smith Barney Inc., A.G. Edwards & Sons, Inc. and affiliates thereof engage
or may engage in transactions with and perform services for the Company in the
ordinary course of business.
The Company has agreed to indemnify each Agent against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Act"), or to contribute to payments such Agent may be required to make in
respect thereof. Each Agent may be deemed to be an "underwriter" within the
meaning of the Act with respect to Notes sold through it.
S-5
<PAGE> 6
PROSPECTUS
SOUTHERN CALIFORNIA WATER COMPANY
SECURITIES
------------------------
Southern California Water Company (the "Company") may offer from time to
time, in one or more series, its unsecured debt securities (the "Debt
Securities"), and shares of its Common Shares, par value $2.50 per share (the
"Common Shares"). The Debt Securities and the Common Shares are collectively
referred to herein as the "Securities." The Securities will have an aggregate
offering price not exceeding $70,000,000 and will be offered on terms to be
determined at the time of offering.
In the case of Debt Securities, the specific title, the aggregate principal
amount, the purchase price, the maturity, the rate and time of payment of any
interest, any redemption or sinking fund provisions, any conversion provisions
and any other specific terms of the Debt Securities will be set forth in an
accompanying supplement to this Prospectus (a "Prospectus Supplement"). In the
case of Common Shares, the specific number of shares and issuance price per
share will be set forth in an accompanying Prospectus Supplement. Unless
otherwise disclosed in the applicable Prospectus Supplement, the Common Shares
will be listed on the New York Stock Exchange under the symbol "SCW."
Securities may be sold directly, through agents from time to time or
through underwriters and/or dealers. If any agent of the Company or any
underwriter is involved in the sale of the Securities, the name of such agent or
underwriter and any applicable commission or discount will be set forth in the
accompanying Prospectus Supplement. See "Plan of Distribution."
The Debt Securities, if issued, will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. See "Description of
Debt Securities."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE DATE OF THIS PROSPECTUS IS AUGUST 11, 1995.
<PAGE> 7
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at Room 1024 of the offices of the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should be available for inspection and copying at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained from the principal
offices of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The issued and outstanding Common
Shares of the Company are listed on the New York Stock Exchange, and such
reports, proxy statements and other information can also be inspected at such
Exchange.
This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto which the Company has filed with the
Commission under the Securities Act of 1933 and reference is hereby made to such
Registration Statement, including the exhibits thereto.
------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are incorporated herein by reference the following documents of the
Company filed with the Commission (file no. 0-1121): (1) Annual Report on Form
10-K for the fiscal year ended December 31, 1994; (2) Quarterly Report on Form
10-Q for the quarter ended March 31, 1995; (3) Amendment No. 1 to Quarterly
Report on Form 10-Q/A for the quarter ended March 31, 1995; (4) Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995; and (5) all documents filed by
the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date of this Prospectus and
prior to the termination of the offering of the Securities.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
in a Prospectus Supplement or in any subsequently filed document which is
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial holder, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all the foregoing
documents incorporated by reference herein, including exhibits specifically
incorporated by reference in such documents but excluding all other exhibits to
such documents. Requests should be made to Southern California Water Company,
630 East Foothill Boulevard, San Dimas, California 91773 (Telephone: (909)
394-3600), Attention: Office of the Treasurer.
THE COMPANY
The Company is a public utility regulated by the California Public
Utilities Commission (the "CPUC"). The Company is engaged in the purchase,
production, distribution and sale of water and in the purchase, distribution and
sale of electricity.
The Company was incorporated in California in 1929. Its executive offices
are located at 630 East Foothill Boulevard, San Dimas, California 91773, and its
telephone number is (909) 394-3600.
USE OF PROCEEDS
The Company is unable to predict either the number of Common Shares or the
amount of Debt Securities that will ultimately be sold or the prices at which,
or other terms upon which, such Securities will be sold. However, the Company
proposes to use the net proceeds from the sale of such Securities for the
reimbursement of moneys actually expended from income, or from other moneys in
the Company's treasury, for the acquisition of property, for the construction,
completion, extension or improvement of the Company's facilities or for other
general corporate purposes. Such proceeds initially may be used to reduce
short-term borrowings or may be invested in short-term securities. Such proceeds
may also be used to refund certain existing debt obligations with maturities in
excess of one year, in which event such refunded debt obligations will be
specified in an applicable Prospectus Supplement.
2
<PAGE> 8
SELECTED FINANCIAL DATA
The following table sets forth selected financial and other data for the
Company and its consolidated subsidiaries for the periods indicated. Such
information is qualified in its entirety by the more detailed financial
information set forth in the financial statements and the notes thereto
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND
RATIOS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets................................ $383,627 $358,533 $312,491 $293,444 $268,028
Total utility plant......................... 314,879 294,990 277,525 258,558 235,713
Capital additions........................... 30,935 28,500 28,162 32,472 27,077
Long-term debt.............................. 92,891 84,286 84,195 82,634 67,246
Preferred Shares subject to mandatory
redemption................................ 560 600 640 680 720
Common equity............................... 118,962 116,463 88,229 83,162 71,141
Total capitalization........................ 214,013 202,949 174,664 168,076 140,707
INCOME STATEMENT DATA
Total operating revenues.................... 122,675 108,506 100,660 90,660 87,340
Net gain from sale of operating
properties................................ 313 -- 849 5,463 --
Net income.................................. 11,338 12,026 12,142 15,363 8,907
Earnings available for common
shareholders.............................. 11,240 11,926 12,040 15,259 8,801
Earnings per Common Share................... 1.43 1.66 1.82 2.34 1.41
Dividends declared per Common Share......... $1.20 $1.19 $1.15 $1.10 $1.08
Ratio of earnings to fixed charges.......... 3.55 3.05 3.41 2.92 3.23
Ratio of debt to total capitalization....... 43.4% 41.5% 48.2% 49.2% 47.8%
</TABLE>
DESCRIPTION OF DEBT SECURITIES
Debt Securities may be issued from time to time in series under the
Indenture, dated as of September 1, 1993 (the "Indenture"), between the Company
and Chemical Trust Company of California, as trustee (the "Trustee"), or such
other trustee as may be designated in a Prospectus Supplement. As used under
this caption, unless the context otherwise requires, "Offered Debt Securities"
shall mean the Debt Securities offered by this Prospectus and the accompanying
Prospectus Supplement. The statements under this caption are brief summaries of
certain provisions contained in the Indenture, do not purport to be complete and
are qualified in their entirety by reference to the Indenture, including the
definitions therein of certain terms, which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The following sets
forth certain general terms and provisions of the Debt Securities. Further terms
of the Offered Debt Securities will be set forth in a Prospectus Supplement.
GENERAL
The Indenture provides for the issuance of Debt Securities in series and
does not limit the principal amount of Debt Securities which may be issued
thereunder.
Reference is made to the applicable Prospectus Supplement for the following
terms of the Offered Debt Securities: (1) the designation, aggregate principal
amount and denominations; (2) the price at which such Debt Securities will be
issued and, if an index formula or other method is used, the method for
determining amounts of principal or interest; (3) the maturity date and other
dates, if any, on which principal will be payable; (4) the interest rate or
rates (which may be fixed or variable), if any; (5) the date or dates from which
interest will accrue and on which interest will be payable, and the record dates
for the payment of interest; (6) the manner of paying principal or interest; (7)
the places where principal and interest will be
3
<PAGE> 9
payable; (8) the terms of any mandatory or optional redemption by the Company;
(9) the terms of any redemption at the option of Holders; (10) whether and upon
what terms any Debt Securities may be exchanged; (11) whether such Debt
Securities are to be represented in whole or in part by a Debt Security in
global form and, if so, the identity of the depositary ("Depositary") for any
global Debt Security; (12) any tax indemnity provisions; (13) the amount or
portion of principal payable upon acceleration of a discounted Debt Security;
(14) whether and upon what terms Debt Securities may be defeased; (15) any
events of default or restrictive covenants in addition to or in lieu of those
set forth in the Indenture; (16) provisions for electronic issuance of Debt
Securities or for Debt Securities in uncertificated form; and (17) any
additional provisions or other special terms not inconsistent with the
provisions of the Indenture, including any terms that may be required or
advisable under United States or other applicable laws or regulations, or
advisable in connection with the marketing of the Debt Securities.
One or more series of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or bearing interest at a rate which at the time
of issuance is below market rates) to be sold at a substantial discount below
their stated principal amount. Tax and other special considerations applicable
to any such discounted Debt Securities will be described in the Prospectus
Supplement relating thereto.
STATUS OF DEBT SECURITIES
The Debt Securities will be unsecured and unsubordinated obligations of the
Company and will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company. At the date of this Prospectus, the Company had no
outstanding indebtedness for money borrowed secured by a mortgage or pledge of
or lien on assets.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. Unless and until it is exchanged in whole or
in part for Debt Securities in definitive form, a Debt Security in global form
may not be transferred except as a whole by the Depositary for such Debt
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor. If any Debt Securities of a series are issuable in global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such global Debt Security may
exchange such interests for definitive Debt Securities of such series and of
like tenor and principal amount in any authorized form and denomination, the
manner of payment of principal of, premium and interest, if any, on any such
global Debt Security and the material terms of the depositary arrangement with
respect to any such global Debt Security.
ABSENCE OF RESTRICTIVE COVENANTS
The Company is not restricted by the Indenture from paying dividends or
from incurring, assuming or becoming liable for any type of debt or other
obligations, including obligations secured by property of the Company. The
Indenture does not require the maintenance of any financial ratios or specified
levels of net worth or liquidity. The Indenture does not contain a covenant or
other provision that specifically is intended to afford the holders of the Debt
Securities special protection in the event of a highly leveraged transaction.
SUCCESSOR CORPORATION
The Indenture provides that the Company may consolidate with, or transfer
all or substantially all of its assets to, or merge with or into, any other
corporation, provided, that in any such case: (i) the surviving Company is a
corporation organized and existing under the laws of the United States or any
state thereof and, if not the Company, assumes, by supplemental indenture, all
of the obligations of the Company under the Debt Securities and the Indenture
and (ii) immediately after such merger or consolidation, or such transfer,
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<PAGE> 10
no default exists in the performance of any such obligation. Subject to certain
limitations in the Indenture, the Trustee may receive from the Company an
officer's certificate and an opinion of counsel as conclusive evidence that any
such consolidation or transfer, and any such assumption, complies with the
provision of the Indenture.
EVENTS OF DEFAULT
An "Event of Default" with respect to a series of Debt Securities will
occur if: (1) the Company defaults in any payment of interest on any Debt
Securities of the series when the same becomes due and payable and the Default
continues for a period of 60 days; (2) the Company defaults in the payment of
the principal of any Debt Securities of the series when the same becomes due and
payable at maturity or upon redemption, acceleration or otherwise and the
Default continues for a period of three business days; (3) the Company defaults
in the payment or satisfaction of any sinking fund obligation with respect to
any Debt Securities of a series as required by the Securities Resolution or
supplemental indenture establishing such series and the Default continues for a
period of three business days; (4) the Company defaults in the performance of
any of its other agreements applicable to the series and the Default continues
for 90 days after the notice specified below; (5) the Company pursuant to or
within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B)
consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Custodian for it or for all or
substantially all of its property, or (D) makes a general assignment for the
benefit of its creditors; (6) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that: (A) is for relief against the Company
in an involuntary case, (B) appoints a Custodian for the Company or for all or
substantially all of its property, or (C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days; or (7) any
other event of default provided for in the series occurs.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or State
law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator or a similar
official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default described in clause (4) above is not an
Event of Default until the Trustee or the Holders of at least 33 1/3% in
principal amount of the series notify the Company of the Default and the Company
does not cure the Default within the time specified after receipt of the notice.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debt Securities of the series. Subject to certain limitations,
Holders of a majority in principal amount of the Debt Securities of the series
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the series notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest. The Company is required to furnish the Trustee,
annually, a brief certificate as to the Company's compliance with all conditions
and covenants under the Indenture.
The Indenture does not have a cross-default provision. Thus, a default by
the Company on any other debt would not constitute an Event of Default. A
Default on any series of Debt Securities shall not constitute a Default on any
other series unless so provided in such other series.
AMENDMENTS AND WAIVERS
Unless the Securities Resolution establishing the terms of a series
otherwise provides, the Indenture and the Debt Securities of a series may be
amended, and any default may be waived as follows. The Debt Securities and the
Indenture may be amended with the consent of the holders of a majority in
principal amount of the Debt Securities of all series affected voting as one
class. Unless the Securities Resolution establishing the terms of the series
otherwise provides, a default on a series may be waived with the consent of the
holders of a majority in principal amount of the Debt Securities of the series.
However, without the consent of each Holder affected, no amendment or waiver may
(1) reduce the amount of Debt Securities whose holders must consent to an
amendment or waiver, (2) reduce the interest on or change the time for payment
of interest on any Debt Security, (3) change the dates on which principal and
interest on any Debt
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<PAGE> 11
Security are payable, (4) change the times at which principal or sinking fund
payments are payable pursuant to, or the amounts of principal or sinking fund
payments subject to, provisions, if any, relating to mandatory redemption,
redemption at the option of the Holder or sinking fund payments, (5) reduce the
principal of any non-discounted Debt Security or reduce the amount of principal
of any discounted Security that would be due on acceleration thereof, or (6)
waive any default in payment of interest on or principal of a Debt Security.
Without the consent of any Holder, the Indenture, the Debt Securities or any
coupons may be amended to cure any ambiguity, omission, defect or inconsistency;
to provide for assumption of Company obligations to Holders in the event of a
merger or consolidation requiring such assumption; to provide that specific
provisions of the Indenture not apply to a series of Securities not previously
issued; to create a series and establish its terms; to provide for a separate
Trustee for one or more series; or to make any change that does not materially
adversely affect the rights of any Securityholder.
DEFEASANCE
Debt Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth below. The Company at any time may terminate as
to a series all of its obligations (except for certain obligations with respect
to the defeasance trust and obligations to register the transfer or exchange of
a Debt Security, to replace destroyed, lost or stolen Debt Securities and to
maintain agencies in respect of the Debt Securities) with respect to the Debt
Securities of the series and the Indenture ("legal defeasance"). The Company at
any time may terminate as to a series its obligations, if any, with respect to
the Debt Securities of the series under the covenants, if any, described in the
Prospectus Supplement ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to the covenants described in the Prospectus
Supplement.
To exercise either defeasance option as to a series, the Company must
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal, premium, if any, and
interest on the Debt Securities of the series to redemption or maturity and must
comply with certain other conditions. In particular, the Company must obtain an
opinion of tax counsel that the defeasance will not result in recognition of any
gain or loss to Holders for Federal income tax purposes. "U.S. Government
Obligations" are direct obligations of the United States of America which have
the full faith and credit of the United States of America pledged for payment
and which are not callable at the issuer's option, or certificates representing
an ownership interest in such obligations.
REGARDING THE TRUSTEE
Chemical Trust Company of California will act as Trustee and Registrar for
Debt Securities issued under the Indenture and, unless otherwise indicated in a
Prospectus Supplement, the Trustee will also act as Transfer Agent and Paying
Agent with respect to the Debt Securities. The Company may remove the Trustee
with or without cause if the Company so notifies the Trustee one month in
advance and if no Default occurs or is continuing during the one-month period.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of California.
DESCRIPTION OF CAPITAL SHARES
The authorized capital stock of the Company consists of 10,000,000 Common
Shares, par value $2.50 per share, and two classes of Preferred Shares,
consisting of 150,000 $100 Preferred Shares, par value $100 per share (the "$100
Preferred Shares"), and 88,000 Preferred Shares, par value $25 per share (the
"$25 Pre-
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<PAGE> 12
ferred Shares"). As of July 31, 1995, there were outstanding 7,845,092 Common
Shares, 88,000 $25 Preferred Shares (of which 24,000 are subject to mandatory
redemption) and no $100 Preferred Shares.
The following statements are brief summaries of certain information
relating to the Company's Common Shares and their rights and limitations,
including those resulting from the provisions of the Company's debt instruments.
For a more complete statement, reference is made to the Company's Restated
Articles of Incorporation, which are filed as an exhibit to the Registration
Statement of which this Prospectus is a part.
DIVIDEND RIGHTS
Subject to the preferential dividend rights of holders of the Company's $25
Preferred Shares and $100 Preferred Shares, if any, dividends on the Common
Shares are payable when and as declared by the Board of Directors out of funds
not restricted as to the payment of dividends.
The Company's Restated Articles of Incorporation provide that except under
certain specified circumstances no dividend, other than dividends payable in
shares of the Company, may be declared on the Common Shares which, after giving
effect to such declaration, would cause the Company's Common Stock Equity to be
less than 25% of the Total Capitalization, as such terms are defined therein.
Common Stock Equity under this formula was approximately 55% of Total
Capitalization as of June 30, 1995. The payment of dividends on the Common
Shares is also restricted under various debt instruments which have been issued.
Under the most restrictive provision (which is contained in the Reimbursement
Agreement by and between the Company and Barclays Bank International Limited
dated as of November, 1984), as of June 30, 1995, earned surplus of $16,190,000
was available, subject to applicable law, for the payment of cash dividends on
the Common Shares.
Preferred dividends are cumulative, so that if full dividends, in respect
of any previous quarter, have not been paid, or declared and set apart for
payment, on all $25 Preferred Shares and $100 Preferred Shares at the time
outstanding, or if the Company is in default with respect to any preferred
sinking fund requirement, the deficiency must be fully paid before any dividend
can be paid on the Common Shares.
VOTING RIGHTS
Holders of Common Shares and $25 Preferred Shares are entitled to vote
together on all matters. Each holder of Common Shares is entitled to one-tenth
of one vote for each share held and each holder of $25 Preferred Shares is
entitled to one vote for each share held as of the applicable record date. If at
any time four quarterly dividends (whether or not consecutive) have accrued on
shares of any series of $25 Preferred Shares and are in arrears, then at the
annual meeting of shareholders next following such dividend default, or under
certain circumstances, at a special meeting called on the written request of the
holders of not less than 10% of the then-outstanding $25 Preferred Shares, the
holders of the outstanding $25 Preferred Shares are entitled, voting separately
as a class, to elect the smallest number of directors of the Company which
constitutes a majority of the authorized number of such directors.
In addition, it is provided in the Restated Articles of Incorporation with
respect to the $25 Preferred Shares as a class and each series of $100 Preferred
Shares that the Company may not take certain actions which may adversely affect
their interest without the approval of two-thirds ( 2/3), or in certain
instances a majority, of the outstanding shares of such class or series, as the
case may be. Actions with respect to which such approval is required (in some
instances only if the proposed action does not satisfy certain tests) include
(i) alterations in the preferences, voting powers and other rights of such class
or series, (ii) authorization or issuance of any shares of any class ranking
prior to such class or series, (iii) reclassification of shares of any class
ranking junior to or on a parity with such class or series into shares of any
other class ranking prior to such class or series, (iv) the sale, conveyance,
leasing or other disposition of all or substantially all of the Company's
assets, properties or business and (v) consolidation or merger with or into any
other corporation.
LIQUIDATION RIGHTS
After there shall have been paid in cash the full amounts to which the $25
Preferred Shares and the $100 Preferred Shares are entitled upon liquidation,
whether voluntary or involuntary ($25 per share and $100 per share,
respectively, except that the holders of two series of $25 Preferred Shares are
entitled to
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<PAGE> 13
receive the then-applicable optional redemption price per share in the event of
a voluntary liquidation plus, in each case, accrued and unpaid dividends), the
holders of the Company's Common Shares are entitled to receive pro rata all
remaining assets of the Company available for distribution to its shareholders.
GENERAL
No holder of any of the Company's capital shares is entitled, as of right,
to subscribe for or to purchase any additional capital shares of the Company.
The Common Shares of the Company offered hereby will be fully paid and
nonassessable when issued.
The Transfer Agent and Registrar for the Common Shares is First Interstate
Bank of California.
Unless otherwise disclosed in the applicable Prospectus Supplement, the
Common Shares will be listed on the New York Stock Exchange under the symbol
"SCW".
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
Securities will be named in the applicable Prospectus Supplement. The Company
has reserved the right to sell Securities directly to investors on its own
behalf in those jurisdictions where it is authorized to do so.
Underwriters may offer and sell Securities at a fixed price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Company
also may, from time to time, authorize dealers, acting as the Company's agents,
to offer and sell Securities upon the terms and conditions as are set forth in
the applicable Prospectus Supplement. In connection with the sale of Securities,
underwriters may receive compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Securities for whom they may act as agent. Underwriters may sell
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers, will be set forth
in the applicable Prospectus Supplement. Dealers and agents participating in the
distribution of Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them on resale of
the Securities may be deemed to be underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act of 1933, as
amended. Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for the Company in the ordinary course of
business.
It has not been determined whether any of the Debt Securities will be
listed on a securities exchange. Underwriters will not be obligated to make a
market in any of the Securities.
LEGAL MATTERS
Matters relating to the legality of the Debt Securities and Common Shares
offered by this Prospectus will be passed upon for the Company by O'Melveny &
Myers. R. Bradbury Clark, a director of the Company, is of counsel to and a
retired partner in the firm of O'Melveny & Myers. Certain legal matters relating
to the Debt Securities and Common Shares offered hereby will be passed upon for
the Underwriters by Cahill Gordon & Reindel, a partnership including a
professional corporation, New York, New York, which firm will rely upon the
opinion of O'Melveny & Myers as to matters of California law.
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<PAGE> 14
EXPERTS
The financial statements and schedules of the Company incorporated in this
Prospectus by reference to its Annual Report on Form 10-K for the year ended
December 31, 1994 have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
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<PAGE> 15
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NO DEALER, SALESPERSON OR ANY OTHER PERSON IS AUTHORIZED IN CONNECTION WITH
ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT (INCLUDING ANY ACCOMPANYING PRICING
SUPPLEMENT) OR THE ACCOMPANYING PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE AGENTS. THIS PROSPECTUS SUPPLEMENT (INCLUDING ANY
ACCOMPANYING PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE NOTES OFFERED HEREBY, NOR DO THEY CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THE PROSPECTUS SUPPLEMENT
(INCLUDING ANY ACCOMPANYING PRICING SUPPLEMENT) OR THE ACCOMPANYING PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Description of Medium-Term Notes,
Series B............................. S-2
Plan of Distribution of Notes.......... S-4
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 2
The Company............................ 2
Use of Proceeds........................ 2
Selected Financial Data................ 3
Description of Debt Securities......... 3
Description of Capital Shares.......... 6
Plan of Distribution................... 8
Legal Matters.......................... 8
Experts................................ 9
</TABLE>
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$45,000,000
SOUTHERN CALIFORNIA
WATER COMPANY
MEDIUM-TERM NOTES,
SERIES B
DUE FROM NINE MONTHS TO 30 YEARS FROM DATE OF ISSUE
------------------------
PROSPECTUS SUPPLEMENT
DATED AUGUST 15, 1995
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SMITH BARNEY INC.
A.G. EDWARDS & SONS, INC.
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