<PAGE> 1
Filed pursuant to
Rule 424(b)(3)
Registration No. 333-68201
PROSPECTUS
$60,000,000
SOUTHERN CALIFORNIA WATER COMPANY
Medium-Term Notes, Series C
We may from time to time offer the notes described in this Prospectus. The
notes
- will mature on varying dates ranging from nine months to 30 years from
the date of issuance,
- will bear interest at a fixed rate payable on June 1 and December 1 of
each year,
- will be unsecured,
- will not be convertible,
- may be subject to either mandatory or optional redemption, and
- will not be listed on any national securities exchange.
We will provide you with the specific terms of the notes in supplements to
this Prospectus.
We will pay each agent a commission of .125% to .750% of the principal
amount of each note sold through an agent, depending upon the maturity of the
note. If all the notes are sold through agents, we will receive between
$59,925,000 and $59,550,000, after paying commissions of between $75,000 and
$450,000.
Neither the Securities and Exchange Commission nor any state securities
regulator has approved of these notes or determined that this Prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
A.G. EDWARDS & SONS, INC. PAINEWEBBER INCORPORATED
January 13, 1999
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SUMMARY
This Prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission ("SEC") using the shelf registration process.
Under this process, we may sell up to $60,000,000 of the notes described in this
Prospectus in one or more offerings over a period of several years.
This Prospectus provides you with a general description of the notes we may
offer. Each time we sell notes, we will provide you with a supplement to this
Prospectus that will describe the specific amounts, prices and terms of the
notes for that offering. Although we will try to include all information that we
believe may be material to investors, certain details that may be important to
you may have been excluded. To see more detail, you should read the exhibits
filed by us with the registration statement or in other SEC filings.
We also periodically file with the SEC documents that include information
about our financial statements and our company, including information on matters
that might affect our future financial results. Directions on how you may get
documents are provided on page 3. It is important for you to read these
documents, this Prospectus and the applicable Prospectus Supplement, in addition
to this Summary, before you invest.
SOUTHERN CALIFORNIA WATER COMPANY
Our company is a wholly owned subsidiary of American States Water Company.
None of our securities are listed on any national securities exchange. The
common shares of American States Water Company are, however, traded on the New
York Stock Exchange under the symbol "AWR." Our principal executive office is
located at 630 East Foothill Blvd., San Dimas, California 91773, and our
telephone number is 909-394-3600.
Our company was founded in 1929 and operates 39 water systems serving
approximately 242,500 customers located in 75 communities in California. We also
sell electricity to approximately 21,000 customers in the Big Bear area of
California. We are regulated by the California Public Utilities Commission.
SELECTED FINANCIAL INFORMATION
The following information is unaudited and was derived from our financial
statements. The information is only a summary and does not provide all of the
information contained in our financial statements and the periodic reports that
we have filed with the SEC.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
FOR THE 12 MONTHS ENDED ---------------------------------
SEPTEMBER 30, 1998 1997 1996 1995
----------------------- --------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Statement of Income Data:
Operating Revenues......... $148,448 $153,755 $151,529 $129,813
Operating Expenses......... 123,008 130,297 128,100 108,425
Operating Income........... 25,440 23,458 23,429 21,388
Other Income............... 328 758 531 366
Interest Charges........... 10,979 10,157 10,500 9,559
Net Income................. 14,789 14,059 13,460 12,165
Dividends on Preferred
Shares (1).............. 69 92 94 96
Earnings Available for
Common Shareholders
(1)..................... 14,720 13,967 13,366 12,069
</TABLE>
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<TABLE>
<CAPTION>
AS OF DECEMBER 31,
AS OF SEPTEMBER 30, ------------------------------
1998 1997 1996 1995
------------------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance Sheet Data:
Total Assets..................... $478,172 $457,074 $430,922 $406,255
Long-Term Debt................. 130,803 115,286 107,190 107,455
Preferred Shares (1)........... 0 1,600 1,600 1,600
Preferred Shares subject to
Mandatory Redemption (1).... 0 440 480 520
Common Equity.................. 154,546 151,053 146,766 121,576
Total Capitalization........... 285,349 268,379 256,036 231,151
</TABLE>
- ---------------
(1) On July 1, 1998, we became a wholly owned subsidiary of American States
Water Company. All of our outstanding Common Shares and Preferred Shares
were exchanged for Common Shares and Preferred Shares of American States
Water Company. As a result, we no longer have any Preferred Shares
outstanding and all of our Common Shares are owned by American States Water
Company.
Set forth below are the ratios of earnings to fixed charges for the periods
indicated:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
FOR THE 12 MONTHS ENDED --------------------------------
SEPTEMBER 30, 1998 1997 1996 1995 1994 1993
----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges..................... 3.36 3.35 3.26 3.19 3.58 3.09
</TABLE>
GENERAL INDENTURE PROVISIONS
- The notes will be issued pursuant to the terms of an indenture.
- The indenture does not limit the amount of other debt securities that we
may issue or provide you any protection should there be a highly
leveraged transaction involving our company.
- The indenture allows us to merge or to consolidate with another person,
or transfer all or substantially all of our assets to another person. If
these events occur, the other person will be required to assume our
responsibilities on the notes, and we will be released from all
liabilities and obligations.
- The indenture provides that holders of a majority of the total principal
amount of the outstanding notes may vote to change our obligations or
your rights concerning the notes. But to change terms relating to the
time or amount of payments, every holder of the notes must consent.
- If we satisfy certain conditions, we may discharge the indenture at any
time by depositing sufficient funds with the Trustee to pay the notes
when due. All amounts due to you on the notes would be paid by the
Trustee from the deposited funds.
- If certain events of default specified in the indenture occur, the
Trustee or holders of not less than one-third of the principal amount of
the notes outstanding may declare the principal of the notes immediately
payable.
- Events of default under the indenture include:
- Failure to pay principal within three business days of when due,
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- Failure to deposit sinking fund payments within three business days of
when due,
- Failure to pay any installment of interest for 60 days, and
- Violation of covenants for 90 days after receipt of notice to cure.
- The indenture does not contain a provision which is triggered by our
default under our other indebtedness.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the SEC. You may read and copy any document we file at the SEC's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public at the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made by us with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
our offering is completed:
- Annual Report on Form 10-K for the year ended December 31, 1997,
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998,
- Current Reports on Form 8-K filed July 1, 1998 and November 2, 1998, and
- The portions of our Proxy Statement on Schedule 14A for the Annual
Meeting of Shareholders held on April 28, 1998 that have been
incorporated by reference into our most recent Form 10-K.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Southern California Water Company
630 East Foothill Boulevard
San Dimas, California 91773
(909) 394-3600
You should rely only on the information incorporated by reference or
provided in this Prospectus or the applicable Prospectus Supplement. We have
authorized no one to provide you with different information. We are not making
an offer of these notes in any state where the offer is not permitted. You
should not assume that the information in this Prospectus or the applicable
Prospectus Supplement is accurate as of any date other than the date on the
front of the document.
USE OF PROCEEDS
The net proceeds from the sale of the notes will be used for general public
utility purposes. General public utility purposes include repayment of debt and
capital expenditures. Proceeds may be temporarily invested in short-term
securities or be used to reduce short-term borrowings. Proceeds may also be used
to acquire public utility property.
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DESCRIPTION OF NOTES
We will issue the notes under an indenture that we have filed with the SEC
(the "Indenture"). The following summary of the terms of the Indenture is not
complete and you should carefully review the Indenture, the Prospectus
Supplement and any securities resolution filed in connection with the offering
of any notes.
GENERAL
We will issue the notes as a series of debt securities under the Indenture.
The Indenture does not limit the amount of other debt securities we may issue.
The specific terms of the notes will be included in a securities resolution and
described in a Prospectus Supplement. Some of the terms that may be included
are:
- redemption at our option or in certain limited circumstances,
- redemption at your option, and
- any changes to or additional Events of Default or covenants.
Unless otherwise specified in the Prospectus Supplement, we will issue the
notes only as fully registered global notes. In addition, unless otherwise
specified, you may purchase notes in authorized denominations of $1,000 or
integral multiples thereof. The notes will mature on the date specified in the
Prospectus Supplement. The maturity date may vary from nine months to 30 years
from the date of issuance of the notes. The notes will bear interest at a fixed
rate specified in the Prospectus Supplement.
STATUS OF NOTES
The notes will be unsecured and unsubordinated and will rank on a parity
with all of our other unsecured and unsubordinated indebtedness. At the date of
this Prospectus, we had no outstanding indebtedness for money borrowed secured
by a mortgage or pledge of or lien on assets.
PAYMENT OF PRINCIPAL AND INTEREST
We will maintain a paying agent in Los Angeles or San Francisco, California
until the notes are paid or we have provided for their payment. We have
initially appointed Chase Manhattan Bank and Trust Company, National
Association, as paying agent. We will notify you in accordance with the
Indenture of any change in the paying agent.
If a payment is due on a legal holiday, we will make the payment on the
next succeeding day that is not a legal holiday. No interest will accrue on the
payment amount for the intervening period. The term "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.
If you do not claim any payments that we may make to a paying agent on any
note for a period of one year, then the paying agent may return the payment to
us. You must then contact us for payment.
Each note will bear interest at a fixed rate from its original issue date
at the rate per annum stated on the face of the note until the principal has
been paid or we have provided for its payment. Interest on each note will be
payable semiannually on each June 1 and December 1 and at maturity or upon
earlier redemption. If, however, we issue a note on a date between the record
date and an interest payment date, the first interest payment date will be the
next succeeding interest payment date. Each interest payment will include
interest to, but excluding, the interest payment date. We will compute interest
on the basis of a 360-day year of twelve 30-day months.
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We will pay interest to the registered holder of the note on the record
date. The record date will be May 15 for the interest payment due on June 1 and
November 15 for the interest payment due on December 1, unless such date is a
legal holiday. If the 15th is a legal holiday, the record date will be the next
preceding date that is not a legal holiday.
REDEMPTION AND REPURCHASE OF NOTES
If our notes held by you are subject to redemption, we will provide you
with not less than 20 nor more than 60 days' notice of any redemption.
We may also at any time purchase notes at any price in the open market or
at a negotiated price. Unless the Prospectus Supplement otherwise provides, any
notes that we purchase may be surrendered to the Trustee for cancellation.
TRANSFER OF NOTES
If notes are registered in your name, you may transfer or exchange the
notes at the office of the Trustee or at any other office or agency maintained
by us for such purposes, without the payment of any service charge, except for
any tax or governmental charge.
GLOBAL NOTES
Unless otherwise stated in the Prospectus Supplement, we will issue the
notes in the form of one or more global notes. We will deposit the global notes
with the depositary referred to in the following paragraph. Unless a global note
is exchanged in whole or in part for notes in definitive form, we may not
transfer a global note except as a whole to the depositary or its nominee or to
a successor of either of them.
Unless otherwise stated in the Prospectus Supplement, The Depository Trust
Company, New York, New York ("DTC") will act as depositary for each offering of
notes. DTC and its participants will maintain records of your beneficial
interest in our global notes. You may only transfer your beneficial interest in
a global note through DTC and its participants.
DTC has provided the following information to us:
- DTC is a limited-purpose trust company organized under the New York
Banking Law,
- a "banking organization" within the meaning of the New York Banking Law,
- a member of the United States Federal Reserve System,
- a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and
- a "clearing agency" registered under the provisions of Section 17A of the
Securities Exchange Act of 1934.
DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among its participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in its participant's accounts. This procedure
eliminates the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations.
DTC also makes access to its book-entry system available to others, such as
securities brokers and dealers and banks and trust companies that, either
directly or indirectly, clear
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through or maintain a custodial relationship with a direct participant in DTC.
The rules applicable to DTC and its direct and indirect participants are on file
with the SEC.
Assuming DTC's nominee is the registered holder of the global note, we will
treat DTC's nominee as the owner of the global note for all purposes. As a
result, we will make all payments through the Trustee to DTC's nominee. All such
payments will thereafter be the responsibility of DTC and its direct and
indirect participants. Our sole responsibility is to make payments to the
Trustee. The Trustee's sole responsibility is to make payments to DTC's nominee.
Likewise, we will give all notices with respect to the notes, such as notices of
redemption, through DTC, and it will be the responsibility of DTC and its
participants to provide such information to you.
We expect that DTC, upon receipt of any payment of the global note, will
credit its participants' accounts on the payment date according to their
respective holdings of beneficial interests in the global note as shown on DTC's
records. We also expect that payments by direct and indirect participants in DTC
will be made to you in accordance with standing instructions and customary
practices, as is the case with securities held for the account of customers in
bearer form or registered in "street name".
Unless otherwise provided in the Prospectus Supplement, you may exchange
notes represented by a global note for a note in definitive form in authorized
denominations only if:
- DTC notifies us that it is unwilling or unable to continue as depositary,
- DTC ceases to be a clearing agency registered under applicable law and a
successor depositary is not appointed by us within 90 days, or
- we, in our discretion, determine not to require all of the notes to be
represented by a global note and notify the Trustee of our decision.
ABSENCE OF RESTRICTIVE COVENANTS
We are 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 our property. 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 you special protection in the event of a
highly leveraged transaction.
SUCCESSOR CORPORATION
The Indenture allows us:
- to consolidate or merge with or into any other person,
- any other person to merge with us, or
- the transfer by us of all or substantially all of our assets to another
person, if, in each case, the following conditions are satisfied:
- the surviving company either
- is a person organized and existing under the laws of the United States
or any state thereof, or
- assumes, by supplemental indenture, all of our obligations under the
notes and the Indenture, and
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- immediately after such merger, consolidation or transfer, there is no
default under the Indenture.
We will be relieved from our obligations on the notes and under the
Indenture if these conditions are satisfied.
Subject to certain limitations in the Indenture, the Trustee may rely on an
officer's certificate and an opinion of counsel from us as conclusive evidence
that any consolidation, merger or transfer, and any related assumption of our
obligations, complies with the Indenture.
EVENTS OF DEFAULT
Unless otherwise indicated in the Prospectus Supplement, the term "Event of
Default", when used in the Indenture, means any of the following:
- default in the payment of any installment of interest on the notes if the
default continues for a period of 60 days,
- default in the payment of the principal of the notes when the same
becomes due and payable if the default continues for three business days,
- default in the deposit of any sinking fund payment, when and as the same
becomes due and payable by the terms of the notes if the default
continues for three business days,
- default for 90 days after notice in the performance of our other
agreements applicable to the notes; the notice may be sent either by the
Trustee or by holders of at least one-third in aggregate principal amount
of the notes; the Trustee is required to notify you of any event that
would become a default with notice if the Trustee has actual knowledge of
the event,
- certain events in bankruptcy, insolvency or reorganization of our
company, or
- any other Event of Default provided in the terms of the notes.
The Indenture does not have a cross-default provision. Thus, a default by
us on any other debt would not constitute an Event of Default. A default on any
other series of debt securities does not necessarily constitute a default on the
notes. The Trustee may withhold notice to you of a default on the notes (except
a payment default) if the Trustee considers the withholding of notice in your
best interest.
If an Event of Default on the notes has occurred and is continuing, the
Trustee or the holders of not less than one-third in aggregate principal amount
of the notes may declare the entire principal amount of the notes to be due and
payable immediately. Subject to certain conditions, the holders of not less than
a majority in aggregate principal amount of the notes may annul such declaration
and rescind its consequences.
We must file annually with the Trustee a certificate regarding our
compliance with the Indenture.
The Trustee may require a reasonable indemnity from you before it enforces
the Indenture or the notes. Subject to these provisions for indemnification, the
holders of a majority in principal amount of the notes may direct the time,
method and place of conducting any proceeding or any remedy available to the
Trustee, or of exercising any trust or power conferred upon the Trustee, for the
notes.
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MODIFICATION OF INDENTURE
Unless indicated in the Prospectus Supplement, the holders of not less than
a majority in aggregate principal amount of all outstanding notes, voting
together as a single class, may, with certain exceptions described below, modify
the Indenture. We may not, however, modify any terms relating to the amount or
timing of payments or reduce the percentage of holders required for
modifications to the Indenture without your consent.
We may modify the Indenture without your consent to:
- create a new series of debt securities and establish its terms,
- cure ambiguities or fix omissions,
- comply with the provisions of the Indenture regarding successor
corporations, or
- make any change that does not materially adversely affect your rights as
a holder of the notes.
DEFEASANCE
Unless otherwise provided in the Prospectus Supplement, we may either:
- terminate as to the notes all of our obligations (except for our
obligation to pay all amounts due on the notes in accordance with their
terms and certain other obligations with respect to the transfer or
exchange of a note and the replacement of destroyed, lost or stolen
notes), or
- terminate as to the notes our obligations, if any, with respect to the
notes under the covenants described in the Prospectus Supplement.
We may exercise either defeasance option notwithstanding our prior exercise
of the other defeasance option. If we terminate all of our obligations, a series
may not be accelerated because of an Event of Default. If we terminate our
covenants, a series may not be accelerated by reference to the covenants
described in the Prospectus Supplement.
To exercise either defeasance option as to the notes, we must deposit in
trust with the Trustee money or U.S. government obligations sufficient to make
all payments on the notes to redemption or maturity. We must also comply with
certain other conditions. In particular, we must obtain an opinion of tax
counsel that the defeasance will not result in recognition of any gain or loss
to you for Federal income tax purposes.
REGARDING THE TRUSTEE
Unless otherwise indicated in a Prospectus Supplement, Chase Manhattan Bank
and Trust Company, National Association will act as Trustee, registrar, transfer
and paying agent for the notes. We may remove the Trustee with or without cause
if we notify the Trustee 30 days in advance and if no default occurs or is
continuing during the 30-day period.
In certain circumstances, the Trustee may not exercise its rights as one of
our creditors. The Trustee may, however, engage in certain other transactions
with us. If the Trustee acquires any conflicting interest as a result of any of
these transactions and there is a default under the notes, the Trustee must
eliminate the conflict of interest or resign.
GOVERNING LAW
The Indenture and the notes will be governed by and construed in accordance
with the laws of the State of California.
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PLAN OF DISTRIBUTION
We are offering the Notes on a continuous basis through A.G. Edwards &
Sons, Inc. and PaineWebber Incorporated (the "Agents"). The Agents have agreed
to use reasonable efforts to solicit purchases of the notes. We will pay each
Agent a commission of .125% to .750% of the principal amount of each note sold
through the Agent, depending upon the maturity of the note. We may sell the
notes to any of the Agents acting as principal, either
- 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 the Agent, or
- for resale to one or more dealers at a discount to be determined by
the Agent.
We have agreed to reimburse the Agents for certain expenses of the offering
of the notes.
We have also reserved the right to sell the notes directly to one or more
purchasers. We will not pay any commissions to the Agents for any notes that we
sell directly.
We have the sole right to accept offers to purchase the notes and may
reject any proposed purchase of the notes in whole or in part. The Agents have
similar rights.
The notes will not have an established trading market when issued. We do
not intend to list the notes on any securities exchange. Each Agent may make a
market in the notes, but is under no obligation to do so. Any Agent marketing
the notes may also discontinue its market-making at any time.
The Agents may be underwriters, and any discounts or commissions we pay
them and any profit they may make on the resale of the notes, may be treated as
underwriting discounts and commissions under the Securities Act of 1933 (the
"Act").
We have agreed to indemnify the Agents against certain civil liabilities,
including liabilities under the Act, and to contribute to payments which the
Agents may be required to make.
The Agents may perform other services for us, American States Water Company
or any of our subsidiaries in the ordinary course of business.
LEGAL MATTERS
O'Melveny & Myers LLP will pass on the validity of the notes for us.
Certain legal matters in connection with the securities will be passed upon for
the Agents by Cahill Gordon & Reindel, a partnership including a professional
corporation, New York, New York. They may rely upon the opinion of O'Melveny &
Myers LLP as to matters of California law in passing upon such matters.
EXPERTS
Our financial statements and schedules incorporated in this Prospectus by
reference to our Annual Report on Form 10-K for the year ended December 31, 1997
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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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY............................... 1
WHERE YOU CAN FIND MORE INFORMATION... 3
USE OF PROCEEDS....................... 3
DESCRIPTION OF NOTES.................. 4
General............................... 4
Status of Notes....................... 4
Payment of Principal and Interest..... 4
Redemption and Repurchase of Notes.... 5
Transfer of Notes..................... 5
Global Notes.......................... 5
Absence of Restrictive Covenants...... 6
Successor Corporation................. 6
Events of Default..................... 7
Modification of Indenture............. 8
Defeasance............................ 8
Regarding the Trustee................. 8
Governing Law......................... 8
PLAN OF DISTRIBUTION.................. 9
LEGAL MATTERS......................... 9
EXPERTS............................... 9
</TABLE>
===============================================================================
===============================================================================
$60,000,000
SOUTHERN CALIFORNIA
WATER COMPANY
Medium-Term Notes, Series C
------------------------
PROSPECTUS
------------------------
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
January 13, 1999
===============================================================================
