Total Number of Pages - 32
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from .............to....................
Commission file No. 0-464
CALIFORNIA WATER SERVICE COMPANY
(Exact name of registrant as specified in its charter)
California 94-0362795
(State or other jurisdiction (I.R.S. Employer Identification No.)
of Incorporation)
1720 North First Street San Jose, California 95112
(Address of Principal Executive Offices) (Zip Code)
1-408-451-8200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, No Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Cumulative Preferred Stock, Par Value, $25
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant - $265,001,940 at February 28, 1997.
Common stock outstanding at February 28, 1997 - 6,309,570 shares.
1
EXHIBIT INDEX
The exhibit index to this Form 10-K is on page 28
DOCUMENTS INCORPORATED BY REFERENCE
Designated portions of Registrant's Annual Report to
Shareholders for the calendar year ended December 31, 1996 ("1996
Annual Report") are incorporated by reference in Part I (Item 1),
Part II (Items 5, 6, 7 and 8) and in Part IV (Item 14(a)(1)).
Designated portions of the Registrant's Proxy
Statement/Prospectus of California Water Service Company and
California Water Service Group (Proxy Statement/Prospectus),
dated March 18, 1997, relating to the 1997 annual meeting of
shareholders are incorporated by reference in Part III (Items 10,
11 and 12) as of the date the Proxy Statement was filed with the
Securities and Exchange Commission. The Proxy Statement/Prospectus
was filed under EDGAR on March 4, 1997.
2
TABLE OF CONTENTS
Page
PART I
Item 1. Business............................ 5
a. General Development of Business..... 5
Regulation and Rates................ 5
b. Financial Information about
Industry Segments................. 7
c. Narrative Description of Business... 7
Geographical Service Areas and Number
of Customers at year-end........... 9
Water Supply........................ 10
Nonregulated Operations............ 13
Utility Plant Construction Program
and Acquisitions.................. 14
Quality of Supplies................. 14
Competition and Condemnation........ 15
Environmental Matters .............. 16
Human Resources..................... 16
d. Financial Information about Foreign and
Domestic Operations and Export
Sales ............................. 18
Item 2. Properties ......................... 18
Item 3. Legal Proceedings................... 18
Item 4. Submission of Matters to a Vote of
Security Holders.................. 19
Executive Officers of the Registrant........ 20
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters.... 21
Item 6. Selected Financial Data............. 21
Item 7. Management's Discussion and Analysis
of Financial Condition
and Results of Operations.......... 21
Item 8. Financial Statements and
Supplementary Data................. 22
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure.............. 22
3
PART III
Item 10. Directors and Executive Officers
of the Registrant................. 22
Item 11. Executive Compensation.............. 22
Item 12. Security Ownership of Certain
Beneficial Owners and Management.. 22
Item 13. Certain Relationships and Related
Transactions...................... 22
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K........... 23
Signatures.................................. 24
Independent Auditors' Report................ 26
Schedules................................... 27
Exhibit Index............................... 28
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PART I
Item 1 Business.
a. General Development of Business.
California Water Service Company ("Company") is a public
utility providing water service to 376,100 customers in 56
California cities and communities through 21 separate water
systems or districts. In the Company's 20 regulated systems,
which serve 370,100 customers, rates and operations are
subject to the jurisdiction of the California Public Utilities
Commission ("Commission" or "PUC"). An additional 6,000
customers receive service through a long-term lease of the
City of Hawthorne water system, which is not subject to
Commission regulation. The Company also has contracts with
various municipalities to operate water systems and provide
billing services to 27,500 other customers.
The Company, the largest investor-owned water company in
California, was incorporated under the laws of the State of
California on December 21, 1926. Its mailing address and
principal executive offices are located at 1720 North First
Street, San Jose, California; telephone number: 1-408-451-8200.
The Company maintains a web site which can be accessed via the
Internet at http://www.calwater.com.
During the year ended December 31, 1996, there were no
significant changes in the kind of products produced or
services rendered by the Company, or in the Company's markets
or methods of distribution.
In November 1996, the Company announced its intention to form a
holding company. Shareholders will vote on this proposal at
their annual meeting on April 16, 1997. In January 1997, the
Company also announced plans to effectively split its common
stock on a two-for-one basis. The split will be accomplished,
together with a proportionate adjustment of preferred stock
voting rights, during formation of the holding company by a
planned conversion of each common share of California Water
Service Company stock into two shares of holding company common
stock and a conversion of each preferred share of California
Water Service Company into one share of holding company
preferred stock. By approving the holding company structure,
shareholders will also approve the stock split.
Rates and Regulations.
Rates, service and other matters for the Company's regulated
business are subject to the jurisdiction of the Commission.
The Commission's decisions and the timing of those decisions
can have an important impact on Company operations and results
of operations.
5
The Company's 20 regulated systems, each of which is within the
State of California, are operated as 20 separate districts,
however, the systems are not integrated with one another, and
except for allocation of general office expenses and the
determination of cost of capital, the expenses and revenues of
individual districts are not affected by operations in other
districts. Cost of capital (i.e. return on debt and equity) is
determined on a company-wide basis. Otherwise, the PUC
requires that each district be considered a separate and
distinct entity for ratemaking purposes.
Since the Commission requires that water rates for each Company
operating district be determined independently, the Company
annually files general rate case applications for a portion of
its districts, typically requesting rate increases. Thus, the
number of customers affected by each filing, varies from year
to year. The decision to file a general rate case depends on
various factors including the time since the last general rate
case was filed, the return being earned in each district,
expected current returns and the need for capital spending.
According to its rate case processing procedures for water
utilities, the Commission attempts to issue decisions within
eight months of acceptance of the general rate case
application. Rates are set prospectively for a three-year
period, with a provision for step increases, which are designed
to maintain the authorized rate of return between rate case
filings. Offset rate adjustments are allowed as required for
changes in the costs of purchased water, power and pump taxes.
General rate case applications, which had been filed with the
Commission during 1995 for five districts serving 47 percent
of the Company's customers, were finalized by the Commission in
1996. The applications requested a rate of return on common
equity (ROE) of 12.1 percent and additional revenue of $26.7
million over a three-year period. The Commission staff
recommended a rate of return of 9.9 percent, however, a
stipulation agreement was reached with the staff for a 10.3
percent ROE in January 1996. The Commission's decision for this
rate case series was issued in June 1996. During the first
full year, the decision is expected to provide $5.4 million of
added revenue, including $1.2 million in step rate increases
which were effective at the start of 1996. Over a four-year
period, the decision will provide about $10.6 million in new
revenue. The decision includes a provision to accelerate the
recovery of the Company's utility plant investment, resulting
in an increase in the annualized depreciation rate for these
districts of 2.6 percent compared to a 2.4 percent rate
experienced in recent years.
In July 1996, general rate cases were filed for two districts
representing 11 percent of the regulated customers. The
Company requested an ROE of 12.05 percent, while the Commission
staff recommended 10.1 percent. In January 1997, the Company
and Commission staff stipulated to a ROE of 10.35 percent.
Additional 1997 revenue of $1.6 million is anticipated as a
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result of the decision, along with step rate increases to
become effective in the following three years. Although there
can be no assurance that the Commission will approve the
stipulation agreement, both the Company and Commission staff
were signatories to the agreement. The Company expects the
Commission's decision to be finalized by mid year.
In January 1995, a consultant retained by the Commission's
Division of Ratepayer Advocates completed a report on the
reasonableness of the Second Amended Contract between the
Company, Stockton-East Water District, the City of Stockton and
San Joaquin County, pertaining to the sale and delivery of
water to the Company's Stockton District by the Stockton-East
Water District. The report alleges that the Company was
required to receive Commission approval prior to entering into
the Second Amended Contract and furthermore challenges the
reasonableness of the Second Amended Contract for ratemaking
purposes. However, the report does not include specific
ratemaking recommendations. It is difficult to assess the
potential impact on the Company if the report were to be
adopted by the Commission. However, the Company anticipates
that if there is any adverse financial impact as a result of
the report, such impact would be prospective, affecting only
future rates for the Stockton district. Hearings have not yet
been scheduled on the report by the assigned administrative law
judge. Following hearings at which the Company intends to
present evidence to rebut the report, the assigned
administrative law judge will render a proposed decision for
comment and eventual Commission consideration. Management
intends to vigorously defend its position that the Second
Amended Contract did not require prior Commission approval and
is reasonable for ratemaking purposes.
b. Financial Information about Industry Segments.
The Company has only one business segment.
c. Narrative Description of Business.
The Company's business consists of the production, purchase,
storage, purification, distribution and sale of water for
domestic, industrial, public and irrigation uses, and for fire
protection. The Company's business fluctuates according to the
demand for water, which is partially dictated by seasonal
conditions, such as summer temperatures or the amount and
timing of precipitation during the year. The Company holds
such franchises or permits in the communities it serves as it
judges necessary to operate and maintain its facilities in the
public streets. The Company distributes its water to customers
in accordance with accepted water utility methods.
The Company leases the City of Hawthorne water system, has
contracts under which it operates three municipally owned water
systems and two reclaimed water distribution systems and
provides billing services for other municipalities. These
7
operations are discussed in more detail in a following section
titled Nonregulated Operations.
The Company intends to continue to explore opportunities to
expand operating and other revenue sources. The opportunities
could include system acquisitions, contracts similar to the
City of Hawthorne arrangement, operating contracts, billing
contracts and other utility related services. The Company
believes that a holding company structure, as discussed above,
will make the Company more competitive in providing
nonregulated utility services, which would not be subject to
Commission jurisdiction.
8
Geographical Service Areas and Number of Customers at year-end.
The principal markets for the Company's products are users of
water within the Company's service areas. The Company's
geographical service areas or districts for both the regulated and
nonregulated operations and the approximate number of customers
served in each district at December 31, 1996, are listed below.
SAN FRANCISCO BAY AREA
Mid-Peninsula (comprised of San Mateo and San Carlos) 35,600
South San Francisco (including Colma and Broadmoor) 15,400
Bear Gulch (serving Menlo Park, Atherton,
Woodside and Portola Valley) 17,200
Los Altos (including portions of Cupertino,
Los Altos Hills, Mountain View and Sunnyvale) 18,000
Livermore 15,600
101,800
SACRAMENTO VALLEY
Chico (including Hamilton City) 21,300
Oroville 3,500
Marysville 3,800
Dixon 2,700
Willows 2,300
33,600
SALINAS VALLEY
Salinas 23,600
King City 2,000
25,600
SAN JOAQUIN VALLEY
Bakersfield 54,800
Stockton 41,000
Visalia 27,000
Selma 4,800
127,600
LOS ANGELES AREA
East Los Angeles (including portions of
the cities of Commerce and Montebello) 26,300
Hermosa Beach and Redondo Beach (including
a portion of Torrance) 25,000
Palos Verdes (including Palos Verdes
Estates, Rancho Palos Verdes, Rolling
Hills Estates and Rolling Hills) 23,500
Westlake (a portion of Thousand Oaks) 6,700
81,500
TOTAL REGULATED CUSTOMERS 370,100
NONREGULATED OPERATION
Hawthorne 6,000
TOTAL 376,100
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Water Supply
The Company's water supply is obtained from wells, surface runoff
or diversion, and by purchase from public agencies and other
wholesale suppliers. The effects of the six-year California
drought, which ended with the 1992-93 winter, and 1995-96 winter
rains are discussed below. The Company's supply has been adequate
to meet consumption demands, however, during periods of drought,
some districts have required water rationing.
California's rainy season usually begins in November and continues
through March with December, January and February providing the
most rainfall. During winter months reservoirs and underground
aquifers are replenished by rainfall. Snow accumulated in the
mountains provides an additional water source when spring and
summer temperatures melt the snowpack producing runoff into
streams and reservoirs, and also replenishing underground
aquifers.
During years in which precipitation is especially heavy or extends
beyond the spring into the early summer, customer demand can
decrease from historic normal levels, generally due to reduced
outdoor water usage. This was the case during 1995, when winter
rains continued well into the spring along with cooler than normal
temperatures. Likewise, an early start to the rainy season can
cause a decline in customer usage during the fall months.
The Company's water business is seasonal in nature and weather
conditions can have a pronounced effect on customer usage and thus
operating revenues and net income. Customer demand generally is
less during the normally cooler and rainy winter months,
increasing in the spring when warmer weather gradually returns to
California and the rains end. Temperatures are warm during the
generally dry summer months, resulting in increased demand. Water
usage declines during the fall as temperatures decrease and the
rainy season approaches.
During years of less than normal rainfall, customer demand can
increase as outdoor water usage continues. When rainfall is below
average for consecutive years, drought conditions can result and
certain customers may be required to reduce consumption to
preserve existing water reserves. California experienced a six-
year drought which ended with the winter of 1992-93. During that
period some Company districts imposed rationing on customers.
The Company delivered 105 billion gallons of water to customers
during 1996 of which approximately 50 percent was obtained from
wells and 50 percent was purchased from the following suppliers:
10
Supply
District Purchased Source of Purchased Supply
SAN FRANCISCO BAY AREA
Mid-Peninsula 100% San Francisco Water Department
South San Francisco 96% San Francisco Water Department
Bear Gulch 87% San Francisco Water Department
Los Altos 79% Santa Clara Valley Water District
Livermore 84% Alameda County Flood Control
and Water Conservation District
SACRAMENTO VALLEY
Oroville 71% Pacific Gas and Electric Co.
6% County of Butte
SAN JOAQUIN VALLEY
Bakersfield 18% Kern County Water Agency
Stockton 72% Stockton-East Water District
LOS ANGELES AREA
East Los Angeles 79% Central Basin Municipal Water District
Hermosa Beach and
Redondo Beach 100% West Basin Municipal Water District
Palos Verdes 100% West Basin Municipal Water District
Westlake 100% Russell Valley Municipal Water District
Hawthorne 68% West Basin Municipal Water District
The balance of the required supply for the above districts is
obtained from wells, except for Bear Gulch where the balance is
obtained from surface runoff from the local watershed and
processed through the Company's treatment plant before being
delivered to the system.
Historically, groundwater has yielded 10 to 15 percent of the
Hermosa-Redondo district supply and 15 to 20 percent of the South
San Francisco district supply. During 1996, wells in those two
districts, were out of service while treatment facilities were
being installed. Once the treatment facilities are operative,
which is expected to occur during 1997, the wells will be returned
11
to service. Water produced from wells is generally less expensive
than water purchased from wholesale suppliers.
The Chico, Marysville, Dixon and Willows districts in the
Sacramento Valley, the Salinas and King City districts in
the Salinas Valley, and the Selma and Visalia districts in
the San Joaquin Valley obtain their entire supply from wells.
Purchases for the Los Altos, Livermore, Oroville, Stockton
and Bakersfield districts are pursuant to long-term contracts
expiring on various dates after 2011. The supplies for the East
Los Angeles, Hermosa-Redondo, Palos Verdes, Westlake and Hawthorne
districts are provided to the Company by public agencies pursuant
to an obligation of continued nonpreferential service to persons
within their boundaries.
Purchases for the South San Francisco, Mid-Peninsula and Bear
Gulch districts are pursuant to long-term contracts with the San
Francisco Water Department expiring June 30, 2009.
The cost of water purchases are subject to pricing changes imposed
by the various wholesale suppliers who deliver water to the
Company.
The 1995-96 water year provided above average levels of
precipitation which assured sufficient supply for the year and
above normal carryover into 1997. Heavy rains fell in California
during December 1995 through February 1996. Spring weather was
drier and warmer than normal, leading to an increase in customer
usage which continued into the summer.
Groundwater levels in underground aquifers which provide supply to
Company districts served by well water improved in 1996 due to
heavy rains. Most regions have recorded positive changes in
groundwater levels as compared to 1995. Regional groundwater
management planning continues throughout the State as required by
Assembly Bill 3030. Enacted in 1992, AB 3030 provides a mechanism
for local agencies to maintain control of their groundwater
supply. Progress has been made by Consolidated Irrigation
District (Selma) and Kaweah Delta Water Conservation District
(Visalia) towards the implementation of a water management plan.
The Company is participating in the formulation of these plans.
The water supply outlook for 1997 is good, however, California
faces long-term water supply challenges. The Company is
actively working to meet the challenges by continuing to educate
customers on responsible water use practices, particularly
in the districts with conservation programs approved by the
California Public Utilities Commission.
On an ongoing basis, the Company is actively participating with
the Salinas Valley water users and the Monterey County Water
Resources Agency (MCWRA) to address the seawater intrusion concern
to the water supply for the Salinas district. MCWRA started
construction on the Castroville Seawater Intrusion Project in 1995
and deliveries are expected to commence in 1997. When completed,
12
this project will deliver up to 20,000 acre feet of recycled water
annually to agricultural users in the Castroville area and is
designed to help mitigate seawater intrusion into the region by
reducing the need to pump groundwater.
The Company is participating with the City and County of San
Francisco, and the cities of San Bruno and Daly City to prepare a
groundwater management plan for the Westside Basin from which the
Company's South San Francisco District pumps a portion of its
supply.
Nonregulated Operations
The Company operates municipally owned water systems for the
cities of Bakersfield, Commerce and Montebello, and two private
water company systems in the Bakersfield and Salinas districts.
The total number of services operated under these contracts is
about 23,800. With the exception of the 15-year Hawthorne lease
discussed below, the terms of the operating agreements range from
one year to three-year periods with provisions for renewals. The
first operating agreement was signed with the City of Bakersfield
in 1977. The Company has never experienced the cancellation of
any of its operating agreements.
Recycled water distribution systems are operated for the West
Basin and Central Basin municipal water districts located in the
Los Angeles Basin. Some engineering department services are also
provided for these two recycled water systems.
The Company provides meter reading, billing and customer service
for the City of Menlo Park's 3,900 water customers. Additionally,
sewer and/or refuse billing services are provided to six
municipalities.
In February 1996, the Company commenced operation of the City of
Hawthorne's 6,000 account water system under terms of a 15-year
lease. The system which is near the Company's Hermosa-Redondo
district serves about half the City's population. Under terms of
the lease, the Company made an up-front $6.5 million lease payment
to the City which will be amortized over the lease term.
Additionally, the Company will make annual lease payments of
$100,000 indexed to changes in water rates, and is responsible for
all aspects of system operation including capital improvements,
although title to the system and system improvements resides with
the City. At the end of the lease, the Company will be reimbursed
for the unamortized value of capital improvements. In exchange,
the Company receives all system revenues which are estimated to be
$4 million annually.
The Company leases various antenna sites to telecommunication
companies. Individual lease payments range from $750 to $2,200
per month. The antennas are used in cellular phone and personal
communication applications. Other leases are being negotiated for
similar uses.
13
The Company also provides laboratory services to San Jose Water
Company.
Utility Plant Construction Program and Acquisitions
The Company is continually extending, enlarging and replacing its
facilities as required to meet increasing demands and to maintain
its systems. Capital expenditures, including the Hawthorne up-
front lease payment and developer financed projects, for
additional facilities and for the replacement of existing
facilities amounted to approximately $35.7 million in 1996.
Financing was provided by funds from operations, short-term bank
borrowings, dividend reinvestments, issuance of senior notes in
1995, advances for construction, and contributions in aid of
construction as set forth in the "Statement of Cash Flows" on page
26 of the Company's 1996 Annual Report which is incorporated
herein by reference. Company funded expenditures were $27.6
million including the $6.5 million Hawthorne lease payment.
Developer payments accounted for $8.1 million. Advances for
construction of main extensions are payments or facilities
received by the Company from subdivision developers under rules of
the Commission. These advances are refundable without interest
over a period of 40 years. Contributions in aid of construction
consist of nonrefundable cash deposits or facilities received from
developers, primarily for fire protection.
The Company's construction budget for additions and improvements
to its facilities during 1997 is approximately $23.2 million,
exclusive of additions and improvements financed through advances
for construction and contributions in aid of construction.
Financing is expected to be from internally generated funds,
short-term borrowings and long-term debt financing.
Quality of Supplies
The Company maintains procedures to produce potable water in
accordance with accepted water utility practice. Water
entering the distribution systems from surface sources is
treated in compliance with Safe Drinking Water Act standards.
Samples of water from each district are analyzed regularly by the
Company's state certified water quality laboratory.
In recent years, federal and state water quality regulations have
continued to increase. Changes in the federal Safe Drinking Water
Act, which the Company believes will bring treatment costs more in
line with the actual health threat posed by contaminants, were
enacted by Congress during 1996. The Company continues to monitor
water quality and upgrade its treatment capabilities to maintain
compliance with the various regulations. These activities
include:
~ installation of chlorinators at all well sources
~ maintaining a State approved compliance monitoring program
required by Phase II and V of the Safe Drinking Water Act
~ upgrading laboratory equipment
14
~ operating several granular activated carbon (GAC) filtration
systems for removal of hydrogen sulfide or volatile organic chemicals
~ placing treatment on two Los Angeles Basin wells and wells at
the South San Francisco well field which have elevated levels
of iron and manganese; the treatment will allow the Company to
return the wells to production and thus use less costly well
water, rather than purchased water supplies
~ Completion of desktop studies for two water systems in compliance
with the Federal Lead and Copper Rule. Chemical water treatment to
inhibit and control potential corrosion will be installed in each of
these water systems
~ monitoring all sources for MTBE, the gasoline additive widely
used throughout the State
Competition and Condemnation
The Company is a public utility regulated by the Commission. The
Company provides service within filed service areas approved by
the Commission. Under the laws of the State of California, no
privately owned public utility may compete with the Company in any
territory already served by the Company without first obtaining a
certificate of public convenience and necessity from the PUC.
Under PUC practices, such certificate will be issued only upon
showing that the Company's service in such territory is deficient.
California law also provides that whenever a public agency
constructs facilities to extend a utility service into the service
area of a privately owned public utility, such an act constitutes
the taking of property and for such taking the public utility is
to be paid just compensation. Under the constitution and statutes
of the State of California, municipalities, water districts and
other public agencies have been authorized to engage in the
ownership and operation of water systems. Such agencies are
empowered to condemn properties already operated by privately
owned public utilities upon payment of just compensation and are
further authorized to issue bonds (including revenue bonds) for
the purpose of acquiring or constructing water systems. To the
Company's knowledge, no municipality, water district or other
public agency has any pending action to acquire or condemn any of
the Company's systems.
The water industry is experiencing competitive changes and the
potential exists for new growth. The Company has in the past
participated in public/private partnerships, such as the lease of
a water system, system operation agreements, or billing service
contracts, and anticipates future opportunities for further
participation and development. The Company has proposed the
formation of a holding company structure to enhance its ability to
actively compete for the new business. The holding company
structure will facilitate the financing, accounting and operation
of the nonregulated business activities.
15
Environmental Matters
The Company is subject to environmental regulation by various
governmental authorities. Compliance with federal, state and
local provisions which have been enacted or adopted regulating the
discharge of materials into the environment, or otherwise relating
to the protection of the environment, has not had, as of the date
of filing of this Form 10-K, any material effect on the Company's
capital expenditures, earnings or competitive position. The
Company is unaware of any pending environmental matters which will
have a material effect on its operations.
Stringent air quality regulations had presented past operational
problems for facilities with diesel powered emergency engines.
State and local air quality regulations were in conflict with the
Company's responsibility to provide water service in times of
emergency by subjecting routine testing of these engines to fines
if they emitted air pollutants in excess of established air
quality standards. In response, the California Water Association,
an industry association of California's investor owned public
utility water companies, sponsored legislative relief through
Assembly Bill 1855 to allow testing of emergency engines without
fines. The legislation was enacted in 1996.
Human Resources
As of December 31, 1996, the Company had 633 employees, of
whom 163 were executive, administrative and supervisory employees,
and 470 were members of unions. In December 1995, two-year
collective bargaining agreements, expiring December 31, 1997, were
successfully negotiated with the Utility Workers Union of America, AFL-
CIO, representing the majority of the Company's field and clerical
union employees, and the International Federation of Professional
and Technical Engineers, AFL-CIO, representing certain engineering
department and water quality laboratory employees. Agreements
have been successfully renewed in the past without a labor
interruption.
Effective January 1, 1996, Robert W. Foy, who has been a Board
member since 1977, was elected Chairman of the Board, replacing
C. H. Stump. Mr. Stump, who had been an employee for 45 years,
continues as a Board member.
On February 1, 1996, Peter C. Nelson replaced Donald L. Houck as
President and Chief Executive Officer (CEO). Mr. Nelson was
previously employed for 24 years by Pacific Gas & Electric
Company, the largest California energy utility, most recently as
Vice President-Division Operations. Upon his retirement, Mr.
Houck had been an employee for 19 years, serving as President and
CEO since 1991.
On August 1, 1996, the Board of Directors elected Paul G. Ekstrom,
Robert R. Guzzetta, Christine L. McFarlane and Raymond L. Worrell
to the officer positions of Corporate Secretary, Vice President -
Engineering and Water Quality, Vice President - Human Resources,
and Vice President - Chief Information Officer, respectively.
Mr. Ekstrom had been Operations Coordinator; Mr. Guzzetta had been
Chief Engineer; Ms. McFarlane had been Director of Human
16
Resources; and Mr. Worrell had been Director of Information
Systems. Combined they have 100 years of experience with the
Company.
17
d. Financial Information about Foreign and Domestic Operations
and Export Sales.
The Company makes no export sales.
Item 2. Properties.
The Company's physical properties consist of offices and water
systems to accomplish the production, storage, purification, and
distribution of water. These properties are located in or near
the Geographic Service Areas listed above under section Item 1.c.
entitled "Narrative Description of the Business." The Company
maintains all of its properties in good operating condition.
The Company holds all its principal properties in fee simple
title, subject to the lien of the indenture securing the Company's
first mortgage bonds, of which $122,153,000 were outstanding at
December 31, 1996.
The Company owns 523 wells and operates six leased wells. The
Company has 290 storage tanks with a capacity of 216 million
gallons and one reservoir located in the Bear Gulch district with
a 210 million gallon capacity. There are 4,585 miles of supply
and distribution mains in the various systems. The Company owns
two treatment plants, one in the Bear Gulch district, the other in
Oroville. Both treatment plants are designed to process six
million gallons per day. During 1996, the Company's average daily
water production was 283 million gallons, while the maximum
production on one day was 497 million gallons.
In the systems which the Company leases or operates under contract
for cities, title to the various properties is held exclusively by
the city.
Item 3. Legal Proceedings.
The State of California's Department of Toxic Substances Control
(DTSC) alleges that the Company is a responsible party for cleanup
of a toxic contamination in the Chico groundwater. The DTSC has
prepared a draft report titled "Preliminary Nonbinding Allocation
of Financial Responsibility" for the cleanup which asserts that
the Company's share should be 10 percent. The DTSC estimates the
total cleanup cost to be $8.69 million. The toxic spill occurred
when cleaning solvents, which were discharged into the city's
sewer system by local dry cleaners, leaked into the underground
water supply due to breaks in sewer pipes. The DTSC contends that
the Company's responsibility stems from the Company's operation of
wells in the surrounding vicinity which caused the contamination
plume to spread. The Company denies any responsibility for the
contamination or the resulting cleanup and intends to vigorously
resist any action brought against it. The Company believes that
it has insurance coverage for such a claim and that if the Company
was ultimately held responsible for a portion of the cleanup
18
costs, it would not have a material adverse effect on the
Company's financial position.
The Company is not a party to any other legal matters, other than
those which are incidental to its business.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders in
the fourth quarter of year 1996.
19
Executive Officers of the Registrant.
Name Positions and Offices with the Company Age
Robert W. Foy Chairman of the Board since January 1, 1996. 60
Director of the Company since 1977. Formerly
President and Chief Executive Officer of
Pacific Storage Company, Stockton, Modesto,
Sacramento and San Jose, California, a
diversified transportation and warehousing
company, where he had been employed for 32 years.
Peter C. Nelson President and Chief Executive Officer of the 49
Company since February 1, 1996. Formerly Vice
President, Division Operations (1994-1995) and
Region Vice President (1989-1994), Pacific Gas
& Electric Company, a gas and electric public
utility.
Gerald F. Feeney Vice President, Chief Financial Officer and 52
Treasurer since November 1994; Controller,
Assistant Secretary and Assistant Treasurer
from 1976 to 1994. From 1970 to 1976, an audit
manager with Peat Marwick Mitchell & Co.
Francis S. Vice President, Regulatory Matters since August 47
Ferraro 1989. Employed by the California Public
Utilities Commission for 15 years, from 1985
through 1989 as an administrative law judge.
James L. Good Vice President, Corporate Communications 33
and Marketing since January 1995. Previously
Director of Congressional Relations for the
National Association of Water Companies from
1991 to 1994.
Robert R. Vice President-Engineering and Water Quality 43
Guzzetta since August 1996; Chief Engineer, 1990 to 1996;
Assistant Chief Engineer, 1988 to 1990; various
engineering department positions since 1977.
Christine L. Vice President-Human Resources since August 50
McFarlane 1996; Director of Human Resources, 1991 to 1996;
Assistant Director of Personnel, 1989 to 1991;
an employee of the Company since 1969.
Raymond H. Vice President, Operations since April 1995; 51
Taylor Vice President and Director of Water Quality,
1990 to 1995; Director of Water Quality, 1986
to 1990. Prior to joining the Company in
1982, he was employed by the United States
Environmental Protection Agency.
20
Raymond L. Vice President-Chief Information Officer since 57
Worrell August 1996; Director of Information Systems,
1991 to 1996; Assistant Manager of Data Processing,
1970 to 1991; Data Processing Supervisor, 1967 to 1970.
Calvin L. Breed Controller, Assistant Secretary and Assistant 41
Treasurer since November 1994. Previously
Treasurer of TCI International, Inc.
Paul G. Ekstrom Corporate Secretary since August 1996; 44
Operations Coordinator, 1993 to 1996;
District Manager, Livermore, 1988 to 1993;
previously served in various field management
positions since 1979; an employee of the Company
since 1972.
John S. Simpson Assistant Secretary, Manager of New Business 52
since 1991; Manager of New Business development
for the past twelve years; served in various
management positions with the Company since 1967.
No officer or director has any family relationship to any other
executive officer or director. No executive officer is appointed
for any set term. There are no agreements or understandings
between any executive officer and any other person pursuant to
which he was selected as an executive officer, other than those
with directors or officers of the Company acting solely in their
capacities as such.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The information required by this item is contained in the
Section captioned "Quarterly Financial and Common Stock Market
Data" on page 34 of the Company's 1996 Annual Report and is
incorporated herein by reference. The number of shareholders
listed in such section includes the Company's record holders and
an estimate of shareholders who hold stock in street name.
Item 6. Selected Financial Data.
The information required by this item is contained in the section
captioned California Water Service Company "Ten Year Financial
Review" on pages 14 and 15 of the Company's 1996 Annual Report and
is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The information required by this item is contained in the section
captioned "Management's Discussion and Analysis of Financial
Condition and Results of Operations," on pages 16 through 21 of
21
the Company's 1996 Annual Report and is incorporated herein by
reference.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is contained in the sections
captioned "Balance Sheet", "Statement of Income", "Statement of
Common Shareholders' Equity", "Statement of Cash Flows", "Notes to
Financial Statements" and "Independent Auditors' Report" on pages
22 through 35 of the Company's 1996 Annual Report and is
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this item as to directors of the
Company is contained in the section captioned "Election of
Directors" on pages 16 through 18 of the 1997 Proxy Statement/
Prospectus and is incorporated herein by reference. Information
regarding executive officers of the Company is included in a
separate item captioned "Executive Officers of the Registrant"
contained in Part I of this report.
Item 11. Executive Compensation.
The information required by this item as to directors of the
Company is included under the caption "Election of Directors" on
pages 16 through 18 of the 1997 Proxy Statement/Prospectus and is
incorporated herein by reference. The information required by
this item as to compensation of executive officers is included
under the caption "Compensation of Executive Officers" on pages 19
through 21 of the Proxy Statement/Prospectus and is incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is contained in the sections
captioned "Election of Directors," "Security Ownership of Certain
Beneficial Owners" and "Security Ownership of Management" pages
16, 17 and 23 of the Proxy Statement/Prospectus and is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
None.
22
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) (1) Financial Statements:
Balance Sheet as of December 31, 1996 and 1995.
Statement of Income for the years ended December 31, 1996, 1995, and 1994.
Statement of Common Shareholders' Equity for the years ended
December 31, 1996, 1995, and 1994.
Statement of Cash Flows for the years ended December 31, 1996, 1995, and 1994.
Notes to Financial Statements, December 31, 1996, 1995, and 1994.
The above financial statements are contained in sections
bearing the same captions on pages 22 through 34 of the
Company's 1996 Annual Report and are incorporated herein by
reference.
(2) Financial Statement Schedule:
Schedule
Number
Independent Auditors' Report dated January 17, 1997.
II Valuation and Qualifying Accounts and Reserves--years ending
December 31, 1996, 1995, and 1994.
All other schedules are omitted as the required
information is inapplicable or the information is
presented in the financial statements or related notes.
(3) Exhibits required to be filed by Item 601 of Regulation S-K.
See Exhibit Index on page 28 of this document which is incorporated
herein by reference.
The exhibits filed herewith are attached hereto (except as
noted) and those indicated on the Exhibit Index which are not
filed herewith were previously filed with the Securities and
Exchange Commission as indicated. Except where stated
otherwise, such exhibits are hereby incorporated by reference.
(B) Report on Form 8-K.
None required to be filed during the fourth quarter of 1996.
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CALIFORNIA WATER SERVICE COMPANY
Date: March 19, 1997 By /s/ Peter C. Nelson
PETER C. NELSON, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated:
Date: March 19, 1997 /s/ Robert W. Foy
ROBERT W. FOY, Chairman,
Board of Directors
Date: March 19, 1997 /s/ Edward D. Harris, Jr.
EDWARD D. HARRIS, JR., M.D., Member,
Board of Directors
Date: March 19, 1997 /s/ Robert K. Jaedicke
ROBERT K. JAEDICKE, Member,
Board of Directors
Date: March 19, 1997 /s/ Richard P. Magnuson
RICHARD P. MAGNUSON, Member,
Board of Directors
Date: March 19, 1997 /s/ Linda R. Meier
LINDA R. MEIER, Member,
Board of Directors
Date: March 19, 1997 /s/ Peter C. Nelson
PETER C. NELSON
President and Chief Executive Officer,
Member, Board of Directors
Date: March 19, 1997 /s/ C. H. Stump
C. H. STUMP, Member,
Board of Directors
24
Date: March 19, 1997 /s/ Edwin E. van Bronkhorst
EDWIN E. VAN BRONKHORST, Member,
Board of Directors
Date: March 19, 1997 /s/ J. W. Weinhardt
J. W. WEINHARDT, Member,
Board of Directors
Date: March 19, 1997 /s/ Gerald F. Feeney
GERALD F. FEENEY,
Vice President, Chief Financial
Officer and Treasurer;
Principal Financial Officer
Date: March 19, 1997 /s/ Calvin L. Breed
CALVIN L. BREED, Controller,
Assistant Secretary and Assistant Treasurer;
Principal Accounting Officer
25
Independent Auditors' Report
Shareholders and Board of Directors
California Water Service Company:
Under date of January 17, 1997, we reported on the balance sheet of
California Water Service Company as of December 31, 1996 and 1995, and
the related statements of income, common shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31,
1996, as contained in the 1996 annual report to shareholders. These
financial statements and our report thereon are incorporated by
reference in the annual report on Form 10-K for the year 1996. In
connection with our audits of the aforementioned financial statements,
we also audited the related financial statement schedule as listed in
the index appearing under Item 14(a)(2). This financial statement
schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement
schedule based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
San Jose, California /s/ KPMG Peat Marwick LLP
January 17, 1997
26
CALIFORNIA WATER SERVICE COMPANY Schedule II
Valuation and Qualifying Accounts
Years Ended December 31, 1996, 1995 and 1994
Additions
Balance at Charged to Charged to Balance
beginning costs and other at end
Description of period expenses accounts Deductions of period
1996
(A) Reserves deducted in the balance sheet from
assets to which they apply:
Allowance for doubtful accounts $76,197 $530,691 $65,445(3) $572,783(1) $99,550
Allowance for obsolete materials and supplies 74,675 48,000 21,598(2) 101,077
(B) Reserves classified as liabilities in the
balance sheet:
Miscellaneous reserves:
General Liability $826,965 $740,000 $569,131(2) $997,834
Employees' group health plan 400,004 2,880,000 14,348 2,826,366(2) 467,986
Retirees' group health plan 670,998 523,000 241,000 523,000(2) 911,998
Workers compensation 260,170 835,430 595,949(2) 499,651
Deferred revenue - contributions in aid
of construction 1,930,336 276,525 407,288(6) 1,799,573
Disability insurance 47,453 199,097 196,179(2) 50,371
$4,135,926 $4,978,430 $730,970 $5,117,913 $4,727,413
Contributions in aid of construction $40,113,707 $4,062,087(4) $1,109,209(5) $43,066,585
1995
(A) Reserves deducted in the balance sheet from
assets to which they apply:
Allowance for doubtful accounts $50,816 $429,096 $74,170(3) $477,885(1) $76,197
Allowance for obsolete materials and supplies $3,393 95,000 23,718(2) 74,675
(B) Reserves classified as liabilities in the
balance sheet:
Miscellaneous reserves:
General Liability $962,152 $339,960 $475,147(2) $826,965
Employees' group health plan $200,387 2,907,000 14,928 2,722,311(2) 400,004
Retirees' group health plan $425,998 507,000 245,000 507,000(2) 670,998
Workers compensation $107,576 879,423 726,829(2) 260,170
Deferred revenue - contributions in aid
of construction $1,917,386 368,180 355,230(6) 1,930,336
Disability insurance $116,130 200,973 269,650(2) 47,453
$3,729,629 $4,633,383 $829,081 $5,056,167 $4,135,926
Contributions in aid of construction $37,866,799 $3,244,258(4) $997,350(5) $40,113,707
1994
(A) Reserves deducted in the balance sheet from
assets to which they apply:
Allowance for doubtful accounts $72,696 $363,284 $71,235(3) $456,399(1) $50,816
Allowance for obsolete materials and supplies $61,395 11,000 69,002(2) 3,393
(B) Reserves classified as liabilities in the
balance sheet:
Miscellaneous reserves:
General Liability $1,064,300 $340,000 $442,148(2) $962,152
Employees' group health plan $882,143 2,549,056 12,262 3,243,074(2) 200,387
Retirees' group health plan $237,000 480,998 189,000 481,000(2) 425,998
Workers compensation $150,523 648,374 691,321(2) 107,576
Deferred revenue - contributions in aid
of construction $1,649,386 572,366 304,366(6) 1,917,386
Disability insurance $97,352 256,969 238,191(2) 116,130
$4,080,704 $4,018,428 $1,030,597 $5,400,100 $3,729,629
Contributions in aid of construction $34,915,778 $3,858,961(4) $907,940(5) $37,866,799
Notes:
(1)Accounts written off during the year.
(2)Expenditures and other charges made during the year.
(3)Recovery of amounts previously charged to reserve.
(4)Properties acquired at no cost, cash contributions and net transfer on non-refundable balances from
advances to construction.
(5)Depreciation of utility plant acquired by contributions charged to a balance sheet account.
(6)Amortized to revenue.
EXHIBIT INDEX
Sequential
Page Numbers
Exhibit Number in this Report
3. Articles of Incorporation and by-laws:
3.1 Restated Articles of Incorporation dated 28
March 20, 1968; Certificate of Ownership
Merging Palos Verdes Water Company into
California Water Service Company dated
December 22, 1972; Certificate of Amendment
of Restated Articles of Incorporation dated
April 7, 1975; Certificate of Amendment of
Restated Articles of Incorporation dated
April 16, 1984; Certificate of Amendment of
Restated Articles of Incorporation dated July
31, 1987; Certificate of Amendment of
Restated Articles of Incorporation dated
October 19, 1987 (Exhibit 3.1 to Form 10-K
for fiscal year 1987, File No. 0-464)
3.2 Certificates of Determination of Preferences 28
for Series C Preferred Stock (Exhibit 3.2 to
Form 10-K for fiscal year 1987, File No. 0-464)
3.3 Certificate of Amendment of the Company's 28
Restated Articles of Incorporation dated
April 27, 1988. (Exhibit 3.3 to Form 10-K
for fiscal year 1989, File No. 0-464)
3.4 By-laws dated September 21, 1977, as 28
amended 24 November 19, 1980, April 21, 1982,
June 15, 1983, September 17, 1984, and
November 16, 1987 (Exhibit 3.3 to Form 10-K
for fiscal year 1987, File No. 0-464).
3.5 Amendment to By-laws dated May 16, 1988. 28
(Exhibit 3.5 to Form 10-K for fiscal year
1991, File No. 0-464)
4. Instruments Defining the Rights of Security 28
Holders, including Indentures:
Mortgage of Chattels and Trust Indenture 28
dated April 1, 1928; Eighth Supplemental Indenture
dated November 1, 1945, covering First Mortgage
3.25% Bonds, Series C; Seventeenth Supplemental
Indenture dated November 1, 1967, covering First
Mortgage 6.75% Bonds, Series L; Twenty-First
Supplemental Indenture dated October 1, 1972,
cover First Mortgage 7.875% Bonds, Series P;
Twenty-Fourth Supplemental Indenture dated
November 1, 1973, covering First Mortgage 8.50%
28
Bonds, Series S (Exhibits 2(b), 2(c), 2(d),
Registration Statement No. 2-53678, of which
certain exhibits are incorporated by reference
to Registration Statement Nos. 2-2187, 2-5923,
2-5923, 2-9681, 2-10517 and 2-11093.
Thirty-Third Supplemental Indenture dated as 29
of May 1, 1988, covering First Mortgage
9.48% Bonds, Series BB. (Exhibit 4 to Form 10-Q
dated September 30, 1988, File No. 0-464)
Thirty-Fourth Supplemental Indenture dated as 29
of November 1, 1990, covering First Mortgage
9.86% Bonds, Series CC. (Exhibit 4 to Form 10-K
for fiscal year 1990, File No. 0-464)
Thirty-Fifth Supplemental Indenture dated as of 29
November 1, 1992, covering First Mortgage 8.63%
Bonds, Series DD. (Exhibit 4 to Form 10-Q
dated September 30, 1992, File No. 0-464)
Thirty-Sixth Supplemental Indenture dated as of 29
May 1, 1993, covering First Mortgage 7.90% Bonds
Series EE (Exhibit 4 to Form 10-Q dated
June 30, 1993, File No. 0-464)
Thirty-Seventh Supplemental Indenture dated as 29
of September 1, 1993, covering First Mortgage
6.95% Bonds, Series FF (Exhibit 4 to Form 10-Q
dated September 30, 1993, File No. 0-464)
Thirty-Eighth Supplemental Indenture dated as 29
of October 15, 1993, covering First Mortgage 6.98%
Bonds, Series GG (Exhibit 4 to Form 10-K for fiscal
year 1994, File No. 0-464)
Note Agreement dated August 15, 1995, pertaining 29
to issuance of $20,000,000, 7.28% Series A
unsecured Senior Notes, due November 1, 2025
(Exhibit 4 to Form 10-Q dated September 30, 1995
File No. 0-464)
10. Material Contracts.
10.1 Water Supply Contract between the Company 29
and the County of Butte relating to the
Company's Oroville District; Water Supply
Contract between the Company and the Kern
County Water Agency relating to the
Company's Bakersfield District; Water
Supply Contract between the Company and
Stockton East Water District relating to
the Company's Stockton District.
(Exhibits 5(g), 5(h), 5(i), 5(j),
Registration Statement No. 2-53678, which
incorporates said exhibits by reference to
29
Form 1O-K for fiscal year 1974, File No. 0-464).
10.2 Settlement Agreement and Master Water Sales 30
Contract between the City and County of San
Francisco and Certain Suburban Purchasers
dated August 8, 1984; Supplement to
Settlement Agreement and Master
Water Sales Contract, dated August 8, 1984;
Water Supply Contract between the Company and
the City and County of San Francisco relating
to the Company's Bear Gulch District dated
August 8, 1984; Water Supply Contract
between the Company and the City and County
of San Francisco relating to the Company's
San Carlos District dated August 8, 1984;
Water Supply Contract between the Company
and the City and County of San Francisco
relating to the Company's San Mateo District
dated August 8, 1984; Water Supply Contract
between the Company and the City and County
of San Francisco relating to the Company's
South San Francisco District dated August 8, 1984.
(Exhibit 10.2 to Form l0-K for fiscal year 1984,
File No. 0-464).
10.3 Water Supply Contract dated January 27, 30
1981, between the Company and the Santa
Clara Valley Water District relating to
the Company's Los Altos District
(Exhibit 10.3 to Form 10-K for fiscal
year 1992, File No. 0-464)
10.4 Amendments No. 3, 6 and 7 and Amendment 30
dated June 17, 1980, to Water Supply
Contract between the Company and the
County of Butte relating to the Company's
Oroville District. (Exhibit 10.5 to Form
10-K for fiscal year 1992, File No. 0-464)
10.5 Amendment dated May 31, 1977, to Water 30
Supply Contract between the Company and
Stockton-East Water District relating to
the Company's Stockton District.
(Exhibit 10.6 to Form 10-K for fiscal
year 1992, File No. 0-464)
10.6 Second Amended Contract dated September 25, 30
1987 among the Stockton East Water District,
the California Water Service Company, the
City of Stockton, the Lincoln Village
Maintenance District, and the Colonial Heights
Maintenance District Providing for the Sale of
Treated Water. (Exhibit 10.7 to Form 10-K for
30
fiscal year 1987, File No. 0-464).
10.7 Dividend Reinvestment Plan. (Exhibit 10.8 to 31
Form 10-Q dated March 31, 1994, File No. 0-464)
10.8 Water Supply Contract dated April 19, 1927, 31
and Supplemental Agreement dated June 5,
1953, between the Company and Pacific Gas
and Electric Company relating to the
Company's Oroville District. (Exhibit 10.9
to Form 10-K for fiscal year 1992, File No. 0-464)
10.9 California Water Service Company Pension Plan 31
(Exhibit 10.10 to Form 10-K for fiscal year
1992, File No. 0-464)
10.10 California Water Service Company Supplemental 31
Executive Retirement Plan. (Exhibit 10.11 to
Form 10-K for fiscal year 1992, File No. 0-464)
10.11 California Water Service Company Salaried 31
Employees' Savings Plan. (Exhibit 10.12 to
Form 10-K for fiscal year 1992, File No. 0-464)
10.12 California Water Service Company Directors 31
Deferred Compensation Plan (Exhibit 10.13 to
Form 10-K for fiscal year 1992, File No. 0-464)
10.13 Board resolution setting forth the terms of 31
the retirement as amended, for Directors of
California Water Service Company (Exhibit 10.14
to Form 10-K for fiscal year 1992, File No. 0-464)
10.14 $30,000,000 Business Loan Agreement between 31
California Water Service Company and Bank of
America dated April 12, 1995, expiring
April 30, 1997 (Exhibit 10.16 to Form 10-Q
dated September 30, 1995)
10.15 Agreement between the City of Hawthorne and 31
California Water Service Company for the 15
year lease of the City's water system.
(Exhibit 10.17 to Form 10-Q dated March 31, 1996)
10.16 Water Supply Agreement dated September 25, 1996 31
between the City of Bakersfield and California
Water Service Company. (Exhibit 10.18 to Form 10-Q
dated September 30, 1996)
31
13. Annual Report to Security Holders, Form 10-Q 32
or Quarterly Report to Security Holders:
1996 Annual Report. The sections of the 1996 Annual
Report which are incorporated by reference in this
10-K filing. This includes those sections referred
to in Part II, Item 5, Market for Registrant's
Common Equity and Related Shareholder Matters;
Part II, Item 6, Selected Financial Data; Part II,
Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations; and
Part II, Item 8, Financial Statement and Supplementary Data.
27. Financial Data Schedule as of December 31, 1996 32
32