-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B6Kr1fxquyUDldnmAVOpIcDc5at034WmL1CyuA0ni3yPME1l8QHGO3jgHiajMu4u 0C9+G6jSz1X1qOKY06v80g== 0000898430-97-004794.txt : 19971121 0000898430-97-004794.hdr.sgml : 19971121 ACCESSION NUMBER: 0000898430-97-004794 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHWEST WATER CO CENTRAL INDEX KEY: 0000092472 STANDARD INDUSTRIAL CLASSIFICATION: 4941 IRS NUMBER: 951840947 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08176 FILM NUMBER: 97715284 BUSINESS ADDRESS: STREET 1: 225 N BARRANCA AVE STE 200 CITY: WEST COVINA STATE: CA ZIP: 91791-1605 BUSINESS PHONE: 8189151551 MAIL ADDRESS: STREET 1: 225 N BARRANCA AVENUE STREET 2: SUITE 200 CITY: WEST COVINA STATE: CA ZIP: 91791-1605 FORMER COMPANY: FORMER CONFORMED NAME: SUBURBAN WATER SYSTEMS DATE OF NAME CHANGE: 19751202 10-Q 1 FORM 10-Q DATED 9-30-97 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ------- EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 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 number: 0-8176 [LOGO OF SOUTHWEST WATER COMPANY SOUTHWEST (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) WATER COMPANY] DELAWARE 95-1840947 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 225 NORTH BARRANCA AVENUE, SUITE 200 WEST COVINA, CALIFORNIA 91791-1605 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (626) 915-1551 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. On November 4, 1997, there were 3,152,560 common shares outstanding. SOUTHWEST WATER COMPANY AND SUBSIDIARIES INDEX
Page No. -------- Part I. Financial Information: - - ------- ---------------------- Item 1. Financial Statements: Condensed Consolidated Balance Sheets - September 30, 1997 and December 31, 1996................. 3 Condensed Consolidated Statements of Income - Three and nine months ended September 30, 1997 and 1996.. 4 Condensed Consolidated Statements of Cash Flows - Nine months ended September 30, 1997 and 1996............ 5 Notes to Condensed Consolidated Financial Statements..... 6 - 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 8 - 12 Part II. Other Information: - - -------- ------------------ Item 1. Legal Proceedings........................................ 13 Item 4. Submission of Matters to a Vote of Security Holders...... 14 Item 6. Exhibits and Reports on Form 8-K......................... 14 Signatures............................................... 15
2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SOUTHWEST WATER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31, 1997 1996 ------------- ------------ (Unaudited) (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 539 $ 790 Customers' accounts receivable, net 10,179 8,216 Other current assets 2,792 2,086 -------- -------- 13,510 11,092 PROPERTY, PLANT AND EQUIPMENT: Utility property, plant and equipment - at cost 131,144 119,731 Contract operations property, plant and equipment - at cost 6,654 6,448 -------- -------- 137,798 126,179 Less accumulated depreciation and amortization 37,487 34,765 -------- -------- 100,311 91,414 OTHER ASSETS 9,233 8,910 -------- -------- $123,054 $111,416 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt and bank notes payable $ 9,240 $ 6,089 Accounts payable 2,114 1,513 Other current liabilities 8,150 7,569 -------- -------- 19,504 15,171 OTHER LIABILITIES AND DEFERRED CREDITS: Long-term debt 30,700 30,700 Advances for construction 7,714 7,719 Contributions in aid of construction 26,555 21,556 Deferred income taxes 4,152 3,398 Other liabilities and deferred credits 2,499 2,472 -------- -------- TOTAL LIABILITIES AND DEFERRED CREDITS 91,124 81,016 STOCKHOLDERS' EQUITY: Cumulative preferred stock 517 517 Common stock 31 31 Paid-in capital 26,477 26,159 Retained earnings 4,923 3,728 Unamortized value of restricted stock issued (18) (35) --------- -------- TOTAL STOCKHOLDERS' EQUITY 31,930 30,400 -------- -------- $123,054 $111,416 ======== ========
See accompanying notes to condensed consolidated financial statements. 3 SOUTHWEST WATER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------- ------------------------------- 1997 1996 1997 1996 ----------- ----------- ----------- --------- (In thousands except per share amounts) OPERATING REVENUES $19,975 $18,476 $53,876 $49,903 OPERATING EXPENSES: Direct operating expenses 14,590 13,918 40,020 38,348 Selling, general and administrative 2,658 2,449 8,221 7,430 ------- ------- ------- ------- 17,248 16,367 48,241 45,778 ------- ------- ------- ------- OPERATING INCOME 2,727 2,109 5,635 4,125 OTHER INCOME (EXPENSE): Interest expense (807) (720) (2,397) (2,074) Interest income 28 25 91 72 Other 106 78 227 125 ------- ------- ------- ------- (673) (617) (2,079) (1,877) ------- ------- ------- ------- INCOME BEFORE INCOME TAXES 2,054 1,492 3,556 2,248 Income tax provision 862 626 1,493 944 ------- ------- ------- ------- NET INCOME 1,192 866 2,063 1,304 Dividends on preferred shares (6) (6) (20) (20) ------- ------- ------- ------- NET INCOME AVAILABLE FOR COMMON SHARES $ 1,186 $ 860 $ 2,043 $ 1,284 ======= ======= ======= ======= EARNINGS PER COMMON SHARE (NOTE 8) $ 0.38 $ 0.28 $ 0.65 $ 0.41 ======= ======= ======= ======= CASH DIVIDENDS PER COMMON SHARE (NOTE 8) $ 0.09 $ 0.083 $ 0.27 $ 0.249 ======= ======= ======= ======= WEIGHTED AVERAGE OUTSTANDING COMMON SHARES (NOTE 8) 3,146 3,114 3,137 3,107 ======= ======= ======= =======
See accompanying notes to condensed consolidated financial statements. 4 SOUTHWEST WATER COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, --------------------------- 1997 1996 ------- -------- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES, NET $ 3,662 $ 4,079 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property, plant and equipment (7,928) (8,256) Investment in Windermere Utility Company - (3,000) ------- -------- Net cash used in investing activities (7,928) (11,256) CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings of short-term debt 3,151 7,311 Contributions in aid of construction 1,583 881 Net proceeds from dividend reinvestment and employee stock purchase plans 292 208 Additions to advances for construction 75 140 Dividends paid (866) (783) Payments of advances for construction (220) (250) ------- -------- Net cash provided by financing activities 4,015 7,507 ------- -------- Net increase (decrease) in cash and cash equivalents (251) 330 Cash and cash equivalents at beginning of period 790 784 ------- -------- Cash and cash equivalents at end of period $ 539 $ 1,114 ======= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 2,151 $ 1,986 Income taxes $ $539 $ $695 Depreciation and amortization $ 3,139 $ 2,930 Non-cash contributions in aid of construction conveyed to Company by developers $ 4,276 $ 2,595
See accompanying notes to condensed consolidated financial statements. 5 SOUTHWEST WATER COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 1997 (Unaudited) 1. Southwest Water Company ("the Company") and its subsidiaries provide water management services through contract and utility operations. The unaudited condensed consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial position of the Company as of September 30, 1997, and the Company's results of operations for the three and nine months ended September 30, 1997. All such adjustments are of a normal recurring nature. Certain reclassifications have been made to the 1996 financial statements to conform to the 1997 presentation. 2. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These condensed consolidated financial statements should be read in conjunction with the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. 3. There is seasonality to the water management services industry; thus, the results of operations for the three and nine months ended September 30, 1997 are not necessarily indicative of the results to be expected for the full year. The first and fourth quarters of each year are normally the lowest in terms of average customer water usage for the Company's water utilities. Rainfall and weather conditions affect utility operations, and utility revenues usually peak during the second and third quarters of each year. The Company's contract operations business can also be seasonal in nature. Heavy rainfall during a quarter hampers the Company's ability to perform billable work such as pipeline maintenance, manhole rehabilitation and other outdoor services. 4. For the three and nine months ended September 30, 1997 and 1996, earnings per common share were calculated using the weighted average number of common shares and dilutive common equivalent shares outstanding during the period. Common equivalent shares arise from stock options, but since common stock equivalents do not exceed 3% of weighted average common shares outstanding, primary and fully diluted earnings are not reported separately. 5. The Company will be subject to Statement of Financial Accounting Standards No. 128 "Earnings Per Share" ("SFAS No. 128") for interim and annual financial statements issued after December 15, 1997. SFAS No. 128 changes the standards for computing earnings per share ("EPS") by replacing the presentation of primary EPS with a presentation of basic EPS. Diluted EPS will replace fully diluted EPS and will reflect the potential dilution that could occur if common stock equivalents were exercised or converted into common stock that could share in the earnings of the entity. SFAS No. 128 requires a dual presentation of basic and diluted EPS by entities with complex capital structures. Management does not expect that SFAS No. 128 will materially impact the Company's financial position or results of operations. 6. The Company will also be subject to Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" ("SFAS No. 130") for interim and annual financial statements issued for periods beginning after December 15, 1997. SFAS No. 130 establishes standards for the reporting and display of comprehensive income and its components. Comprehensive income is defined as net income and all other revenue, expenses, gains and losses that under generally accepted accounting principles are typically excluded from net income (such as extraordinary and non-recurring gains and 6 losses). SFAS No. 130 requires that items of comprehensive income be classified separately in the financial statements. The statement also requires that the accumulated balance of comprehensive income items be reported separately from retained earnings and paid-in capital in the equity section of the balance sheet. Management does not expect that the implementation of SFAS No. 130 will have a material effect on the Company's financial position or results of operations. 7. The Company will be subject to Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS No. 131") for annual financial statements issued for periods beginning after December 15, 1997. SFAS No. 131 is not required in interim financial statements in the initial year of application. SFAS No. 131 requires that financial and descriptive information about operating segments of a company be provided. Generally, financial information will need to be reported on the same basis that it is used internally for evaluating segment performance and deciding how to allocate resources to segments. SFAS No. 131 will require additional financial disclosure by the Company, but will not have any effect on the Company's financial position or results of operations. 8. The 1996 earnings per common share, cash dividends per common share and weighted average outstanding common shares have been restated to reflect a 20% stock dividend granted to stockholders of record on January 2, 1997. 9. As discussed in the Company's 1996 Annual Report on Form 10-K, the Company was approached by the City of Albuquerque ("the City") during the first quarter of 1997 concerning the potential sale of New Mexico Utilities, Inc. ("NMUI") to the City. Under New Mexico state law, municipalities have the right to acquire private water utility plants and systems through condemnation by eminent domain, but must pay fair value if the election to proceed with condemnation is made. During the second quarter of 1997, the City and NMUI hired independent third parties to perform separate appraisals of NMUI. Three separate appraisals were completed with values ranging from $22,000,000 to $39,000,000. On November 4, 1997 the City initiated legal action in New Mexico State Court to acquire the operations of NMUI by eminent domain. The City offered approximately $16,000,000, which includes the assumption of $6,000,000 of NMUI First Mortgage Bonds. No agreement as to purchase price or terms of sale has been reached. Based on the results of recent City elections and public statements made by City officials, the Company believes there is some doubt as to whether the City will proceed with the eminent domain action against NMUI. The Company also believes that the fair market value is substantially in excess of the amount offered by the City. If fair market value is determined by a court trial, the Company does not anticipate resolution of the matter in the near future. 10. The Company has completed a review of all computer software currently in use to determine that it is year 2000 compliant. Most of the computer software is already year 2000 compliant, and compliance of remaining software should be completed in the coming months. Therefore, this issue should not have a material effect on the Company's financial position or results of operations. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES: Liquidity and capital resources of the Company are influenced primarily by construction expenditures at Suburban Water Systems ("Suburban") for the replacement and renovation of existing water utility facilities and by construction expenditures for new water and wastewater utility facilities at NMUI. The operations of ECO Resources, Inc. ("ECO") are currently generating positive cash flows for the Company; however, liquidity may be influenced in the future by ECO's need to invest in operating and computer equipment, as well as new business development and acquisition costs. At September 30, 1997, the Company had cash and cash equivalent balances totaling $539,000. The Company has three separate lines of credit from different commercial banks. As of September 30, 1997, the Company had a total line of credit facility with limits of $16,000,000, and unused lines of credit of $7,660,000. Two of the lines of credit have limits of $6,000,000 each and expire at December 31, 1997 and January 1, 1998, respectively. The third line of credit which has a limit of $4,000,000 expires on April 30, 1998. All of the lines of credit are expected to be renewed in the normal course of business. As of September 30, 1997, the amount of additional borrowing capacity available under short-term lines of credit was limited by financial covenants that restrict additional current borrowing to a maximum of $3,954,000. The Company expects to complete negotiations with two banks in November 1997 to renew the lines of credit expiring at the end of 1997. Based on negotiations during November, and subject to completion of all documentation with the banks, the Company has extended the two lines of credit through 1999 and has renegotiated its financial covenants. If the revised covenants had been in effect at September 30, 1997, the additional borrowing capacity available would have been $9,051,000. The Company has traditionally used its short-term credit facility primarily for funding utility plant and equipment additions. When favorable long-term opportunities exist or when short-term borrowing needs exceed available short- term credit facilities, the Company has refinanced short-term borrowing with long-term financing. For example, in 1996, the Company completed long-term First Mortgage Bond financing aggregating $12,000,000. Among other financial covenants, the First Mortgage Bond Indentures limit the amount of utility property that may be pledged for additional secured borrowings. At September 30, 1997, the additional secured borrowing capacity under these indentures was approximately $28,858,000. During the third quarter of 1997, the Company's additions to property, plant and equipment were $12,204,000, representing an increase of $1,353,000 over the same period in 1996. Developers made contributions in aid of construction ("CIAC") and advances totaling $5,934,000, of which $4,276,000 was non-cash CIAC and the remaining $1,658,000 was received as cash. The Company-financed capital additions amount was $6,270,000 which was funded through net short-term borrowing of $3,151,000 with the remaining amount of $3,119,000 generated by cash flow from operations. Capital expenditures and developer contributions are expected to decrease approximately $2,000,000 over the next 12 months due to the completion of major projects in 1997. The Company anticipates that the available short-term borrowing capacity and the cash flow generated from operations will be sufficient to fund its activities for the next year. If additional cash were needed to fund improvements or to acquire additional assets, the Company would consider alternative sources, including long-term financing. The amount and timing of any future long-term financing would depend on various factors, including the timeliness and adequacy of rate increases, the availability of capital, and the Company's ability to meet interest and fixed charge coverage requirements. Regulatory approval is required for any long-term financing by Suburban and NMUI. If the Company were unable to renew its existing lines of credit or 8 obtain additional long-term financing, capital spending would be reduced or delayed until new arrangements were secured. Such financing arrangements could include seeking equity financing through a private placement or a public offering. REGULATORY AFFAIRS: Regulation: The rates and operations of the Company's utilities are regulated by the California Public Utilities Commission ("CPUC") and the New Mexico Public Utility Commission ("NMPUC"). The rates allowed are intended to provide the utilities an opportunity to earn a reasonable return on common equity and to fund necessary investments in property, plant and equipment. The Company anticipates that continuing construction expenditures and increased direct operating expenses will require periodic requests for rate increases. Suburban received CPUC approval for a 4.25% ($1,100,000) general rate increase, effective April 24, 1996, as well as a 2.62% ($705,000) step increase, effective January 1, 1997. Suburban has filed for an additional step increase of 2.62% ($740,000) which, if approved, would become effective January 1, 1998. Tax Legislation: In 1996, the California legislature enacted Senate Bill 1099, which became effective January 1, 1997. This legislation provides that a water utility which sold excess property and reinvested the sale proceeds within an eight-year period in the utility's plant do not need to allocate any portion of any gain on sale to the ratepayers. From 1990 through 1995, Suburban recorded pretax gains on land sales of four parcels of excess real property totaling $1,690,000. Since the proceeds of the four land sales were reinvested in utility plant, the gains should not be subject to allocation to the ratepayers. In 1996, legislation was enacted that changed the federal tax treatment of CIAC received after June 12, 1996. This legislation repealed the requirement to include CIAC as a component of taxable income, eliminating the requirement for the Company to pay taxes on CIAC when received. The new legislation also eliminates the depreciation deduction for CIAC and changes the depreciation method and useful lives for most non-CIAC water utility property. The net impact of the repeal of the income tax on CIAC, combined with the changes in depreciation calculations, is expected to favorably impact the Company's utilities' cash flow. In 1997, the States of California and New Mexico adopted the federal treatment of CIAC and the related depreciation changes to their respective tax regulations. The Company does not believe that these tax law changes will have a material adverse impact on its ability to fund ongoing operations and capital requirements. Regulatory Developments: The California legislature has held hearings discussing the CPUC's organization and operation. Among other options, the CPUC has proposed consideration of performance-based rate making, which would provide incentives for utilities to operate more efficiently and improve productivity. If enacted, these changes are expected to reduce regulatory burden and promote efficiency among utilities which, if accomplished, would likely benefit both ratepayers and stockholders. Legislative and CPUC developments are closely monitored by the Company and by the various water industry associations in which the Company actively participates. Whether such legislative or CPUC changes will be enacted, or, if enacted, what the terms of such changes would be, are not known by the Company. Therefore, management cannot predict the impact of final legislative or CPUC developments on the Company's financial condition or results of operations. 9 In 1996, the residents of the state of New Mexico voted to pass a constitutional amendment to combine the NMPUC and the New Mexico Corporation Commission ("NMCC") and create the New Mexico Public Regulatory Commission ("NMPRC"). Presently, the NMPUC consists of three appointed officials and the NMCC consists of three elected officials. Under the newly enacted legislation, the NMPRC will consist of five elected officials who will be elected in November 1998, and take office on January 1, 1999. A legislative committee is currently reviewing proposed changes to the Public Utilities Act (the "PUA"). The Company cannot predict if or when changes to the PUA will ultimately occur; or if changes are enacted, the impact on NMUI's financial position or results of operations. Contract Operations: ECO's pricing is not subject to regulation by a public utilities commission. ECO's long-term water and wastewater service contracts typically include annual inflation adjustments. Most contracts with municipal utility districts are short-term contracts and do not generally include inflation adjustments. Changes in prices are negotiated on a contract-by-contract basis. ENVIRONMENTAL AFFAIRS: The Company's operations are subject to water and wastewater pollution prevention standards and water and wastewater quality regulations of the United States Environmental Protection Agency (the "EPA") and various state regulatory agencies. The EPA and state regulatory agencies continue to promulgate new regulations mandated by the Federal Water Pollution Control Act, the Safe Drinking Water Act (as reenacted in 1996), and the Resource Conservation and Recovery Act. Both the EPA and state regulatory agencies require periodic testing and sampling of water. To date, the Company has not experienced any material adverse effects upon its operations resulting from compliance with governmental regulations. As discussed in the Company's Form 10-Q Report for the quarter ending June 30, 1997, Suburban was advised by the San Gabriel Basin Water Quality Authority that the California Department of Health Services ("CDHS") was monitoring groundwater sources for the contaminant "perchlorate", which had been detected in the Main San Gabriel Valley Upper Basin. In June 1997, the contaminant was detected in a well that is operated but not owned by Suburban, at a level in excess of the state's allowable standards. Suburban continues to blend water produced from this well with other water sources, bringing the concentration within the CDHS standards. The impact of this contaminant on the results of operations for Suburban is not fully known at the time; however, costs associated with testing of Suburban's water supplies have increased and are expected to increase further as regulatory agencies adopt additional monitoring requirements. Suburban believes that these costs will be recoverable from ratepayers in future rate increases; however, there is no assurance that recovery of these costs will be allowed. The Company believes that future incremental costs of complying with governmental regulations, including capital expenditures, if any, will be recoverable through increased rates and contract operations revenues. However, there is no assurance that recovery of such costs will be allowed. RESULTS OF OPERATIONS: THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1996 Earnings per common share were $.38 in 1997, compared to $.28 (adjusted for a stock dividend of 20% on January 2, 1997) during the same period in 1996. Operating income increased $618,000 or 29%, and, as a percentage of operating revenues, was 14% in 1997 compared with 11% in 1996. Operating income at the utilities increased $442,000, due primarily to 10 increased water sales at Suburban and the positive effects of water rate increases. ECO's operating results improved $476,000, due to increased revenue from new contracts, additional work performed outside the scope of existing contracts, aggressive cost containment measures, and restructuring of marketing responsibilities. Parent company expenses increased $300,000, due primarily to increases in insurance expenses, legal reserves, and payroll related costs. Operating revenues Operating revenues increased $1,499,000 or 8%. Water utility revenues increased $404,000 due primarily to Suburban's rate increases. Warmer weather in Southern California led to a modest increase in water consumption by Suburban's customers. Water utility revenues increased at NMUI by 10% due to the increase in the number of NMUI's customers in 1997 as compared to 1996. ECO's revenues increased $1,095,000, primarily as a result of new contracts and additional work performed outside the scope of existing contracts. Direct operating expenses Direct operating expenses increased $672,000 or 5%. As a percentage of operating revenues, these expenses were 73% in 1997 and 75% in 1996. Water utility direct operating expenses decreased $84,000, primarily reflecting a decrease in water purchased from outside suppliers which resulted in lower water costs. ECO's direct operating expenses increased $756,000, resulting primarily from higher expenses associated with new contracts and additional work performed outside the scope of existing contracts. Selling, general and administrative Selling, general and administrative expenses increased $209,000 or 9%. As a percentage of operating revenues, these expenses were 13% in 1997 and 1996. General and administrative expenses at the utilities increased $46,000. ECO's selling, general and administrative expenses decreased $137,000, primarily due to the restructuring of marketing responsibilities. As discussed above, general and administrative expenses of the parent company increased $300,000. Interest expense Interest expense increased $87,000, due primarily to higher short-term and long-term credit balances in 1997 as compared with 1996. NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1996 Earnings per common share increased from $.41 (adjusted for a stock dividend of 20% on January 2, 1997) in 1996 to $.65 in 1997. Operating income increased $1,510,000, or 37%, and, as a percentage of operating revenues, was 10% in 1997 as compared with 8% in 1996. Operating income at the utilities increased $1,292,000, due primarily to increased water consumption at Suburban and the positive effects of water rate increases. ECO's operating results improved by $600,000 due to increased revenues from new contracts, additional work performed outside the scope of existing contracts, aggressive cost containment measures, and restructuring of marketing responsibilities. Parent company expenses increased $382,000 primarily due to increases in insurance expenses, legal reserves, payroll related costs, and increases in outside services. 11 Operating revenues Operating revenues increased $3,973,000 or 8%. Water utility sales increased $1,841,000 due to warmer weather in Southern California resulting in a 5.2% increase in water consumption by Suburban's customers. Water rate increases at Suburban also favorably impacted operating revenues. ECO's revenues increased $2,132,000, primarily as a result of revenues from new contracts and additional work performed outside the scope of existing contracts. Direct operating expenses Direct operating expenses increased $1,672,000 or 4%. As a percentage of operating revenues, these expenses were 74% in 1997 and 77% in 1996. Water utility direct operating expenses increased $289,000, which reflects the increase in water consumption by Suburban's customers. ECO's operating expenses increased $1,383,000 resulting primarily from higher expenses associated with new contracts and increased billable work. Selling, general and administrative Selling, general and administrative expenses increased $791,000 or 11%. As a percentage of operating revenues, these expenses were 15% in 1997 and 1996. Selling, general and administrative expenses at the utilities increased $260,000 primarily due to increased legal reserves, insurance, payroll and payroll related benefits, and outside services. ECO's selling, general and administrative expenses increased $149,000 primarily due to higher insurance, legal and consulting expenses, and payroll related expenses. This was offset by a reduction in marketing costs resulting from the restructuring of marketing responsibilities. As discussed above, general and administrative expenses of the parent company increased $382,000. Interest expense and other income Interest expense increased $323,000, primarily due to higher total short-term and long-term credit balances in 1997 as compared with 1996. Other income increased $102,000, primarily due to consulting fees received as a result of an investment in Windermere Utility Company. 12 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On October 30, 1997, Suburban and the Company were served with a summons and an amended complaint in the Kristin Santamaria, et al. vs. Suburban Water Systems, et al. action. Information concerning these proceedings was included in the Company's Form 10-Q Report for the quarter ended June 30, 1997. The only changes from the original complaint filed in July 1997, but not served, were the addition of approximately 250 additional plaintiffs (claiming on behalf of themselves and for the alleged wrongful deaths of family members) and the addition of two additional water purveyors in the San Gabriel Valley (the "Valley") as defendants in the action. The plaintiffs contend, in essence, that they or deceased family members are or were long-time residents of the Valley and that, by virtue of their residence in the Valley, they have suffered long- term exposure to various hazardous substances and, in some cases, wrongful deaths. Suburban annually takes over 4,000 water samples from reservoirs, wells and residences, which are then tested by independent, state-certified laboratories. Water tested by these laboratories has continued to comply with all state and Federal drinking water standards. Southwest Water Company is a holding company and not a water purveyor. The Company and Suburban will vigorously defend against all claims made by the plaintiffs and believe they are not liable for any damages to the plaintiffs. Based on information available at this time, management does not expect that this matter will have a material effect on the Company's financial position or results of operations. Suburban, the Company, and several unrelated parties were served with a complaint in September 1995, wherein the plaintiff claimed that while working in the 1950's and 1960's for an independent contractor hired by Suburban, he was exposed to asbestos fibers and contracted mesothelioma. Suburban and the Company denied all allegations in their response to the complaint. The plaintiff died in 1995, and in 1996 the plaintiff's widow and children filed a wrongful death action against Suburban and the Company. This complaint alleges the same facts as the first complaint, plus the wrongful death of the original plaintiff. The two actions have been consolidated. Information concerning this action, the other defendants therein and the efforts of the Company and Suburban to cause their insurers to defend the action is set forth in the Company's Form 10-Q Report for the quarter ended March 31, 1997. To date, there has been no specific claim for damages by the plaintiffs. Suburban and the Company maintain that they have no responsibility for the death of the original plaintiff and intend to contest these claims vigorously. As discussed in Note 9 to the Condensed Consolidated Financial Statements, the City of Albuquerque (the "City") on November 4, 1997 initiated an action in eminent domain to acquire the operations of NMUI. The Company believes that the fair market value of NMUI is substantially in excess of the amount offered in the City's complaint and that there is some doubt whether the City will proceed with the action. Under New Mexico state law, there are procedures which would allow the City to take possession prior to a resolution of the fair market value issue; however, the Company believes that it has adequate defenses should the City choose to pursue these procedures. If the City pursues a final determination of fair market value and possession of NMUI through a court trial, the Company does not anticipate resolution of these matters in the near future. The Company and its subsidiaries are the subject of certain litigation arising from the ordinary course of operations. The Company believes the ultimate resolution of such matters will not materially affect its consolidated financial condition, results of operations or cash flow. 13 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits furnished pursuant to Item 601 of Regulation S-K: 4.6 Registration Statement for the Second Amendment to the Amended and Restated Southwest Water Company Stock Option and Restricted Stock Plan (incorporated by reference to Registrant's Form S-8 Registration Statement filed with the Commission on October 29, 1997). 10.4F Letter of Extension to Credit Agreement dated September 1, 1997, between Registrant and Wells Fargo Bank, filed herewith. 10.4G Letter of Extension to Credit Agreement dated November 1, 1997, between Registrant and Wells Fargo Bank, filed herewith. 10.13B Letter of Extension to Credit Agreement dated September 1,1997, between Suburban Water Systems and Wells Fargo Bank, filed herewith. 10.13C Letter of Extension to Credit Agreement dated November 1,1997, between Suburban Water Systems and Wells Fargo Bank, filed herewith. 10.14C Third Amendment to Credit Agreement dated August 11, 1997, between Registrant and Mellon Bank, filed herewith. 27 Financial Data Schedule. (b) Reports on Form 8-K: There were no reports on Form 8-K filed for the three months ended September 30, 1997. 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. SOUTHWEST WATER COMPANY ----------------------- (Registrant) Dated: November 12, 1997 /s/ Peter J. Moerbeek - - ------------------------ --------------------- PETER J. MOERBEEK, Vice President Finance and Chief Financial Officer 15 EX-10.4F 2 LETTER OF EXTENSION TO CREDIT AGRMNT DATED 9-1-97 EXHIBIT 10.4F September 1, 1997 Southwest Water Company 225 N. Barranca Ave., Suite 200 West Covina, CA 91719 Gentlemen: This letter is to confirm that Wells Fargo Bank, National Association, successor-by-merger to First Interstate Bank of California ("Bank") has agreed to extend the maturity date of that certain credit accommodation granted by Bank to Southwest Water Company ("Borrower") in the original maximum principal amount of Five Million dollars ($5,000,000.00) with said principal amount subsequently increased to Six Million Dollars ($6,000,000.00) pursuant to the terms and conditions of that certain Credit Agreement between Bank and Borrower dated as of December 22, 1992, as amended from time to time (the "Agreement"). The maturity date of said credit accommodation is hereby extended until November 1, 1997. Until such date, all terms and conditions of the Agreement which pertain to said credit accommodation shall remain in full force and effect, except as expressly modified hereby. The promissory note dated as of December 22, 1992, as modified and/or amended from time to time, executed by Borrower and payable to the order of Bank which evidences said credit accommodation, a copy of which is attached hereto as Exhibit A (the "Note"), --------- shall be deemed modified as of the date this letter is acknowledged by Borrower to reflect the new maturity date set forth above. All other terms and conditions of the note remain in full force and effect, without waiver or modification. Borrower acknowledges that Bank has not committed to make any renewal of further extension of the maturity date of the above-described credit accommodation beyond the new maturity date specified herein, and that any such renewal of further extension remains in the sole discretion of Bank. This letter constitutes the entire agreement between Bank and Borrower with respect to the maturity date extension for the above-described credit accommodation, and supersedes all prior negotiations, discussions and correspondence concerning said extension. Please acknowledge your acceptance of the terms and conditions contained herein by dating and signing one copy below and returning it to my attention at the above address on or before September 15, 1997. Very truly yours, WELLS FARGO BANK, NATIONAL ASSOCIATION SUCCESSOR- BY-MERGER TO FIRST INTERSTATE BANK OF CALIFORNIA By: /s/ Richard Madsen ---------------------- RICHARD MADSEN Vice President Acknowledged and accepted as of September 1, 1997 SOUTHWEST WATER COMPANY By: /s/Peter J. Moerbeek -------------------- PETER J. MOERBEEK Title: Vice President Finance, CFO --------------------------- By: /s/Stephen J. Muzi ------------------ STEPHEN J. MUZI Title: Corporate Controller -------------------- EX-10.4G 3 LETTER OF EXTENSION TO CREDIT AGRMNT DATED 11-1-97 EXHIBIT 10.4G November 1, 1997 Southwest Water Company 225 N. Barranca Ave., Suite 200 West Covina, CA 91719 Gentlemen: This letter is to confirm that Wells Fargo Bank, National Association, successor-by-merger to First Interstate Bank of California ("Bank") has agreed to extend the maturity date of that certain credit accommodation granted by Bank to Southwest Water Company ("Borrower") in the original maximum principal amount of Five Million dollars ($5,000,000.00) with said principal amount subsequently increased to Six Million Dollars ($6,000,000.00) pursuant to the terms and conditions of that certain Credit Agreement between Bank and Borrower dated as of December 22, 1992, as amended from time to time (the "Agreement"). The maturity date of said credit accommodation is hereby extended until January 1, 1998. Until such date, all terms and conditions of the Agreement which pertain to said credit accommodation shall remain in full force and effect, except as expressly modified hereby. The promissory note dated as of December 22, 1992, as modified and/or amended from time to time, executed by Borrower and payable to the order of Bank which evidences said credit accommodation, a copy of which is attached hereto as Exhibit A (the "Note"), --------- shall be deemed modified as of the date this letter is acknowledged by Borrower to reflect the new maturity date set forth above. All other terms and conditions of the note remain in full force and effect, without waiver or modification. Borrower acknowledges that Bank has not committed to make any renewal of further extension of the maturity date of the above-described credit accommodation beyond the new maturity date specified herein, and that any such renewal of further extension remains in the sole discretion of Bank. This letter constitutes the entire agreement between Bank and Borrower with respect to the maturity date extension for the above-described credit accommodation, and supersedes all prior negotiations, discussions and correspondence concerning said extension. Please acknowledge your acceptance of the terms and conditions contained herein by dating and signing one copy below and returning it to my attention at the above address on or before November 14, 1997. Very truly yours, WELLS FARGO BANK, NATIONAL ASSOCIATION SUCCESSOR- BY-MERGER TO FIRST INTERSTATE BANK OF CALIFORNIA By: /s/ Richard Madsen ------------------ RICHARD MADSEN Vice President Acknowledged and accepted as of October 1, 1997 SOUTHWEST WATER COMPANY By: /s/Anton C. Garnier ------------------- ANTON C. GARNIER Title: President --------- By: /s/Peter J. Moerbeek -------------------- PETER J. MOERBEEK Title: Vice President Finance, ----------------------- EX-10.13B 4 LETTER OF EXTENSION TO CREDIT AGRMNT DATED 9-1-97 EXHIBIT 10.13B September 1, 1997 Southwest Water Company 225 N. Barranca Ave., Suite 200 West Covina, CA 91719 Gentlemen: This letter is to confirm that Wells Fargo Bank, National Association ("Bank") has agreed to extend the maturity date of that certain credit accommodation granted by Bank to Suburban Water Systems ("Borrower") in the maximum principal amount of Four Million Dollars ($4,000,000.00) pursuant to the terms and conditions of that certain credit Agreement between Bank and Borrower dated as of June 30, 1996, as amended from time to time (the "Agreement"). The maturity date of said credit accommodation is hereby extended until November 1, 1997. Until such date, all terms and conditions of the Agreement which pertain to said credit accommodation shall remain in full force and effect, except as expressly modified hereby. The promissory note dated as of December 22, 1992, as modified and/or amended from time to time, executed by Borrower and payable to the order of Bank which evidences said credit accommodation, a copy of which is attached hereto as Exhibit A (the "Note"), --------- shall be deemed modified as of the date this letter is acknowledged by Borrower to reflect the new maturity date set forth above. All other terms and conditions of the note remain in full force and effect, without waiver or modification. Borrower acknowledges that Bank has not committed to make any renewal of further extension of the maturity date of the above-described credit accommodation beyond the new maturity date specified herein, and that any such renewal of further extension remains in the sole discretion of Bank. This letter constitutes the entire agreement between Bank and Borrower with respect to the maturity date extension for the above-described credit accommodation, and supersedes all prior negotiations, discussions and correspondence concerning said extension. Please acknowledge your acceptance of the terms and conditions contained herein by dating and signing one copy below and returning it to my attention at the above address on or before September 15, 1997. Very truly yours, WELLS FARGO BANK, NATIONAL ASSOCIATION SUCCESSOR- BY-MERGER TO FIRST INTERSTATE BANK OF CALIFORNIA By: /s/ Richard Madsen ---------------------- RICHARD MADSEN Vice President Acknowledged and accepted as of September 1, 1997 SOUTHWEST WATER COMPANY By: /s/Daniel N. Evans ------------------ DANIEL N. EVANS Title: Vice President Finance ---------------------- By: /s/Peter J. Moerbeek -------------------- PETER J. MOERBEEK Title: Secretary --------- EX-10.13C 5 LETTER OF EXTENSION TO CREDIT AGRMNT DATED 11-1-97 EXHIBIT 10.13C November 1, 1997 Southwest Water Company 225 N. Barranca Ave., Suite 200 West Covina, CA 91719 Gentlemen: This letter is to confirm that Wells Fargo Bank, National Association ("Bank") has agreed to extend the maturity date of that certain credit accommodation granted by Bank to Suburban Water Systems ("Borrower") in the maximum principal amount of Four Million Dollars ($4,000,000.00) pursuant to the terms and conditions of that certain credit Agreement between Bank and Borrower dated as of June 30, 1996, as amended from time to time (the "Agreement"). The maturity date of said credit accommodation is hereby extended until January 1, 1998. Until such date, all terms and conditions of the Agreement which pertain to said credit accommodation shall remain in full force and effect, except as expressly modified hereby. The promissory note dated as of December 22, 1992, as modified and/or amended from time to time, executed by Borrower and payable to the order of Bank which evidences said credit accommodation, a copy of which is attached hereto as Exhibit A (the "Note"), --------- shall be deemed modified as of the date this letter is acknowledged by Borrower to reflect the new maturity date set forth above. All other terms and conditions of the note remain in full force and effect, without waiver or modification. Borrower acknowledges that Bank has not committed to make any renewal of further extension of the maturity date of the above-described credit accommodation beyond the new maturity date specified herein, and that any such renewal of further extension remains in the sole discretion of Bank. This letter constitutes the entire agreement between Bank and Borrower with respect to the maturity date extension for the above-described credit accommodation, and supersedes all prior negotiations, discussions and correspondence concerning said extension. Suburban Water Systems November 1, 1997 Page 2 Please acknowledge your acceptance of the terms and conditions contained herein by dating and signing one copy below and returning it to my attention at the above address on or before November 14, 1997. Very truly yours, WELLS FARGO BANK, NATIONAL ASSOCIATION SUCCESSOR- BY-MERGER TO FIRST INTERSTATE BANK OF CALIFORNIA By: /s/Richard Madsen ----------------- RICHARD MADSEN Vice President Acknowledged and accepted as of October 1, 1997 SOUTHWEST WATER COMPANY By: /s/Daniel N. Evans ------------------ DANIEL N. EVANS Title: Vice President Finance ---------------------- By: /s/Peter J. Moerbeek -------------------- PETER J. MOERBEEK Title: Secretary --------- EX-10.14C 6 THIRD AMENDMENT TO CREDIT AGRMNT DATED 8-11-97 EXHIBIT 10.14C THIRD AMENDMENT TO CREDIT AGREEMENT ----------------------------------- THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of August 11, 1997, is entered into between MELLON BANK, N.A. ("Lender:), with a place of ------ business at 400 South Hope Street, Fifth Floor, Los Angeles, California 90071 and SOUTHWEST WATER COMPANY, a Delaware corporation ("Borrower"), with its chief executive office at 225 North Barranca Avenue, Suite 200, West Covina, California 91719-1605. RECITALS -------- A. Borrower and Lender have previously entered into that certain Credit Agreement dated as of August 29, 1996, as amended by that certain First Amendment to Credit Agreement effective as of March 31, 1997 and that certain Second Amendment to Credit Agreement dated as of June 17, 1997 (Collectively, the "Credit Agreement"), pursuant to which lender has made certain loans and ---------------- financial accommodations available to Borrower. Terms used herein without definition shall have the meanings ascribed to them in the Credit Agreement. B. Borrower has requested Lender to amend the Credit Agreement to extend the Maturity Date from August 31, 1997 to December 31, 1997. C. Lender is willing to amend the Credit Agreement under the terms and conditions set forth in this Amendment. Borrower is entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of Lender's rights or remedies as set forth in the Credit Agreement is being waived or modified by the terms of this Amendment. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. The definition of "Maturity Date" set forth in Section 1.01 of the ------------- Credit Agreement is hereby amended to read in its entirety as follows: "Maturity Date: December 31, 1997." ------------- 2. Effectiveness of this Amendment. Lender must have received the ------------------------------- following items, in form and content acceptable to Lender, before this Amendment is effective and before Lender is required to extend any credit to Borrower as provided for by this Amendment. The date on which all of the following conditions have been satisfied is the "Closing Date". ------------ (a) Amendment. This Amendment fully executed in a sufficient number of counterparts for distribution to Lender and Borrower. (b) Authorization. Evidence that the execution, delivery and ------------- performance by Borrower of this Amendment has been duly authorized. (c) Representations and Warranties. The Representations and ------------------------------ Warranties set forth in the Credit Agreement must be true and correct. 3. Representations and Warranties. The Borrower represents and warrants ------------------------------ as follows: (a) Authority. The Borrower has the requisite corporate power and --------- authority to execute and deliver this Amendment and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party. The execution, delivery and performance by the Borrower of this Amendment and the performance by the Borrower of each Loan Document (as amended or modified hereby) to which it is a party have been duly approved by all necessary corporate action of the Borrower and no other corporate proceedings on the part of the Borrower are necessary to consummate such transactions. (b) Enforceability. This Amendment has been duly executed and --------------- delivered by the Borrower. This Amendment and each Loan Document (as amended or modified hereby) is the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, and is in full force and effect. (c) Representations and Warranties. The representations and ------------------------------ warranties contained in each Loan Document (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct on and as of the date hereof as though made on and as of the date hereof. (d) No Default. No event has occurred and is continuing that ---------- constitutes an Event of Default. 4. Choice of Law. The validity of this Amendment, its construction, ------------- interpretation and enforcement, the rights of the parties hereunder, shall be determined under, governed by, and construed in accordance with the internal laws of the State of California governing contracts only to be performed in that State. 5. Counterparts. This Amendment may be executed in any number of ------------ counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile shall be effective as delivery of a manually executed counterpart of this Amendment. 2 6. Due Execution. The execution, delivery and performance of his ------------- Amendment are within the power of Borrower, have been duly authorized by all necessary corporate action, have received all necessary governmental approval, if any, and do not contravene any law or any contractual restrictions binding on Borrower. 7. Reference to and Effect on the Loan Documents. --------------------------------------------- (a) Upon and after the effectiveness of this Amendment each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to "the Credit Agreement", "thereof" or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as modified and amended hereby. (b) Except as specifically amended above, the Credit Agreement and all other Loan Documents, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations of Borrower to Lender. (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. (d) To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Credit Agreement as modified or amended hereby. 8. Ratification. Borrower hereby restates, ratifies and reaffirms each ------------ and every term and condition set forth in the Credit Agreement, as amended hereby, and the Loan Documents effective as of the date hereof. 9. Estoppel. To induce Lender to enter into his Amendment an to continue -------- to make advances to Borrower under the Credit Agreement, Borrower hereby acknowledges and agrees that, after giving effect to this Amendment, as of the date hereof, their exists no Event of Default and no right of offset, defense, counterclaim or objection in favor of Borrower as against Lender with respect to the obligations owing by Borrower to Lender under the Loan Documents. 3 IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written. SOUTHWEST WATER COMPANY, a Delaware corporation By: /s/Peter J. Moerbeek -------------------- Title: Vice President Finance and Chief Financial Officer By: /s/Stephen J. Muzi ------------------ Title: Controller MELLON BANK, N.A. By: /s/Kevin Kelly -------------- Title: Vice President 4 EX-27 7 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 539,000 0 10,755,000 576,000 0 13,510,000 137,798,000 37,487,000 123,054,000 19,504,000 30,700,000 0 517,000 31,000 31,382,000 123,054,000 0 53,876,000 0 48,241,000 (227,000) 158,000 2,397,000 3,556,000 1,493,000 2,063,000 0 0 0 2,063,000 0.65 0.65
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