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1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994 Commission File
number 1-6659
PHILADELPHIA SUBURBAN CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1702594
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
762 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010
--------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: (610)-527-8000
--------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
------------------- -------------------------
Common stock, par value $.50 per share New York Stock Exchange, Inc.
Philadelphia Stock Exchange Inc.
Securities registered pursuant to Section
12(g) of the Act: None
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
filing requirements for the past 90 days.
Yes x No
------ ------
State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 1, 1995. $176,943,928
For purposes of determining this amount only, registrant has defined
affiliates as including (a) the executive officers named in Part I of this
10-K report, (b) all directors of registrant, and (c) each shareholder that
has informed registrant by March 1, 1995, that it has sole or shared voting
power of 5% or more of the outstanding common stock of registrant.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of March 1, 1995. 11,758,514
Documents incorporated by reference
(1) Portions of registrant's 1994 Annual Report to shareholders have been
incorporated by reference into Parts I and II of this Form 10-K Report.
(2) Portions of the Proxy Statement, relative to the May 18, 1995 annual
meeting of shareholders of registrant, to be filed within 120 days after
the end of the fiscal year covered by this Form 10-K Report, have been
incorporated by reference into Part III of this Form 10-K Report.
2
PART I
------
Item 1. Business
--------
Philadelphia Suburban Corporation ("PSC" or the "Registrant"), a
Pennsylvania corporation, was incorporated in 1968. The business of PSC is
conducted almost entirely through its subsidiary Philadelphia Suburban Water
Company ("PSW"), a regulated public utility. PSC also owns a small data
processing service operation, Utility & Municipal Services, Inc. The
information appearing in "Management's Discussion and Analysis" from the
portions of PSC's 1994 Annual Report to shareholders filed as Exhibit 13.2 to
this Form 10-K Report is incorporated by reference herein.
In 1990, the Board of Directors authorized the sale of Mentor Information
Systems, Inc., Digital Systems, Inc., American Tele/Response Group, Inc.,
Stoner Associates, Inc., and its subsidiary Kesler Engineering, Inc.; and in
1991, the Board of Directors authorized the sale of PSC Engineers &
Consultants, Inc. During 1991, all the businesses were sold except for American
Tele/Response Group, Inc. and Kesler Engineering, Inc., which were sold in the
first quarter of 1993. The results of operations of these businesses are
accounted for as discontinued operations. Unless otherwise indicated, as used
herein the "Company" includes the continuing operations of both PSC and its
consolidated subsidiaries. The sales of the non-water service subsidiaries were
authorized in order to allow the Company to concentrate its activities on its
core water utility operations.
Consistent with that decision, PSW has completed five water system
acquisitions in the last three years. In December 1994, PSW acquired the
franchise rights and the water utility assets of two privately owned water
companies for a total of $612,000 in cash. These water supply systems are
located adjacent to PSW's existing service territory and had combined 1994
revenues of approximately $120,000 prior to the acquisitions. In December 1993,
PSW acquired the water utility assets and franchise rights of the Borough of
Malvern for $1,323,000 in cash. In December 1992, PSW acquired the water
utility assets of the West Whiteland Township and the Uwchlan Township
Municipal Authority water systems for $9,128,000 in cash and the issuance of
$1,777,000 in debt. Combined, the latter three systems added 41 square miles of
service territory adjacent to PSW's existing service territory and had revenues
of approximately $2,480,000 in 1994.
Further, PSW submitted a proposal to purchase the water utility assets of
Media Borough ("Media") for approximately $24,500,000. In November 1994, Media
disclosed that it has selected PSW's proposal and has since enacted the
necessary ordinance authorizing the transaction. The Media water system covers
a 23 square mile service area contiguous to PSW's service territory. The
transaction, which is subject to final negotiations and the approval of the
Pennsylvania Public Utility Commission ("PUC"), is expected to be completed in
the late spring or early summer of 1995.
PSW has also entered into preliminary agreements to acquire six water
systems for a combined purchase price of approximately $7,300,000. These
systems cover approximately 40 square miles and are adjacent or near to PSW's
service territory. In addition, PSW continues to hold discussions with several
other water systems that are near or adjacent to it's service territory.
3
Item 1, Continued
Philadelphia Suburban Water Company
-----------------------------------
General. PSW is an operating public utility company, which supplies water to
approximately 249,533 residential, commercial, industrial and public customers.
PSW's contiguous service territory is approximately 382 square miles,
comprising a large portion of the suburban area west and north of the City of
Philadelphia. This territory is primarily residential in nature and is
completely metered, except for fire hydrant service.
Based on the 1990 census, PSW estimates that the total number of persons
currently served is approximately 800,000. Excluding the customers that were
added at the time of acquisitions in the last three years, customer accounts
have grown at an average rate of approximately .6% per annum for the last three
years.
Operating revenues during the twelve months ended December 31, 1994 were
derived approximately as follows:
65.1% from residential customers
21.5% from commercial customers
4.9% from industrial customers
1.2% from public customers
6.6% from fire protection services
.7% from sales to other water utilities and
miscellaneous customers
-----
100.0%
=====
4
Item 1, Continued
Selected operating statistics. Set forth below is a table showing certain
selected operating statistics for PSW for the past three years.
Revenues from water sales (000's omitted) 1994 1993 1992
---- ---- ----
Residential $69,545 $66,183 $58,738
Commercial 23,020 19,970 18,755
Industrial 5,175 4,568 4,387
Public 1,257 1,027 1,003
Fire protection 7,054 5,912 5,330
Other 848 1,095 1,057
Tax Surcharge (97) 706 2,281
-------- ------- -------
Total $106,802 $99,461 $91,551
======== ======= =======
Water sales (million gallons)
Residential 16,577 16,729 16,034
Commercial 7,804 7,441 7,146
Industrial 2,085 1,985 1,947
Public 324 294 277
Fire protection - metered 55 60 56
Other 261 401 383
-------- ------- -------
Total 27,106 26,910 25,843
======== ======= =======
System delivery by source
(million gallons)
Surface (including Upper Merion
reservoir) 25,386 24,635 24,230
Wells 5,037 5,466 4,642
Purchased 2,356 2,446 2,392
-------- ------- -------
Total 32,779 32,547 31,264
======== ======= =======
Number of metered customers
(end of year)
Residential 234,624 232,684 230,740
Commercial 10,777 10,7 10,547
Industrial 833 832 837
Public 688 696 671
Fire protection 2,596 2,248 1,980
Other 15 15 13
-------- ------- -------
Total 249,533 247,195 244,788
======== ======= =======
Average consumption per
customer in gallons 109,001 110,368 108,258
======== ======= =======
5
Item 1, Continued
Water supplies and usage. PSW derives its principal supply of water from the
Schuylkill River, five rural streams which are tributaries of the Schuylkill
and Delaware Rivers, and the Upper Merion Reservoir, a former quarry now
impounding groundwater. All of these are either within or adjacent to PSW's
service territory. PSW acquired the right to remove water from these sources,
and in connection with such rights, PSW has secured the necessary regulatory
approvals. PSW has constructed five impounding reservoirs and four treatment
and pumping facilities to provide storage and purification of these surface
water supplies.
The Pennsylvania Department of Environmental Resources ("DER") has regulatory
power with respect to sources of supply and the construction, operation and
safety practices for certain dams and other water containment structures under
the Pennsylvania Dam Safety and Encroachments Act of 1979. PSW's dams are in
compliance with these requirements in all material respects.
PSW's surface supplies are supplemented by 40 wells. PSW also has
interconnections with: the Chester Water Authority, which permits PSW to
withdraw up to 6.2 million gallons per day ("mgd"); the Bucks County Water and
Sewer Authority, which provides for a supply of up to 7.0 mgd; and the West
Chester Area Municipal Authority, which provides up to a maximum of 1.0 mgd.
Agreements regarding the first two interconnections require PSW to purchase
certain minimum amounts of water. PSW believes it possesses all the necessary
permits to obtain its supply of water from the sources indicated above.
The minimum safe yield of all sources of supply described above, based on low
stream flows of record with respect to surface supplies, is as follows:
Surface supplies 90.5 mgd
Upper Merion Reservoir 7.2
Wells 17.7
Purchased supplies 8.1
-----
Total 123.5 mgd
=====
During periods of normal precipitation, the safe yield is more than the
minimum shown above. Under normal operating conditions, PSW can deliver a
maximum of 139 mgd to its distribution system for short periods of time. The
average daily sendout for 1994, 1993 and 1992 was 89.8, 89.1 and 85.4 mgd,
respectively.
The maximum demand ever placed upon PSW's facilities for one month occurred
during June 1988, when sendout averaged 101.4 mgd. The peak day of record
occurred during July 1993 when water use reached 118.8 mgd.
Actual water usage (as measured by the water meters installed at each service
location) is less than the amount of water delivered into the system due to
leaks, PSW's operational use of water, fire hydrant usage and other similar
uses. Water consumption per customer is affected by local weather conditions
during the year. In general, during the late spring and summer, an increase in
rainfall reduces water consumption, while a decrease in rainfall increases it.
Also, an increase in the average temperature generally causes an increase in
water consumption.
Energy supplies. PSW does all of its pumping using electric power purchased
from PECO Energy Company. Energy supplies have been sufficient to meet customer
demand.
6
Item 1, Continued
Water shortages. The Delaware River Basin, which is the drainage area of the
Delaware River from New York State to Delaware, periodically experiences water
shortages during the summer months. To the extent that the reservoirs in the
upper part of the Basin are affected by a lack of precipitation, the Delaware
River Basin Commission (the "DRBC") may impose either voluntary or mandatory
water use restrictions on portions or all of the Basin.
PSW's raw water supplies have generally been adequate to meet customer demand
for the past five years principally because of its five impounding reservoirs.
However, since PSW's service territory is within the Basin, PSW's customers may
be required to comply with DRBC water use restrictions, even if PSW's supplies
are adequate, if the availability of water in the entire DRBC area is
inadequate.
During 1988 and the two preceding years, the lower regions of the Basin
experienced hot, dry weather conditions while the upper regions of the Basin
enjoyed normal or above normal precipitation. During all three years PSW had
sufficient quantities of raw water available and no drought restrictions were
imposed by the DRBC. However, in the summer of 1988, with the record breaking
heat and the resulting high water demand created by lawn sprinkling, PSW
imposed restrictions banning nonessential water uses in order to maintain
adequate storage levels of treated water and to reduce peak demands in the
distribution system. No water use restrictions were imposed by PSW in the years
subsequent to 1988. The addition of the 15 mgd Pickering Creek treatment plant
in 1991 and improvements to the distribution system in the past five years have
reduced the possibility of PSW issuing water use restrictions in the future due
to demands on its system.
Regulation by the Pennsylvania Public Utility Commission. PSW is subject to
regulation by the PUC which has jurisdiction with respect to rates, service,
accounting procedures, issuance of securities, acquisitions and other matters.
Under applicable Pennsylvania statutes, PSW has rights granted under its
Articles of Incorporation and by certificates of public convenience from the
PUC authorizing it to conduct its present operations in the manner in which
such operations are now conducted and in the territory in which it now renders
service, to exercise the right of eminent domain and to maintain its mains in
the streets and highways of such territory. Such rights are generally
nonexclusive, although it has been the practice of the PUC to allow only one
water company to actually provide service to a given area. Consequently, PSW is
subject to competition only with respect to potential customers located on the
fringe of areas that it presently serves who also may have access to the
service of another water supplier.
In 1992, the PUC issued a policy statement which, under certain
circumstances, required utilities to extend service to new customers without
the benefit of a customer advance for construction. As a result of various
problems and uncertainties associated with the implementation of this policy
statement, the PUC initiated a rulemaking procedure in December 1993, intended
to facilitate the development of practical standards by which the broad policy
statement can be applied. The Company believes that when instituted, the new
standards will reflect the position that the cost of service extensions should
be justified by anticipated revenues from the extension or should be paid by
the service applicant.
7
Item 1, Continued
Water Quality & Environmental Issues. PSW is subject to regulation of water
quality by the U.S. Environmental Protection Agency ("EPA") under the Federal
Safe Drinking Water Act (the "SDWA") and by the Pennsylvania Department of
Environmental Resources ("DER") under the Pennsylvania Safe Drinking Water Act.
The SDWA provides for the establishment of uniform minimum national water
quality standards, as well as governmental authority to specify the type of
treatment process to be used for public drinking water. PSW is presently in
compliance with all standards and treatment requirements promulgated to date.
The EPA has an ongoing directive to issue additional regulations under the
SDWA. The directive was clarified in 1986 when Congress amended the SDWA to
require, among other revisions, disinfection of all drinking water, additional
maximum contaminant level ("MCL") specifications, and filtration of all surface
water supplies. PSW has already installed the necessary equipment to provide
for the disinfection of the drinking water throughout the system and is
monitoring for the additional specified contaminants. PSW's surface water
supplies are filtered.
In addition, the 1986 SDWA Amendments require the EPA to promulgate MCLs for
many chemicals not previously regulated. EPA has to date promulgated MCLs for
numerous additional contaminants and is required to mandate further MCLs every
three years. Promulgation of additional MCLs by the EPA in the future may
require PSW to change some of its treatment techniques, however, PSW meets all
existing MCL requirements and believes that the currently proposed MCLs will
not have a significant impact on its capital requirements or operating
expenses. In 1991, the EPA proposed regulations pertaining to radionuclides
(including radon). Recently, the Congress extended a one year moratorium to two
years on radon regulations. Depending upon the final MCLs permitted, PSW will
likely be required to take remedial action at certain of its groundwater
facilities. The remediation options presently under evaluation include
dilution, treatment, or replacement of the supply with other groundwater or
surface water supplies. Based on the MCL initially proposed, it is anticipated
that the capital costs of compliance will range from $2.5 to $3.5 million over
the next 10 years. PSW may, in the future, have to change its method of
treating drinking water at certain of its sources of supply if additional
regulations become effective.
In 1991, EPA promulgated final regulations for lead and copper (the "Lead and
Copper Rule"). Under the Lead and Copper Rule, large water utilities are
required to conduct corrosion control studies and to sample certain high-risk
customer homes to determine the extent of treatment techniques that may be
required. PSW conducted the two required rounds of sampling in 1992 and did not
exceed the EPA action levels for either lead or copper. Additional sampling
will be required in the future. PSW has developed a corrosion control program
for its surface sources of supply and does not foresee the need to make any
major additional treatment changes or capital expenditures as a result of the
Lead and Copper Rule.
On January 1, 1993, new federal regulations ("Phase II") became effective for
certain volatile organics, herbicides, pesticides and inorganic parameters.
Although PSW will not be required by the DER to monitor for most of these
parameters until 1995, PSW has already done substantial monitoring. In the few
cases where Phase II contaminants were detected, concentrations were below
MCLs. Future monitoring will be required, but no major treatment modifications
are anticipated as a result of these regulations.
8
Item 1, Continued
PSW is also subject to other environmental statutes administered by the EPA
and DER. These include the Federal Clean Water Act and the Resource
Conservation and Recovery Act ("RCRA"). Under the Federal Clean Water Act, the
Company must obtain National Pollutant Discharge Elimination System ("NPDES")
permits for discharges from its treatment stations. PSW currently maintains
three NPDES permits relating to its surface water treatment plants, which are
subject to renewal every five years. During the past five years, PSW has
installed the required waste water treatment facilities and presently meets all
NPDES requirements. Although management recognizes that permit renewal may
become more difficult if more stringent guidelines are imposed, no significant
obstacles to permit renewal are presently foreseen.
Under RCRA, PSW is subject to specific regulations regarding the solid waste
generated from the water treatment process. The DER promulgated "Final
Rulemaking" for solid waste (Residual Waste Management) in July 1992. PSW has
retained an engineering consultant to assist with the extensive monitoring,
record keeping and reporting required under these regulations. A preliminary
application for permitting has been filed, and formal permitting of these
facilities should be completed by 1996 in accordance with regulatory
requirements.
Where PSW is required to make certain capital investments in order to
maintain its compliance with any of the various regulations discussed above, it
is management's belief that all such expenditures would be fully recoverable in
PSW's water rates. However, the capital costs, under current law, would have to
be financed prior to their inclusion in PSW's rate structure, and the resulting
rate increases would not necessarily be timely.
Utility & Municipal Services, Inc.
----------------------------------
Utility & Municipal Services, Inc. ("UMS") provides data processing services
to several water utilities including PSW, and to several municipal water and
sewer systems. The services provided to the utilities and municipalities
include billing services and the processing of financial reports.
Employee Relations
------------------
As of December 31, 1994, the Registrant employed a total of 525 persons, of
which 513 are employees of PSW. Hourly employees of PSW are represented by the
International Brotherhood of Firemen and Oilers, Local No. 473. The contract
with the union was renewed on December 1, 1994 for a three-year period.
Management considers its employee relations to be satisfactory.
Item 2. Properties.
-----------
The Registrant believes that the facilities used in the operation of its
various businesses are generally in excellent condition in terms of
suitability, adequacy and utilization.
9
Item 2, Continued
The property of PSW consists of a waterworks system devoted to the
collection, storage, treatment and distribution of water in its service
territory. Management considers that its properties are maintained in good
operating condition and in accordance with current standards of good waterworks
practice. The following table summarizes the principal physical properties
owned by PSW:
No. of Square Feet
Location Buildings Description Floor Area
-------- --------- ----------- ----------
Pennsylvania 5 Office & warehouse 151,185
Pennsylvania 14 Pumping stations and
treatment buildings 155,116
Pennsylvania 22 Well stations App. 600 ea.
Pennsylvania 18 Well stations App. 150 ea.
Pennsylvania 38 Booster stations App. 1,100 ea.
In addition, PSW also owns 45 storage facilities for treated water throughout
its service territory with a combined capacity of 139.1 million gallons and
five surface water impounding reservoirs. The water utility also owns
approximately 2,991 miles of transmission and distribution mains, has 249,533
active metered services and 11,030 fire hydrants.
PSW's properties referred to herein, with certain minor exceptions which do
not materially interfere with their use, are owned and are subject to the lien
of an Indenture of Mortgage dated as of January 1, 1941, as supplemented. In
the case of properties acquired through the exercise of the power of eminent
domain and certain properties acquired through purchase, it has title only for
water supply purposes.
The Registrant's corporate offices and the facilities of UMS are leased from
PSW and located in Bryn Mawr, Pennsylvania.
Item 3. Legal Proceedings
-----------------
There are no pending legal proceedings to which the Registrant or any of its
subsidiaries is a party or to which any of their properties is the subject that
present a reasonable likelihood of a material adverse impact on the Registrant.
As previously reported, there are two proceedings which arose from a fire in a
warehouse in Newark, New Jersey, where hazardous substances were alleged to have
been stored. PSW was involved or potentially involved because it was alleged
that, out of more than 2,000 drums of material at the warehouse, one of the
drums had originated from PSW. One of these proceedings has been dismissed and
the other is in settlement discussions and is not expected to have a material
adverse impact on the Registrant.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of 1994.
Information with respect to the executive officers of the Company is
contained in Item 10 hereof and is hereby incorporated by reference herein.
10
PART II
-------
Item 5. Market for the Registrant's Common Stock and Related Security
Holder Matters
-------------------------------------------------------------
The Company's common stock is traded on the New York Stock Exchange and the
Philadelphia Stock Exchange. As of March 1, 1995, there were approximately
11,260 holders of record of the Company's common stock.
The following selected quarterly financial data of the Company is in
thousands of dollars, except for per share amounts:
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -----
1994
Earned revenues ................... 24,849 $26,730 $28,849 $28,208 $108,636
Operating expenses ................ 12,056 12,001 12,511 13,728 50,296
Net income ........................ 2,949 4,035 4,897 3,757 15,638
Net income per share .............. .26 .35 .42 .32 1.35
Dividend paid per share ........... .27 .27 .28 .28 1.10
Price range of common stock
- high .......................... 19.63 18.50 19.38 18.75 19.63
- low ........................... 17.38 17.13 17.50 17.25 17.13
1993
Earned revenues ................... $22,726 $25,048 $27,948 $25,522 $101,244
Operating expenses ................ 10,733 11,205 12,078 11,973 45,989
Net income ........................ 2,587 3,604 4,257 3,387 13,835
Net income per share .............. .26 .33 .38 .30 1.27
Dividend paid per share ........... .26 .27 .27 .27 1.07
Price range of common stock
- high .......................... 18.25 18.38 20.75 20.13 20.75
- low ........................... 15.63 17.25 18.13 17.75 15.63
Following is a recent history of income from continuing operations and
dividends of the Company:
Income per
share from
Cash dividend continuing Payout
per share operations ratio
------------- ---------- ------
1990 $1.00 $1.27 79%
1991 1.00 1.29 78
1992 1.04 1.23 85
1993 1.07 1.27 84
1994 1.10 1.35 81
Dividends have averaged approximately 81% of income from continuing
operations during this period. In May 1994, the annual dividend increased by
3.7% to $1.12 beginning with the September 1994 dividend.
11
Item 6. Selected Financial Data
-----------------------
The information appearing in the section captioned "Summary of Selected
Financial Data" from the portions of the Company's 1994 Annual Report to
shareholders filed as Exhibit 13.2 to this Form 10-K Report is incorporated by
reference herein.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
----------------------------------------------------------------
The information appearing in the section captioned "Management's Discussion
and Analysis" from the portions of the Company's 1994 Annual Report to
shareholders filed as Exhibit 13.2 to this Form 10-K Report is incorporated by
reference herein.
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
Information appearing under the captions "Consolidated Statements of Income",
"Consolidated Balance Sheets", "Consolidated Cash Flow Statements" and "Notes
to Consolidated Financial Statements" from the portions of the Company's 1994
Annual Report to shareholders filed as Exhibit 13.2 to this Form 10-K Report is
incorporated by reference herein. Also, the information appearing in the
section captioned "Reports on Financial Statements" from the portions of the
Company's 1994 Annual Report to shareholders filed as Exhibit 13.2 to this Form
10-K Report is incorporated by reference herein.
Item 9. Disagreements on Accounting and Financial Disclosure
----------------------------------------------------
None.
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Directors of the Registrant
---------------------------
The information appearing in the section captioned "Information Regarding
Nominees and Directors" of the Proxy Statement relating to the May 18, 1995,
annual meeting of shareholders of the Company, to be filed within 120 days
after the end of the fiscal year covered by this Form 10-K Report, is
incorporated by reference herein.
Executive Officers of the Registrant
------------------------------------
The following table and the notes thereto set forth information with
respect to the executive officers of the Registrant, including their names,
ages, positions with the Registrant and business experience during the last
five years:
Position with the Registrant
Name Age and date of election (1)
---- --- ----------------------------
Nicholas DeBenedictis 49 President and Chairman (May 1993 to
present); President and Chief Executive
Officer (July 1992 to May 1993);
Chairman and Chief Executive Officer,
Philadelphia Suburban Water Company
(July 1992 to Present); President,
Philadelphia Suburban Water Company
(February 1995 to present) (2)
12
Item 10, Continued
Robert A. Luksa 60 Vice Chairman, Philadelphia Suburban
Water Company (February 1995 to
present); President, Philadelphia
Suburban Water Company (October 1986 to
February 1995) (3)
Richard R. Riegler 48 Senior Vice President - Operations,
Philadelphia Suburban Water Company
(April 1989 to present) (4)
Roy H. Stahl 42 Senior Vice President and General
Counsel (April 1991 to present) (5)
Michael P. Graham 46 Senior Vice President - Finance and
Treasurer (March 1993 to present) (6)
-------------------------
(1) In addition to the capacities indicated, the individuals named in the above
table hold other offices or directorships with subsidiaries of the Registrant.
Officers serve at the discretion of the Board of Directors.
(2) Mr. DeBenedictis was Secretary of the Pennsylvania Department of
Environmental Resources from 1983 to 1986. From December 1986 to April 1989,
he was President of the Greater Philadelphia Chamber of Commerce. Mr.
DeBenedictis was Senior Vice President for Corporate and Public Affairs of
Philadelphia Electric Company from April 1989 to June 1992.
(3) Mr. Luksa was Executive Vice President of PSW from April 1982 to October
1986 and from 1971 to April 1982 he was Vice President and Chief Engineer of
this subsidiary.
(4) Mr. Riegler was Chief Engineer of Philadelphia Suburban Water Company from
1982 to 1984. He then served as Vice President and Chief Engineer from 1984 to
1986 and Vice President of Operations from 1986 to 1989.
(5) From January 1984 to August 1985, Mr. Stahl was Corporate Counsel, from
August 1985 to May 1988 he was Vice President - Administration and Corporate
Counsel of the Registrant, and from May 1988 to April 1991 he was Vice
President and General Counsel of the Registrant.
(6) Mr. Graham was Controller of the Company from 1984 to September 1990, and
from September 1990 to May 1991 he was Chief Financial Officer and Treasurer.
From May 1991 to March 1993, Mr. Graham was Vice President - Finance and
Treasurer.
Item 11. Management Remuneration
-----------------------
The information appearing in the sections captioned "Compensation of
Directors and Executive Officers" of the Proxy Statement relating to the May
18, 1995, annual meeting of shareholders of the Company, to be filed within 120
days after the end of the fiscal year covered by this Form 10-K Report, is
incorporated by reference herein.
13
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The information appearing in the sections captioned "Ownership of Common
Stock" of the Proxy Statement relating to the May 18, 1995, annual meeting of
shareholders of the Company, to be filed within 120 days after the end of the
fiscal year covered by this Form 10-K Report, is incorporated by reference
herein.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
The information appearing in the sections captioned "Other Remuneration and
Certain Transactions" of the Proxy Statement relating to the May 18, 1995,
annual meeting of shareholders of the Company, to be filed within 120 days
after the end of the fiscal year covered by this Form 10-K Report, is
incorporated by reference herein.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
---------------------------------------------------------------
Financial Statements. The following is a list of the consolidated financial
statements of the Company and its subsidiaries and supplementary data
incorporated by reference in Item 8 hereof:
Management's Report
Independent Auditors' Report
Consolidated Balance Sheets - December 31, 1994 and 1993
Consolidated Statements of Income - 1994, 1993 and 1992
Consolidated Statements of Cash Flow - 1994, 1993, and 1992
Notes to Consolidated Financial Statements
Financial Statement Schedules. The financial statement schedules, or
supplemental schedules, filed as part of this annual report on Form 10-K are
omitted because they are not applicable or not required, or because the
required information is included in the consolidated financial statements or
notes thereto.
Reports on Form 8-K. The Company filed no report on Form 8-K during the quarter
ended December 31, 1994.
Exhibits, Including Those Incorporated by Reference. The following is a list of
exhibits filed as part of this annual report on Form 10-K. Where so indicated
by footnote, exhibits which were previously filed are incorporated by
reference. For exhibits incorporated by reference, the location of the exhibit
in the previous filing is indicated in parenthesis. The page numbers listed
refer to page number where such exhibits are located using the sequential
numbering system specified by Rules 0-3 and 403.
14
EXHIBIT INDEX
Exhibit No. Page No.
- - ------------ --------
3.1 Amended and Restated Articles of Incorporation, as -
amended (1) (Exhibit 3.1)
3.2 By-Laws, as amended (1) (Exhibit 3.2) -
4.1 Indenture of Mortgage dated as of January 1, 1941 -
between Philadelphia Suburban Water Company and
The Pennsylvania Company for Insurance on Lives
and Granting Annuities(now First Pennsylvania
Bank, N.A.), as Trustee, with supplements
thereto through the Twentieth Supplemental
Indenture dated as of August 1, 1983 (2)
(Exhibits 4.1 through 4.16)
4.2 Revolving Credit Agreement between Philadelphia Suburban -
Water Company and Mellon Bank (East) National Associ-
ation dated as of February 16, 1990 (3) (Exhibit 4.3)
4.3 First Amendment to Revolving Credit Agreement between -
Philadelphia Suburban Water Company and Mellon Bank
N.A. dated as of September 1, 1992 (1) (Exhibit 4.3)
4.4 Preferred Stock Agreement between Philadelphia Suburban -
Water Company and Provident Life and Accident Insurance
Company dated as of January 1, 1991 (3) (Exhibit 4.4)
4.5 Indenture dated as of July 1, 1988 between Philadelphia -
Suburban Corporation and the Philadelphia National
Bank, as Trustee. (4) (Exhibit 4)
4.6 Form of Rights Agreement, dated as of February 19, 1988, -
between Philadelphia Suburban Corporation and
Mellon Bank (East) National Association, as amended
by Amendment No. 1. (5) (Exhibit 1)
4.7 Agreement to furnish copies of other long-term debt -
instruments (1) (Exhibit 4.7)
4.8 Twenty-first Supplemental Indenture dated as of August 1, -
1985 (6) (Exhibit 4.2)
4.9 Twenty-second Supplemental Indenture dated as of April 1, -
1986 (7) (Exhibit 4.3)
4.10 Twenty-third Supplemental Indenture dated as of April 1, -
1987 (8) (Exhibit 4.4)
4.11 Twenty-fourth Supplemental Indenture dated as of June 1, -
1988 (9) (Exhibit 4.5)
4.12 Twenty-fifth Supplemental Indenture dated as of -
January 1, 1990 (10) (Exhibit 4.6)
15
EXHIBIT INDEX, Continued
Exhibit No. Page No.
- - ------------ --------
4.13 Twenty-sixth Supplemental Indenture dated as of November -
1, 1991 (11) (Exhibit 4.12)
4.14 Twenty-seventh Supplemental Indenture dated as of June 1, -
1992 (1) (Exhibit 4.14)
4.15 Twenty-eighth Supplemental Indenture dated as of April -
1, 1993 (12) (Exhibit 4.15)
4.16 Revolving Credit Agreement between Philadelphia -
Suburban Water Company and Mellon Bank, N.A., PNC Bank
National Association, First Fidelity Bank, N.A.
and Meridian Bank, N.A. dated as of March 17, 1994
(12) (Exhibit 4.16)
10.1 1982 Stock Option Plan, as amended and restated effective -
May 21, 1992* (1) (Exhibit 10.1)
10.2 1988 Stock Option Plan, as amended and restated effective -
May 21, 1992* (1) (Exhibit 10.2)
10.3 Executive Incentive Award Plan, as amended March 21, -
1989 and February 6, 1990* (10) (Exhibit 10.3)
10.4 Excess Benefit Plan for Salaried Employees, -
effective December 1, 1989* (10) (Exhibit 10.4)
10.5 Supplemental Executive Retirement Plan, effective -
December 1, 1989* (10) (Exhibit 10.5)
10.6 Supplemental Executive Retirement Plan, effective March -
15, 1992* (1) (Exhibit 10.6)
10.7 1993 Incentive Compensation Plan* (1) (Exhibit 10.7) -
10.8 Employment letter agreement with Mr. Nicholas -
DeBenedictis* (1) (Exhibit 10.8)
10.9 1994 Incentive Compensation Program* (12) (Exhibit 10.9) -
10.10 1994 Equity Compensation Plan* (12) (Exhibit 10.10) -
10.11 1995 Incentive Compensation Plan* 20
13.1 Selected portions of Annual Report to -
shareholders for the year ended December 31,
1993 incorporated by reference in Annual Report
on Form 10-K for the year ended December 31,
1993 (12) (Exhibit 13)
13.2 Selected portions of Annual Report to 26
shareholders for the year ended December 31,
1994 incorporated by reference in Annual Report
on Form 10-K for the year ended December 31,
1994
16
EXHIBIT INDEX, Continued
Exhibit No. Page No.
- - ------------ --------
22. Subsidiaries of Philadelphia Suburban Corporation 64
24. Consent of Independent Auditors 65
25. Power of Attorney (set forth as a part of this report) 18
27. Financial Data Schedule 66
17
- Notes -
Documents Incorporated by Reference
(1) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1992
(2) Indenture of Mortgage dated as of January 1, 1941 with supplements
thereto through the Twentieth Supplemental Indenture dated as of August
1, 1983 were filed as an Exhibit to Annual Report on Form 10-K for the
year ended December 31, 1983.
(3) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1990.
(4) Filed as Exhibit 4 to the Registration Statement on Form S-3 filed with
the Securities and Exchange Commission on June 14, 1988.
(5) Filed as Exhibit 1 to the Registration Statement on Form 8-A filed with
the Securities and Exchange Commission on March 1, 1988, with respect to
the New York Stock Exchange, and on November 9, 1988, with respect to
the Philadelphia Stock Exchange.
(6) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1985.
(7) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1986.
(8) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1987.
(9) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1988.
(10) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1989.
(11) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1991.
(12) Filed as an Exhibit to Annual Report on Form 10-K for the year ended
December 31, 1993.
* Indicates management contract or compensatory plan or arrangement.
18
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.
PHILADELPHIA SUBURBAN CORPORATION
By Nicholas DeBenedictis
---------------------
Nicholas DeBenedictis
President and
Chairman
Date: March 13, 1995
Pursuant to the requirements of the Securities and 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.
Each person in so signing also makes, constitutes and appoints Nicholas
DeBenedictis, President and Chairman of Philadelphia Suburban Corporation,
Michael P. Graham, Senior Vice President - Finance and Treasurer of
Philadelphia Suburban Corporation, and each of them, his or her true and lawful
attorneys-in-fact, in his or her name, place and stead to execute and cause to
be filed with the Securities and Exchange Commission any and all amendments to
this report.
19
John H. Austin, Jr. Claudio Elia
- - ------------------------------- ---------------------------------
John H. Austin, Jr. Claudio Elia
Director Director
John W. Boyer, Jr. Michael P. Graham
- - ------------------------------- ---------------------------------
John W. Boyer, Jr. Michael P. Graham
Director Senior Vice President - Finance and
Treasurer (principal financial and
accounting officer)
Mary C. Carroll Joseph C. Ladd
- - ------------------------------- ---------------------------------
Mary C. Carroll Joseph C. Ladd
Director Director
Nicholas DeBenedictis John F. McCaughan
- - ------------------------------- ---------------------------------
Nicholas DeBenedictis John F. McCaughan
President and Chairman Director
(principal executive
officer) and Director
G. Fred DiBona, Jr.
- - ------------------------------- ---------------------------------
G. Fred DiBona, Jr. Harvey J. Wilson
Director Director