Item 1. BUSINESS
PRODUCTS AND SERVICES
IWC Resources Corporation (Resources or, together with its subsidiaries, the Company) is a holding company which owns and operates seven subsidiaries, including two waterworks systems, which supply water for residential, commercial, and industrial uses, and for fire protection service in Indianapolis, Indiana and surrounding areas. The territory served by the two utilities covers an area of approximately 309 square miles, which includes areas in Marion, Hancock, Hamilton, Hendricks, Boone and Morgan counties in central Indiana.
Resources' two waterworks systems include Indianapolis Water Company (IWC) and Harbour Water Corporation (HWC). At year's end, IWC was providing service to 232,568 customers. HWC, in the Morse Reservoir area of Hamilton County (north of Indianapolis), was serving 2,722 customers.
In addition to the two water utilities, Resources has five other wholly owned subsidiaries; SM&P Utility Resources, Inc. (SM&P), Miller Pipeline Corporation (MPC), Waterway Holdings, Inc., Utility Data Corporation (UDC), and IWC Services, Inc. SM&P performs underground utility locating and marking services in Indiana and other states. MPC's primary function is the installation of underground pipelines for natural gas utilities. In addition, MPC sells products and services related to infrastructure preservation and replacement. The Company, principally through Waterway Holdings, Inc., owns real estate that it expects to sell or develop in the future. UDC provides customer relations, customer billing, and other data processing services for the Company's two water utilities and other water and sewer utilities. IWC Services provides laboratory water testing services, principally for water utilities.
The Company, through IWC Services, is a majority partner in the White River Environmental Partnership (WREP) which, under a five-year contract entered into in December, 1993, operates and maintains two advanced wastewater treatment facilities for the city of Indianapolis. WREP is actively seeking new markets and opportunities for contract management service pursuant to expanded governmental privatization efforts.
The Company continues to seek expansion and diversification through the acquisition of other water utilities and other related businesses. It is expected, however, that the water utilities will continue as the majority source of earnings for the Company in the forseeable future. The utility subsidiaries of the Company are subject to regulation by the Indiana Utility Regulatory Commission, which has jurisdiction over rates, standards of service, accounting procedures, issuance of securities, and related matters. Utility operations are subject to pollution control and water quality control regulations,including those issued by the Environmental Protection Agency, the Indiana Department of Environmental Management, the Indiana Water Pollution Control Board, and the Indiana Department of Natural Resources. There are competitors operating near the Company's system, which include various municipal water utilities, as well as privately owned water utilities, some of which purchase water from the Company.
INDUSTRY SEGMENT FINANCIAL INFORMATION
The Company's operations include two business segments: regulated water utilities and unregulated utility-related services. The water utilities segment includes the operations of the Company's two water utility subsidiaries. The utility-related services segment provides utility line locating services, installation, repairs and maintenance of underground pipelines, data processing and billing and payment processing, and other utility-related services to both unaffiliated utilities and to the Company's water utilities, and holds real estate for sale or development. The discussion of segment information, including selected financial data included on pages 36 through 37 of the 1995 Annual Report under "Segment Information", is incorporated herein by reference.
SECURITIES AND RATE REGULATION
The utility subsidiaries of the Company are subject to regulation by the Indiana Utility Regulatory Commission (Commission) which has jurisdiction over rates, standards of service, accounting procedures, issuance of securities and related matters. The Commission consists of five Commissioners, appointed by the Governor of Indiana from a list of persons selected by a 7-member nominating committee whose members are: appointed by the Governor (3); and the majority (2) and minority (2) leaders of the Indiana House and Senate. Decisions of the Commission are appealable directly to the Indiana Court of Appeals.
Securities. The issuance of securities by Resources is not subject to approval by the Commission. The issuance of securities by, and changes in the equity capital of, the Company's utility subsidiaries, including IWC, must be approved.
Water Rates. Rates charged by the Company for water service are approved by the Commission. It is the Company's policy to seek rate relief when necessary to maintain its service and financial soundness. The Company is not permitted to submit petitions for general rate relief more frequently than every fifteen months.
Rate Case. On May 10, 1995, the Commission approved a Settlement Agreement entered into by the UCC, four intervening customers and IWC, which provided for an annual increase in IWC's rates of $2,547,000, or approximately 4%. The parties further agreed not to seek an adjustment in IWC's basic rates and charges prior to April 1, 1997, subject to IWC's interim right to request approval of new rates to cover operating expenses connected with implementing measures which might be required in connection with new National Pollutant Discharge Elimination System permits which IWC anticipates receiving for wastewater discharges at its Fall Creek and White River Stations (NPDES permits). The parties also agreed that prior to April 1, 1997, IWC may request that the Commission approve, in a separate proceeding, the continuation of the allowance for funds used during construction (debt component only), and the deferral of depreciation, on any capital expenditures made in connection with new NPDES permits at the Fall Creek and White River Stations or IWC's anticipated new South Well Field Station until a rate base determination has been made with respect to these items in IWC's next rate case.
On March 22, 1995, the Commission granted IWC authority to issue, on or before December 31, 1996, and aggregate of $30,000,000 in securities, to consist of not more than $18,000,000 in the form of long-term debt and/or preferred equity, and, assuming favorable market conditions, up to $12,000,000 in common equity. IWC issued $18,000,000 of long-term debt in September 1995, in the form of First Mortgage Bonds, 5.85% Series due 2025. Proceeds from the issuance of these securities are being used for the construction, extension and improvement of IWC's facilities, plant and distribution system, reimbursement of IWC's treasury for plant capital expenditures previously made, and the discharge or refunding of short-term debt and higher cost long-term debt. In December 1995, Resources made an equity capital contribution to IWC of $10,505,000. The amount invested by Resources was derived from proceeds of the sale of common shares of the Company through its Dividend Reinvestment and Share Purchase Plan.
COMPETITIVE CONDITIONS
The Company conducts its water utility operations, subject to regulation by the Commission, under indeterminate permit and related franchise rights, all of which may be revoked for cause. Under such permit and franchise rights, the Company may lay, maintain and operate its mains and conduits in public streets and ways throughout the area which it serves. The permit and franchise rights granted to the Company are not exclusive. There are competitors operating near the Company's service area, which include various municipal water utilities, as well as privately owned water utilities, some of which purchase water from the Company. As the Indianapolis metropolitan area has expanded to include surrounding communities or previously rural areas, the Company has faced competition for new customers from town or rural water utilities.
The continuing regulation of the Commission covers, among other things, matters relating to rates, service, acquisition of utility properties, accounting practices, and the issuance of securities by IWC or HWC. The Company does not pay a franchise tax, and its franchise rights are long-term in nature.
The Company's unregulated utility-related services segment predominately serve other utilities. Underground facility locating services are provided primarily to the electric, gas and telecommunications industries which operate in the midwest and southwest regions of the country. Installation, repairs and maintenance of underground pipelines are provided primarily to the gas industry which operate principally in Indiana and Ohio. Data processing and billing and payment processing services are provided to the city of Indianapolis, the Company's water utilities, and to other unaffiliated utilities located in the state of Indiana. Services provided by this segment are subject to competitive conditions and are generally contracted for a period of three to five years.
RECENT AND PROPOSED CHANGES IN FACILITIES
During the year ended December 31, 1995, the Company added $42,835,000 (including $14,921,000 from the acquisition of MPC) to utility plant and other property, of which $20,941,000 is applicable to the water utilities segment. Approximately 93 miles of new mains were placed in service during the year.
During the past five years, additions to utility plant and other property have averaged $24,049,000 annually. The Company plans capital expenditures of approximately $150,000,000 during the five-year period 1996-2000 primarily for further extensions and improvements to the Company's utility distribution systems, further additions and improvements to its treatment, pumping and storage facilities and for other operating equipment. In 1995, construction was started on a new laboratory facility at the White River plant to alleviate the crowding conditions in the existing laboratory. The new facility will accommodate the additional equipment and personnel needed to perform the testing and monitoring required to assure water quality.
Design commenced on the first phase of a major new plant to be built in the South Well Field in southern Marion County. When completed, this plant will have the capacity to treat 50 million gallons of well water a day, making it the second largest treatment facility owned by the Company and the largest ground water plant in the state of Indiana.
For possible capital expenditures relating to environmental matters, which are not included above, see "Environmental Matters."
CAPACITY OF FACILITIES AND SOURCES OF WATER SUPPLY
The combined maximum daily capacity of the Company's treatment plants, together with the maximum daily capacity of its two primary well fields, is 220 million gallons per day (MGD). During 1995, the average consumption was 129 MGD and the maximum consumption was 207 MGD. See "Operating Information by Industry Segment."
The principal sources of IWC's present water supply are (a) the White River, which flows through Indianapolis from north to south and is supplemented by Morse Reservoir on a tributary, Cicero Creek, (b) Fall Creek, which flows from the northeast and is supplemented by Geist Reservoir, (c) the city of Indianapolis' Eagle Creek Reservoir, located on Eagle Creek in northwest Marion County, from which water is purchased under a long-term contract, (d) Geist Well Field, a ground water supply located downstream of Geist Reservoir, and (e) South Well Field located in southern Marion and northern Johnson Counties. See "Properties-Source of Water Supply."
The three large surface reservoirs are essential to providing an adequate supply during dry periods. Two are used to supplement low stream flows in the White River and Fall Creek, respectively, and water is drawn directly from the third. The reservoirs are rated at a dependable capacity designed to maintain an adequate supply during a repetition of the worst two-year drought ever recorded in the Indianapolis area.
The theoretical dependable supply impounded by the three combined reservoirs represents about 65 percent of the total dependable supply available today with the balance coming from natural stream flow and wells. Wells constitute the source of supply for HWC.
The Company has aquifer protections plans for the Geist and South well fields. Once fully developed, the Geist well field will produce 12 to 15 MGD while the South well field will produce 40 to 50 MGD. The protection plans will guide the Company's development of these newest major sources of supply, and result in land use plans to protect the aquifer systems from potential contamination sources.
SEASONAL NATURE OF BUSINESS
Typically, the seasonal nature of the Company's business results in a higher proportion of operating revenues being realized in the second and third quarters of the year than the first and fourth quarters of the year.
ENVIRONMENTAL MATTERS
The Company's utility operations are subject to pollution control and water quality control regulations, including those issued by the Environmental Protection Agency (EPA), the Indiana Department of Environmental Management (IDEM), the Indiana Water Pollution Control Board and the Indiana Department of Natural Resources. Under the Federal Clean Water Act and Indiana's regulations, the Company must obtain National Pollutant Discharge Elimination System (NPDES) permits for discharges from its White River, White River North, Fall Creek, Thomas W. Moses and the Geist treatment stations.
The Company's current NPDES permits were to have expired on June 30, 1989, for White River and Fall Creek stations, December 31, 1990, for Thomas W. Moses treatment station, April 30, 1994 for Geist treatment station and January 31, 1996, for the White River North Station. Applications for renewal of the permits have been filed with, but not finalized by, IDEM. (These permits continue in effect pending review of the applications.)
Under the federal Safe Drinking Water Act (SDWA), the Company is subject to regulation by EPA of the quality of water it sells and treatment techniques it uses to make the water potable. EPA promulgates nationally applicable maximum contaminants levels (MCLs) for contaminants found in drinking water. Management believes that the Company is currently in compliance with all MCLs promulgated to date. EPA has continuing authority, however, to issue additional regulations under the SDWA, and Congress amended the SDWA in July 1986 to require EPA, within a three-year period, to promulgate MCLs for over 80 chemicals not then regulated. EPA has been unable to meet the three-year deadline, but has promulgated MCLs for many of these chemicals and has proposed additional MCLs.
Management of the Company believes that it will be able to comply with the promulgated MCLs and those now proposed without any change in treatment technique, but anticipates that in the future, because of EPA regulations, the Company may have to change its method of treating drinking water to include ozonation and/or granular activated carbon (GAC). In either case, the capital costs could be significant (currently estimated at $27,000,000 for ozonation and $105,000,000 for GAC), as would be the Company's increase in annual operating costs (currently estimated at $1,400,000 for ozonation and $5,600,000 for GAC). Actual costs could exceed these estimates. The Company would expect to recover such costs through its water rates; however, such recovery may not necessarily be timely.
Under a 1991 law enacted by the Indiana Legislature, a water utility, including the utility subsidiaries of the Company, may petition the Indiana Utility Regulatory Commission (Commission) for prior approval of its plans and estimated expenditures required to comply with provisions of, and regulations under, the Federal Clean Water Act and SDWA. Upon obtaining such approval, the utility may include, to the extent of its estimated costs as approved by the Commission, such costs in its rate base for ratemaking purposes and recover its costs of developing and implementing the approved plans if statutory standards are met. The capital costs for such new systems, equipment or facilities or modifications of existing facilities may be included in the utility's rate base upon completion of construction of the project or any part thereof. While use of this statute is voluntary on the part of a utility, if utilized, it should allow utilities a greater degree of confidence in recovering major costs incurred to comply with environmental related laws on a timely basis.
EMPLOYEES
At December 31, 1995, Resources, its subsidiaries and affiliated partnership, employed 2,059 full time employees, including 351 water utility employees, 544 MPC employees and 928 SM&P employees. Approximately one-half of the Company's water utility employees are members of the International Brotherhood of Firemen and Oilers Local 131, AFL-CIO (Union). IWC and the Union have a four-year contract through December 31, 1998.
OPERATION INFORMATION BY INDUSTRY SEGMENT
Operating information by industry segment for each of the past five years follows:
Operating Revenues-Industry Segment (in thousands)
1995 1994 1993 1992 1991 Water Utilities: Residential $ 48,907 44,700 41,513 40,633 38,901 Commercial and Industrial 21,999 20,576 18,032 16,696 15,393 Other (1) 9,471 8,248 5,038 6,123 5,636
Total Water Utilities 80,377 73,524 64,583 63,452 59,930
Utility-Related Services (2) 66,688 37,855 19,659 - -
Total Operating Revenues (3) $147,065 111,379 84,242 63,452 59,930 ======= ======= ======= ======= =======
(1) Includes $4,698 and $3,611 in income taxes collected from developers in 1995 and 1994, respectively. (2) Reporting by segment was adopted in 1993 as a result of the acquisition of SM&P. Utility-related services for prior periods are not material and, accordingly, have not been reclassified to conform with the 1993 presentation. (3) Certain reclassifications have been made to originally reported amounts for 1994 and 1993 to conform with classifications adopted for 1995. These reclassifications did not have a material effect on amounts previously reported.
Operating Statistics-Water Utilities
1995 1994 1993 1992 1991 Water Sold (million gallons) Residential 21,723 21,402 20,232 20,644 22,493 Commercial and Industrial 17,294 17,121 15,337 14,660 15,312 Other 841 1,112 756 837 944 Total Water Sold 39,858 39,635 36,325 36,161 38,749 ====== ====== ====== ====== ====== Daily Pumpage (million gallons) Maximum 207 192 154 161 202 Minimum 100 91 93 90 91 Average 129 122 118 115 124
Utility Customers (end of year, in thousands) 235 229 224 219 214 Fire Hydrants (end of year) 26,525 25,737 24,730 24,215 23,465 Miles of Mains (end of year) 3,033 2,940 2,827 2,759 2,673
Item 2.
Item 2. PROPERTIES
GENERAL DESCRIPTION
The Company's water utilities' properties consist of land, easements, rights (including water rights), buildings, reservoirs, canal, wells, supply lines, purification plats, pumping stations, transmission and distribution pipes, mains and conduits, meters and other facilities used for the collection, purification, and storage of water, and the distribution of water to its customers. The water systems extend from well fields and raw water reservoirs on Cicero Creek and Fall Creek, north and northeast of Indianapolis, and from the intake structure in Indianapolis' Eagle Creek Reservoir, northwest of Indianapolis, to the service connections of the ultimate consumers. The principal properties are all located in or near Indianapolis and, except for Eagle Creek Reservoir, which is owned by the city of Indianapolis, are all owned by the Company, in fee, with the exception of its easements. Substantially all its utility property rights and interests, both tangible and intangible, are subject to the lien securing first mortgage bonds.
The Company's utility-related properties consist of data processing equipment used to provide data processing and billing and payment processing to both unaffiliated utilities and to the Company's water utilities, and land, buildings, vehicles and operating equipment used to provide line locating services and installation, repairs and maintenance of underground pipelines to unaffiliated utilities. The Company also owns parcels of land which it holds for possible sale or development. A general description of the principal properties is set forth in the following paragraphs.
SOURCE OF WATER SUPPLY
WHITE RIVER: White River, supplemented by Morse Reservoir, furnished 69% of IWC's water supply during 1995, of which 63% was provided by IWC's White River plant and 6% was provided by IWC's White River North plant. The drainage area of the White River above the intake of IWC's canal is approximately 1,200 square miles. In 1956, IWC completed Morse Reservoir on Cicero Creek, a tributary of the White River. It is located on approximately 1,692 acres of land owned by IWC of which about 1,500 acres are inundated. The storage capacity of this reservoir is approximately 6.9 billion gallons. With the reservoir supplementing the natural flow, it is estimated by IWC that the combined dependable flow in the White River can be maintained at a volume sufficient to produce 88 MGD. IWC owns and maintains a dam across White River at Broad Ripple
which serves to divert the flow into a canal. Water diverted at the Broad Ripple dam flows by gravity in the open canal to the White River treatment and pumping station. IWC's White River North plant has its intake directly on the White River.
FALL CREEK: Fall Creek, supplemented by Geist Reservoir, provided 19% of IWC's water supply in 1995. The area of the watershed drained by Fall Creek upstream from the Fall Creek Station intake is approximately 300 square miles. In 1943, IWC completed the Geist Reservoir on Fall Creek. The reservoir is situated on about 1,983 acres of land owned by IWC, of which 1,890 acres are inundated, and has a storage capacity of approximately 6.1 billion gallons. With the reservoir supplementing the natural flow in Fall Creek, it is estimated by IWC that the combined dependable flow in Fall Creek can be maintained at a volume sufficient to provide 25 MGD. At the Fall Creek Station, IWC owns and maintains a concrete dam which diverts the flow of the creek into the station intake.
EAGLE CREEK RESERVOIR: Raw water purchased from Eagle Creek Reservoir, a multipurpose reservoir owned and operated by the city of Indianapolis, provided 9% of IWC's water supply in 1995. On October 18, 1971, IWC and the City signed a 50-year contract, with an option for an additional 25 years, providing for the withdrawal, subject to certain restrictions, of up to 12.4 MGD on an annual average basis. IWC owns and maintains a raw water intake structure, pumping station, and pipeline within the reservoir property, which delivers the allotted supply to its Thomas W. Moses Treatment Plant.
WELLS: IWC owns 32 wells, of which 25 are supplementary or auxiliary supply and seven are primary sources of supply. Of the primary wells, three are located at the Geist Well Field and four are the first development of the South Well Field. The Company owns water rights under a total of 984 acres of land, of which 938 acres are located in Marion County and 46 acres are located in Johnson County. It is estimated that the aggregate dependable annual average yield under a repetition of the most severe two-year drought on record is approximately 14 MGD from the wells. In 1995, wells provided approximately 3% of IWC's water supply.
The source of supply for HWC consists of six wells having a total rated capacity and actual pumping capacity of 4.2 MGD.
PURIFICATION
Treatment of surface water in IWC's system involves coagulation and flocculation, after which the water flows through the sedimentation basins and then to gravity-type rapid filters. IWC has four primary surface water filtration and purification plants--two for the White River supply sources, one for the Fall Creek supply source, and one for the Eagle Creek supply source--equipped with rapid filters having a maximum operating capacity aggregating 180 MGD and two ground water treatment plants totaling 10 MGD.
The water treatment plant for HWC consists of four packaged filter iron removal units with a combined rated capacity of 3.5 MGD, including the new east plant which increased rated capacity by 1.5 MGD.
PUMPING
IWC owns seven principal pumping stations and eleven booster stations. The principal pumping stations have a total of 40 primary distribution pumps and have a maximum capacity of 326 MGD. The booster stations have 42 pumps, all of which are electrically or diesel fuel driven with a maximum capacity of 101 MGD. IWC has not to date experienced, nor does it anticipate, any shortage of electrical energy to run its pumps.
The high service pumping facilities for HWC consist of six electric motor-driven pumps housed in the same buildings as the treatment plants and have a maximum capacity of approximately 3.5 MGD.
In 1995, improvements were made to the piping at the Edmondson Booster Station, which resulted in significantly improved pressure in the southeast portion of the Company's service territory.
FILTERED WATER STORAGE
The Company's aggregate storage capacity for finished water is approximately 55 million gallons. IWC owns six filtered-water underground reservoirs at its five principal pumping stations which have an aggregate storage capacity of 39 million gallons. The filtered water in storage has been treated and is available to be pumped into the distribution system. Also, there are four elevated storage tanks with an aggregate storage capacity of over four million gallons and two ground storage tanks with an aggregate storage capacity of 12 million gallons.
The filtered water in the two ground storage tanks has been pumped by the principal pumping stations and is available to the respective booster stations to be pumped into the distribution system served by these stations. The four outlying elevated storage tanks "ride on" the distribution system and provide water by gravity flow.
There are two ground storage tanks at HWC, the first located adjacent to the treatment plant with a storage capacity of 50,000 gallons, and the second located adjacent to the new booster station with a storage capacity of 250,000 gallons. There is also an elevated storage tank in the distribution system which "rides on" the system and has a capacity of 250,000 gallons.
TRANSMISSION AND DISTRIBUTION
The Company's utility transmission and distribution systems are composed of 3,033 miles of mains, most of which are cast iron and ductile iron. During the past ten years, an aggregate of 765 miles of mains, or approximately 25% of the total, were added to the systems. In general, the mains are located in city streets, other public ways and occasionally in easements. The supply mains are located partly in city streets and partly in rights-of-way and land owned by the Company. The Company furnishes public fire protection service through hydrants owned by the Company and located generally within the limits of street rights-of-way.
UTILITY-RELATED PROPERTIES
The Company's data processing equipment is located at IWC's general office in Indianapolis, Indiana. The Company also owns land and buildings and leases (operating leases) additional buildings, all of which are used for its line locating services and operations related to installation, repairs and maintenance of underground pipelines. Vehicles, data processing equipment, and other operating equipment used in these operations are located at the various operating offices.
REAL ESTATE INTERESTS
At December 31, 1995, the Company owned undeveloped non-utility land located primarily north and west of Geist Reservoir in Hamilton County, and several additional parcels in Marion County. The Company continues to explore the possible sale or development of this land.
OFFICE BUILDING
The Company's main office building and service center was constructed in 1957 on 20 acres of land located approximately two miles from the center of the main business district of Indianapolis. The building houses the general and local commercial offices of the Company and provides a garage and building for storage of materials and vehicles, as well as shop space for repairs to automotive and other equipment. In May 1994, various administrative departments moved into the new General Office addition, west of the original building.
Item 3.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary litigation incidental to the Company's business, to which the Company is a party or of which any of their property is the subject.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of 1995 to a vote of security holders of the Registrant, through the solicitation of proxies or otherwise.
PART II
Item 5.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information regarding the trading market for the Company's Common Shares, the range of selling prices for each quarterly period during the past two years with respect to the Common Shares, the approximate number of holders of Common Shares as of December 31, 1995, the frequency and amount of dividends paid during the past two years with respect to the Common Shares and other matters is included under the captions "Stock Statistics" and "Distribution of Shareholders" on page 47 of the 1995 Annual Report, which information is incorporated herein by reference.
Item 6.
Item 6. SELECTED FINANCIAL DATA
The data included on page 40 of the 1995 Annual Report under "Selected Financial Data" is incorporated herein by reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the 1995 Annual Report on pages 41 through 46 is incorporated herein by reference.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements included in the 1995 Annual Report and listed in Item 14.1. of this Report are incorporated herein by reference from the 1995 Annual Report.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item regarding nominees for Director of the Company is incorporated herein by reference to the Company's definitive proxy statement for its 1996 annual meeting of common stockholders filed with the Commission pursuant to Regulation 14A (the "1996 Proxy Statement").
The following table sets forth the current officers of IWC Resources Corporation and its principal subsidiary, Indianapolis Water Company, their ages, and (as presented below in parentheses) their positions during the past five years. There is no family relationship between any of the officers of the Company. All officers are elected for a term of one year.
IWC RESOURCES CORPORATION
Name Age Position
James T. Morris 52 Chairman of the Board, Chief Executive Officer and President (President and Chief Operating Officer)
Joseph R. Broyles 53 President-IWC Industries
J. A. Rosenfeld 64 President-IWC Utilities (Executive Vice President; Senior Vice President and Treasurer; Financial Consultant)
Kenneth N. Giffin 52 Senior Vice President- Governmental Relations and Real Estate
John M. Davis 44 Vice President, General Counsel and Secretary
Alan R. Kimbell 64 Vice President-Marketing
James W. Shaffer 46 Vice President-Corporate Affairs
Murvin S. Enders 53 Vice President-Administrative Affairs
James P. Lathrop 50 Assistant Treasurer and Chief Accounting Officer (Controller)
Peggy J. Stinson 58 Assistant Secretary
INDIANAPOLIS WATER COMPANY
James T. Morris 52 Chairman of the Board and Chief Executive Officer (President and Chief Operating Officer)
J. A. Rosenfeld 64 President and Chief Operating Officer (Executive Vice President; Senior Vice President and Treasurer)
Kenneth N. Giffin 52 Senior Vice President-Governmental Relations (Senior Vice President- Human Resources and Corporate Relations)
John M. Davis 44 Vice President, General Counsel and Secretary
Robert F. Miller 51 Vice President-Engineering (Principal Projects Engineer)
David S. Probst 57 Vice President-Business Development (Vice President-Engineering Services)
Tim K. Bumgardner 47 Vice President-Operations (Vice President-Production)
Patricia L. Chastain 58 Vice President-Community Affairs (Director of Special Projects; Corporate Affairs Coordinator)
James W. Shaffer 46 Vice President - Corporate Affairs
Martha L. Wharton 66 Vice President-Customer Service (Vice President-Customer Relations; Assistant Secretary)
L. M. Williams 52 Vice President - Human Resources
James P. Lathrop 50 Assistant Treasurer and Chief Accounting Officer
Peggy J. Stinson 58 Assistant Secretary (Executive Secretary)
All of the above have been employed by the Company for more than five years except for Murvin S. Enders, J. A. Rosenfeld, John M. Davis and James W. Shaffer. Mr. Enders has been employed since October, 1995 and was previously employed by Chrysler Corporation. Additionally, Mr. Enders was a member of the Company's Board of Directors. Mr. Rosenfeld has been employed since January, 1992 and was previously employed by Melvin Simon & Associates. Mr. Davis has been employed since June, 1993 and was previously employed by KPMG Peat Marwick LLP. Mr. Shaffer has been employed since January, 1993 and was previously employed by Creative Concepts, Inc.
Item 11.
Item 11. EXECUTIVE COMPENSATION
The information required by this Item regarding compensation of the Company's officers and directors is incorporated herein by reference to the Company's 1996 Proxy Statement. The Compensation Committee Report to Shareholders and Comparative Stock Performance sections of the Company's 1996 Proxy Statement shall not be deemed "filed" herewith.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Information required by this item applicable to the Company's Redeemable Preferred Stock follows:
Title Name and Address Amount and Nature Percent of of of Beneficial of Class Beneficial Owner Ownership Class Redeemable Patrick J. Baker 17,204 shares 33-1/3% Preferred 1913 W. 116th St. Stock Carmel, IN 46032
Daniel S. Baker (1) 17,204 shares 33-1/3% 7285 Waterview Pt. Noblesville, IN 46060
Diana L. Sosbey 17,204 shares 33-1/3% 8596 Twin Pt. Cir. Indianapolis, IN 46236
(1) Mr. Daniel S. Baker is President of SM&P Utility Resources, Inc., (formerly SM&P Conduit Co., Inc.) a wholly owned subsidiary of the Company.
(b) The information required by this Item regarding the number of shares of the Company's Common Stock, beneficially owned by the nominees for Director and the officers of the Company is incorporated herein by reference to the Company's 1996 Proxy Statement.
(c) The Company knows of no arrangements the operation of which may at a subsequent date result in a change of control of the Company.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item regarding certain relationships and related transactions is incorporated herein by reference to the Company's 1996 Proxy Statement.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
The documents listed below are filed as a part of this report except as otherwise indicated:
1. Financial Statements. The following described consolidated financial statements found on the pages of the 1995 Annual Report indicated below are incorporated into Item 8 of this Report by reference.
Description of Financial Location in 1995 Statement Item Annual Report Independent Auditors' Report Page 39 Consolidated Balance Sheets, December 31, 1995 and 1994 Pages 22 and 23 Consolidated Statements of Shareholders' Equity, Years ended December 31, 1995, 1994 and 1993 Page 24 Consolidated Statements of Earnings, Years ended December 31, 1995, 1994 and 1993 Page 25 Consolidated Statements of Cash Flows, Years ended December 31, 1995, 1994 and 1993 Page 26 Notes to Consolidated Financial Statements, Years ended Pages 27 December 31, 1995, 1994 and 1993 through 38
2. Financial Statement Schedules.
All schedules for which provision is made in Regulation S-X have been omitted for the reason that they are not required, are not applicable, or the required information is set forth in the consolidated financial statements or notes thereto.
3. Exhibits
The exhibits set forth on the Index to Exhibits are incorporated herein by reference.
4. Reports on Form 8-K
On November 6, 1995, the Company filed Amendment No. 1 to its current report on Form 8-K originally filed September 5, 1995 to report the acquisition by merger of Miller Pipeline Corporation. Amendment No. 1 contained pro forma financial information filed under "Item 7. Financial Statements and Exhibits". The pro forma financial information consisted of Pro Forma Condensed Consolidation Balance Sheet of the Registrant as of June 30, 1995 (Unaudited), Pro Forma Condensed Consolidated Statement of Earnings of the Registrant for the Six Months Ended June 30, 1995 (Unaudited), Pro Forma Condensed Consolidated Statement of Earnings of the Registrant for the Year Ended December 31, 1994 (Unaudited), and Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
OTHER MATTERS
For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statement on Form S-8 No. 33-33021 (filed August 17, 1989):
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.
IWC RESOURCES CORPORATION Registrant
Date March 29, 1996 By: J. A. Rosenfeld, President IWC Utilities
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date March 29, 1996 By: James T. Morris, Chairman of the Board, Chief Executive Officer and President and Director
Date March 29, 1996 By: Robert B. McConnell, Chairman of the Executive Committee
Date March 29, 1996 By: J. A. Rosenfeld, President IWC Utilities and Director (Principal Financial Officer)
Date March 29, 1996 By: James P. Lathrop, Assistant Treasurer (Principal Accounting Officer)
Date March 29, 1996 By: Joseph R. Broyles, President IWC Industries and Director
Date March 29, 1996 By: Joseph D. Barnette, Jr., Director
Date March 29, 1996 By: Robert A. Borns, Director
Date March 29, 1996 By: Susan O. Connor, Director
Date March 29, 1996 By: Otto N. Frenzel III, Director
Date March 29, 1996 By: J. B. King, Director
Date March 29, 1996 By: J. George Mikelsons, Director
Date March 29, 1996 By: Thomas M. Miller, Director
Date March 29, 1996 By: Jack E. Reich, Director
Date March 29, 1996 By: Fred E. Schlegel, Director
Date March 29, 1996 By: Milton O. Thompson, Director
INDEX TO EXHIBITS
2 Reorganization Agreement dated as of July 21, 1995 (without exhibits other than the Plan and Agreement of Merger dated as of August 18, 1995), filed as Exhibit 2 to Registrant's Form 8-K filed September 5, 1995, is incorporated herein by reference.
3A-1 Restated Articles of Incorporation of Registrant, as amended to date. The copy of this exhibit filed as Exhibit 3-A to Registrant's Registration Statement on Form S-8 effective August 17, 1989 "Registration No. 33-30221", is incorporated by reference.
3-B Bylaws of Registrant, as amended to date. The copy of this exhibit filed as Exhibit 3-B to Registrant's Registration Statement on Form S-8 effective August 17, 1989 "Registration No. 33-30221", is incorporated by reference.
4.1 Ninth Supplemental Indenture dated as of August 1, 1967. The copy of this exhibit filed as Exhibit 4-B5 to IWC's Annual Report on Form 10-K for the fiscal year ended December 31, 1980, is incorporated herein by reference.
4.2 Eleventh Supplemental Indenture dated as of December 1, 1971. The copy of this exhibit filed as Exhibit 4-B6 to IWC's Annual Report on Form 10-K for the fiscal year ended December 31, 1980, is incorporated herein by reference.
4.3 Seventeenth Supplemental Indenture dated as of March 1, 1989, between Fidelity Bank, National Association, and IWC. The copy of this exhibit filed as Exhibit 4-A9 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988 is incorporated herein by reference.
4.4 Eighteenth Supplemental Indenture dated as of March 1, 1989, between Fidelity Bank, National Association and IWC. The copy of this exhibit filed as Exhibit 4-A10 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, is incorporated herein by reference.
4.5 Nineteenth Supplemental Indenture dated as of June 1, 1989, between Fidelity Bank, National Association, and IWC. The copy of this exhibit filed as Exhibit 4-A9 to Registrant's Registration Statement on Form S-2 effective December 12, 1991 (Registration No. 33-43939), is incorporated herein by reference.
4.6 Fourteenth Supplemental Indenture dated as of January 15, 1978, between the Fidelity Bank, (formerly Fidelity-Philadelphia Trust Company) and IWC, including as Appendix A the "Restatement of Principal Indenture of Indianapolis Water Company," which, except as otherwise specified, restates the granting clauses and all other sections contained in the First Mortgage dated July 1, 1936, between Fidelity-Philadelphia Trust Company and Registrant as amended by the Fourth, Fifth, Sixth, Eighth, Twelfth and Fourteenth Supplemental Indentures. A copy of this exhibit filed as Exhibit 4-B1 to IWC's Annual Report on Form 10-K for the fiscal year ended December 31, 1980, is incorporated herein by reference.
4.7 Twentieth Supplemental Indenture dated as of December 1, 1992, between Fidelity Bank, National Association, and IWC. The copy of this Exhibit filed as Exhibit 4-A9 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, is incorporated herein by reference.
4.8 Twenty-First Supplemental Indenture dated as of December 1, 1992, between Fidelity Bank, National Association and IWC. The copy of this Exhibit filed as Exhibit 4-A10 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, is incorporated herein by reference.
4.9 Rights Agreement, dated as of February 9, 1988, between IWC Resources Corporation and Bank One, Indianapolis, NA (as Rights Agent), which includes the Form of Certificate of Designations of Series A Junior Participating Preferred Stock as Exhibit A, the Form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Shares as Exhibit C. The copy of this exhibit filed as Exhibit 4 to the Registrant's Current Report on Form 8-K dated February 9, 1988, is incorporated by reference.
4.10 Indenture of Trust dated as of March 1, 1989, between IWC, City of Indianapolis, Indiana, and Merchants National Bank & Trust Company of Indianapolis, as Trustee. The copy of this exhibit filed as Exhibit 10-F to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, is incorporated herein by reference.
4.11 Indenture of Trust dated as of March 1, 1989, between IWC, Town of Fishers, Indiana, and Merchants National Bank & Trust Company of Indianapolis, as Trustee. The copy of this exhibit filed as Exhibit 10-G to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, is incorporated herein by reference.
4.12 Indenture of Trust dated as of December 1, 1992, between City of Indianapolis, Indiana, and IWC to National City Bank, Indiana, as Trustee. The copy of this Exhibit filed as Exhibit 10-J to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, is incorporated herein by reference.
4.13 Indenture of Trust, City of Indianapolis, Indiana, and Indianapolis Water Company to National City Bank, Indiana, as Trustee, dated as of April 1, 1993. The copy of this Exhibit filed as Exhibit 4.14 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
4.14 Twenty-Second Supplemental Indenture dated as of April 1, 1993, between Indianapolis Water Company and Fidelity Bank, National Association. The copy of this Exhibit filed as Exhibit 4.15 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
10.1 Agreement dated October 18, 1971, between IWC and the Department of Public Works of the City of Indianapolis, Indiana, relating to the purchase of water at Eagle Creek Reservoir. The copy of this exhibit filed as Exhibit 5 to IWC's Statement (No. 2-55201), effective January 14, 1976, is incorporated herein by reference.
*10.2 The description of "split dollar" life insurance policies owned by IWC with respect to certain officers of Registrant is incorporated hereby by reference to the Company's 1988 Proxy Statement.
*10.3 Form of Executive Supplemental Benefits Plan of IWC. The copy of this exhibit filed on Exhibit 10-D to IWC's Annual Report on Form 10-K for the fiscal year ended December 31, 1985, is incorporated herein by reference.
10.4 Loan Agreement dated as of March 1, 1989, between IWC and the City of Indianapolis, Indiana. The copy of this exhibit filed as Exhibit 10-D to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, is incorporated herein by reference.
10.5 Loan Agreement dated as of March 1, 1989, between IWC and Town of Fishers, Indiana. The copy of this exhibit filed as Exhibit 10-E to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, is incorporated herein by reference.
10.6 Guaranty Agreement dated as of March 1, 1989, between Registrant and Merchants National Bank and Trust Company of Indianapolis re: City of Indianapolis, Indiana Industrial Development Bonds. The copy of this exhibit filed as Exhibit 10-H to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, is incorporated herein by reference.
10.7 Guaranty Agreement dated as of March 1, 1989, between Registrant and Merchants National Bank & Trust Company of Indianapolis re: Town of Fishers, Indiana Industrial Development Bonds. The copy of this exhibit filed as Exhibit 10-I to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, is incorporated herein by reference.
10.8 Loan Agreement dated as of December 1, 1992, between IWC and City of Indianapolis, Indiana. The copy of this exhibit filed as Exhibit 10-K to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, is incorporated herein by reference.
10.9 Guaranty Agreement dated as of December 1, 1992, between Resources and National City Bank, Indiana, as Trustee. The copy of this exhibit filed as Exhibit 10-L to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1992, is incorporated herein by reference.
10.10 Note Agreement dated as of March 1, 1994, between Registrant and American United Life Insurance Company. The copy of this exhibit filed as Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
10.11 Loan Agreement dated as of April 1, 1993, between Indianapolis Water Company and City of Indianapolis. The copy of this exhibit filed as Exhibit 10.11 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
10.12 Guaranty Agreement between Registrant and National City Bank, Indiana, as Trustee, dated as of April 1, 1993. The copy of this exhibit filed as Exhibit 10.12 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
10.13 Agreement for the Operation and Maintenance of the City of Indianapolis, Indiana, Advanced Wastewater Treatment Facilities dated as of December 20, 1993, among the City of Indianapolis, White River Environmental Partnership, the Registrant and certain other parties. The copy of this exhibit filed as Exhibit 10.13 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
10.14 White River Environmental Partnership Agreement between IWC Services, Inc., JMM White River Corporation and LAH White River Corporation, dated as of August 20, 1993. The copy of this exhibit filed as Exhibit 10.14 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
10.15 Plan and Agreement of Merger among Registrant, Resources Acquisition Corp., S.M.& P. Conduit Co., Inc., and its shareholders dated as of June 14, 1993. The copy of this exhibit filed as Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
*10.16 Executive Employment Agreement between Registrant and James T. Morris, dated as of December 31, 1993 (substantially similar agreements in favor of J. A. Rosenfeld, Joseph R. Broyles, John M. Davis and Kenneth N. Giffin have been omitted pursuant to Instruction 2 to Item 601 of Regulation S-K). The copy of this exhibit filed as Exhibit 10.16 to Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, is incorporated herein by reference.
*10.17 Employment Agreement between Miller Pipeline Corporation (surviving corporation) and Don W. Miller dated August 22, 1995, filed as Exhibit 10 (1) to Registrant's Form 8-K filed September 5, 1995, is incorporated herein by reference.
*10.18 Employment Agreement between Miller Pipeline Corporation (surviving corporation) and Dale R. Miller dated August 22, 1995, filed as Exhibit 10 (2) to Registrant's Form 8-K filed September 5, 1995, is incorporated herein by reference.
13 Registrant's Annual Report to Stockholders for the year ended December 31, 1995. This exhibit, except for the portions thereof that have expressly been incorporated by reference into this Report, is furnished for the information of the Commission and shall not be deemed "filed" as part hereof.
21 Subsidiaries
23 Consent of Independent Certified Public Accountants.
27 Financial Data Schedule
*This exhibit relates to executive compensation or benefit plans.