<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
( ) Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
------ ------
COMMISSION FILE NUMBER 1-2967
UNION ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Missouri 43-0559760
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1901 Chouteau Avenue, St. Louis, Missouri 63103
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (314) 621-3222
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, $5 par value New York Stock Exchange
Preferred Stock, without par value (entitled to cumulative dividends):
Stated value $100 per share - )
$7.44 Series $4.50 Series ) New York Stock Exchange
$6.40 Series $4.00 Series )
$4.56 Series $3.50 Series )
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 such
filing requirements for the past 90 days. Yes X No.
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
agreement to this Form 10-K. (X)
Aggregate market value of voting stock held by non-affiliates as of
March 1, 1996, based on closing prices most recently available as reported in
The Wall Street Journal (excluding Preferred Stock for which quotes are not
publicly available): $4,445,250,627.
Shares of Common Stock, $5 par value, outstanding as of March 1, 1996:
102,123,834 shares (excluding 42,990 treasury shares).
DOCUMENTS INCORPORATED BY REFERENCES.
Portions of the registrant's 1995 Annual Report to Stockholders (the
"1995 Annual Report") are incorporated by reference into Parts I, II and IV.
Portions of the registrant's definitive proxy statement for the 1996
annual meeting are incorporated by reference into Part III.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I
Item 1 -- Business
General...................................................................... 1
Construction Program and Financing........................................... 1
Rates........................................................................ 2
Fuel Supply.................................................................. 2
Regulation................................................................... 3
Industry Issues.............................................................. 4
Operating Statistics(1)...................................................... 5
Other Statistical Information................................................ 5
Item 2 -- Properties..................................................................... 6
Item 3 -- Legal Proceedings.............................................................. 7
Item 4 -- Submission of Matters to a Vote of Security Holders............................ 7
Executive Officers of the Registrant (Item 401(b) of Regulation S-K)..................... 8
PART II
Item 5 -- Market for Registrant's Common Equity and Related Stockholder Matters(1)....... 9
Item 6 -- Selected Financial Data(1)..................................................... 9
Item 7 -- Management's Discussion and Analysis of Financial Condition and Results
of Operations(1)............................................................. 9
Item 8 -- Financial Statements and Supplementary Data(1)................................. 9
Item 9 -- Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure(2)......................................................
PART III
Item 10 -- Directors and Executive Officers of the Registrant(1)......................... 10
Item 11 -- Executive Compensation(1)..................................................... 10
Item 12 -- Security Ownership of Certain Beneficial Owners and Management(1)............. 10
Item 13 -- Certain Relationship and Related Transactions(1).............................. 10
PART IV
Item 14 -- Exhibits, Financial Statement Schedules (including unaudited pro forma
financial information), and Reports on Form 8-K............................... 11
SIGNATURES............................................................................... 20
EXHIBITS................................................................................. 21
</TABLE>
- ----------
(1) Incorporated herein by reference.
(2) Not applicable and not included herein.
<PAGE> 3
PART I
ITEM 1. BUSINESS.
GENERAL
The registrant, Union Electric Company (the ""Company"), incorporated
in Missouri in 1922, is successor to a number of companies, the oldest of which
was organized in 1881. The Company, which is the largest electric utility in
the State of Missouri, supplies electric service in territories in Missouri and
Illinois having an estimated population of 2,600,000 within an area of
approximately 24,500 square miles, including the greater St. Louis area.
Retail gas service is supplied in 90 Missouri communities and in the City of
Alton, Illinois and vicinity.
On August 11, 1995, the Company and CIPSCO Incorporated ("CIPSCO") entered
into an Agreement and Plan of Merger, which was subsequently approved by the
shareholders of both companies. The merger ("Merger") is further conditioned
on, among other things, receipt of certain regulatory and governmental
approvals and is expected to be consummated in early 1997. Upon completion of
the Merger, two operating companies will continue as subsidiaries of a newly
formed holding company, Ameren Corporation. For additional information on the
Merger, see Note 2 to the "Notes to Financial Statements" on Page 29 of the
1995 Annual Report pages incorporated herein by reference and Item 4 below.
Also, see Item 14 below for unaudited pro forma financial information for
Ameren Corporation.
For the year 1995, 95.8% of total operating revenues was derived from the
sale of electric energy and 4.2% from the sale of natural gas. Electric
operating revenues as a percentage of total operating revenues for the years
1991, 1992, 1993, and 1994 were 95.7%, 95.7%, 95.2%, and 95.8% respectively.
The Company employed 6,190 persons at December 31, 1995. Approximately
70% of the Company's employees are represented by local unions affiliated with
the AFL-CIO. Labor agreements representing approximately 4,282 employees will
expire in 1996. Two agreements covering 118 employees will expire in 1997.
CONSTRUCTION PROGRAM AND FINANCING
The Company is engaged in a construction program under which expenditures
averaging approximately $290 million are anticipated during each of the next
five years. Capital expenditures for compliance with the Clean Air Act
Amendments of 1990 are included in the construction program -- also see
"Regulation", below. The Company does not anticipate a need for additional
base load electric generating capacity until after the year 2013.
During the five-year period ended 1995, gross additions to the property of
the Company, including allowance for funds used during construction and
excluding nuclear fuel, were approximately $1.4 billion (including $311 million
in 1995) and property retirements were $215 million.
In addition to the funds required for construction during the 1996-2000
period, $214 million will be required to repay long-term debt and preferred
stock as follows: $69 million in 1996, $45 million in 1997, and $100 million
in 1999. Amounts for years subsequent to 1996 do
- 1 -
<PAGE> 4
not include nuclear fuel lease payments since the amounts of such
payments are not currently determinable.
For information on the Company's external cash sources, see "Liquidity and
Capital Resources" under "Management's Discussion and Analysis" on Page 20 of
the 1995 Annual Report pages incorporated herein by reference.
FINANCING RESTRICTIONS. Under the most restrictive earnings test
contained in the Company's principal Indenture of Mortgage and Deed of Trust
("Mortgage") relating to its First Mortgage Bonds ("Bonds"), no Bonds may be
issued (except in certain refunding operations) unless the Company's net
earnings available for interest after depreciation for 12 consecutive months
within the 15 months preceding such issuance are at least two times annual
interest charges on all Bonds and prior lien bonds then outstanding and to be
issued (all calculated as provided in the Mortgage). Such ratio for the 12
months ended December 31, 1995 was 6.6, which would permit the Company to issue
an additional $3.3 billion of Bonds (7% annual interest rate assumed).
Additionally, the Mortgage permits issuance of new bonds up to (a) 60% of
defined property additions, or (b) the amount of previous bonds retired or to
be retired, or (c) the amount of cash put up for such purpose. At December 31,
1995, the aggregate amount of Bonds issuable under (a) and (b) above was
approximately $1.7 billion. The Company's Restated Articles of Incorporation
restrict the Company from selling Preferred Stock unless its net earnings for a
period of 12 consecutive months within 15 months preceding such sale are at
least two and one-half times the annual dividend requirements on its Preferred
Stock then outstanding and to be issued. Such ratio for the 12 months ended
December 31, 1995 was 23.3, which would permit the Company to issue an
additional $1.6 billion stated value of Preferred Stock (7% annual dividend
rate assumed). Certain other financing arrangements require the Company to
obtain prior consents to various actions by the Company, including any future
borrowings, except for permitted financings such as borrowings under revolving
credit agreements, the nuclear fuel lease, unsecured short-term borrowings
(subject to certain conditions), and the issuance of additional Bonds.
RATES
For the year 1995, approximately 89%, 8%, and 3% of the Company's electric
operating revenues were based on rates regulated by Missouri Public Service
Commission ("Missouri Commission"), Illinois Commerce Commission ("Illinois
Commission"), and the Federal Energy Regulatory Commission ("FERC") of the
U.S. Department of Energy, respectively.
For additional information on "Rates", see Note 3 to the "Notes to
Financial Statements" on Page 30 of the 1995 Annual Report pages incorporated
herein by reference.
FUEL SUPPLY
<TABLE>
<CAPTION>
FUEL SUPPLY
COST OF FUELS YEAR
- ------------- -----------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Per Million BTU -Coal 117.645c. 123.950c. 153.284c. 150.941c. 151.926c.
-Nuclear 48.592c. 49.932c. 56.848c. 61.818c. 79.043c.
-System 101.590c. 101.867c. 126.362c. 126.711c. 130.117c.
Per kWh of Steam Generation 1.068c. 1.064c. 1.331c. 1.310c. 1.348c.
</TABLE>
- 2 -
<PAGE> 5
COAL. Because of uncertainties of supply due to potential work stoppages,
equipment breakdowns and other factors, the Company has a policy of maintaining
a coal inventory of 75 days, based on normal annual burn practices. See
"Regulation" for additional reference to the Company's coal requirements.
NUCLEAR. The components of the nuclear fuel cycle required for nuclear
generating units are as follows: (1) uranium; (2) conversion of uranium into
uranium hexafluoride; (3) enrichment of uranium hexafluoride; (4) conversion of
enriched uranium hexafluoride into uranium dioxide and the fabrication into
nuclear fuel assemblies; and (5) disposal and/or reprocessing of spent nuclear
fuel.
The Company has agreements to fulfill its needs for uranium, enrichment,
and fabrication services through 2001. The Company's agreements for conversion
services are sufficient to supply the Callaway Plant through 1997. Additional
contracts will have to be entered into in order to supply nuclear fuel during
the remainder of the life of the Plant, at prices which cannot now be
accurately predicted. The Callaway Plant normally requires re-fueling at
18-month intervals and re-fuelings are presently scheduled for the fall of 1996
and the spring of 1998.
Under the Nuclear Waste Policy Act of 1982, the U. S. Department of Energy
("DOE") is responsible for the permanent storage and disposal of spent nuclear
fuel. DOE currently charges one mill per nuclear generated kilowatt-hour sold
for future disposal of spent fuel. Electric rates charged to customers provide
for recovery of such costs. DOE is not expected to have its permanent storage
facility for spent fuel available until at least 2015. The Company has
sufficient storage capacity at the Callaway Plant site until 2005 and has
viable storage alternatives under consideration. Each alternative will likely
require Nuclear Regulatory Commission approval and may require other regulatory
approvals. The delayed availability of DOE's disposal facility is not expected
to adversely affect the continued operation of the Callaway Plant.
OIL AND GAS. The actual and prospective use of such fuels is minimal, and
the Company has not experienced and does not expect to experience difficulty in
obtaining adequate supplies.
For additional information on the Company's "Fuel Supply", see Note 12 to
the "Notes to Financial Statements" on Page 34 of the 1995 Annual Report pages
incorporated herein by reference.
REGULATION
The Company is subject to regulation by the Missouri Commission and the
Illinois Commission as to rates, service, accounts, issuance of equity
securities, issuance of debt having a maturity of more than twelve months,
mergers, and various other matters. The Company is also subject to regulation
by the FERC as to rates and charges in connection with the transmission of
electric energy in interstate commerce and the sale of such energy at wholesale
in interstate commerce, mergers, and certain other matters. Authorization to
issue debt having a maturity of twelve months or less is obtained from the
FERC.
Operation of the Company's Callaway Plant is subject to regulation by the
Nuclear Regulatory Commission. The Company's Facility Operating License for
the Callaway Plant expires on October 18, 2024.
The Company's Osage hydroelectric plant and its Taum Sauk pumped-storage
hydro plant, as licensed projects under the Federal Power Act, are subject to
certain federal regulations
- 3 -
<PAGE> 6
affecting, among other things, the general operation and maintenance of the
projects. The Company's license for the Osage Plant expires on February 28,
2006, and its license for the Taum Sauk Plant expires on June 30, 2010. The
Company's Keokuk Plant and dam located in the Mississippi River between
Hamilton, Illinois and Keokuk, Iowa, are operated under authority, unlimited in
time, granted by an Act of Congress in 1905.
The Company is exempt from the provisions of the Public Utility Holding
Company Act of 1935 ("PUHCA"), except Section 9(a)(2) relating to the
acquisition of securities of other public utility companies and Section
11(b)(2) with respect to concluding matters relating to the 1974 acquisition of
the common stock of a former subsidiary. When the Securities and Exchange
Commission approved such acquisition it reserved jurisdiction to pass upon the
right of the Company to retain its gas properties. For information on PUHCA
and the Merger, see Note 2 to the "Notes to Financial Statements" on Page 29 of
the 1995 Annual Report pages incorporated herein by reference.
The Company is regulated, in certain of its operations, by air and water
pollution and hazardous waste regulations at the city, county, state and
federal levels. The Company is in substantial compliance with such existing
regulations.
Under the Clean Air Act Amendments of 1990, the Company is required to
reduce total annual emissions of sulfur dioxide by the year 2000. Significant
reductions in nitrogen oxide will also be required. With switching to
low-sulfur coal and early banking of emission credits, the Company anticipates
that it can comply with the requirements of the law with no significant revenue
increases because the related capital costs, estimated at about $300 million,
are largely offset by lower fuel costs. As of the end of 1995 about 75% of the
Clean Air Act related capital costs had been expended.
As of December 31, 1995, the Company was designated a potentially
responsible party ("PRP") by federal or state environmental protection agencies
for five hazardous waste sites. Other hazardous waste sites have been
identified for which the Company may be responsible but has not been designated
a PRP. The Company continually reviews remedial costs that will be required
for all of these sites. However, such costs are not expected to have a
material adverse effect on the Company's financial position, results of
operations or liquidity.
Other aspects of the Company's business are subject to the jurisdiction of
various regulatory authorities.
INDUSTRY ISSUES
The Company is facing issues common to the electric and gas utility
industries which have emerged during the past several years. These issues
include: the potential for more intense competition and for changing the
structure of utility regulation; changes in the structure of the industry as a
result of amendments to federal laws regulating ownership of generating
facilities and access to transmission systems; continually developing
environmental laws, regulations and issues; public concern about the siting of
new facilities; increasing public attention on the potential public health
consequences of exposure to electric and magnetic fields emanating from power
lines and other electric sources; proposals for demand side management
programs; and public concerns about nuclear decommissioning and the disposal of
nuclear wastes, and about global climate issues. The Company is monitoring
these issues and is unable to predict at this time what impact, if any, these
issues will have on its operations, financial condition, or liquidity.
- 4 -
<PAGE> 7
OPERATING STATISTICS
The information on Page 37 in the Company's 1995 Annual Report is
incorporated herein by reference.
OTHER STATISTICAL INFORMATION
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
KILOWATTHOUR OUTPUT (in millions)
Fossil fuel generation 23,822 21,941 19,582 21,266 22,144
Nuclear generation 8,242 10,007 8,381 8,084 9,979
Hydro generation 1,626 1,714 1,971 1,509 1,148
Purchased from Electric
Energy, Inc. 760 681 673 527 465
Net interchange and
other purchases 1,392 44 3,360 1,819 194
------ ------ ------ ------ ------
Total Output 35,842 34,387 33,967 33,205 33,930
Less line losses and system use 2,507 2,412 2,389 2,300 2,320
------ ------ ------ ------ ------
KilowattHour Sales 33,335 31,975 31,578 30,905 31,610
====== ====== ====== ====== ======
----------------------
<CAPTION>
<S> <C> <C> <C> <C> <C>
Common Stock dividends
as a percentage
of earnings 83 80 84 80 72
</TABLE>
- 5 -
<PAGE> 8
ITEM 2. PROPERTIES
The following table sets forth information with respect to the
Company's generating facilities and capability at the time of the expected 1996
peak.
<TABLE>
<CAPTION>
GROSS KILOWATT
ENERGY INSTALLED
SOURCE PLANT LOCATION CAPABILITY
- ------ ----- -------- --------------
<S> <C> <C> <C>
Coal Labadie Franklin County, Mo. 2,400,000
Rush Island Jefferson County, Mo. 1,214,000
Sioux St. Charles County, Mo. 992,000
Meramec St. Louis County, Mo. 925,000
---------
Total Coal 5,531,000
Nuclear Callaway Callaway County, Mo. 1,180,000
Hydro Osage Lakeside, Mo. 212,000
Keokuk Keokuk, Ia. 126,000
---------
Total Hydro 338,000
Oil and Venice Venice, Ill. 459,000
Natural Other Various 386,000
Gas ---------
Total Oil and
Natural Gas 845,000
Pumped-
storage Taum Sauk Reynolds County, Mo. 350,000
---------
TOTAL 8,244,000
=========
</TABLE>
In planning its construction program, the Company is presently
utilizing a forecast of kilowatthour sales growth of approximately 1.8% and
peak load growth of 1%, each compounded annually, and is providing for a
minimum reserve margin of approximately 18% to 22% above its anticipated peak
load requirements.
See "Operating Statistics", incorporated by reference in Part I of this
Form 10-K, for information on loads and capability during the five-year period
ended 1995.
The Company is a member of one of the nine regional electric reliability
councils organized for coordinating the planning and operation of the nation's
bulk power supply - MAIN (Mid-America Interconnected Network) operating
primarily in Wisconsin, Illinois and Missouri. The Company has interconnections
for the exchange of power, directly and through the facilities of others,
within thirteen private utilities and with Associated Electric Cooperative,
Inc., the City of Columbia, Missouri, the Southwestern Power Administration and
the Tennessee Valley Authority.
The Company owns 40% of the capital stock of Electric Energy, Inc.
("EEI"), the balance of which is held by three other sponsoring companies --
Kentucky Utilities Company ("KU"), Central Illinois Public Service Company
("CIPS" -- a subsidiary of CIPSCO), and Illinois Power Company ("IP"). EEI owns
and operates a generating plant with a nominal capacity of 1,000 mW.
- 6 -
<PAGE> 9
60% of the plant's output is committed to the Paducah Project of the DOE, 20%
is committed to KU, 10% to the Company, and 5% each to IP and CIPS.
As of December 31, 1995, the Company owned approximately 3,299 circuit
miles of electric transmission lines and substations with a transformer
capacity of approximately 44,989,000 kVA. The Company owns four propane-air
plants with an aggregate daily natural gas equivalent capacity of 31,590
million cubic feet and 2,629 miles of gas mains. Other properties of the
Company include distribution lines, underground cable, steam distribution
facilities in Jefferson City, Missouri and office buildings, warehouses,
garages and repair shops.
The Company has fee title to all principal plants and other important
units of property, or to the real property on which such facilities are located
(subject to mortgage liens securing outstanding indebtedness of the Company and
to permitted liens and judgment liens, as defined), except that (i) a portion
of the Osage Plant reservoir, certain facilities at the Sioux Plant, certain of
the Company's substations and most of its transmission and distribution lines
and gas mains are situated on lands occupied under leases, easements,
franchises, licenses or permits; (ii) the United States and/or the State of
Missouri own, or have or may have, paramount rights to certain lands lying in
the bed of the Osage River or located between the inner and outer harbor lines
of the Mississippi River, on which certain generating and other properties of
the Company are located; and (iii) the United States and/or State of Illinois
and/or State of Iowa and/or City of Keokuk, Iowa own, or have or may have,
paramount rights with respect to, certain lands lying in the bed of the
Mississippi River on which a portion of the Company's Keokuk Plant is located.
Substantially all of the Company's property and plant is subject to the
direct first lien of an Indenture of Mortgage and Deed of Trust dated June 15,
1937, as amended and supplemented. As part of the 1983 merger of the Company
with its utility subsidiaries, the Company assumed the mortgage indenture of
each subsidiary. Currently, the prior liens of two former subsidiary indentures
extend to the property and franchises acquired by the Company from such
subsidiaries. Such indentures also contain provisions subjecting to the prior
lien thereof after-acquired property of the Company constituting (with certain
exceptions) additions, extensions, improvements, repairs, and replacements
appurtenant to property acquired in the merger. In addition, one such indenture
contains a provision subjecting to the prior lien thereof after-acquired
property of the Company situated in the territory served by the former
subsidiary prior to the merger. Further, no debt is outstanding under the one
such indenture, and the Company is in the process of extinguishing the lien of
such indenture.
ITEM 3. LEGAL PROCEEDINGS.
The Company is involved in legal and administrative proceedings before
various courts and agencies with respect to matters arising in the ordinary
course of business, some of which involve substantial amounts. Management is of
the opinion that the final disposition of these proceedings will not have a
material adverse effect on the Company's financial position, results of
operations, or liquidity.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
A special meeting of the Company's shareholders was held on December 20,
1995 to vote on a proposal providing for the Merger with CIPSCO. Shareholders
approved the proposal and, as reported by the inspectors of election, shares
were voted as follows: For - 75,091,584; Against - 1,972,890; Abstain -
1,027,681; broker non-votes - 167,549.
- 7 -
<PAGE> 10
INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) OF REGULATION
S-K:
<TABLE>
<CAPTION> DATE FIRST
AGE AT ELECTED OR
NAME 12/31/95 PRESENT POSITION APPOINTED
- ---- -------- ---------------- ---------
<S> <C> <C> <C>
Charles W. Mueller 57 President 7/1/93
Chief Executive Officer 1/1/94
and Director 6/11/93
Paul A. Agathen 48 Senior Vice President 2/16/96
Donald E. Brandt 41 Senior Vice President 7/1/88
Robert O. Piening 58 Senior Vice President 7/1/88
Donald F. Schnell 63 Senior Vice President 7/1/88
Charles J. Schukai 61 Senior Vice President 7/1/88
M. Patricia Barrett 58 Vice President 3/1/91
Charles A. Bremer 51 Vice President 4/24/84
Donald W. Capone 60 Vice President 7/1/88
William J. Carr 58 Vice President 10/1/88
Jean M. Hannis 48 Vice President 1/1/96
William E. Jaudes 58 Vice President and 4/23/85
General Counsel 4/22/80
R. Alan Kelley 43 Vice President 7/1/88
Michael J. Montana 49 Vice President 7/1/88
Gary L. Rainwater 49 Vice President 7/1/93
Garry L. Randolph 47 Vice President 3/1/91
Robert J. Schukai 57 Vice President 7/1/88
William C. Shores 57 Vice President 7/1/88
Samuel E. Willis 51 Vice President 11/1/95
Ronald C. Zdellar 51 Vice President 7/1/88
Joseph M. Pfeifer 61 Controller 7/1/88
James C. Thompson 56 Secretary 12/1/82
Jerre E. Birdsong 41 Treasurer 7/1/93
Warner L. Baxter 34 Assistant Controller 8/16/95
</TABLE>
All officers are elected or appointed annually by the Board of Directors
following the election of such Board at the annual meeting of stockholders held
in April. There are no family relationships between the foregoing officers of
the Company except that Charles J. Schukai and Robert J. Schukai are brothers.
Except for Mr. Baxter, each of the above-named executive officers has been
employed by the Company for more than five years in executive or management
positions. Mr. Baxter was previously employed by Price Waterhouse LLP.
- 8 -
<PAGE> 11
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information required to be reported by this item is included on page 41
of the 1995 Annual Report and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Information for the 1991-1995 period required to be reported by this
item is included on pages 38 and 39 of the 1995 Annual Report and is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Information required to be reported by this item is included on pages
18, 19, 20, and 21 of the 1995 Annual Report and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Company on pages 22 through 36, the
report thereon of Price Waterhouse LLP appearing on page 17 and the Selected
Quarterly Information on page 28 of the 1995 Annual Report are incorporated
herein by reference.
- 9 -
<PAGE> 12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Any information concerning directors required to be reported by this item
is included under "Item (1): Election of Directors" in the Company's 1996
definitive proxy statement filed pursuant to Regulation 14A and is incorporated
herein by reference.
Information concerning executive officers required by this item is
reported in Part I of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Any information required to be reported by this item is included under
"Compensation" in the Company's 1996 definitive proxy statement filed pursuant
to Regulation 14A and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Any information required to be reported by this item is included under
"Security Ownership of Management" in the Company's 1996 definitive proxy
statement filed pursuant to Regulation 14A and is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Any information required to be reported by this item is included under
"Item (1): Election of Directors" in the Company's 1996 definitive proxy
statement filed pursuant to Regulation 14A and is incorporated herein by
reference.
- 10 -
<PAGE> 13
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
1. Financial Statements:*
Page From 1995
Annual Report
--------------
Report of Independent Accountants . . . . . . . . . . . . . . . . . 17
Statement of Income - Years 1995, 1994, and 1993 . . . . . . . . . 22
Statement of Cash Flows - Years 1995, 1994, and 1993 . . . . . . . 23
Balance Sheet - December 31, 1995 and 1994 . . . . . . . . . . . . 24
Long-Term Debt - December 31, 1995 and 1994 . . . . . . . . . . . . 26
Preferred Stock - December 31, 1995 and 1994 . . . . . . . . . . . 27
Statement of Retained Earnings - Years 1995, 1994, and 1993 . . . . 28
Statement of Other Paid-in Capital - Years 1995, 1994, and 1993 . . 28
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 29
*Incorporated by reference from the indicated pages of the 1995
Annual Report
2. Financial Statement Schedules:
The following schedule, for the years ended December 31, 1995, 1994,
and 1993, should be read in conjunction with the aforementioned
financial statements (schedules not included have been omitted
because they are not applicable or the required data is shown in
the aforementioned financial statements).
Pages Herein
------------
Report of Independent Accountants on Financial
Statement Schedule . . . . . . . . . . . . . . . . . . . . . . . 12
Valuation and Qualifying Accounts (Schedule VIII) . . . . . . . . . 13
3. Unaudited Pro Forma Financial Information of Ameren Corporation
Balance Sheet - December 31, 1995 . . . . . . . . . . . . . . . . 15
Statements of Income for the years ended
December 31, 1995, 1994, and 1993 . . . . . . . . . . . . . . . 16
Notes to Unaudited Pro Forma Combined
Condensed Financial Statements . . . . . . . . . . . . . . . . 19
4. Exhibits: See EXHIBITS, Page 21
(b) Reports on Form 8-K. None
- 11 -
<PAGE> 14
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Union Electric Company
Our audits of the financial statements referred to in our report dated
February 1, 1996 appearing in the 1995 Annual Report to Stockholders of
Union Electric Company (which report and financial statements are
incorporated by reference in this Annual Report on Form 10-K) also
included an audit of the Financial Statement Schedule listed in Item 14(a)
of this Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related financial statements.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
St. Louis, Missouri
February 1, 1996
- 12 -
<PAGE> 15
UNION ELECTRIC COMPANY
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
COL. A. COL. B COL. C COL. D COL. E
------- ------ ------ ------ ------
ADDITIONS
---------------------------
(1) (2)
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND CHARGED TO END OF
DESCRIPTION OF PERIOD EXPENSES OTHER ACCOUNTS DEDUCTIONS PERIOD
----------- ---------- ---------- -------------- ---------- ---------
(NOTE)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995
Reserves deducted in the balance sheet
from assets to which they apply:
Allowance for doubtful accounts $6,277,378 $10,800,000 $10,152,413 $6,924,965
========== =========== =========== ==========
Year ended December 31, 1994
Reserves deducted in the balance sheet
from assets to which they apply:
Allowance for doubtful accounts $6,194,179 $10,800,000 $10,716,801 $6,277,378
========== =========== =========== ==========
Year ended December 31, 1993
Reserves deducted in the balance sheet
from assets to which they apply:
Allowance for doubtful accounts $5,857,615 $10,800,000 $10,463,436 $6,194,179
========== =========== =========== ==========
</TABLE>
Note: Uncollectible accounts charged off, less recoveries.
- 13 -
<PAGE> 16
UNAUDITED PRO FORMA FINANCIAL INFORMATION
AMEREN CORPORATION
The following unaudited pro forma financial information combines the
historical balance sheets and statements of income of the Company and CIPSCO,
including their respective subsidiaries, after giving effect to the Merger. The
unaudited pro forma combined condensed balance sheet at December 31, 1995 gives
effect to the Merger as if it had occurred at December 31, 1995. The unaudited
pro forma combined condensed statements of income for each of the years ended
December 31, 1995, 1994, and 1993, give effect to the Merger as if it had
occurred at the beginning of the periods presented. These statements are
prepared on the basis of accounting for the Merger as a pooling of interests
and are based on the assumptions set forth in the notes thereto. In addition,
the pro forma financial information does not give effect to the expected
synergies of the transaction.
The following pro forma financial information has been prepared from,
and should be read in conjunction with, the historical financial statements and
related notes thereto of the Company and CIPSCO. The following information is
not necessarily indicative of the financial position or operating results that
would have occurred had the Merger been consummated on the date, or at the
beginning of the periods, for which the Merger is being given effect nor is it
necessarily indicative of future operating results or financial position.
- 14 -
<PAGE> 17
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
BALANCE SHEET
AT DECEMBER 31, 1995
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
As Reported (Note 1) Pro Forma
--------------------------- Adjustments Pro Forma
UE CIPSCO (Notes 2, 9) Combined
---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS
Property and plant
Electric $8,473,501 $2,296,402 $ 375,024 $11,144,927
Gas 174,231 229,118 -- 403,349
Other 35,033 -- -- 35,033
---------- ---------- --------- -----------
8,682,765 2,525,520 375,024 11,583,309
Less accumulated depreciation and amortization 3,494,722 1,132,355 250,686 4,877,763
---------- ---------- --------- -----------
5,188,043 1,393,165 124,338 6,705,546
Construction work in progress:
Nuclear fuel in process 121,460 -- -- 121,460
Other 125,934 72,490 1,176 199,600
---------- ---------- --------- -----------
Total property and plant, net 5,435,437 1,465,655 125,514 7,026,606
Regulatory asset -- deferred income taxes (Note 6) 732,580 45,083 -- 777,663
Other assets:
Unamortized debt expense 44,496 16,474 657 61,627
Nuclear decommissioning trust fund 73,838 -- -- 73,838
Investments in nonregulated activities -- 105,081 -- 105,081
Other 20,101 28,465 (1,156) 47,410
---------- ---------- --------- -----------
Total other assets 138,435 150,020 (499) 287,956
Current assets:
Cash and temporary investments 1,025 8,235 265 9,525
Accounts receivable, net 191,520 65,267 17,222 274,009
Unbilled revenue 82,098 27,234 -- 109,332
Materials and supplies, at average cost --
Fossil fuel 46,381 52,408 8,577 107,366
Other 92,921 40,246 5,949 139,116
Other 34,072 18,846 3,560 56,478
---------- ---------- --------- -----------
Total current assets 448,017 212,236 35,573 695,826
---------- ---------- --------- -----------
Total Assets $6,754,469 $1,872,994 $ 160,588 $ 8,788,051
========== ========== ========= ===========
CAPITAL AND LIABILITIES
Capitalization:
Common stock (Note 2) $ 510,619 $ 356,812 $(866,059) $ 1,372
Other stockholders' equity (Note 2) 1,808,578 294,720 866,059 2,969,357
---------- ---------- --------- -----------
Total common stockholders' equity 2,319,197 651,532 -- 2,970,729
Preferred stock of subsidiary 219,147 80,000 -- 299,147
Long-term debt 1,763,613 478,926 130,000 2,372,539
---------- ---------- --------- -----------
Total capitalization 4,301,957 1,210,458 130,000 5,642,415
Minority interest in consolidated subsidiary -- -- 3,534 3,534
Accumulated deferred income taxes 1,357,689 325,181 (5,724) 1,677,146
Accumulated deferred investment tax credits 166,524 52,234 -- 218,758
Regulatory liability 216,502 113,206 -- 329,708
Accumulated provision for nuclear decommissioning 75,511 -- -- 75,511
Other deferred credits and liabilities 150,600 -- 5,511 156,111
Current liabilities:
Current maturity of long-term debt 69,462 -- -- 69,462
Short-term debt 19,600 47,921 10,000 77,521
Accounts payable 169,012 60,603 14,160 243,775
Wages payable 36,605 9,335 -- 45,940
Taxes accrued 75,142 11,266 9 86,417
Interest accrued 46,244 9,525 527 56,296
Other 69,621 33,265 2,571 105,457
---------- ---------- --------- -----------
Total current liabilities 485,686 171,915 27,267 684,868
---------- ---------- --------- -----------
Total Capital and Liabilities $6,754,469 $1,872,994 $ 160,588 $ 8,788,051
========== ========== ========= ===========
</TABLE>
See accompanying Notes to Unaudited Pro Forma
Combined Condensed Financial Statements.
- 15 -
<PAGE> 18
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1995
(THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
UE CIPSCO Pro Forma
(As Reported) (As Reported) Adjustments Pro Forma
(Notes 1,4,10) (Notes 1,3,4) (Notes 2,9) Combined
-------------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $2,014,452 $703,483 $181,985 $2,899,920
Gas 87,814 129,606 - 217,420
Other 441 9,173 362 9,976
---------- ---------- ---------- ---------
Total operating revenues 2,102,707 842,262 182,347 3,127,316
OPERATING EXPENSES:
Operations
Fuel and purchased power 365,158 248,226 97,664 711,048
Gas Costs 51,251 74,054 - 125,305
Other 367,870 155,368 19,148 542,386
--------- ---------- ---------- ---------
784,279 477,648 116,812 1,378,739
Maintenance 221,609 67,996 17,941 307,546
Depreciation and amortization 233,237 83,263 15,747 332,247
Income taxes (Note 7) 209,541 45,772 8,090 263,403
Other taxes 212,145 56,613 1,911 270,669
--------- ---------- ---------- ---------
Total operating expenses 1,660,811 731,292 160,501 2,552,604
OPERATING INCOME 441,896 110,970 21,846 574,712
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during
construction 6,827 889 - 7,716
Minority interest in consolidated subsidiary - - (4,558) (4,558)
Miscellaneous, net (5,981) (2,298) (6,972) (15,251)
--------- ---------- ---------- ---------
Total other income and deductions, net 846 (1,409) (11,530) (12,093)
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS 442,742 109,561 10,316 562,619
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest 134,741 33,769 10,316 178,826
Allowance for borrowed funds used during
construction (6,106) (73) - (6,179)
Preferred dividends of subsidiaries (Note 8) 13,250 3,850 - 17,100
--------- ---------- ---------- ---------
Net interest charges and preferred dividends 141,885 37,546 10,316 189,747
NET INCOME $ 300,857 $ 72,015 $ - $ 372,872
========= ========== ========== =========
EARNINGS PER SHARE OF COMMON STOCK
(BASED ON AVERAGE SHARES OUTSTANDING) $2.95 $2.11 $2.72
========= ========== ========== =========
AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,069,542 1,022,086 137,215,462
=========== ========== ========== ===========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
- 16 -
<PAGE> 19
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1994
(THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
UE CIPSCO Pro Forma
(As Reported) (As Reported) Adjustments Pro Forma
(Note 1) (Note 1) (Notes 2,9) Combined
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $1,969,533 $697,427 $245,189 $2,912,149
Gas 86,109 138,418 - 224,527
Other 474 8,770 181 9,425
------------ ------- -------- ---------
Total operating revenues 2,056,116 844,615 245,370 3,146,101
OPERATING EXPENSES:
Operations
Fuel and purchased power 329,562 251,867 157,618 739,047
Gas Costs 60,096 85,043 - 145,139
Other 375,570 140,068 19,952 535,590
------------ ------- -------- ---------
765,228 476,978 177,570 1,419,776
Maintenance 197,760 65,176 19,076 282,012
Depreciation and amortization 226,045 81,099 13,776 320,920
Income taxes (Note 7) 206,421 49,082 9,739 265,242
Other taxes 210,476 56,017 1,929 268,422
------------ ------- -------- ---------
Total operating expenses 1,605,930 728,352 222,090 2,556,372
OPERATING INCOME 450,186 116,263 23,280 589,729
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during
construction 5,767 630 - 6,397
Minority interest in consolidated subsidiary - - (5,554) (5,554)
Miscellaneous, net 403 3,502 (8,297) (4,392)
------------ ------- -------- ---------
Total other income and deductions, net 6,170 4,132 (13,851) (3,549)
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS 456,356 120,395 9,429 586,180
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest 141,112 33,220 9,429 183,761
Allowance for borrowed funds used during
construction (5,513) (289) - (5,802)
Preferred dividends of subsidiaries (Note 8) 13,252 3,510 - 16,762
------------ ------- -------- ---------
Net interest charges and preferred dividends 148,851 36,441 9,429 194,721
NET INCOME $307,505 $83,954 $- $391,459
============ ======= ======== =========
EARNINGS PER SHARE OF COMMON STOCK
(BASED ON AVERAGE SHARES OUTSTANDING) $3.01 $2.46 $2.85
============ ======= =========
AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,106,585 1,023,198 137,253,617
============ ========== ========= ===========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
- 17 -
<PAGE> 20
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1993
(THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
UE CIPSCO Pro Forma
(As Reported) (As Reported) Adjustments Pro Forma
(Note 1) (Note 1) (Notes 2,9) Combined
------------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $1,965,980 $688,820 $228,178 $2,882,978
Gas 99,552 145,702 - 245,254
Other 472 10,238 2 10,712
------------- ------- -------- ---------
Total operating revenues 2,066,004 844,760 228,180 3,138,944
OPERATING EXPENSES:
Operations
Fuel and purchased power 413,054 247,119 136,332 796,505
Gas costs 66,718 90,097 - 156,815
Other 378,817 142,716 37,981 559,514
------------- ------- -------- ---------
858,589 479,932 174,313 1,512,834
Maintenance 190,097 61,218 18,378 269,693
Depreciation and amortization 219,633 78,062 7,094 304,789
Income taxes (Note 7) 179,475 51,861 8,315 239,651
Other taxes 206,913 54,813 1,770 263,496
------------- ------- -------- ---------
Total operating expenses 1,654,707 725,886 209,870 2,590,463
OPERATING INCOME 411,297 118,874 18,310 548,481
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during
construction 6,418 1,459 - 7,877
Minority interest in consolidated subsidiary - - (5,204) (5,204)
Miscellaneous, net 3,919 3,107 (7,089) (63)
------------- ------- -------- ---------
Total other income and deductions, net 10,337 4,566 (12,293) 2,610
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS 421,634 123,440 6,017 551,091
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest 129,600 35,024 6,017 170,641
Allowance for borrowed funds used during
construction (5,126) (800) - (5,926)
Preferred dividends of subsidiaries (Note 8) 14,087 3,718 - 17,805
------------- ------- -------- ---------
Net interest charges and preferred dividends 138,561 37,942 6,017 182,520
NET INCOME $ 283,073 $85,498 $ - $ 368,571
============= ======= ======== =========
EARNINGS PER SHARE OF COMMON STOCK
(BASED ON AVERAGE SHARES OUTSTANDING) $2.77 $2.51 $2.69
============= ======= =========
AVERAGE COMMON SHARES OUTSTANDING (NOTE 2) 102,123,834 34,107,706 1,023,231 137,254,771
============= ========== ========= ===========
</TABLE>
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
- 18 -
<PAGE> 21
AMEREN CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. Reclassifications have been made to certain "as reported" account
balances reflected in the Company's and CIPSCO's financial statements to
conform to this reporting presentation (See Notes 6, 7 and 8). All other
financial statement presentation and accounting policy differences are
immaterial and have not been adjusted in the pro forma combined condensed
financial statements.
2. The pro forma combined condensed financial statements reflect the
conversion of each share of the Company's Common Stock ($5 par value)
outstanding into one share of Ameren Common Stock ($.01 par value) and the
conversion of each share of CIPSCO Common Stock (no par value) outstanding
into 1.03 shares of Ameren Common Stock, as provided in the Merger
Agreement. The pro forma combined condensed financial statements are
presented as if the companies were combined during all periods included
therein.
3. Net income for the twelve months ended December 31, 1995 includes
CIPSCO's pre-tax charges of $5.8 million for a voluntary separation
program and $5.7 million of system development expenses.
4. The allocation between the Company and CIPSCO and their customers of the
estimated cost savings resulting from the Merger, net of the costs
incurred to achieve such savings, will be subject to regulatory review and
approval. Transaction costs are currently estimated to be approximately
$22 million (including fees for financial advisors, attorneys,
accountants, consultants, filings and printing). None of these estimated
cost savings or the costs to achieve such savings have been reflected in
the pro forma combined condensed financial statements. However, net
income for the twelve months ended December 31, 1995 includes Merger
transaction charges of $9.0 million, net of income taxes, for the Company
and $4.7 million, net of income taxes, for CIPSCO.
5. Intercompany transactions (including purchased and exchanged power
transactions) between the Company and CIPSCO during the periods presented
were not material and, accordingly, no pro forma adjustments were made to
eliminate such transactions.
6. CIPSCO's regulatory asset related to deferred income taxes was
reclassified from the regulatory liability account balance to conform to
this reporting presentation.
7. CIPSCO's income taxes are reflected as operating expenses to conform to
this reporting presentation.
8. Currently, the Company's Preferred Stock is not issued by a subsidiary;
subsequent to the Merger, the Company's Preferred Stock will be issued by
a subsidiary of Ameren. As a result, the Company's preferred dividend
requirements have been reclassified to conform to this reporting
presentation.
9. Pro forma adjustments have been made to consolidate the financial results
of Electric Energy, Inc. (EEI), which will, in substance, be a 60% owned
subsidiary of Ameren subsequent to the Merger. The Company and CIPSCO
hold 40% and 20% ownership interests, respectively, in EEI and account for
these investments under the equity method of accounting. All
intercompany transactions between the Company, CIPSCO and EEI have been
eliminated.
10. Net income for the twelve months ended December 31, 1995 includes a
one-time credit to Missouri electric customers which reduced revenues and
pre-tax income of the registrant by $30 million.
- 19 -
<PAGE> 22
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.
UNION ELECTRIC COMPANY
(Registrant)
CHARLES W. MUELLER
President and
Chief Executive Officer
Date March 28, 1996 By /s/ James C. Thompson
---------------------- -------------------------------------
(James C. Thompson, Attorney-in-Fact)
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 date indicated.
Signature Title
CHARLES W. MUELLER President, Chief Executive
Officer and Director
(Principal Executive Officer)
DONALD E. BRANDT Senior Vice President
(Principal Financial and Accounting Officer)
WILLIAM E. CORNELIUS Director
THOMAS A. HAYS Director
THOMAS H. JACOBSEN Director
RICHARD A. LIDDY Director
JOHN PETERS MacCARTHY Director
PAUL L. MILLER, JR. Director
ROBERT H. QUENON Director
HARVEY SALIGMAN Director
JANET McAFEE WEAKLEY Director
By /s/ James C. Thompson March 28, 1996
-------------------------------------
(James C. Thompson, Attorney-in-Fact)
- 20 -
<PAGE> 23
EXHIBITS
EXHIBITS FILED HEREWITH
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.7 - Long-Term Incentive Plan of 1995.
10.8 - Change of Control Severance Plan.
12(a) - Statement re Computation of Ratios of Earnings to Fixed
Charges, 12 Months Ended December 31, 1995.
12(b) - Statement re Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements, 12 Months
Ended December 31, 1995.
13 - Those pages of the 1995 Annual Report incorporated herein by
reference.
23 - Consent of Independent Accountants.
24 - Powers of Attorney.
27 - Financial Data Schedule.
- 21 -
<PAGE> 24
EXHIBITS INCORPORATED BY REFERENCE
The following exhibits heretofore have been filed with the Securities and
Exchange Commission pursuant to requirements of the Acts administered by the
Commission. Such exhibits are identified by the references following the
listing of each such exhibit, and they are hereby incorporated herein by
reference under Rule 24 of the Commission's Rules of Practice.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
2 - Agreement and Plan of Merger, dated as of August 11, 1995, by and
among the Company, CIPSCO Incorporated, Ameren Corporation and Arch
Merger Inc. (June 30, 1995 Form 10-Q/A (Amendment No. 1), Exhibit
2(a).)
3(i) - Restated Articles of Incorporation of the Company, as filed with
the Secretary of State of the State of Missouri. (1993 Form 10-K,
Exhibit 3(i).)
3(ii) - By-Laws of the Company as amended to August 11, 1995. (June 30,
1995 Form 10-Q/A (Amendment No. 2), Exhibit 3(ii).)
4.1 - Order of the Securities and Exchange Commission dated October 16,
1945 in File No. 70-1154 permitting the issue of Preferred Stock,
$3.70 Series. (Registration No. 2-27474, Exhibit 3-E.)
4.2 - Order of the Securities and Exchange Commission dated April 30,
1946 in File No. 70-1259 permitting the issue of Preferred Stock,
$3.50 Series. (Registration No. 2-27474, Exhibit 3-F.)
4.3 - Order of the Securities and Exchange Commission dated October 20,
1949 in File No. 70-2227 permitting the issue of Preferred Stock,
$4.00 Series. (Registration No. 2-27474, Exhibit 3-G.)
4.4 - Indenture of Mortgage and Deed of Trust of the Company dated June
15, 1937, as amended May 1, 1941, and Second Supplemental Indenture
dated May 1, 1941. (Registration No. 2-4940, Exhibit B-1.)
4.5 - Supplemental Indentures to Mortgage
<CAPTION>
DATED AS OF FILE REFERENCE EXHIBIT NO.
----------- -------------- -----------
<S> <C> <C>
May 1, 1966 2-56062 2.33
March 1, 1967 2-58274 2.9
April 1, 1971 Form 8-K, April 1971 6
February 1, 1974 Form 8-K, February 1974 3
July 7, 1980 2-69821 4.6
May 1, 1990 Form 10-K, 1990 4.6
December 1, 1991 33-45008 4.4
December 4, 1991 33-45008 4.5
January 1, 1992 Form 10-K, 1991 4.6
October 1, 1992 Form 10-K, 1992 4.6
</TABLE>
- 22 -
<PAGE> 25
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
DATED AS OF FILE REFERENCE EXHIBIT NO.
----------- -------------- -----------
<S> <C> <C> <C>
4.5 - (continued)
December 1, 1992 Form 10-K, 1992 4.7
February 1, 1993 Form 10-K, 1992 4.8
May 1, 1993 Form 10-K, 1993 4.6
August 1, 1993 Form 10-K, 1993 4.7
October 1, 1993 Form 10-K, 1993 4.8
January 1, 1994 Form 10-K, 1993 4.9
4.6 - Indenture of Mortgage and Deed of Trust of Missouri Power & Light Company dated July 1, 1946 and Supplemental
Indentures dated July 1, 1946, November 1, 1949, June 1, 1951, July 1, 1954, December 1, 1959, July 1, 1962, March 1,
1966, April 1, 1967, June 15, 1969, April 15, 1973, December 1, 1974, May 1, 1976 and July 1, 1979. (Registration
No. 2-87469, Exhibit 4.1.)
4.7 - Fourteenth Supplemental Indenture dated as of December 30, 1983 to the Mortgage and Deed of Trust dated July 1, 1946,
of Missouri Power & Light Company. (1983 Form 10-K, Exhibit 4.23.)
4.8 - Instrument of Substitution of Individual Trustee dated as of November 1, 1988 under the Mortgage and Deed of Trust
dated July 1, 1946 of Union Electric Company (successor to Missouri Power & Light Company). (1988 Form 10-K, Exhibit
4.8.)
4.9 - Indenture of Mortgage or Deed of Trust of Missouri Edison Company dated July 1, 1945 and Supplemental Indentures
dated January 1, 1952, June 1, 1961, June 1, 1965, August 1, 1975, September 1, 1976, November 1, 1977, February 1,
1981 and July 1, 1982. (Registration No. 2-87469, Exhibit 4.2.)
4.10 - Ninth Supplemental Indenture dated as of December 30, 1983 to the Indenture of Mortgage or Deed of Trust dated as of
July 1, 1945 of Missouri Edison Company. (1983 Form 10-K, Exhibit 4.24.)
4.11 - Instrument of Substitution of Trustee dated as of March 1, 1985 under the Indenture of Mortgage or Deed of Trust
dated July 1, 1945 of Union Electric Company (successor to Missouri Edison Company). (1984 Form 10-K, Exhibit 4.10.)
4.12 - Instrument of Substitution of Trustee dated as of October 14, 1986 under the Indenture of Mortgage or Deed of Trust
dated July 1, 1945 of Union Electric Company (successor to Missouri Edison Company). (September 30, 1986 Form 10-Q,
Exhibit 4.2.)
4.13 - Series A Agreement of Sale dated as of June 1, 1984 between the State Environmental Improvement and Energy Resources
Authority of the State of Missouri and the Company, together with Letter of Credit and Reimbursement Agreement dated
as of June 1, 1984 between Citibank, N.A. and the Company and
</TABLE>
- 23 -
<PAGE> 26
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
Series A Trust Indenture dated as of June 1, 1984 between the Authority and Mercantile Trust Company National
Association, as trustee. (Registration No. 2-96198, Exhibit 4.25.)
4.14 - Reimbursement Agreement dated as of April 21, 1992 among Swiss Bank Corporation, various financial institutions, and
the Company, providing for an alternate letter of credit to serve as a source of payment for bonds issued under the
Series A Trust Indenture dated as of June 1, 1984. (1992 Form 10-K, Exhibit 4.23.)
4.15 - Series B Agreement of Sale dated as of June 1, 1984 between the State Environmental Improvement and Energy Resources
Authority of the State of Missouri and the Company, together with Reimbursement Agreement dated as of June 1, 1984
between Chemical Bank and the Company and Series B Trust Indenture dated as of June 1, 1984 between the Authority and
Mercantile Trust Company National Association, as trustee. (Registration No. 2-96198, Exhibit 4.26.)
4.16 - Reimbursement Agreement dated as of April 22, 1988 between Union Bank of Switzerland and the Company, providing for
an alternate letter of credit to serve as a source of payment for bonds issued under the Series B Trust Indenture
dated as of June 1, 1984. (June 30, 1988 Form 10-Q, Exhibit 4.2.)
4.17 - Amendment and Extension Agreement dated as of June 1, 1990 to the Reimbursement Agreement dated as of April 22, 1988
between Union Bank of Switzerland and the Company. (1990 Form 10-K, Exhibit 4.29.)
4.18 - Amendment and Extension Agreement dated as of June 1, 1991 to the amended Reimbursement Agreement dated as of April
22, 1988 between Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.27.)
4.19 - Amendment Agreement dated as of June 1, 1992 to the amended Reimbursement Agreement dated as of April 22, 1988
between Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.28.)
4.20 - Series 1985 A Reaffirmation Agreement and Second Supplement to Agreement of Sale dated as of June 1, 1985 between the
State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together
with Series 1985 A Reimbursement Agreement dated as of June 1, 1985 between Union Bank of Switzerland and the Company
and Series 1985 A Trust Indenture dated as of June 1, 1985 between the Authority and Mercantile Trust Company
National Association, as trustee and Texas Commerce Bank National Association, as co-trustee. (June 30, 1985 Form
10-Q, Exhibit 4.1.)
4.21 - Amendment and Extension Agreement dated as of June 1, 1988 revising the Reimbursement Agreement dated as of June 1,
1985 between Union Bank of Switzerland and the Company. (June 30, 1988 Form 10-Q, Exhibit 4.4.)
</TABLE>
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<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
4.22 - Amendment and Extension Agreement dated as of June 1, 1990 revising the Reimbursement Agreement dated as of June 1,
1985, as amended, between Union Bank of Switzerland and the Company. (1990 Form 10-K, Exhibit 4.37.)
4.23 - Amendment and Extension Agreement dated as of June 1, 1991 to the amended Reimbursement Agreement dated as of
June 1, 1985 between Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.32.)
4.24 - Amendment Agreement dated as of June 1, 1992 to the amended Reimbursement Agreement dated as of June 1, 1985 between
Union Bank of Switzerland and the Company. (1992 Form 10-K, Exhibit 4.33.)
4.25 - Series 1985 B Reaffirmation Agreement and Third Supplement to Agreement of Sale dated as of June 1, 1985 between the
State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together with
Series 1985 B Reimbursement Agreement dated as of June 1, 1985 between The Long-term Credit Bank of Japan, Limited
and the Company and Series 1985 B Trust Indenture dated as of June 1, 1985 between the Authority and Mercantile Trust
Company National Association, as trustee and Texas Commerce Bank National Association, as co-trustee. (June 30, 1985 Form
10-Q, Exhibit 4.2.)
4.26 - Reimbursement Agreement dated as of February 1, 1993 between Westdeutsche Landesbank Girozentrale and the Company,
providing for an alternate letter of credit to serve as a source of payment for bonds issued under the Series 1985
B Trust Indenture dated as of June 1, 1985. (1992 Form 10-K, Exhibit 4.35.)
4.27 - Loan Agreement dated as of May 1, 1990 between the State Environmental Improvement and Energy Resources Authority of the
State of Missouri and the Company, together with Indenture of Trust dated as of May 1, 1990 between the Authority and
Mercantile Bank of St. Louis, N.A., as trustee. (1990 Form 10-K, Exhibit 4.40.)
4.28 - Loan Agreement dated as of December 1, 1991 between the State Environmental Improvement and Energy Resources Authority
and the Company, together with Indenture of Trust dated as of December 1, 1991 between the Authority and Mercantile
Bank of St. Louis, N.A., as trustee. (1992 Form 10-K, Exhibit 4.37.)
4.29 - Loan Agreement dated as of December 1, 1992, between the State Environmental Improvement and Energy Resources Authority
and the Company, together with Indenture of Trust dated as of December 1, 1992 between the Authority and Mercantile Bank
of St. Louis, N.A., as trustee. (1992 Form 10-K, Exhibit 4.38.)
4.30 - Fuel Lease dated as of February 24, 1981 between the Company, as lessee, and Gateway Fuel Company, as lessor, covering
nuclear fuel. (1980 Form 10-K, Exhibit 10.20.)
</TABLE>
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<PAGE> 28
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
4.31 - Amendments to Fuel Lease dated as of May 8, 1984 and October 15, 1984,
respectively, between the Company, as lessee, and Gateway Fuel Company,
as lessor, covering nuclear fuel. (Registration No. 2-96198, Exhibit
4.28.)
4.32 - Amendment to Fuel Lease dated as of October 15, 1986 between the
Company, as lessee, and Gateway Fuel Company, as lessor, covering
nuclear fuel. (September 30, 1986 Form 10-Q, Exhibit 4.3.)
4.33 - Credit Agreement dated as of August 15, 1989 among the Company, Certain
Lenders, The First National Bank of Chicago, as Agent and Swiss Bank
Corporation, Chicago Branch, as Co-Agent. (September 30, 1989 Form
10-Q, Exhibit 4.)
4.34 - Credit Agreement dated as of November 8, 1991 between the Company,
Certain Banks and Chemical Bank, as Agent. (1991 Form 10-K, Exhibit
4.44.)
4.35 - Amendment dated as of October 26, 1992, to the Credit Agreement dated
as of November 8, 1991 between the Company, Certain Banks and Chemical
Bank, as Agent. (1992 Form 10-K, Exhibit 4.44.)
10.1 - Deferred Compensation Plan for Members of the Board of Directors.
(1992 Form 10-K, Exhibit 10.1.)
10.2 - Retirement Plan for Certain Directors. (1992 Form 10-K, Exhibit 10.2.)
10.3 - Deferred Compensation Plan for Members of the General Executive Staff.
(1992 Form 10-K, Exhibit 10.3.)
10.4 - Executive Incentive Plan. (1992 Form 10-K, Exhibit 10.4.)
10.5 - Stock Option Agreement, dated as of August 11, 1995, by and between
CIPSCO Incorporated and the Company. (June 30, 1995 Form 10-Q, Exhibit
10(a).)
10.6 - Stock Option Agreement, dated as of August 11, 1995, by and between the
Company and CIPSCO Incorporated. (June 30, 1995 Form 10-Q, Exhibit
10(b).)
</TABLE>
Note: Reports of the Company on Forms 8-K, 10-Q and 10-K are on file with the
SEC under file number 1-2967.
- 26 -
<PAGE> 1
EXHIBIT 10.7
UNION ELECTRIC COMPANY
LONG TERM INCENTIVE PLAN OF 1995
SECTION 1. PURPOSE. The purpose of this Long Term Incentive Plan of
1995 (the "Plan") of Union Electric Company (together with any successor
thereto, the "Company") is (1) to increase incentive to enhance the value of
the Company for the benefit of its customers and shareholders; (2) to
encourage management to further develop an interest in the long-term growth
and performance of the Company; and (3) to aid in the attraction and retention
of qualified personnel.
SECTION 2. DEFINITIONS. In addition to the terms defined elsewhere in
the Plan, the following shall be defined terms under the Plan:
"Award" means any Performance Award, Option, Stock Appreciation Right,
Restricted Stock, Dividend Equivalent, or Other Stock-Based Award, or any other
right or interest relating to Shares or cash, granted to a Participant under
the Plan.
"Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, including successor provisions thereto and regulations thereunder.
"Committee" means the Human Resources Committee of the Board, or such
other Board committee as may be designated by the Board to administer the
Plan, or any subcommittee of either; provided, however, that the Committee
shall be constituted to permit the Plan to comply with Rule 16b-3 under the
Exchange Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, including successor provisions thereto and regulations
thereunder.
"Fair Market Value" means, with respect to Shares, Awards, or other
property, the fair market value of such Shares, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. Unless otherwise determined by the Committee, the Fair
Market Value of Shares as of any date shall be the closing sale price
on that date of a Share as reported in the New York Stock Exchange Composite
Transaction Report.
<PAGE> 2
"Incentive Stock Option" means an Option that is designated as such by
the Committee and meets the requirements of Section 422 of the Code.
"Non-Qualified Stock Option" means an Option that is not an Incentive
Stock Option.
"Participant" means a person who, as an officer or employee of the
Company or any Subsidiary, has been granted an Award under the Plan.
"Rule 16b-3" means Rule 16b-3, as from time to time amended and
applicable to Participants, promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.
"Shares" means the Common Stock, $5.00 par value, of the Company and
such other securities of the Company as may be substituted for Shares or such
other securities pursuant to Section 10.
"Subsidiary" means any company (other than the Company) with respect to
which the Company owns, directly or indirectly, 50% or more of the total
combined voting power of all classes of stock. In addition, any other related
entity may be designated by the Board as a Subsidiary, provided such entity
could be considered as a subsidiary according to generally accepted accounting
principles.
"Year" means a calendar year.
In addition to the foregoing, the terms "Performance Award", "Option",
"Stock Appreciation Right", "Restricted Stock", "Dividend Equivalent" and
"Other Stock-Based Award" shall mean as described in Section 6 of the Plan.
SECTION 3. ADMINISTRATION.
3.01. Authority of the Committee. The Plan shall be administered by the
Committee on behalf of the Board. The Committee shall have full power to
interpret the Plan, to establish, modify and grant waivers of Award
restrictions and to adopt such rules, regulations and guidelines for carrying
out the Plan as it deems necessary or appropriate. All determinations by the
Committee shall be final and binding upon all parties affected thereby.
3.02. Manner of Exercise of Committee Authority. The express grant of
any specific power to the Committee, and the taking of any action by the
Committee, shall not be construed as limiting any power or authority of the
Committee. A memorandum signed by all members of the Committee shall constitute
the act of the Committee without the necessity, in such event, to hold a
meeting. The Committee may delegate to officers or managers of the Company or
any Subsidiary the authority, subject to such terms as the Committee shall
determine, to perform administrative functions under the Plan. Only the
Committee may select, and grant Awards to, Participants who are subject to
Section 16 of the Exchange Act.
- 2 -
<PAGE> 3
SECTION 4. SHARES SUBJECT TO THE PLAN. Subject to adjustment as
provided in the Plan, the total number of Shares that may be issued or
delivered pursuant to Awards under the Plan shall be 2,500,000, which shall
consist of Shares which have been authorized and issued and have been acquired
by or on behalf of the Company or the Plan and are available for Awards under
the Plan; provided that, if the Board shall hereafter so authorize, such Shares
may consist of authorized and unissued Shares. Subject to the requirements of
Rule 16b-3, the Committee may adopt procedures for the counting of Shares
relating to any Award for which the number of Shares to be distributed or with
respect to which payment will be made cannot be fixed at the date of grant to
ensure appropriate counting, avoid double counting (in the case of tandem or
substitute awards), and provide for adjustments in any case in which the number
of Shares actually distributed or with respect to which payments are actually
made differs from the number of Shares previously counted in connection with
such Award. To the extent permitted under Rule 16b-3, in the event that any
Shares to which an Award relates are forfeited or the Award is settled or
terminates without a distribution of Shares (whether or not cash, other
Awards, or other property is distributed with respect to such Award), any
Shares counted against the number of Shares reserved and available under the
Plan with respect to such Award shall again be available for Awards under the
Plan.
SECTION 5. ELIGIBILITY. Awards may be granted only to individuals who
are officers or other employees (including employees who also are directors)
of the Company or a Subsidiary; provided, however, that no Award shall be
granted to any member of the Committee.
SECTION 6. SPECIFIC TERMS OF AWARDS
6.01. General. The Committee may grant Awards as described in this
Section. The Committee shall determine who may participate in the Plan and the
number and types of Awards to be made to each Participant and shall determine
and set forth in the Award or the related Award Agreement the terms,
conditions, performance requirements (if any) and limitations (which need not
be limited to those referred to below) applicable to each Award. Awards may be
granted singly, in combination or in tandem.
6.02. Performance Awards. A Performance Award shall confer upon
the Participant a right to receive cash, Shares, other Awards, or the property
contingent upon the achievement of performance goals specified by the
Committee. A Performance Award shall be denominated in Shares and may be
payable in cash, Shares, other Awards, or other property, and have such other
terms as shall be determined by the Committee.
6.03. Restricted Stock. Restricted Stock shall confer upon the
Participant the right to receive Shares subject to such restrictions on
transferability and other restrictions as the Committee may impose (including,
without limitation, forfeiture if such restrictions are not satisfied,
limitations on the right to vote and limitations on the right to receive
dividends), which restrictions may lapse at such times and under such
circumstances as the Committee shall determine.
- 3 -
<PAGE> 4
6.04. Options. An Option shall confer upon the Participant the right
to purchase Shares, other Awards, or property, subject to the following terms
and conditions:
(i) Exercise Price. The exercise price per Share purchasable
under an Option shall not be less than the Fair Market Value of a Share on the
date of grant of such Option.
(ii) Time and Method of Exercise. The Committee shall
determine the time during which an Option may be exercised in whole or in part,
the methods by which the exercise price may be paid and the methods by which
Shares will be delivered to Participants. Options shall expire not later than
ten years after the date of grant.
(iii) Terms Applicable to Incentive Stock Options. The terms
of any Incentive Stock Option granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code which, among other
limitations, provides that the aggregate Fair Market Value (determined at the
time the Option is granted) of Shares for which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year shall
not exceed $100,000. The number of Shares that shall be available for Incentive
Stock Options granted under the Plan is limited to 500,000. Anything in the
Plan to the contrary notwithstanding, no term of the Plan relating to Incentive
Stock Options shall be interpreted, amended, or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as to
disqualify either the Plan or any Incentive Stock Option under Section 422 of
the Code.
(iv) Limitation on Re-Pricing and Replacement. No Option shall
provide by its terms for the re-setting of its exercise price, or for its
replacement, in whole or in part, upon its exercise or expiration; provided
that the foregoing shall not limit the authority of the Committee to grant
additional Options in any such event or circumstance.
6.05. Stock Appreciation Rights. A Stock Appreciation Right shall
confer upon the Participant a right to receive the excess of (A) the Fair
Market Value of one Share on the date of exercise (or, except in the case of a
Stock Appreciation Right related to an Incentive Stock Option, the Fair Market
Value of one Share at any time during a specified period before or after the
date of exercise) over (B) the grant price of the Stock Appreciation Right,
which shall be not less than the Fair Market Value of one Share on the date of
grant. A Stock Appreciation Right may be granted as a Limited Stock
Appreciation Right which may be exercised only upon the occurrence of a Change
of Control. Stock Appreciation Rights shall expire not later than ten years
after the date of grant.
6.06. Dividend Equivalents. A Dividend Equivalent shall confer upon
the Participant a right to receive cash, Shares, other Awards, or other property
equal in value to dividends paid with respect to a specified number of Shares.
6.07. Other Stock-Based Awards. The Committee is authorized to grant
to Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, Shares,
as deemed by the Committee to be consistent with the purposes of the Plan.
- 4 -
<PAGE> 5
SECTION 7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
7.01. Certain Performance-Based Awards. The Committee may provide in
any Award Agreement that Performance Awards, including Restricted Stock and
other Awards which may be forfeited for non-satisfaction of performance
criteria, made to certain employees are intended to be "qualified
performance-based compensation" within the meaning of Section 162(m) of the
Code and shall be paid solely on account of the attainment of one or more
preestablished, objective performance goals within the meaning of Section
162(m). If any provision of this Plan or any Award Agreement does not comply
with the requirements of Section 162(m) of the Code as then applicable to any
such employee, such provision shall be construed or deemed amended to the
extent necessary to conform to such requirements with respect to such employee.
7.02. Term of Awards. The term of each Award shall be for such period
as shall be determined by the Committee subject to the requirements of the
Plan.
7.03. Forms of Payment. Subject to the terms of the Plan and any
applicable Award Agreement, (i) payments to be made by the Company or a
Subsidiary with respect to Awards may be made in such forms as the Committee
shall determine; and (ii) the timing, method, amount and nature of payments to
be made by Participants with respect to Awards (including, if permitted by the
Committee, by means of tendering Shares or Awards) shall be determined by the
Committee.
7.04. Termination of Employment. If the employment of a Participant
terminates, all unexercised, deferred and unpaid Awards shall be cancelled
immediately, unless the Award Agreement provides otherwise or unless the
Committee shall provide otherwise in connection with such termination,
including without limitation, in the case of termination pursuant to
retirement, resignation, death or disability of a Participant.
7.05. Minimum Holding Period. Unless otherwise provided by the
Committee with respect to any Award, Awards payable, in whole or in part, in
Shares must be held for at least six months (i) in the case of an Option, Stock
Appreciation Right or Dividend Equivalent, from the date of grant to the date
of disposition exercise; and (ii) in the case of other Awards, from the date of
acquisition to the date of disposition.
SECTION 8. GENERAL RESTRICTIONS APPLICABLE TO AWARDS.
8.01. Restrictions Under Rule 16b-3. It is the intent of the Company
that this Plan comply (including but not limited to holding period and
nontransferability limitations) in all respects with Rule 16b-3 in connection
with any Award granted to a person who is subject to Section 16 of the Exchange
Act. Accordingly, if any provision of this Plan of any Award Agreement does not
comply with the requirements of Rule 16b-3 as then applicable to any such
person, such provision shall be construed or deemed amended to the extent
necessary to conform to such requirements with respect to such person.
- 5 -
<PAGE> 6
8.02 Limits on Transfer of Awards; Beneficiaries. No Award may be
assigned or transferred by a Participant otherwise than by will or the laws of
descent and distribution, or payable to or exercisable by anyone other than the
Participant to whom it was granted, and no right or interest of a Participant
in any Award may be pledged, encumbered or hypothecated to or in favor of any
party, or shall be subject to any lien, obligation or liability of a
Participant to any party; provided, however, that (i) a Participant may, in the
manner established by the Committee, designate a beneficiary or beneficiaries
to exercise the rights of the Participant, and to receive any distribution with
respect to any Award, upon the death or disability of the Participant, (ii) the
Committee may provide in any Award or the related Award Agreement that an Award
(other than an Incentive Stock Option) may be assigned, transferred,
exercisable by another person or pledged, encumbered or hypothecated, subject
to the applicable requirements of the Code and provided that such provision or
transfer would not cause the Plan not to be in compliance with the requirements
of Rule 16b-3 and (iii) transfers of Awards may be made to the Company or a
Subsidiary to the extent permitted under the terms of the Plan. A beneficiary,
guardian, legal representative, or other person claiming any rights under the
Plan from or through any Participant shall be subject to all terms and
conditions of the Plan and any Award Agreement applicable to such Participant,
except to the extent the Plan and such Award Agreement otherwise
provide with respect to such persons, and to any additional restrictions deemed
necessary or appropriate by the Committee.
8.03 Share Certificates. All certificates for Shares delivered under
the Plan pursuant to any Award or the exercise thereof shall be subject to such
stop-transfer order and other restrictions as the Committee may deem advisable
under applicable federal or state laws, rules and regulations thereunder, and
the rules of any national securities exchange on which Shares are listed. The
Committee may cause a legend or legends to be placed on any such certificates
to make appropriate reference to such restrictions or any other restrictions
that may be applicable to Shares. In addition, during any period in which
Awards or Shares are subject to restrictions, or during any period during which
delivery or receipt of an Award or Shares has been deferred by the Committee or
a Participant, the Committee may require the Participant to enter into an
agreement providing that certificates representing Shares issuable or issued
pursuant to an Award shall remain in the physical custody of the Company or
such other person as the Committee may designate.
If certificates representing Restricted Stock are registered in the
name of the Participant, such certificates shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, the Company shall retain physical possession of the
certificates, and the Participant shall deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.
SECTION 9. CHANGE OF CONTROL. Notwithstanding any other provision of
the Plan, the following acceleration provisions shall apply in the event of a
"Change of Control" as defined in this Section:
9.01. Acceleration. In the event of a Change of Control, unless
otherwise provided in the related Award Agreement: (i) all Limited Stock
Appreciation Rights shall become exercisable
- 6 -
<PAGE> 7
in full; (ii) all Options which have not been granted in tandem with Limited
Stock Appreciation Rights shall become exercisable in full; and (iii) all
restrictions (other than restrictions imposed by law) and conditions of all
Restricted Stock then outstanding shall be deemed satisfied subject to any
holding period limitations.
9.02 Change of Control. "Change of Control" means a change of control
of the Company of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item
of any similar schedule or form) under the Exchange Act, whether or not the
Company is then subject to such reporting requirements; provided, however,
that, without limitation, such a Change of Control shall be deemed to have
occurred if: (i) any person, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, and other than the
Company or a corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the Common Stock of the Company then outstanding;
or (ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board and any new directors (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in (i) above) whose election by the
Board or nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority of the Board.
SECTION 10. ADJUSTMENT PROVISIONS. In the event that the Committee
shall determine that any dividend or other distribution (whether in the form of
cash, Shares, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or event,
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the rights of
Participants under the Plan, then the Committee shall, in such manner as it may
deem equitable, make any adjustments it deems appropriate. In addition, the
Committee is authorized to make such adjustments as it deems appropriate in the
terms and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, events described
in the preceding sentence) affecting the Company or any Subsidiary or the
financial statements of the Company of any Subsidiary, or in response to
changes in applicable laws, regulations, or accounting principles.
SECTION 11. CHANGES TO THE PLAN AND AWARDS.
11.01. Changes to the Plan. The Board may amend, alter, suspend,
discontinue or terminate the Plan without the consent of shareholders or
Participants, except as is required by any federal or state law or regulation
or the rules of any stock exchange on which the Shares may be listed, or if
the Board in its discretion determines that obtaining such shareholder
approval is
- 7 -
<PAGE> 8
for any reason advisable; provided, however, that (i) without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may impair the rights of such Participant under any
Award theretofore granted to such Participant; and (ii) the Plan may not be
amended without the consent of the holders of a majority of the Shares then
outstanding to (a) increase the aggregate number of Shares that may be issued
under the Plan (except for adjustments pursuant to Section 10), (b) decrease
the Option Price, (c) materially modify the requirements as to eligibility for
participation in the Plan, (d) withdraw administration of the Plan from the
Committee or (e) extend the period during which Awards may be granted.
11.02. Changes to Awards. The Committee may waive any conditions or
rights under, or amend, alter, accelerate, suspend, discontinue, or terminate,
any Award theretofore granted and any Award Agreement relating thereto;
provided, however, that, without the consent of an affected Participant, no such
amendment, alteration, suspension, discontinuation, or termination of any Award
may impair the rights of such Participant under such Award.
SECTION 12. GENERAL PROVISIONS.
12.01. No Rights to Awards. No Participant or employee shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants and employees.
12.02. No Shareholder Rights. No Award shall confer on any
Participant any of the rights of a shareholder of the Company unless and until
Shares are duly issued or transferred to the Participant in accordance with the
terms of the Award.
12.03. Dividends. The recipient of any Award may, if so determined by
the Committee, be entitled to receive on a current or deferred basis, dividends
or Dividend Equivalents, with respect to the number of Shares covered by the
Award.
12.04. Tax Withholding. The Company or any Subsidiary is authorized
to withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to a Participant, amounts of withholding and other taxes due with respect
thereto, its exercise, or any payment thereunder, and to take such other action
as the Committee may deem necessary or advisable to enable the Company and
Participants to satisfy obligations for the payment of withholding taxes and
other tax liabilities relating to any Award. This authority shall include
authority to withhold or receive Shares or other property and to make cash
payments in respect thereof in satisfaction of a Participant's tax obligations.
12.05. No Right to Employment. Nothing contained in the Plan or any
Award Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any employee any right to continue in the employ of the
Company or any Subsidiary or to interfere in any way with the right of the
Company or any Subsidiary to terminate the employee's employment at any time or
increase or decrease the employee's compensation from the rate in existence at
the time of granting of an Award.
- 8 -
<PAGE> 9
12.06. Unfunded Status of Awards. The Plan is intended to constitute
an "unfunded" plan for incentive and deferred compensation. Nothing contained
in the Plan, any Award Agreement, or any Award shall give any such Participant
any rights that are greater than those of an unsecured general creditor of
the Company.
12.07. Other Compensatory Arrangements. The Company or any Subsidiary
shall be permitted to adopt other or additional compensation arrangements (which
may include arrangements which relate to Awards), and such arrangements may be
either generally applicable or applicable only in specific cases.
12.08. Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu
of fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.
12.09. Governing Law. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan, any action taken pursuant
to the Plan and any Award Agreement shall be governed by the laws of the State
of Missouri, without giving effect to principles of conflicts of laws, and
applicable federal law.
SECTION 13. The Plan, the granting and exercising of Awards thereunder
and the other obligations of the Company under the Plan shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any regulatory or governmental agency as may be required. The Company, in
its discretion, may postpone the granting and exercising of Awards, the
issuance or delivery of Shares under any Award or any other action permitted
under the Plan to permit the Company, with reasonable diligence, to complete
any stock exchange listing or registration or qualification of such Shares or
other required action under any federal or state law, rule or regulation and
may require any participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of Shares in compliance with applicable laws, rules and regulations.
The Company shall not be obligated by virtue of any provision of the Plan to
recognize the exercise of any Award or to otherwise sell or issue Shares in
violation of any such laws, rules, or regulations; and any postponement of the
exercise or settlement of any Award under this provision shall not extend the
term of such Award, and neither the Company nor its directors or officers shall
have any obligation or liability to the Participant with respect to any Award
(or stock issuable thereunder) that shall lapse because of such postponement.
SECTION 14. EFFECTIVE DATE. The Plan shall become effective on April
25, 1995 provided that the Plan is approved by the affirmative vote of the
holders of a majority of the Shares present or represented and entitled to vote
at a meeting of the Company's shareholders on that date. The Plan shall
terminate ten years after its effective date, subject to earlier termination by
the Board pursuant to Section 11, after which no Awards may be made under the
Plan, but any such termination shall not affect Awards then outstanding or the
authority of the Committee to continue to administer the Plan.
- 9 -
<PAGE> 1
EXHIBIT 10.8
UNION ELECTRIC COMPANY
CHANGE OF CONTROL SEVERANCE PLAN
Introduction
The Board of Directors of Union Electric Company recognizes that, as is
the case with many publicly held corporations, there exists the possibility of
a Change of Control of the Company. This possibility and the uncertainty it
creates may result in the loss or distraction of senior executives of the
Company, to the detriment of the Company and its shareholders.
The Board considers the avoidance of such loss and distraction to be
essential to protecting and enhancing the best interests of the Company and its
shareholders. The Board also believes that when a Change of Control is
perceived as imminent, or is occurring, the Board should be able to receive and
rely on disinterested service from senior executives regarding the best
interests of the Company and its shareholders, without concern that senior
executives might be distracted or concerned by the personal uncertainties and
risks created by the perception of an imminent or occurring Change of Control.
In addition, the Board believes that it is consistent with the
Company's employment practices and policies and in the best interests of the
Company and its shareholders to treat fairly its employees whose employment
terminates in connection with or following a Change of Control.
Accordingly, the Board has determined that appropriate steps should be
taken to assure the Company of the continued employment and attention and
dedication to duty of its senior executives and to seek to ensure the
availability of their continued service, notwithstanding the possibility,
threat or occurrence of a Change of Control.
Therefore, in order to fulfill the above purposes, the following plan
has been developed and is hereby adopted.
ARTICLE I
ESTABLISHMENT OF PLAN
As of the Effective Date, the Company hereby establishes a separation
compensation plan known as Union Electric Company Change of Control Severance
Plan, as set forth in this document.
ARTICLE II
DEFINITIONS
As used herein, the following words and phrases shall have the following
respective meanings unless the context clearly indicates otherwise.
(a) Annual Bonus Award. The annual cash bonus that a Participant is
eligible to earn pursuant to the Company's Executive Incentive Plan, and/or any
successors thereto.
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(b) Annual Salary. The Participant's regular annual base salary
immediately prior to his or her termination of employment, including
compensation converted to other benefits under a flexible pay arrangement
maintained by the Company or deferred pursuant to a written plan or agreement
with the Company.
(c) Board. The Board of Directors of Union Electric Company.
(d) Cause. With respect to any Participant: (i) the willful and
continued failure of the Participant to perform substantially the Participant's
duties with the Company or one of its affiliates (other than any such failure
resulting from incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Participant by the Board
or the Chief Executive Officer of the Company which specifically identifies the
manner in which the Board or Chief Executive Officer believes that the
Participant has not substantially performed the Participant's duties, or (ii)
the willful engaging by the Participant in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the Company. For purposes of
this definition, no act or failure to act on the part of the Participant shall
be considered "willful" unless it is done, or omitted to be done, by the
Participant in bad faith or without reasonable belief that the Participant's
action or omission was in the best interests of the Company. Any act or
failure to act based upon authority given pursuant to a resolution duly adopted
by the Board or upon the instructions of the Chief Executive Officer or a
senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
the Participant in good faith and in the best interests of the Company.
(e) Change of Control. The occurrence of any of the following events:
(i) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (x) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (y) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change of Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation con- trolled by the Company or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B) and
(C) of paragraph (iii) below; or
(ii) Individuals who, as of the date of this Plan, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date of this Plan whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the
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election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another corporation (a "Business Combination"), in
each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 80% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(f) Code. The Internal Revenue Code of 1986, as amended from time to
time.
(g) Committee. The Human Resources Committee of the Board.
(h) Company. Union Electric Company and any successor thereto.
(i) Date of the Change of Control. The date on which a Change of Control
occurs.
(j) Date of Termination. The date on which a Participant ceases to be an
Employee.
(k) Disability. A termination of a Participant's Employment for
Disability shall have occurred if the Termination occurs because illness or
injury has prevented the Participant from performing his or her duties (as they
existed immediately prior to the illness or injury) on a full time basis for
180 consecutive business days.
(l) Effective Date. The date specified in the resolution of the Board
adopting this Plan.
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(m) Employee. Any full-time, regular-benefit, non-bargaining employee of
the Company.
(n) Employment. The state of being an Employee.
(o) ERISA. The Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
(p) Good Reason. With respect to any Participant, (i) the assignment to
the Participant of any duties inconsistent in any respect with the
Participant's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately before the
Change of Control, or any other action by the Company which results in a
significant diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Participant; (ii) any material reduction
in the Participant's Annual Salary, opportunity to earn Annual Bonuses, or
other compensation or employee benefits, other than as a result of an isolated
and inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Participant;
(iii) the Company's requiring the Participant to relocate his or her principal
place of business to a place which is more than 50 miles from his or her
previous principal place of business; (iv) any purported termination of the
Plan otherwise than as expressly permitted by the Plan; or (v) any failure by
the Company to comply with and satisfy Article V of the Plan. For purposes of
the Plan, any good faith determination of "Good Reason" made by the Participant
shall be conclusive.
(q) Highest Annual Bonus. With respect to any Participant, the higher of
(i) the average of the Annual Bonuses received by the Participant with respect
to the three most recent years before the Date of the Change of Control and
(ii) the Annual Bonus most recently received by the Participant.
(r) Multiple. With respect to any Participant, the number set forth
opposite the Participant's name under the heading "Benefit Level" on Schedule I
hereto or, if less, the number of years and fractions thereof remaining, as of
the Participant's Date of Termination, until the Participant reaches his or her
mandatory retirement age (if any) under the applicable Company policy.
(s) Participant. An individual who is designated as such pursuant to
Section 3.1.
(t) Plan. Union Electric Company Change of Control Severance Plan.
(u) Retirement. A termination by Retirement shall have occurred where a
Participant's termination is due to his or her late, normal or early retirement
under a pension plan sponsored by the Company or any of its affiliates, as
defined in such plan.
(v) Separation Benefits. The benefits described in Section 4.2 that are
provided to qualifying Participants under the Plan.
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(w) Separation Period. With respect to any Participant, the period
beginning on a Participant's Date of Termination and ending after the
expiration of a number of years equal to the Multiple for such Participant.
ARTICLE III
ELIGIBILITY
3.1 Participation. Each of the individuals named on Schedule I hereto
shall be a Participant in the Plan. Schedule I may be amended by the Human
Resources Committee of the Board from time to time to add individuals as
Participants.
3.2 Duration of Participation. A Participant shall only cease to be a
Participant in the Plan as a result of an amendment or termination of the Plan
complying with Article VI of the Plan, or when he ceases to be an Employee of
any Employer, unless, at the time he ceases to be an Employee, such Participant
is entitled to payment of a Separation Benefit as provided in the Plan or there
has been an event or occurrence that constitutes Good Reason that which would
enable the Participant to terminate his employment and receive a Separation
Benefit. A Participant entitled to payment of a Separation Benefit or any
other amounts under the Plan shall remain a Participant in the Plan until the
full amount of the Separation Benefit and any other amounts payable under the
Plan have been paid to the Participant.
ARTICLE IV
SEPARATION BENEFITS
4.1 Terminations of Employment Which Give Rise to Separation Benefits
Under Plan. A Participant shall be entitled to Separation Benefits as set
forth in Section 4.2 below if, at any time before the third anniversary of the
Date of the Change of Control, the Participant's Employment is terminated (i)
by the Company for any reason other than Cause, death, Disability or Retirement
or (ii) by the Participant within 90 days after the occurrence of Good Reason.
4.2 Separation Benefits.
(a) If a Participant's employment is terminated under circumstances
entitling him to Separation Benefits as provided in Section 4.1, the Company
shall pay such Participant, within ten days of the Date of Termination, a cash
lump sum as set forth in subsection (b) below and the continued benefits set
forth in subsection (c) below. For purposes of determining the benefits set
forth in subsection (b) and (c), if the termination of the Participant's
employment is for Good Reason after there has been a reduction of the
Participants Annual Salary, opportunity to earn Annual Bonuses, or other
compensation or employee benefits, such reduction shall be ignored.
(b) The cash lump sum referred to in Section 4.2(a) is the aggregate of
the following amounts:
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(i) the sum of (1) the Participant's Annual Salary through the Date of
Termination to the extent not theretofore paid, (2) the product of (x) the
Highest Annual Bonus and (y) a fraction, the numerator of which is the number
of days in the such year through the Date of Termination, and the denominator
of which is 365, and (3) any accrued vacation pay, to the extent not
theretofore paid and in full satisfaction of the rights of the Participant
thereto;
(ii) an amount equal to the product of (1) the Participant's Multiple
times (2) the sum of the Participant's (x) Annual Salary and (y) Highest Annual
Bonus; and
(iii) an amount equal to the difference between (a) the actuarial
equivalent of the benefit under the Company's qualified defined benefit
retirement plan (the "Retirement Plan") and any excess or supplemental
retirement plans in which the Participant participates (collectively, the
"SERP") which the Participant would receive if his or her employment continued
during the Separation Period, assuming that the Participant's compensation
during the Separation Period would have been equal to his or her compensation
as in effect immediately before the termination or, if higher, on the Effective
Date, and (b) the actuarial equivalent of the Participant's actual benefit
(paid or payable), if any, under the Retirement Plan and the SERP as of the
Date of Termination. The actuarial assumptions used for purposes of
determining actuarial equivalence shall be no less favorable to the Participant
than the most favorable of those in effect under the Retirement Plan and the
SERP on the Date of Termination and the Effective Date.
(c) The continued benefits referred to above are as follows:
(i) during the Separation Period, the Participant and his or her family
shall be provided with medical, dental and life insurance benefits as if the
Participant's employment had not been terminated; provided, however, that if
the Participant becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer-provided plan,
the medical and other welfare benefits described herein shall be secondary to
those provided under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but not the time of
commencement of benefits) of the Participant for retiree medical, dental and
life insurance benefits under the Company's plans, practices, programs and
policies, the Participant shall be considered to have remained employed during
the Separation Period and to have retired on the last day of such period; and
(ii) the Company shall, at its sole expense as incurred, provide the
Participant with outplacement services the scope and provider of which shall be
selected by the Participant in his or her sole discretion (but at a cost to the
Company of not more than $30,000);
To the extent any benefits described in this Section 4.2(c) cannot be provided
pursuant to the appropriate plan or program maintained for Employees, the
Employer shall provide such benefits outside such plan or program at no
additional cost (including without limitation tax cost) to the Participant.
4.3 Other Benefits Payable. The cash lump sum and continuing benefits
described in Section 4.2 above shall be payable in addition to, and not in lieu
of, all other accrued or vested or earned but deferred compensation, rights,
options or other benefits which may be owed to a Participant upon or
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following termination, including but not limited to accrued vacation or sick
pay, amounts or benefits payable under any bonus or other compensation plans,
stock option plan, stock ownership plan, stock purchase plan, life insurance
plan, health plan, disability plan or similar or successor plan, but excluding
any severance pay or pay in lieu of notice required to be paid to such
Participant under applicable law.
4.4 Certain Additional Payments by the Company.
(a) Anything in this Plan to the contrary notwithstanding and except as
set forth below, in the event it shall be determined that any payment or
distribution by the Company to or for the benefit of any Participant (whether
paid or payable or distributed or distributable pursuant to the terms of this
Plan or otherwise, but determined without regard to any additional payments
required under this Section 4.4) (a "Payment") would be subject to the excise
tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Participant with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Participant shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Participant of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Participant retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) Subject to the provisions of Section 4.4(c), all determinations
required to be made under this Section 4.4, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
Arthur Andersen or such other certified public accounting firm as may be
designated by the Participant (the "Accounting Firm"), which shall provide
detailed supporting calculations both to the Company and the Participant within
15 business days of the receipt of notice from the Participant that there has
been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Participant
shall appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 4.4 shall be paid by the Company to the Participant
within five days of the receipt of the Accounting Firm's determination. Any
determination by the Accounting Firm shall be binding upon the Company and the
Participant. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Under-payment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 4.4(c) and the Participant thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Participant.
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(c) The Participant shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Participant is
informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Participant shall not pay such claim prior to the expiration of the 30-day
period following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Participant in writing prior
to the expiration of such period that it desires to contest such claim, the
Participant shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Participant
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 4.4(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Participant to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Participant
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Participant to pay such claim and sue for a refund, the Company
shall advance the amount of such payment to the Participant, on an
interest-free basis and shall indemnify and hold the Participant harmless, on
an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of taxes for the taxable year of the Participant with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Participant shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.
(d) If, after the receipt by the Participant of an amount advanced by the
Company pursuant to Section 4.4(c), the Participant becomes entitled to receive
any refund with respect to such claim,
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the Participant shall (subject to the Company's complying with the requirements
of Section 4.4(c)) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Participant of an amount advanced by the
Company pursuant to Section 4.4(c), a determination is made that the Participant
shall not be entitled to any refund with respect to such claim and the Company
does not notify the Participant in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
4.5 Payment Obligations Absolute.
The obligations of the Company and the Employers to pay the separation
benefits described in Section 4.2 and any additional payments described in
Section 4.4 shall be absolute and unconditional and shall not be affected by
any circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company or any of its Subsidiaries
may have against any Participant. In no event shall a Participant be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to a Participant under any of the provisions of this Plan, nor
shall the amount of any payment hereunder be reduced by any compensation earned
by a Participant as a result of employment by another employer, except as
specifically provided in Section 4.2(c)(i).
4.6 Deferred Compensation Plan. With respect to each Participant who is a
participant in the Company's Deferred Compensation Plan for Members of the
General Executive Staff, or any successor thereto (collectively, the "Deferred
Compensation Plan"), the definition of "Change of Control" for purposes of the
Deferred Compensation Plan shall be deemed to be the definition given in
Article II of this Plan, rather than the definition given in the Deferred
Compensation Plan.
ARTICLE V
SUCCESSOR TO COMPANY
This Plan shall bind any successor of the Company, its assets or its
businesses (whether direct or indirect, by purchase, merger, consolidation or
otherwise), in the same manner and to the same extent that the Company would be
obligated under this Plan if no succession had taken place.
In the case of any transaction in which a successor would not by the
foregoing provision or by operation of law be bound by this Plan, the Company
shall require such successor expressly and unconditionally to assume and
agree to perform the Company's obligations under this Plan, in the same manner
and to the same extent that the Company would be required to perform if no such
succession had taken place. The term "Company," as used in this Plan, shall
mean the Company as hereinbefore defined and any successor or assignee to the
business or assets which by reason hereof becomes bound by this Plan.
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ARTICLE VI
DURATION, AMENDMENT AND TERMINATION
6.1 Duration. If a Change of Control has not occurred, this Plan shall
continue in effect until the fifth anniversary of the Effective Date, and shall
automatically be extended for successive two-year terms unless, not less than
one year before the end of the initial five-year term or any such two-year
extension, the Board determines that it shall not be so extended. If a Change
of Control occurs while this Plan is in effect, this Plan shall continue in
full force and effect and shall not terminate or expire until after all
Participants who become entitled to any payments hereunder shall have received
such payments in full and all adjustments required to be made pursuant to
Section 4.4 have been made.
6.2 Amendment or Termination. The Board may amend or terminate this Plan
at any time; provided, that this Plan may not be terminated or amended (i)
following a Change of Control, (ii) at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control, or (iii)
otherwise in connection with or in anticipation of a Change of Control, in any
manner that could adversely affect the rights of any Participant.
6.3 Procedure for Extension, Amendment or Termination. Any extension,
amendment or termination of this Plan by the Board in accordance with the
foregoing shall be made by action of the Board in accordance with the Company's
charter and by-laws and applicable law, and shall be evidenced by a written
instrument signed by a duly authorized officer of the Company, certifying that
the Board has taken such action.
ARTICLE VII
MISCELLANEOUS
7.1 Indemnification. If a Participant institutes any legal action in
seeking to obtain or enforce, or is required to defend in any legal action the
validity or enforceability of, any right or benefit provided by this Plan, the
Company will pay for all actual legal fees and expenses incurred (as incurred)
by such Participant, regardless of the outcome of such action.
7.2 Employment Status. This Plan does not constitute a contract of
employment, nor does it impose on the Participant or the Company any obligation
for the Participant to remain an Employee or change the status of the
Participant's employment or the Company's policies regarding termination of
employment.
7.3 Named Fiduciary; Administration. The Company is the named fiduciary
of the Plan, with full authority to control and manage the operation and
administration of the Plan, acting through the Employee Benefits Department.
7.4 Claim Procedure. If an Employee or former Employee makes a written
request alleging a right to receive benefits under this Plan or alleging a right
to receive an adjustment in benefits being paid under the Plan, the Company
shall treat it as a claim for benefit. All claims for benefit under the Plan
shall be sent to the Employee Benefits Department and must be received within
30 days after
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termination of employment. If the Company determines that any individual who
has claimed a right to receive benefits, or different benefits, under the Plan
is not entitled to receive all or any part of the benefits claimed, it will
inform the claimant in writing of its determination and the reasons therefor in
terms calculated to be understood by the claimant. The notice will be sent
within 90 days of the claim unless the Company determines additional time,
not exceeding 90 days, is needed. The notice shall make specific reference to
the pertinent Plan provisions on which the denial is based, and describe any
additional material or information is necessary. Such notice shall, in
addition, inform the claimant what procedure the claimant should follow to take
advantage of the review procedures set forth below in the event the claimant
desires to contest the denial of the claim. The claimant may within 90 days
thereafter submit in writing to the Company a notice that the claimant contests
the denial of his or her claim by the Company and desires a further review. The
Company shall within 60 days thereafter review the claim and authorize the
claimant to appear personally and review pertinent documents and submit issues
and comments relating to the claim to the persons responsible for making the
determination on behalf of the Company. The Company will render its final
decision with specific reasons therefor in writing and will transmit it to the
claimant within 60 days of the written request for review, unless the Company
determines additional time, not exceeding 60 days, is needed, and so notifies
the Participant. If the Company fails to respond to a claim filed in accordance
with the foregoing within 60 days or any such extended period, the Company shall
be deemed to have denied the claim.
7.5 Unfunded Plan Status. This Plan is intended to be an unfunded plan
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, within the meaning
of Section 401 of ERISA. All payments pursuant to the Plan shall be made from
the general funds of the Company and no special or separate fund shall be
established or other segregation of assets made to assure payment. No
Participant or other person shall have under any circumstances any interest in
any particular property or assets of the Company as a result of participating
in the Plan. Notwithstanding the foregoing, the Company may (but shall not be
obligated to) create one or more grantor trusts, the assets of which are
subject to the claims of the Company's creditors, to assist it in accumulating
funds to pay its obligations under the Plan.
7.6 Validity and Severability. The invalidity or unenforceability of any
provision of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
7.7 Governing Law. The validity, interpretation, construction and
performance of the Plan shall in all respects be governed by the laws of
Missouri, without reference to principles of conflict of law, except to the
extent pre-empted by ERISA.
- 11 -
<PAGE> 12
Schedule I
Participants
Benefit
Name Level
- 12 -
<PAGE> 1
EXHIBIT 12(A)
UNION ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
(THOUSANDS OF DOLLARS EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C>
Net Income for the Period ............ $321,512 $302,748 $297,160 $320,757 $314,107
-------- -------- -------- -------- --------
Add:
Taxes Based on Income ................ 218,954 197,009 182,716 203,827 207,734
-------- -------- -------- -------- --------
Fixed Charges:
Interest on Debt .................. 163,061 125,798 124,430 135,608 129,239(*)
Amortization of Premium
and Discount, Less
Expense, on Debt; and
Bond Defeasance Cost ........... 4,148 9,521 5,170 5,504 5,502
Rentals (See Note) ................ 1,171 908 1,314 1,299 3,330
-------- -------- -------- -------- --------
Total Fixed Charges ......... 168,380 136,227 130,914 142,411 138,071
-------- -------- -------- -------- --------
Earnings Available for Fixed
Charges ........................... $708,846 $635,984 $610,790 $666,995 $659,912
======== ======== ======== ======== ========
Ratio of Earnings to Fixes
Charges ........................... 4.21 4.66 4.66 4.68 4.78
======== ======== ======== ======== ========
</TABLE>
(*) Total annual interest charges on all bonds for the twelve months ended
December 31, 1995 was $115,128,000.
Note: Represents the interest factor applicable to rentals.
<PAGE> 1
EXHIBIT 12(b)
PAGE 1 OF 2
UNION ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
(THOUSANDS OF DOLLARS EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C>
Net income for the period . . . . . . . $321,512 $302,748 $297,160 $320,757 $314,107
Add:
Taxes based on income . . . . . . . 218,954 197,009 182,716 203,827 207,734
Fixed charges (see below) . . . . . 168,380 136,227 130,914 142,411 138,071
-------- -------- -------- -------- --------
Earnings available for fixed
charges and preferred stock
dividend requirements of Company . . . $708,846 $635,984 $610,790 $666,995 $659,912
======== ======== ======== ======== ========
Fixed charges:
Interest on debt . . . . . . . . . . $163,061 $125,798 $124,430 $135,608 $129,239
Amortization of premium and
discount, less expense, on
debt; and bond defeasance
cost . . . . . . . . . . . . . . . 4,148 9,521 5,170 5,504 5,502
Rentals (see note) . . . . . . . . . 1,171 908 1,314 1,299 3,330
-------- -------- -------- -------- --------
Total fixed charges . . . . . . . $168,380 $136,227 $130,914 $142,411 $138,071
Preferred stock dividend requirements
of Company* (Adjusted for income
tax effect) . . . . . . . . . . . . . 22,213 21,852 21,537 20,514 20,808
-------- -------- -------- -------- --------
Total fixed charges and preferred
stock dividend requirements . . . . . $190,593 $158,079 $152,451 $162,925 $158,879
======== ======== ======== ======== ========
Ratio of earnings to fixed charges
and preferred stock dividends . . . . 3.72 4.02 4.01 4.09 4.15
======== ======== ======== ======== ========
</TABLE>
Note: Represents the interest factor applicable to rentals.
* See following page for supporting computation.
<PAGE> 2
EXHIBIT 12(b)
PAGE 2 OF 2
UNION ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(THOUSANDS OF DOLLARS EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C>
Computation of preferred stock
dividend requirements of Company,
adjusted for income tax effect*
Preferred stock dividend require-
ments of Company, as shown on
statement of earnings............. $ 14,059 $ 14,058 $ 14,087 $ 13,252 $ 13,250
Less deductible preferred stock
dividends**......................... 2,085 2,085 1,973 1,816 1,816
-------- -------- -------- -------- --------
Non-deductible preferred stock
dividends........................... $ 11,974 $ 11,973 $ 12,114 $ 11,436 $ 11,434
======== ======== ======== ======== ========
Excess of net income before income
taxes over net income (percentage)
See note below...................... 68.1% 65.1% 61.5% 63.5% 66.1%
---- ---- ---- ---- ----
Income tax effect on non-deductible
preferred stock dividends*.......... $ 8,154 $ 7,794 $ 7,450 $ 7,262 $ 7,558
Add:
Deductible preferred stock
dividends (above)................ 2,085 2,085 1,973 1,816 1,816
Non-deductible preferred stock
dividends (above)................ 11,974 11,973 12,114 11,436 11,434
-------- -------- -------- -------- --------
Preferred stock dividend requirements
of Company, adjusted for income
tax effect.......................... $ 22,213 $ 21,852 $ 21,537 $ 20,514 $ 20,808
======== ======== ======== ======== ========
Note: Calculated as follows -
Net income before income taxes.... $540,466 $499,757 $479,876 $524,584 $521,841
Less net income................... 321,512 302,748 297,160 320,757 314,107
-------- -------- -------- -------- --------
Excess - Taxes based on
income.......................... $218,954 $197,009 $182,716 $203,827 $207,734
======== ======== ======== ======== ========
- Percentage of net income........ 68.1% 65.1% 61.5% 63.5% 66.1%
======== ======== ======== ======== ========
</TABLE>
* Income tax adjustment to reflect pre-tax earnings required to meet preferred
stock dividend.
** Dividends deductible on federal income tax return.
<PAGE> 1
EXHIBIT 13
REPORT OF INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
One Boatmen's Plaza
Telephone 314-425-0500
St. Louis, MO 63101
February 1, 1996
To the Stockholders and Board of Directors
of Union Electric Company
In our opinion, the accompanying balance sheet and the related statements of
income, long-term debt, preferred stock, retained earnings, other paid-in
capital, and cash flows appearing on pages 22-36 of this report present fairly,
in all material respects, the financial position of Union Electric Company at
December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
UNION ELECTRIC 1995 Annual Report 17
<PAGE> 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
Union Electric and CIPSCO Incorporated entered into a Merger Agreement dated
August 11, 1995, which was later approved by the shareholders of both companies
in December 1995. The merged entity is expected to realize $590 million in
savings over 10 years from combining certain operations of the two companies
and is expected to adopt Union Electric's dividend payment level. However, the
merger is conditioned upon, among other things, receipt of certain regulatory
and governmental approvals. The merger is expected to be consummated in early
1997. See Note 2 - Merger Agreement under Notes to Financial Statements for
further information.
RESULTS OF OPERATIONS
Common stock earnings and earnings per share for 1995, 1994 and 1993 were $301
million ($2.95 per share), $308 million ($3.01 per share) and $283
million ($2.77 per share), respectively. Earnings and earnings per share
fluctuated due to many conditions, the primary ones being: weather variations,
electric rate reductions, credits to electric customers, sales growth,
fluctuating operating costs including Callaway nuclear refueling outages,
merger transaction costs, new accounting requirements, changes in interest
expense and changes in income and property taxes.
The impacts of the more significant items affecting revenues, costs and
earnings during the past several years are analyzed and discussed below.
<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
EARNINGS PER SHARE $2.77 $3.01 $2.95
</TABLE>
ELECTRIC OPERATING REVENUES
<TABLE>
<CAPTION>
ELECTRIC Variation from Prior Year
--------------------------------------------------------------------------
(Millions of Dollars) 1995 1994 1993
--------------------------------------------------------------------------
<S> <C> <C> <C>
Rate variations $ (13.7) $ -- $ (42.9)
Credit to customers (30.0) -- --
Effect of abnormal
weather 52.8 (33.9) 74.9
Growth and other 35.8 37.5 4.5
--------------------------------------------------------------------------
$ 44.9 $ 3.6 $ 36.5
==========================================================================
</TABLE>
The increase in 1995 electric revenues is due to increased sales of 4%
over 1994, mainly due to unusually hot weather in the third quarter and to
sales growth reflecting the Company's healthy service area economy.
Weather-sensitive residential and commercial sales increased 6% and 3%,
respectively, over 1994 while industrial sales rose 3%. These revenue
increases were partially offset by the one-time $30 million credit and the 1.8%
rate decrease for Missouri electric customers. See Note 3 - Regulatory Matters
under Notes to Financial Statements for further information.
The increase in 1994 electric revenues reflects growth in sales to
commercial and industrial customers of 4% and 2%, respectively, offset by
reduced sales to residential customers of 2%, primarily due to milder weather
in the first and third quarters of 1994 compared to 1993.
The increase in 1993 electric revenues primarily reflects increased sales
from colder, more normal winter weather in the first quarter 1993 followed by
warmer spring and summer weather when compared to 1992. These increased
revenues were partially offset by the November 1992 Missouri rate settlement,
effective January 1, 1993, which decreased rates for all Missouri electric
customers and reduced annual revenues by approximately $42 million.
The variation in electric revenues attributable to growth and other
factors in 1993, 1994 and 1995 largely reflects the differences in economic
growth in the Company's service territory for these periods. In 1993,
normalized kilowatthour sales decreased approximately 1% reflecting the loss of
sales from disposition of our Iowa and northern Illinois service territory,
partially offset by an improved economy in other parts of our service
territory. In 1995 and 1994, normalized kilowatthours increased 2% and 3%,
respectively, over the prior year, demonstrating a growing local economy.
Other less significant factors contributing to variations in electric sales are
conservation, installation of energy-efficient appliances, and changes to and
from alternate fuels.
OPERATING EXPENSES
<TABLE>
<CAPTION>
FUEL AND PURCHASED POWER Variation from Prior Year
- -----------------------------------------------------------------------------
(Millions of Dollars) 1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Fuel:
Variation in generation $ 1.2 $ 52.6 $(18.3)
Price (.8) (76.9) (.4)
Generation efficiencies 1.9 (3.6) 6.7
Department of Energy
assessment (.1) 1.6 .4
Net interchange sales
and purchased power
variation 33.4 (57.2) 17.6
- -----------------------------------------------------------------------------
$35.6 $(83.5) $ 6.0
=============================================================================
</TABLE>
18 UNION ELECTRIC 1995 Annual Report
<PAGE> 3
The increased 1995 Fuel and Purchased Power costs reflect increased net
purchased power costs due to greater electric sales during the hot 1995 summer
and the need for replacement power during Callaway's spring refueling outage.
The decreased 1994 Fuel and Purchased Power costs reflect lower fuel prices
resulting from increased use of low-sulfur coal at our fossil fuel power plants
and greater generation at our nuclear plant due to the absence of a refueling
outage in 1994. Higher generation, resulting in greater fuel costs, was more
than offset by reduced net purchased power costs. The increased 1993 Fuel and
Purchased Power costs reflect a rise in purchased power and lower generating
efficiencies, partly offset by more hydro generation and reduced fossil-fueled
generation. Increased power purchases from other utilities were required in
1993 when flooding in the Midwest interrupted coal deliveries to several of the
Company's power plants.
Other operating expenses variations in 1993 through 1995 reflect recurring
conditions such as growth, inflation, and wage and benefit increases. In 1995,
operations expenses, other than fuel and purchased power costs, decreased $17
million, mainly due to a $9 million reduction in natural gas purchased for
resale, a $6 million decrease in employee benefits expense, a $9 million
decrease in injuries, damages and insurance premiums partially offset by a $5
million increase in labor costs and increased material and supplies costs. In
1994, operations expenses, other than fuel and purchased power costs, decreased
$10 million, primarily due to a $7 million reduction in natural gas purchased
for resale, a $5 million decrease in labor costs, and a $3 million decrease in
employee benefit expenses, partially offset by increased provision for injuries
and damages and higher consulting and communications expenses. In 1993,
operations expenses, other than fuel and purchased power costs increased $64
million, primarily due to a $32 million increase in employee postretirement
benefits expense pursuant to Statement of Financial Accounting Standards (SFAS)
No. 106, "Employers' Accounting for Postretirement Benefits other than
Pensions", a $14 million increase in natural gas purchased for resale, a $5
million increase in labor costs, and higher pensions, professional and computer
services, regulatory fees and provision for injuries and damages.
O&M EXPENSES
EXCLUDING FUEL
& PURCHASED
POWER
<TABLE>
<CAPTION>
1993 1994 1995
--------------------
(MILLIONS OF DOLLARS)
<S> <C> <C>
$636 $633 $641
</TABLE>
In 1995, maintenance expenses increased $24 million, mainly due to a $28
million increase in power plant maintenance, partially offset by reduced
distribution system maintenance. Callaway Plant's maintenance expenses
increased $17 million primarily due to the Spring 1995 nuclear refueling
outage. Maintenance at other power plants increased $11 million primarily due
to scheduled maintenance outages. In 1994, maintenance expenses increased $8
million, mainly caused by additional maintenance expenses at our fossil fuel
power plants and greater tree-trimming expense, partly offset by lower Callaway
Plant maintenance (no refueling outage in 1994) and reduced labor costs. In
1993, maintenance expenses increased $3 million primarily due to flood-related
labor expenses.
Depreciation increased $7 million in 1995 and $6 million in 1994 and 1993,
respectively, due to increased depreciable property.
TAXES
Income taxes from operations increased $3 million in 1995 primarily due to a
higher effective income tax rate, partially offset by lower pre-tax income.
The $27 million increase in 1994 income taxes resulted from higher pre-tax
income and a higher effective Missouri income tax rate. 1993 income taxes from
operations reflected a higher federal income tax rate offset by lower pre-tax
income.
In 1995, other taxes charged to operating expenses increased $2 million
due to increased gross receipts taxes from greater electric sales and increased
real estate taxes. In 1994, other taxes charged to operating expenses rose
$4 million due to increased real estate taxes and greater corporate franchise
taxes. In 1993, other taxes charged to operating expenses increased $6 million
from higher gross receipts and real estate taxes.
OTHER INCOME AND DEDUCTIONS
Miscellaneous other net income and deductions decreased $6 million for 1995,
primarily due to $9 million of merger-related expenses. See Note 2-Merger
Agreement under Notes to Financial Statements.
INTEREST
In 1995, interest expense declined $6 million as decreases in other interest
expense were partly offset by higher interest rates on variable rate long-term
debt. In 1994, interest expense increased $12 million generally
UNION ELECTRIC 1995 Annual Report 19
<PAGE> 4
MANAGEMENT'S DISCUSSION AND ANALYSIS
due to a greater amount of total debt outstanding and overall higher interest
rates on variable rate debt. In 1993, interest expenses decreased $6 million
primarily due to the refinancing of high-cost debt with lower cost issues,
lower interest rates on variable rate debt and a reduction in total debt
outstanding.
BALANCE SHEET
The $37.5 million increase (16%) in accounts receivable and unbilled revenues
at December 31, 1995 is due primarily to increased revenues of 8% for the
months of November and December 1995, compared to the corresponding period in
1994, coupled with increased budget billing accounts receivable balances
resulting from the hot summer weather in 1995.
Changes in the accounts payable, income taxes accrued and other taxes
accrued balances are related largely to the timing of various payments to
taxing authorities and suppliers.
RATE MATTERS
See Note 3 - Regulatory Matters under Notes to Financial Statements for further
information.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities totaled $640 million for 1995, compared
to $544 million and $627 million during 1994 and 1993, respectively.
Cash flows used in investing activities totaled $341 million, $333 million
and $292 million for the years ended December 31, 1995, 1994 and 1993,
respectively. 1995 expenditures for constructing new or improving existing
facilities, purchasing rail cars and expenditures for complying with the Clean
Air Act were $311 million. In addition, the Company spent $42 million to
acquire nuclear fuel.
CAPITAL REQUIREMENTS FORECAST
<TABLE>
<CAPTION>
Forecast
Actual --------------------------------------------------
(Millions of Dollars) 1995 1996 1997 1998 1999 2000
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Construction Expenditures:
Power Plants $118 $127 $78 $75 $98 $77
Transmission &
Distribution 150 138 147 160 168 150
General Plant 29 39 30 40 36 18
Gas & Steam 14 10 12 12 13 13
- --------------------------------------------------------------------------------------------
Total Construction $311 $314 $267 $287 $315 $258
============================================================================================
Construction Requirements
Generated Internally 122% 83% 118% 99% 92% 114%
============================================================================================
</TABLE>
The Company completed Callaway Plant construction in late 1984. The need
for additional base load electric generation capacity is not anticipated until
after the year 2013. Under the Clean Air Act Amendments of 1990, the Company
is required to reduce total annual sulfur dioxide emissions by approximately
two-thirds by 2000. Significant reductions in nitrogen oxide are also
required. By switching to low-sulfur coal and using early banking of emission
credits, the Company anticipates that no significant revenue increases will be
required. The related capital costs, currently estimated at about $300
million, are largely offset by lower fuel costs. At December 31, 1995, about
75% of the Clean Air Act-related capital costs had been spent.
See Note 14 - Callaway nuclear plant under Notes to Financial Statements
for a discussion of Callaway Plant decommissioning costs.
Cash flows used in financing activities were $299 million for 1995
compared to $211 million and $336 million during 1994 and 1993, respectively.
The Company's principal financing activities during 1995 were the redemption of
$38 million of First Mortgage Bonds and the payment of dividends.
Ratings on the Company's First Mortgage Bonds are as follows:
FIRST MORTGAGE BOND RATINGS
<TABLE>
<S> <C>
Duff & Phelps AA-
Moody's A1
Standard & Poor's AA-
</TABLE>
The Company plans to continue utilizing short-term debt to support normal
operations and other temporary requirements. The Company is authorized by the
Federal Energy Regulatory Commission to have up to $600 million of short-term
unsecured debt instruments outstanding at any one time. Short-term borrowings
of the Company consist of bank loans (maturities generally on an overnight
basis) andcommercial paper(maturities generally within 10 to 45 days). The
Company has committed bank lines of credit aggregating $184 million which make
available interim financing at various rates of interest based on
20 UNION ELECTRIC 1995 Annual Report
<PAGE> 5
LIBOR, the bank certificate of deposit rate, or other options, and in support
of which the Company pays to its lending banks annual fees up to 0.10%. At
December 31, 1995, $20 million of bank loans were outstanding. The lines of
credit are renewable annually at various dates through the year. The Company
also has bank credit agreements due 1998 and 1999 which permit the Company to
borrow up to $300 million and $200 million, respectively, on a long-term basis.
The Company has a lease agreement which provides for the financing of
nuclear fuel. At December 31, 1995, the maximum amount which may be financed
under the agreement is $120 million. Cash provided from financing for 1995
included issuances for nuclear fuel of $49 million offset by $70 million of
redemptions. At December 31, 1995, $97 million was financed under the lease.
See Note 6 - Nuclear Fuel Lease under Notes to Financial Statements for further
information.
CONTINGENCIES
See Note 13 - Contingencies under Notes to Financial Statements for material
issues existing at December 31, 1995.
DIVIDENDS
On October 13, 1995, UE's Board of Directors increased the quarterly common
stock dividend to 62.5 cents per share from 61 cents, raising the indicated
annualized common stock dividend to $2.50 per share. Common stock dividends
paid for the year ended December 31, 1995, resulted in a pay out rate of 83% of
the Company's earnings to common stockholders. Dividends paid to the Company's
common stockholders in relation to net cash provided by operating activities
for the same period were 39%.
The Board of Directors does not set specific targets or payout parameters
for dividend payments. In its annual review of dividend payments, however, the
Board considers various issues: the Company's historic earnings and cash flow,
including the Company's projected earnings, cash flow and potential cash flow
requirements; dividend increases at other utilities; return on investments with
similar risk characteristics and overall business considerations.
OUR STRATEGY
The Company's management and Board of Directors recognize the increasing
probability of more intense competition in the utility industry in the future.
Although no one can accurately predict the timing or precise nature of this
competition, the Company operates its business assuming this competition will
occur. Union Electric's basic business strategy is 1) to improve our
competitive position by continually enhancing customer service; 2) to maintain
competitive electric rates and 3) to reduce costs to the lowest levels possible
without compromising customer service, employee safety, environmental
stewardship, fair returns to stockholders and fair rewards to employees.
ACCOUNTING MATTERS
In March 1995, the Financial Accounting Standards Board (FASB) issued SFAS No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of (FAS 121). This statement establishes standards for
determining the impairment of long-lived assets and certain identifiable
intangible assets. In addition, FAS 121 requires that regulatory assets that
are no longer probable of recovery through future revenues be charged to
earnings. FAS 121 is effective January 1, 1996 and is not expected to have a
material effect on the Company's financial position or results of operations
upon adoption.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" (FAS 123). FAS 123 permits companies to adopt a new method of
accounting for stock compensation awards based on their estimated fair value at
the date the awards are granted, or for companies to continue their current
method of accounting for stock compensation awards. The Company will utilize
its current method of accounting for stock compensation awards.
EFFECTS OF INFLATION AND CHANGING PRICES
The current replacement cost of the Company's utility plant substantially
exceeds its recorded historical cost. Under existing regulatory practice, only
the historical cost of plant is recoverable from customers. As a result, cash
flows designed to provide recovery of historical plant costs through
depreciation may not be adequate to replace plant in future years. However,
past practice indicates the Company will be allowed to earn on and to recover
the increased cost of replacing facilities when this occurs. The impact on
common stockholders is mitigated to the extent depreciable property is financed
with debt that is repaid with dollars of less purchasing power.
UNION ELECTRIC 1995 Annual Report 21
<PAGE> 6
STATEMENT OF INCOME
<TABLE>
<CAPTION>
(THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
YEAR ENDED DECEMBER 31, 1995 1994 1993
<S> <C> <C> <C>
OPERATING REVENUES:
Electric $2,014,452 $1,969,533 $1,965,980
Gas 87,814 86,109 99,552
Steam 441 474 472
---------- ---------- ----------
TOTAL OPERATING REVENUES 2,102,707 2,056,116 2,066,004
OPERATING EXPENSES:
Operations:
Fuel and purchased power 365,158 329,562 413,054
Other 419,121 435,666 445,535
---------- ---------- ----------
784,279 765,228 858,589
Maintenance 221,609 197,760 190,097
Depreciation and nuclear decommissioning 233,237 226,045 219,633
Income taxes 209,541 206,421 179,475
Other taxes 212,145 210,476 206,913
---------- ---------- ----------
TOTAL OPERATING EXPENSES 1,660,811 1,605,930 1,654,707
---------- ---------- ----------
OPERATING INCOME 441,896 450,186 411,297
---------- ---------- ----------
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during construction 6,827 5,767 6,418
Miscellaneous, net (5,981) 403 3,919
---------- ---------- ----------
TOTAL OTHER INCOME AND DEDUCTIONS, NET 846 6,170 10,337
---------- ---------- ----------
INCOME BEFORE INTEREST CHARGES 442,742 456,356 421,634
---------- ---------- ----------
INTEREST CHARGES:
Interest 134,741 141,112 129,600
Allowance for borrowed funds used during construction (6,106) (5,513) (5,126)
---------- ---------- ----------
NET INTEREST CHARGES 128,635 135,599 124,474
---------- ---------- ----------
NET INCOME 314,107 320,757 297,160
---------- ---------- ----------
PREFERRED STOCK DIVIDENDS 13,250 13,252 14,087
---------- ---------- ----------
EARNINGS ON COMMON STOCK $300,857 $307,505 $283,073
---------- ---------- ----------
EARNINGS PER SHARE OF COMMON STOCK
(based on average shares outstanding) $2.95 $3.01 $2.77
---------- ---------- ----------
DIVIDENDS PER SHARE OF COMMON STOCK $2.455 $2.395 $2.335
---------- ---------- ----------
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 102,123,834 102,123,834 102,123,834
---------- ---------- ----------
</TABLE>
See Notes to Financial Statements on pages 29 through 36.
22 UNION ELECTRIC 1995 Annual Report
<PAGE> 7
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
(THOUSANDS OF DOLLARS)
YEAR ENDED DECEMBER 31, 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING:
Net income $314,107 $320,757 $297,160
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 223,705 216,731 210,341
Amortization of nuclear fuel 35,140 44,267 46,441
Allowance for funds used during construction (12,933) (11,280) (11,544)
Postretirement benefit accrual 11,923 24,680 31,970
Deferred income taxes, net (5,628) (18,430) 51,154
Deferred investment tax credits, net (6,181) (6,182) (7,626)
Changes in assets and liabilities:
Receivables, net (41,405) 23,020 (23,568)
Materials and supplies 11,914 (10,643) 46,741
Accounts and wages payable 108,997 (94,180) (8,258)
Taxes accrued (5,722) 10,710 (5,762)
Interest and dividends accrued or declared (9,654) 14,657 2,351
Other, net 15,249 29,966 (2,378)
NET CASH PROVIDED BY OPERATING ACTIVITIES 639,512 544,073 627,022
-------- -------- --------
CASH FLOWS FROM INVESTING:
-------- -------- --------
Construction expenditures (311,253) (314,050) (266,433)
Allowance for funds used during construction 12,933 11,280 11,544
Nuclear fuel expenditures (42,444) (30,458) (37,494)
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (340,764) (333,228) (292,383)
-------- -------- --------
CASH FLOWS FROM FINANCING:
-------- -------- --------
Dividends on preferred and common stock (263,964) (257,838) (252,546)
Environmental bond funds 4,443 12,583 30,474
Redemptions -
Nuclear fuel lease (70,420) (32,137) (52,907)
Short-term debt -- (59,600) --
Long-term debt (38,000) (25,000) (605,500)
Preferred stock (26) (26) (73,751)
Issuances -
Nuclear fuel lease 49,134 51,386 51,593
Short-term debt 19,600 -- 37,600
Long-term debt -- 100,000 455,000
Preferred stock -- -- 74,438
-------- -------- --------
NET CASH USED IN FINANCING ACTIVITIES (299,233) (210,632) (335,599)
-------- -------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS (485) 213 (960)
-------- -------- --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,510 1,297 2,257
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $1,025 $1,510 $1,297
-------- -------- --------
Cash and cash equivalents include cash on hand and temporary
investments purchased with a maturity of three months or less.
-------- -------- --------
Cash paid during the periods:
Interest (net of amount capitalized) $131,635 $108,319 $112,296
Income taxes $226,458 $217,417 $145,129
======== ======== =========
</TABLE>
See Notes to Financial Statements on pages 29 through 36.
UNION ELECTRIC 1995 Annual Report 23
<PAGE> 8
BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
(Thousands of Dollars)
- ------------------------------------------------------------------------------------------------------------
December 31, 1995 1994
- ------------------------------------------------------------------------------------------------------------
PROPERTY AND PLANT, AT ORIGINAL COST:
<S> <C> <C>
---------- ----------
Electric $8,473,501 $8,200,094
Gas 174,231 160,729
Other 35,033 35,033
---------- ----------
8,682,765 8,395,856
Less accumulated depreciation and amortization 3,494,722 3,305,582
---------- ----------
5,188,043 5,090,274
Construction work in progress:
Nuclear fuel in process 121,460 134,815
Other 125,934 119,473
---------- ----------
TOTAL PROPERTY AND PLANT, NET 5,435,437 5,344,562
REGULATORY ASSET -- DEFERRED INCOME TAXES (NOTE 9) 732,580 732,478
---------- ----------
DEFERRED CHARGES AND OTHER ASSETS:
---------- ----------
Unamortized debt expense 44,496 49,432
Nuclear decommissioning trust fund 73,838 53,906
Other 20,101 22,508
---------- ----------
TOTAL DEFERRED CHARGES AND OTHER ASSETS 138,435 125,846
CURRENT ASSETS:
---------- ----------
Cash 1,025 1,510
Accounts receivable - trade (less allowance for doubtful
accounts of $6,925 and $6,277, at respective dates) 191,520 164,803
Unbilled revenue 82,098 71,321
Other accounts and notes receivable 21,602 17,691
Materials and supplies, at average cost -
Fossil fuel 46,381 61,533
Construction and maintenance 92,921 89,683
Other 12,470 15,274
---------- ----------
TOTAL CURRENT ASSETS 448,017 421,815
---------- ----------
TOTAL ASSETS $6,754,469 $6,624,701
========== ==========
</TABLE>
See Notes to Financial Statements on pages 29 through 36.
24 UNION ELECTRIC 1995 Annual Report
<PAGE> 9
BALANCE SHEET
<TABLE>
<CAPTION>
CAPITAL AND LIABILITIES
(THOUSANDS OF DOLLARS)
- ----------------------------------------------------------------------------------------------------------
DECEMBER 31, 1995 1994
- ----------------------------------------------------------------------------------------------------------
CAPITALIZATION:
<S> <C> <C>
Common stock, $5 par value, authorized 150,000,000
shares - outstanding 102,123,834 shares (excluding
42,990 shares at par value in treasury) $ 510,619 $ 510,619
Other paid-in capital, principally premium on common
stock (see accompanying statement) 717,669 717,669
Retained earnings (see accompanying statement) 1,090,909 1,040,766
---------- ----------
Total common stockholders' equity 2,319,197 2,269,054
Preference stock, $1 par value, authorized 7,500,000
shares - none outstanding
---------- ----------
Preferred stock not subject to mandatory redemption
(see accompanying statement) 218,497 218,497
Preferred stock subject to mandatory redemption
(see accompanying statement) 650 676
---------- ----------
Long-term debt (see accompanying statement) 1,773,192 1,833,623
Unamortized discount and premium on debt (9,579) (10,134)
---------- ----------
TOTAL CAPITALIZATION 4,301,957 4,311,716
ACCUMULATED DEFERRED INCOME TAXES 1,357,689 1,349,239
---------- ----------
ACCUMULATED DEFERRED INVESTMENT TAX CREDITS 166,524 172,705
---------- ----------
REGULATORY LIABILITY (Note 9) 216,502 229,333
---------- ----------
ACCUMULATED PROVISION FOR NUCLEAR DECOMMISSIONING 75,511 55,579
---------- ----------
OTHER DEFERRED CREDITS AND LIABILITIES 150,600 131,543
---------- ----------
CONSTRUCTION COMMITMENTS AND CONTINGENCIES
(Notes 12, 13 and 14)
CURRENT LIABILITIES:
---------- ----------
Current maturity of long-term debt 69,462 68,318
Accounts payable 169,012 61,575
Wages payable 36,605 35,045
Bank loans 19,600 --
Accumulated deferred income taxes 27,429 28,574
Income taxes accrued 29,986 36,481
Other taxes accrued 17,727 16,954
Interest accrued 46,244 55,909
Dividends declared 3,312 3,301
Other 66,309 68,429
---------- ----------
TOTAL CURRENT LIABILITIES 485,686 374,586
---------- ----------
TOTAL CAPITAL AND LIABILITIES $6,754,469 $6,624,701
========== ==========
</TABLE>
UNION ELECTRIC 1995 Annual Report 25
<PAGE> 10
LONG-TERM DEBT
<TABLE>
<CAPTION>
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------
December 31, 1995 1994
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
FIRST MORTGAGE BONDS SERIES - note (a)
- ----------------------------------------------------------------------------------------------
5 1/2% Due 1996 $ -- $ 30,000
5 5/8% Due 1996 -- 5,000
5 1/2% Due 1997 40,000 40,000
5 5/8% Due 1997 5,000 5,000
6 3/4% Due 1999 100,000 100,000
8.33% Due 2002 75,000 75,000
7.65% Due 2003 100,000 100,000
6 7/8% Due 2004 188,000 188,000
7 3/8% Due 2004 85,000 85,000
6 3/4% Due 2008 148,000 148,000
7.40% Due 2020 - note (b) 60,000 60,000
8 3/4% Due 2021 125,000 125,000
8% Due 2022 85,000 85,000
8 1/4% Due 2022 104,000 104,000
7.15% Due 2023 75,000 75,000
7% Due 2024 100,000 100,000
5.45% Due 2028 - note (b) 44,000 44,000
- ----------------------------------------------------------------------------------------------
UNSECURED LOANS - notes (c) (d) -- --
- ----------------------------------------------------------------------------------------------
MISSOURI ENVIRONMENTAL IMPROVEMENT -
- ----------------------------------------------------------------------------------------------
Revenue bonds 1984 Series A due 2014 - note (e) 80,000 80,000
1984 Series B due 2014 - note (e) 80,000 80,000
1985 Series A due 2015 - note (f) 70,000 70,000
1985 Series B due 2015 - note (f) 56,500 56,500
1991 Series due 2020 - note (f) 42,585 42,585
1992 Series due 2022 - note (f) 47,500 47,500
NUCLEAR FUEL LEASE - note (g) 62,607 88,038
- ----------------------------------------------------------------------------------------------
LONG-TERM DEBT $1,773,192 $1,833,623
- ----------------------------------------------------------------------------------------------
</TABLE>
(a) At December 31, 1995, substantially all of the property and plant was
mortgaged under, and subject to liens of, the respective indentures
pursuant to which the bonds were issued.
(b) Environmental Improvement Series.
(c) A bank credit agreement due 1999 permits the Company to borrow up to $200
million. Interest rates will vary depending on market conditions and the
Company's selection of various options under the agreement. At December 31,
1995, no such borrowings were outstanding.
(d) A bank credit agreement due 1998 permits the Company to borrow or to
support commercial paper borrowings up to $300 million. Interest rates will
vary depending on market conditions. At December 31, 1995, no such
borrowings were outstanding.
(e) On June 1 of each year, the interest rate is established for the following
year, or alternatively at the option of the Company, may be fixed until
maturity. A per annum rate of 4% is effective for the year ending May 31,
1996. Thereafter, the interest rates will depend on market conditions and
the selection of an annual versus remaining life rate by the Company. The
average interest rate for the twelve months ended December 31, 1995 was
3.90%.
(f) Interest rates, and the periods during which such rates apply, vary
depending on the Company's selection of certain defined rate modes. The
average interest rates for the twelve months ended December 31, 1995, for
1985 Series A, 1985 Series B, 1991 Series and 1992 Series bonds were 3.94%,
3.87%, 4.10% and 4.19%, respectively.
(g) At December 31, 1995 and 1994, $34 million and $30 million, respectively,
were included under current maturity of long-term debt.
See Notes to Financial Statements on pages 29 through 36.
26 UNION ELECTRIC 1995 Annual Report
<PAGE> 11
PREFERRED STOCK
<TABLE>
<CAPTION>
(Thousands of Dollars)
- ------------------------------------------------------------------------------------
December 31, 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION:
- ------------------------------------------------------------------------------------
Preferred stock outstanding without par value
(entitled to cumulative dividends) - note (a)
Redemption Price
(per share)
Stated value of $100 per share -
$7.64 Series - 330,000 shares $103.82 - note (b) $ 33,000 $ 33,000
$7.44 Series - 330,001 shares 101.00 33,000 33,000
$6.40 Series - 300,000 shares 101.50 30,000 30,000
$5.50 Series A - 14,000 shares 110.00 1,400 1,400
$5.50 Series B - 3,000 shares 103.50 300 300
$4.75 Series - 20,000 shares 102.176 2,000 2,000
$4.56 Series - 200,000 shares 102.47 20,000 20,000
$4.50 Series - 213,595 shares 110.00 - note (c) 21,359 21,359
$4.30 Series - 40,000 shares 105.00 4,000 4,000
$4.00 Series - 150,000 shares 105.625 15,000 15,000
$3.70 Series - 40,000 shares 104.75 4,000 4,000
$3.50 Series - 130,000 shares 110.00 13,000 13,000
Stated value of $25.00 per share -
$1.735 Series - 1,657,500 shares 25.00 - note (d) 41,438 41,438
- ------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK NOT
SUBJECT TO MANDATORY REDEMPTION $218,497 $218,497
PREFERRED STOCK SUBJECT TO MANDATORY
REDEMPTION:
Preferred stock outstanding without par
value (entitled to cumulative dividends)
- note (a)
Stated value of $100 per share -
$6.30 Series - 6,500 and 6,760
shares at respective dates, due 2020 100.00 - note (e) $650 $676
TOTAL PREFERRED STOCK SUBJECT
TO MANDATORY REDEMPTION $650 $676
</TABLE>
(a) Authorized Union Electric Company total preferred stock - 25,000,000
shares.
(b) Beginning February 15, 2003, eventually declining to $100 per share.
(c) In the event of voluntary liquidation, $105.50.
(d) On or after August 1, 1998.
(e) The Company is required to retire 260 shares at $100 per share on June 1 of
each year.
See Notes to Financial Statements on pages 29 through 36.
UNION ELECTRIC 1995 Annual Report 27
<PAGE> 12
STATEMENT OF RETAINED EARNINGS
<TABLE>
<CAPTION>
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------------
Year 1995 1994 1993
- ---- ---- ---- ----
<S> <C> <C> <C>
Balance at Beginning of Period $1,040,766 $ 977,880 $ 934,919
---------- ---------- ----------
Add:
Net income 314,107 320,757 297,160
---------- ---------- ----------
1,354,873 1,298,637 1,232,079
---------- ---------- ----------
Deduct:
Preferred stock dividends* 13,250 13,252 14,087
Common stock cash dividends - $2.455, $2.395 and $2.335 250,714 244,586 238,459
per share, respectively
Capital stock expense -- 33 1,653
---------- ---------- ----------
263,964 257,871 254,199
---------- ---------- ----------
BALANCE AT CLOSE OF PERIOD $1,090,909 $1,040,766 $ 977,880
========== ========== ==========
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(Under mortgage indentures as amended, free and unrestricted retained
earnings at December 31, 1995 amounted to $1,056,474.)
*Preferred stock dividends include dividends declared, applicable to subsequent
periods.
STATEMENT OF OTHER PAID IN CAPITAL
<TABLE>
<CAPTION>
(Thousands of Dollars)
- ----------------------------------------------------------------------------------------------------------------
Year 1995 1994 1993
- ---- ---- ---- ----
<S> <C> <C> <C>
Balance at Beginning of Period $ 717,669 $ 717,669 $ 718,482
Capital stock expense -- -- (813)
---------- ---------- ----------
BALANCE AT CLOSE OF PERIOD $ 717,669 $ 717,669 $ 717,669
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
SELECTED QUARTERLY INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
(Thousands of Dollars Except Per Share Amounts)
- ----------------------------------------------------------------------------------------------------------------
Operating Operating Net Earnings on Earnings Per
Revenues Income Income Common Stock Share of Stock
QUARTER ENDED: Outstanding
<S> <C> <C> <C> <C> <C>
March 31, 1995 $447,115 $ 67,306 $ 38,224 $ 34,911 $ .34
March 31, 1994 438,900 65,151 38,226 34,913 .34
June 30, 1995 513,575 107,160 76,035 72,722 .71
June 30, 1994 532,944 127,806 97,392 94,078 .92
September 30, 1995 713,678 213,523 172,607 169,295 1.66
September 30, 1994 677,240 205,473 166,475 163,163 1.60
December 31, 1995 428,339 53,907 27,241 23,929 .24
December 31, 1994 407,032 51,756 18,664 15,351 .15
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Net Income and Earnings on Common Stock for the second quarter of 1995 reflect
the Callaway Plant refueling, the effect of which decreased earnings on common
stock approximately $20 million, or 20 cents per share. Net Income and Earnings
on Common Stock for the third quarter of 1995 reflect a one-time credit to
Missouri electric customers, the effect of which reduced earnings on common
stock approximately $18 million, or 18 cents per share. In addition, a 1.8%
rate decrease in 1995 for Missouri electric customers reduced Net Income and
Earnings on Common Stock for the third and fourth quarters by $4 million, or
4 cents per share in each of the quarters. Also, merger transaction costs of $9
million, which are classified in Other Income and Deductions, reduced Net Income
and Earnings on Common Stock approximately 9 cents per share in the third
quarter of 1995. Other changes in quarterly earnings are due to the effect of
weather on sales and other factors which are characteristic of public utility
operations.
See Notes to Financial Statements on pages 29 through 36.
28 UNION ELECTRIC 1995 Annual Report
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
The Company is regulated by the Missouri Public Service Commission (MoPSC),
Illinois Commerce Commission (ICC), and the Federal Energy Regulatory
Commission (FERC). The accounting policies of the Company are in accordance
with the ratemaking practices of the regulatory authorities having jurisdiction
and, as such, conform to generally accepted accounting principles as applied to
regulated public utilities. Following is a description of the Company's
significant accounting policies:
PROPERTY AND PLANT
The cost of additions to and betterments of units of property and plant is
capitalized. Cost includes labor, material, applicable taxes, and overheads,
plus an allowance for funds used during construction. Maintenance expenditures
and the renewal of items not considered units of property are charged to income
as incurred. When units of depreciable property are retired, the original cost
and removal cost, less salvage, are charged to accumulated depreciation.
DEPRECIATION
Depreciation is provided over the estimated lives of the various classes of
depreciable property by applying composite rates on a straight-line basis. The
provision for depreciation in 1995, 1994 and 1993 was approximately 3% of the
average depreciable cost.
NUCLEAR FUEL
The cost of nuclear fuel is amortized to fuel expense on a unit-of-production
basis. Spent fuel disposal cost is charged to expense based on kilowatthours
sold.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the tax consequences of
transactions that have been treated differently for financial reporting and tax
return purposes, measured using statutory tax rates.
Investment tax credits utilized in prior years were deferred and are being
amortized over the useful lives of the properties to which they relate.
ALLOWANCE FOR FUNDS USED
DURING CONSTRUCTION
Allowance for funds used during construction (AFC) is a utility industry
accounting practice whereby the cost of borrowed funds and the cost of equity
funds (preferred and common stockholders' equity) applicable to the Company's
construction program are capitalized as a cost of construction. This
accounting practice offsets the effect on earnings of the cost of financing
current construction, and treats such financing costs in the same manner as
construction charges for labor and materials.
Under accepted rate-making practice, cash recovery of AFC, as well as
other construction costs, occurs when completed projects are placed in service
and reflected in customer rates.
AFC rates are determined by the Company consistent with the methodology
prescribed by the FERC. Average annual AFC rates were 9.3% in 1995, 8.9% in
1994 and 7.8% in 1993.
UNAMORTIZED DEBT EXPENSE
Discount, premium and expense associated with long-term debt are amortized over
the lives of the related issues. Gains or losses related to refunded debt are
amortized over the lives of the related new debt issues or the remaining life
of the old debt issues if no new debt is issued.
REVENUE
The Company accrues on its books estimated, but unbilled, revenue.
Operating Revenues include excise taxes of $99.2 million, $97.9 million
and $97.8 million for the years 1995, 1994 and 1993, respectively.
NOTE 2 - MERGER AGREEMENT
On August 11, 1995, the Company entered into an Agreement and Plan of Merger
(the Merger Agreement) with CIPSCO Incorporated (CIPSCO) and Ameren Corporation
(Ameren), a newly formed entity, 50% owned by the Company and 50% owned by
CIPSCO, pursuant to which, among other things, the Company and CIPSCO will be
merged with Ameren (the Merger). Subsequent to the Merger, the Company and
Central Illinois Public Service Company and CIPSCO Investment Company (wholly
owned subsidiaries of CIPSCO), will continue as wholly owned operating
subsidiaries of Ameren. As a result of the Merger, each outstanding share of
the Company's common stock will be
UNION ELECTRIC 1995 Annual Report 29
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
converted into the right to receive one share of common stock of Ameren (Ameren
Common Stock), each outstanding share of the Company's preferred stock will
remain outstanding and unchanged and each outstanding share of CIPSCO's common
stock will be converted into the right to receive 1.03 shares of Ameren Common
Stock (or cash in lieu of fractional shares). The Merger is expected to be
tax-free for income tax purposes and will be accounted for under the "pooling
of interests" method of accounting.
With their execution and delivery of the Merger Agreement, the Company and
CIPSCO entered into stock option agreements, pursuant to one of which the
Company granted CIPSCO the right, upon the terms and subject to the conditions
set forth therein, to purchase up to 6,983,233 shares of the Company's common
stock at a price of $35.94 per share. Pursuant to the other agreements, CIPSCO
granted the Company the right, upon the terms and subject to the conditions set
forth therein, to purchase up to 6,779,838 shares of CIPSCO common stock at a
price of $37.02 per share. These options will expire upon consummation of the
Merger.
After the Merger, Ameren will become a registered public utility holding
company under the Public Utility Holding Company Act of 1935, as amended. In
December 1995, the Merger was approved by the shareholders of Union Electric
and CIPSCO. However, the Merger is still conditioned upon, among other things,
receipt of certain regulatory and governmental approvals (See Note 3 -
Regulatory Matters).
The following unaudited pro forma financial information reflects the
effects of combining Union Electric and CIPSCO into Ameren under the pooling of
interests method of accounting.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(In Thousands Except Per Share Amounts) (Unaudited)
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Total revenues $3,127,316 $3,146,101 $3,138,944
Net income $ 372,872 $ 391,459 $ 368,571
Earnings per share $ 2.72 $ 2.85 $ 2.69
</TABLE>
The pro forma financial information consolidates the financial results of
Electric Energy Inc. (EEI), which effectively will be 60% owned by Ameren
subsequent to the merger as a result of the current ownership interests in EEI
by Union Electric and CIPS.
NOTE 3 - REGULATORY MATTERS
The Company has filed an application for approval of the Merger with the MoPSC,
and CIPSCO and the Company have filed joint applications for approval of the
merger with the ICC and the FERC. In those applications, the Company and
CIPSCO are requesting a sharing of merger savings, net of merger premium and
transaction costs, between ratepayers and shareholders for the first 10 years
subsequent to the Merger.
On July 21, 1995, the MoPSC approved an agreement involving the Company's
Missouri electric rates. The agreement decreased rates 1.8% for all classes of
Missouri retail electric customers, effective August 1, 1995, reducing annual
revenues by about $30 million. In addition, a one-time $30 million credit to
current Missouri electric customers reduced 1995 earnings approximately 18
cents per share. Also included is a three-year plan which provides that
earnings in any future years in excess of a 12.61% return on equity (determined
on a regulatory basis) will be shared equally between customers and
stockholders and earnings above a 14% return on equity will be credited to
customers. Also, the agreement provides that no party shall file for a general
increase or decrease in the Company's Missouri retail electric rates prior to
July 1, 1998, except that the Company may file for an increase if certain
adverse events occur. At this time, the Company is unable to determine whether
it will be required to make any future credits to its customers under the
agreement.
At December 31, 1995, the Company had recorded the following regulatory
assets and regulatory liabilities:
<TABLE>
<CAPTION>
REGULATORY ASSETS:
---------------------------------------------------
(In Thousands) 1995
--------
<S> <C>
Income taxes $732,580
Unamortized loss on reacquired debt 33,203
Total regulatory assets $765,783
REGULATORY LIABILITY
---------------------------------------------------
Income taxes $216,502
</TABLE>
The Company continually assesses the recoverability of its regulatory
assets. Under current accounting standards, regulatory assets are written-off
to earnings when it is probable that such amounts will not be recovered through
future revenues.
30 UNION ELECTRIC 1995 Annual Report
<PAGE> 15
The Company is currently involved in proceedings with the FERC related to
various accounting matters. The Company believes that the final disposition of
these proceedings will not have a material adverse effect on its financial
position, results of operations or liquidity.
NOTE 4 - DEBT RETIREMENT PROVISIONS
During the five years from December 31, 1995, the amounts of debt maturities
totaling $214 million are: $69 million in 1996; $45 million in 1997; and $100
million in 1999. Amounts for years subsequent to 1996 do not include nuclear
fuel lease payments since the amounts of such payments are not currently
determinable.
Debt retirement provisions in some mortgage bond indentures of the Company
require, subject to certain alternatives, the annual redemption of 1% of the
principal amount (as defined) of each series of bonds. In substantially all
instances, as permitted by the indentures, the Company has pledged property
additions in lieu of such redemptions.
NOTE 5 - SHORT-TERM BORROWINGS
Short-term borrowings of the Company consist of bank loans (maturities
generally on an overnight basis) and commercial paper (maturities generally
within 10-45 days). At December 31, 1995, $19,600,000 of bank loans were
outstanding. The weighted average interest rate on borrowings outstanding for
the year ended December 31, 1995 was 6.1%.
At December 31, 1995, the Company had committed bank lines of credit
aggregating $184 million (of which $164 million were unused) which make
available interim financing at various rates of interest based on LIBOR, the
bank certificate of deposit rate, or other options, and in support of which the
Company pays to its lending banks annual fees up to 0.10%. These lines of
credit are renewable annually at various dates throughout the year.
NOTE 6 - NUCLEAR FUEL LEASE
The Company has a lease agreement which provides for the financing of nuclear
fuel. The maximum amount which may be financed under the agreement is $120
million. Pursuant to the terms of the lease, the Company has assigned to the
lessor certain contracts for purchase of nuclear fuel. The lessor obtains,
through the issuance of commercial paper or from direct loans under a committed
revolving credit agreement from commercial banks, the necessary funds to
purchase the fuel and make interest payments when due.
The Company is obligated to reimburse the lessor for all expenditures for
nuclear fuel, interest and related costs. Obligations under this lease become
due as the nuclear fuel is consumed at the Company's Callaway nuclear plant.
The Company reimbursed the lessor $34.1 million during 1995, $34.5 million
during 1994 and $55.0 million during 1993.
The Company has capitalized the cost, including certain interest costs, of
the leased nuclear fuel and has recorded the related lease obligation. During
the years 1995, 1994 and 1993, the total interest charges under the lease were
$5.8 million, $5.2 million and $3.1 million (based on average interest rates of
6.1%, 4.7% and 3.6%, respectively) of which $2.5 million, $2.7 million and
$1.4 million, respectively, were capitalized.
NOTE 7 - PREFERRED STOCK
During the three years ended December 31, 1995, preferred stock, without par
value, was issued or redeemed as follows: issued 1,657,500 shares, $1.735
Series and 330,000 shares, $7.64 Series in 1993; redeemed 350,000 shares, $8.00
Series and 425,000 shares, $8.00 Series of 1971 in 1993. The Company retired
260 shares, $6.30 Series in 1995, 1994 and 1993.
NOTE 8 - PREFERRED STOCK MANDATORY REDEMPTION PROVISIONS
During each of the years 1996 through 2000, the Company will be required to
redeem $26,000 of the $6.30 Series of preferred stock outstanding at December
31, 1995.
NOTE 9 - INCOME TAXES
Total income tax expense for 1995 resulted in an effective tax rate of 40% on
earnings before income taxes (39% in 1994 and 38% in 1993). The principal
reasons such rates differ from the statutory Federal rate are as follows:
<TABLE>
<CAPTION>
=============================================================================
1995 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory Federal income
tax rate 35% 35% 35%
Increases (Decreases) from:
Depreciation differences 2 1 2
State tax 4 4 2
Miscellaneous, net (1) (1) (1)
- -----------------------------------------------------------------------------
Effective income tax rate 40% 39% 38%
=============================================================================
</TABLE>
UNION ELECTRIC 1995 Annual Report 31
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
Income tax expense components for the years shown are as follows (in
thousands):
<TABLE>
<CAPTION>
===============================================================================
1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Taxes currently payable
(principally Federal):
Included in operating
expenses $222,492 $232,811 $147,062
Included in other income -
Miscellaneous, net (2,949) (4,373) (7,874)
- -------------------------------------------------------------------------------
219,543 228,438 139,188
Deferred taxes
(principally Federal):
Included in operating
expenses -
Depreciation differences 4,767 (1,485) 49,566
Postretirement benefits (9,022) (9,928) (11,921)
Other (2,515) (8,795) 2,394
Included in other income -
Depreciation differences 752 816 9,638
Other 390 963 1,477
- -------------------------------------------------------------------------------
(5,628) (18,429) 51,154
Deferred investment tax
credit amortization
Included in operating
expenses (6,181) (6,182) (7,626)
- -------------------------------------------------------------------------------
Total income tax expense $207,734 $203,827 $182,716
===============================================================================
</TABLE>
The Company recognizes the income tax effects of temporary differences.
Prior to 1993, in accordance with accepted ratemaking practice, deferred income
taxes were not provided for certain temporary differences flowed through to
customers and the equity component of AFC. In accordance with SFAS No. 109,
"Accounting for Income Taxes," a Regulatory Asset, representing the probable
recovery from customers of future income taxes which is expected to occur when
temporary differences reverse, has been recorded along with a corresponding
deferred tax liability. Also, a Regulatory Liability recognizing the lower
expected revenue resulting from reduced income taxes associated with amortizing
accumulated deferred investment tax credits, has been recorded. The deferred
tax asset corresponding to this Regulatory Liability has been combined with the
deferred tax liabilities.
The Company adjusts its deferred tax liabilities for changes enacted in
tax laws or rates. Recognizing that regulators will probably reduce future
revenues for deferred tax liabilities initially recorded at rates in excess of
the current statutory rate, reductions in the deferred tax liability were
credited to the Regulatory Liability.
Temporary differences gave rise to deferred tax assets and deferred tax
liabilities at year-end 1995 and 1994 as follows (in millions):
<TABLE>
==============================================================
1995 1994
- --------------------------------------------------------------
<S> <C> <C>
Depreciation $ 819 $ 809
Regulatory asset, net 516 503
Capitalized taxes and expenses 113 117
Deferred benefit costs (52) (41)
Disallowed plant costs (11) (10)
- --------------------------------------------------------------
Total accumulated deferred
income tax liabilities $1,385 $1,378
==============================================================
</TABLE>
NOTE 10 - RETIREMENT BENEFITS
The Company has non-contributory, defined-benefit retirement plans covering
substantially all of its employees. Benefits are based on the employees' years
of service and compensation. The Company's funding policy is to contribute
annually at least the minimum amount required by government funding standards,
but not more than can be deducted for Federal income taxes. Plan assets consist
principally of common stocks and fixed income securities.
Pension costs for the years 1995, 1994 and 1993, were $26 million, $31
million and $27 million, respectively, of which 20% was charged to construction
accounts in 1995 and approximately 18% in each of the years 1994 and 1993.
The plans' funded status follows (in millions):
<TABLE>
============================================================================
At December 31, 1995 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Actuarial present value
of benefit obligation:
Vested benefit obligation $679 $552 $607
Accumulated benefit obligation $758 $622 $686
Projected benefit obligation
for service rendered to date $913 $779 $820
Less: Plan assets at fair value 847 706 738
- ----------------------------------------------------------------------------
Deficiency of plan assets versus
projected benefit obligation 66 73 82
Unrecognized net gain 22 18 4
Prior service cost not yet
recognized in net periodic
pension cost (82) (89) (93)
Unrecognized net assets
at transition 9 10 11
- ----------------------------------------------------------------------------
Accrued pension cost $ 15 $ 12 $ 4
============================================================================
</TABLE>
32 UNION ELECTRIC 1995 Annual Report
<PAGE> 17
Pension costs include the following components (in millions):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
1995 1994 1993
- -------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Service cost - benefits earned
during the period $ 19 $ 21 $ 18
Interest cost on projected
benefit obligation 66 60 59
Actual return on plan assets (166) 8 (89)
Net amortization and deferral 107 (58) 39
- -------------------------------------------------------------------------------------------------
Pension cost $26 $31 $27
- -------------------------------------------------------------------------------------------------
</TABLE>
Assumptions for actuarial present value of projected benefit obligations
are as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
1995 1994 1993
- -------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Discount rate at
measurement date 7.25% 8.5% 7.25%
Increase in future compensation 4.25% 5.5% 4.25%
Plan assets long-term
rate of return 8.5% 8.5% 8.5%
- -------------------------------------------------------------------------------------------------
</TABLE>
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for retired employees. Substantially
all of the Company's employees may become eligible for those benefits if they
reach retirement age while working for the Company. For 1995, 1994 and 1993,
the actual claims paid were $15.4 million, $15.6 million and $14.6 million,
respectively.
The Company accrues the expected postretirement benefit costs during
employees' years of service. Postretirement benefit costs for the years 1995,
1994 and 1993 were $44 million, $46 million and $53 million, respectively, of
which 19% was charged to construction accounts in 1995 and approximately 18%
was charged to construction accounts in each of the years 1994 and 1993. The
Company's transition obligation at December 31, 1995 is being amortized over
the next 17 years.
In August 1994, the MoPSC authorized the recovery of postretirement
benefit costs in rates to the extent that such costs are funded. In 1995, the
Company established two external trust funds for retiree healthcare and life
insurance benefits. Assets in these trusts amounted to $14.2 million at
December 31, 1995 and were invested primarily in short-term instruments.
The plans' status follows (in millions):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
At December 31, 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Accumulated postretirement benefit
obligation:
Active employees eligible for benefits $ 74 $ 42 $ 47
Retired employees 211 188 169
Other active employees 32 60 109
- ----------------------------------------------------------------------------------------------------------
Total benefit obligation 317 290 325
Less: Plan assets at fair market value 14 -- --
- ----------------------------------------------------------------------------------------------------------
Accumulated postretirement benefit
obligation in excess of plan assets 303 290 325
Unrecognized - transition obligation (213) (225) (265)
- gain/(loss) (7) 4 (21)
- ----------------------------------------------------------------------------------------------------------
Postretirement benefit liability $ 83 $ 69 $ 39
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Components of net periodic postretirement benefit cost are as follows
(in millions):
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 10 $ 11 $ 9
Interest cost on projected
benefit obligation 24 21 28
Amortization - transition obligation 12 13 16
- unrecognized (gain)/ loss (2) 1 --
- ----------------------------------------------------------------------------------------------------------
Net periodic cost $ 44 $ 46 $ 53
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Assumptions for the obligation measurements are as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate at measurement date 7.25% 8.5% 7.25%
Plan assets long-term rate of return 8.5% -- --
Medical cost trend rate - initial 9.25% 11.0% 11.25%
- ultimate 5.25% 6.0% 5.25%
Ultimate medical cost trend rate
expected in year 2000 2000 2000
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A 1% increase in the medical cost trend rate is estimated to increase the
net periodic cost and the accumulated postretirement benefit obligation by
approximately $3 million and $21 million, respectively.
NOTE 11 - STOCK OPTION PLANS
In April, 1995, the Company's shareholders approved a Long-Term Incentive Plan
(the Plan) for eligible employees, as determined by the Human Resources
Committee of the Board. The Plan provides for the grant of options,
performance awards, restricted stock, dividend equivalents and stock
appreciation rights.
UNION ELECTRIC 1995 Annual Report 33
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
Under the terms of the Plan, options may be granted at a price not less
than the fair market value of the shares at the date of grant. Granted options
vest over a period of five years, beginning at the date of grant and provide
for acceleration of exercisability of the options upon the occurrence of
certain events, including retirement. At December 31, 1995, a total of
2,500,000 shares were reserved for future issuance under the Plan; however, the
Company expects to make open market purchases of its common stock to meet the
requirements of the Plan.
Presented below is a summary of activity for the Plan for the year ended
December 31, 1995:
<TABLE>
<S> <C>
Options outstanding at beginning of year --
Options granted during the year 142,500
Options exercised during the year --
Options expired/cancelled during the year --
Options outstanding at end of the year 142,500
Options exercisable at end of the year 9,800
Option price range per share $351/2 -$357/8
</TABLE>
NOTE 12 - COMMITMENTS
The Company is engaged in a construction program under which expenditures
averaging approximately $288 million, including AFC, are anticipated during
each of the next five years.
In addition, the Company has commitments for the purchase of coal under
long-term contracts. Coal contract commitments for 1996 through 2000 are
estimated to be $871 million (excluding contract escalation provisions). Total
coal purchases for 1995, 1994 and 1993 were $293 million, $268 million and $367
million, respectively. The Company also has existing contracts with pipeline
and natural gas suppliers to provide natural gas for distribution and electric
generation. Total delivered natural gas costs for 1995, 1994 and 1993 were $60
million, $63 million and $80 million, respectively. Gas related contracted
cost commitments for 1996 through 2000 are estimated to be $98 million. The
Company's nuclear fuel commitments for 1996 through 2000, including uranium
concentrates, conversion, enrichment and fabrication, are expected to total
$134 million, which is expected to be financed under the nuclear fuel lease.
Nuclear fuel expenditures for 1995, 1994 and 1993 were $42 million, $30 million
and $37 million, respectively.
NOTE 13 - CONTINGENCIES
The Company's insurance coverage for its Callaway Plant is as follows:
TYPE AND SOURCE OF COVERAGE
(In Millions) Maximum Maximum Coverages Assessments
<TABLE>
<S> <C> <C>
for Single
Incidents
Public Liability:
American Nuclear Insurers $200.0 $--
Pool Participation 8,720.3 79.3(a)
$8,920.3(b) $79.3
Nuclear Worker Liability:
American Nuclear Insurers $200.0(c) $3.1
Property Damage:
American Nuclear Insurers $500.0 $--
Nuclear Electric Insurance Ltd. 2,250.0(d) 19.0
$2,750.0 $19.0
Replacement Power:
Nuclear Electric Insurance Ltd. $419.1(e) $3.2
</TABLE>
(a) Retrospective premium under the Price-Anderson liability provisions of
the Atomic Energy Act of 1954, as amended, (Price-Anderson). Subject to
retrospective assessment with respect to loss from an incident at any
U.S. reactor, payable at $10 million per year.
(b) Limit of liability for each incident under Price-Anderson.
(c) Total industry potential liability from workers claiming exposure to
the hazard of nuclear radiation. The policy includes an automatic
reinstatement thereby providing total coverage of $400 million.
(d) Includes premature decommissioning costs.
(e) Weekly indemnity of $3.1 million, for 52 weeks which commences after
the first 21 weeks of an outage, plus $2.5 million per week for 104 weeks
thereafter.
Price-Anderson limits the liability for claims from an incident involving
any licensed U.S. nuclear facility. The limit is based on the number of
licensed reactors and is adjusted at least every five years based on the
Consumer Price Index. Utilities owning a nuclear reactor cover this exposure
through a combination of private insurance and mandatory participation in a
financial protection pool as established by Price-Anderson.
If losses from a nuclear incident at Callaway Plant exceed the limits of,
or are not subject to, insurance, or if coverage is not available, the Company
will self-insure the risk. Although the Company has no reason to
34 UNION ELECTRIC 1995 Annual Report
<PAGE> 19
anticipate a serious nuclear incident, if one did occur it could have a
material but undeterminable adverse effect on the Company's financial position,
results of operations and liquidity.
Under the Clean Air Act Amendments of 1990, the Company is required to
reduce total annual sulfur dioxide emissions significantly by the year 2000.
Significant reductions in nitrogen oxide will also be required. By switching
to low-sulfur coal and early banking of emission credits, the Company
anticipates that it can comply with the requirements of the law with no
significant revenue increases because the related capital costs, estimated at
about $300 million, are largely offset by lower fuel costs. At year-end 1995,
about 75 percent of the Clean Air Act related capital costs had been expended.
As of December 31, 1995, the Company was designated a potentially
responsible party (PRP) by federal and state environmental protection agencies
at five hazardous waste sites. Other hazardous waste sites have been
identified for which the Company may be responsible but has not been designated
a PRP. The Company continually reviews the remediation costs that will be
required for all of these sites. However, such costs are not expected to have
a material adverse effect on the Company's financial position, results of
operations and liquidity.
The Company is involved in legal and administrative proceedings before
various courts and agencies with respect to matters arising in the ordinary
course of business, some of which involve substantial amounts. The Company
believes that the final disposition of these proceedings will not have a
material adverse effect on its financial position, results of operations or
liquidity.
NOTE 14 - CALLAWAY NUCLEAR PLANT
Under the Nuclear Waste Policy Act of 1982, the U.S. Department of Energy (DOE)
is responsible for the permanent storage and disposal of spent nuclear fuel.
DOE currently charges one mill per nuclear generated kilowatthour sold for
future disposal of spent fuel. Electric rates charged to customers provide for
recovery of such costs. DOE is not expected to have its permanent storage
facility for spent fuel available until at least 2015. The Company has
sufficient storage capacity at the Callaway Plant site until 2005 and has
viable storage alternatives under consideration. Each alternative will likely
require Nuclear Regulatory Commission approval and may require other regulatory
approvals. The delayed availability of DOE's disposal facility is not expected
to adversely affect the continued operation of Callaway Plant.
Electric rates charged to customers provide for recovery of Callaway Plant
decommissioning costs over the life of the plant, based on an assumed 40-year
life, ending with expiration of the plant's operating license in 2024. The
Callaway site is assumed to be decommissioned using the DECON (immediate
dismantlement) method. Decommissioning costs, including decontamination,
dismantling and site restoration, are estimated to be $433 million in current
year dollars and are expected to escalate approximately 4% per year through the
end of decommissioning activity in 2033. The Company's previous
decommissioning cost estimate, which was completed in 1993, estimated
decommissioning costs to be $383 million in 1993 dollars. Decommissioning
costs are charged to depreciation expense over Callaway's service life and
amounted to $6.7 million in each of the years 1995, 1994 and 1993. Every three
years, the MoPSC requires the Company to file updated cost studies for
decommissioning Callaway, and electric rates may be adjusted at such times to
reflect changed estimates. Costs collected from customers are deposited in an
external trust fund to provide for Callaway's decommissioning. Fund earnings
are expected to average 9.25% annually through the date of decommissioning. If
the assumed return on trust assets is not earned, the Company believes it is
probable that such earnings deficiency will be recovered in rates. Trust fund
earnings, net of expenses, appear on the balance sheet as increases in Nuclear
decommissioning trust fund and in the Accumulated Provision for Nuclear
Decommissioning.
The staff of the Securities and Exchange Commission has questioned certain
of the current accounting practices of the electric utility industry, including
the Company, regarding the recognition, measurement and classification of
decommissioning costs for nuclear generating stations in the financial
statements of electric utilities. In response to these questions, the
Financial Accounting Standards Board (FASB) has agreed to review the accounting
for removal costs, including decommissioning. If current electric utility
industry accounting practices for such decommissioning are changed (1) the
annual provisions for decommissioning could increase and (2) trust fund income
from the external decommissioning trusts could be reported as investment income
rather than as a reduction to decommissioning expense. The Company does not
expect that changes in the accounting for nuclear decommissioning costs will
have a material effect on its results of operations.
UNION ELECTRIC 1995 Annual Report 35
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS
NOTE 15 - FAIR VALUE OF FINANCIAL
INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value.
CASH AND TEMPORARY INVESTMENTS/
SHORT-TERM BORROWINGS
The carrying amounts approximate fair value because of the short-term maturity
of these instruments.
NUCLEAR DECOMMISSIONING TRUST FUND
The fair value of the Company's Nuclear decommissioning trust fund is estimated
based on quoted market prices for securities.
PREFERRED STOCK
The fair value of the Company's preferred stock outstanding is estimated based
on the quoted market prices for the same or similar issues.
LONG-TERM DEBT
The fair value of the Company's long-term debt is estimated based on the quoted
market prices for the same or similar issues or on the current rates offered to
the Company for debt of comparable maturities.
The estimated fair value of the Company's Preferred Stock and Long-Term
Debt as of December 31, is shown below:
AT DECEMBER 31, 1995:
<TABLE>
<CAPTION>
(In Thousands)
Carrying Amount Fair Value
<S> <C> <C>
Preferred stock $219,147 $188,175
Long-term debt $1,773,192 $1,876,424
<CAPTION>
AT DECEMBER 31, 1994:
(In Thousands)
Carrying Amount Fair Value
<S> <C> <C>
Preferred stock $219,173 $161,950
Long-term debt $1,833,623 $1,728,346
</TABLE>
The Company's investments in debt and equity securities are held in trust
funds for the purpose of funding the nuclear decommissioning of the Callaway
nuclear plant. See Note 14 - Callaway Nuclear Plant. The Company has
classified all investments in debt and equity securities as available for sale
and has recorded all such investments at their fair market value at December
31, 1995 and 1994. In 1995, 1994 and 1993, the proceeds from the sale of
investments were $9.4 million, $22.2 million and $68.9 million, respectively.
Using the specific identification method to determine cost, the gross realized
gains on those sales were $.4 million, $.6 million and $1.7 million,
respectively, for 1995, 1994 and 1993. Net realized and unrealized gains and
losses are reflected in Accumulated Provision for Nuclear Decommissioning on
the Balance Sheet, which is consistent with the method used by the Company to
account for the decommissioning costs recovered in rates. The recorded fair
values and cost basis of the Company's debt and equity investments shown in the
Nuclear decommissioning trust fund are as follows:
<TABLE>
<CAPTION>
AT DECEMBER 31, 1995:
(In Thousands)
Gross Unrealized
Security type Cost Gain (Loss) Fair Value
<S> <C> <C> <C> <C>
Debt securities $22,138 $2,642 $-- $24,780
Equity securities 37,936 9,170 -- 47,106
Cash equivalents 1,952 -- -- 1,952
$62,026 $11,812 $-- $73,838
<CAPTION>
AT DECEMBER 31, 1994:
(In Thousands)
Gross Unrealized
<S> <C> <C> <C> <C>
Debt securities $19,479 $1,037 $-- $20,516
Equity securities 31,085 -- (8) 31,077
Cash equivalents 2,313 -- -- 2,313
$52,877 $1,037 $(8) $53,906
</TABLE>
The contractual maturities of the Company's investments in debt securities
are as follows:
<TABLE>
<CAPTION>
AT DECEMBER 31, 1995:
(In Thousands)
Cost Fair Value
<S> <C> <C>
1 year to 5 years $2,700 $3,094
5 years to 10 years 1,249 1,427
Due after 10 years 18,189 20,259
$22,138 $24,780
</TABLE>
This report and the financial statements contained herein are submitted for the
information of the stockholders of the Company and are not intended to induce,
or for use in connection with, any sale or purchase of any securities of the
Company.
36 UNION ELECTRIC 1995 Annual Report
<PAGE> 21
OPERATING STATISTICS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC OPERATING REVENUES (000):
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Residential $ 843,038 $ 800,117 $ 817,713 $ 754,667 $ 831,106
Commercial 725,438 705,505 684,446 676,761 685,799
Industrial 379,363 368,450 373,353 410,370 395,116
Other electric utilities 64,847 61,985 59,160 57,226 65,317
Miscellaneous 31,761 33,476 31,308 30,444 28,920
Credit to customers (29,995) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ELECTRIC OPERATING REVENUES $2,014,452 $ 1,969,533 $ 1,965,980 $ 1,929,468 $ 2,006,258
- -----------------------------------------------------------------------------------------------------------------------------------
KILOWATTHOUR SALES (000,000):
- -----------------------------------------------------------------------------------------------------------------------------------
Residential 11,229 10,619 10,867 9,690 10,646
Commercial 11,757 11,393 10,989 10,553 10,678
Industrial 8,486 8,203 8,003 9,030 8,524
Other electric utilities 1,726 1,623 1,580 1,488 1,623
Miscellaneous 137 137 139 144 139
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL KILOWATTHOUR SALES 33,335 31,975 31,578 30,905 31,610
- -----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC CUSTOMERS (End of year):
- -----------------------------------------------------------------------------------------------------------------------------------
Residential 991,791 985,609 976,390 972,153 962,629
Commercial 130,557 128,505 126,542 125,196 122,152
Industrial 6,276 6,228 6,605 6,530 6,778
Other electric utilities 17 17 17 19 20
Miscellaneous 1,628 1,628 1,630 1,599 1,599
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ELECTRIC CUSTOMERS 1,130,269 1,121,987 1,111,184 1,105,497 1,093,178
- -----------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL CUSTOMER DATA (Average):
- -----------------------------------------------------------------------------------------------------------------------------------
Kilowatthours used 11,352 10,833 11,151 9,864 11,106
Annual electric bill $ 852.27 $ 816.25 $ 839.11 $ 768.20 $ 867.00
Revenue per kilowatthour 7.51c. 7.54c. 7.52c. 7.79c. 7.81c.
- -----------------------------------------------------------------------------------------------------------------------------------
GROSS INSTANTANEOUS
PEAK DEMAND (Kilowatts) 7,965,000 7,430,000 7,540,000 7,135,000 7,365,000
- -----------------------------------------------------------------------------------------------------------------------------------
CAPABILITY AT TIME OF PEAK,
INCLUDING NET PURCHASES(Kilowatts) 8,714,000 8,469,000 8,597,000 8,407,000 8,285,000
- -----------------------------------------------------------------------------------------------------------------------------------
GENERATING CAPABILITY AT
TIME OF PEAK (Kilowatts) 8,184,000 8,057,000 7,963,000 7,868,000 7,868,000
- -----------------------------------------------------------------------------------------------------------------------------------
COAL BURNED (Tons) 12,714,000 11,444,000 9,803,000 10,314,000 10,732,000
- -----------------------------------------------------------------------------------------------------------------------------------
PRICE PER TON OF COAL $ 22.59 $ 24.49 $ 31.66 $ 31.96 $ 32.26
===================================================================================================================================
</TABLE>
UNION ELECTRIC 1995 Annual Report 37
<PAGE> 22
SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
(Thousands of Dollars Except Shares and Per Share Amounts and Ratios)
- -------------------------------------------------------------------------------------------------------
1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
RESULTS OF OPERATIONS (YEAR ENDED DECEMBER 31,):
- -------------------------------------------------------------------------------------------------------
Operating revenues $2,102,707 $2,056,116 $2,066,004 $2,015,121
Operating expenses 1,660,811 1,605,930 1,654,707 1,603,104
Operating income 441,896 450,186 411,297 412,017
Callaway rate phase-in plans -- -- -- 60
Deferred costs disallowed -- -- -- --
Callaway Unit No. 1 costs
disallowed, net -- -- -- --
Loss on cancellation of
Callaway Unit No. 2, net -- -- -- --
Allowance for all funds used
during construction 12,933 11,280 11,544 8,022
Gain on sales of electric
property, net -- -- -- 18,099
Miscellaneous, net (5,981) 403 3,919 (131)
Interest (134,741) (141,112) (129,600) (135,319)
Net income 314,107 320,757 297,160 302,748
Preferred stock dividends 13,250 13,252 14,087 14,058
Earnings on common stock 300,857 307,505 283,073 288,690
Average common shares outstanding 102,123,834 102,123,834 102,123,834 102,123,834
- -------------------------------------------------------------------------------------------------------
ASSETS, OBLIGATIONS AND EQUITY CAPITAL (YEAR END):
- -------------------------------------------------------------------------------------------------------
Total assets $6,754,469 $6,624,701 $6,595,570 $5,797,363
Long-term debt obligations 1,763,613 1,823,489 1,766,655 1,659,553
Preferred stock subject to
mandatory redemption 650 676 702 728
Preferred stock not subject to
mandatory redemption 218,497 218,497 218,497 217,784
Common equity 2,319,197 2,269,054 2,206,168 2,164,020
- -------------------------------------------------------------------------------------------------------
FINANCIAL INDICES (YEAR ENDED):
- -------------------------------------------------------------------------------------------------------
Earnings per share of common stock
(based on average shares outstanding) $2.95 $3.01 $2.77 $2.83
Cash dividends per share of
common stock $2.455 $2.395 $2.335 $2.26
Return on average common stock equity 13.23% 13.84% 13.01% 13.70%
Ratio of earnings to fixed charges (a) 4.78 4.68 4.66 4.66
Book value per common share $22.71 $22.22 $21.60 $21.19
- -------------------------------------------------------------------------------------------------------
CAPITALIZATION RATIOS (YEAR END):
- -------------------------------------------------------------------------------------------------------
Common equity 53.9% 52.6% 52.6% 53.5%
Preferred stock not subject to
mandatory redemption 5.1 5.1 5.2 5.4
Preferred stock subject to
mandatory redemption -- -- -- --
Long-term debt 41.0 42.3 42.2 41.1
- -------------------------------------------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0%
- -------------------------------------------------------------------------------------------------------
</TABLE>
(a) Earnings used in computing the ratio of earnings to fixed charges consist
of net income plus fixed charges (interest on debt, amortization of debt
discount, premium and expense and a portion of rentals representative of the
interest factor) and income taxes.
38 UNION ELECTRIC 1995 Annual Report
<PAGE> 23
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
1991 1990 1989 1988 1987 1986 1985
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$2,096,940 $2,023,017 $2,010,306 $2,029,107 $1,946,411 $1,807,182 $1,591,763
1,614,127 1,565,477 1,543,838 1,544,953 1,457,957 1,287,572 1,173,187
482,813 457,540 466,468 484,154 488,454 519,610 418,576
107 237 227 2,408 92,791 59,861 74,631
-- -- -- -- (23,169) -- --
-- -- -- -- -- -- (234,780)
-- -- (30,196) -- -- -- --
8,519 14,145 17,908 14,885 20,477 15,812 106,754
-- -- -- -- -- -- --
(2,718) 9,881 7,769 (10,648) (15,714) 3,947 (1,709)
(167,209) (187,584) (176,571) (199,241) (228,961) (247,409) (254,320)
321,512 294,219 285,605 291,558 333,878 351,821 109,152
14,059 14,693 19,134 30,425 36,522 49,245 49,836
307,453 279,526 266,471 261,133 297,356 302,576 59,316
102,123,834 102,123,834 102,123,834 102,123,834 102,123,834 102,123,834 100,403,016
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
$5,733,479 $5,702,341 $5,760,322 $5,827,246 $5,957,811 $5,895,211 $5,738,620
1,730,277 1,948,024 2,106,776 2,188,614 2,357,615 2,436,092 2,454,687
754 780 806 60,832 64,608 165,384 173,160
217,784 218,004 227,582 279,784 354,784 354,784 354,784
2,106,155 2,021,299 1,954,481 1,895,360 1,837,156 1,743,189 1,630,466
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
$3.01 $2.74 $2.61 $2.56 $2.91 $2.96 $0.59
$2.18 $2.10 $2.02 $1.94 $1.92 $1.86 $1.78
14.99% 14.16% 14.03% 14.08% 16.79% 18.16% 3.81%
4.21 3.57 3.63 3.35 3.30 2.79 1.14
$20.62 $19.79 $19.14 $18.56 $17.99 $17.07 $15.97
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
51.9% 48.3% 45.6% 42.8% 39.8% 37.1% 35.3%
5.4 5.2 5.3 6.3 7.7 7.6 7.7
-- -- -- 1.4 1.4 3.5 3.8
42.7 46.5 49.1 49.5 51.1 51.8 53.2
- ------------------------------------------------------------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========================================================================================================================
</TABLE>
UNION ELECTRIC 1995 Annual Report 39
<PAGE> 24
INVESTOR INFORMATION
ANNUAL MEETING
The Annual Meeting of Stockholders will convene at 9 a.m. Tuesday, April 23,
1996 at The Saint Louis Art Museum, 1 Fine Arts Drive, Forest Park, St. Louis,
Missouri.
COMMON STOCK AND DIVIDEND INFORMATION
The company's common stock is listed on the New York Stock Exchange (ticker
symbol: UEP). Common stockholders of record totaled 115,278 at December 31,
1995. Union Electric has paid cash dividends on common stock for
90 consecutive years, since 1906. Under the company's amended mortgage
indentures, $34,435,000 of total retained earnings was restricted against
payment of common dividends - except those payable in common stock; retained
earnings totaled $1,090,909,000 at December 31, 1995.
The following includes the high and low sales prices and the dividends
paid per common share during the past two years:
<TABLE>
<CAPTION>
1995 Price Range
- -----------------------------------------------------------------------------------------------
Quarter Ended High Low Dividends Paid
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
March 31 $38 1/4 $34 3/4 61c
June 30 37 7/8 35 61
September 30 37 5/8 34 5/8 61
December 31 42 37 3/8 62 1/2
1994 Price Range
- -----------------------------------------------------------------------------------------------
Quarter Ended High Low Dividends Paid
- -----------------------------------------------------------------------------------------------
March 31 $39 1/2 $34 3/4 59 1/2c.
June 30 35 7/8 30 3/4 59 1/2
September 30 35 7/8 32 59 1/2
December 31 36 1/2 34 1/2 61
</TABLE>
DIRECT DEPOSIT OF DIVIDENDS
All registered UEstockholders can have their cash dividends automatically
credited to their bank accounts. This service gives stockholders immediate
access to their dividend on the dividend payment date and eliminates the
possibility of lost or stolen dividend checks.
DRPLUS
Through DRPlus -- UE's dividend reinvestment and stock purchase plan -- the
company's stockholders, customers and employees can:
o make cash investments by check or automatic cash payment, totaling up to
$60,000 in UE common stock annually
o reinvest their dividends in UE common
stock -- or receive UE dividends in cash
o place UE certificates in safekeeping and receive regular account statements
.....all without paying any fees.
This is not an offer to sell, or a solicitation of an offer to buy, any
securities.
INVESTOR SERVICES
The company's Investor Services representatives are available to help you each
business day from 7:30 a.m. to 4:30 p.m. (Central Time).
Please write or call:
Union Electric Company
Investor Services Department
P.O. Box 66887
St. Louis, MO 63166-6887
St. Louis area 554-3502
Toll-free 1-800-255-2237
OFFICE
1901 Chouteau Avenue
St. Louis, MO 63103
314-621-3222
STOCK AND FIRST MORTGAGE BOND
TRANSFER AGENT AND REGISTRAR
Union Electric Company
TRUSTEES FOR FIRST MORTGAGE BONDS
Boatmen's Trust Company
St. Louis, MO
Harris Trust and Savings Bank and D.G. Donovan,
Co-Trustees
Chicago, IL
LaSalle National Trust, N.A.
Chicago, IL
This Annual Report is printed on recycled paper.
UNION ELECTRIC 1995 Annual Report 41
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 2-96198) and
the Registration Statement on Form S-8 (No. 33-60330) of Union Electric Company
of our report dated February 1, 1996, which appears on page 17 of Union
Electric Company's 1995 Annual Report to Shareholders, which is incorporated by
reference in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears on page 12 of this Form 10-K.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
St. Louis, Missouri
February 1, 1996
<PAGE> 1
EXHIBIT 24
CERTIFIED COPY OF RESOLUTION ADOPTED AT THE
REGULAR MEETING OF THE BOARD OF DIRECTORS OF
UNION ELECTRIC COMPANY
HELD ON FRIDAY, DECEMBER 8, 1995
--------------------------------------------
RESOLVED, that the proper officers and directors of this Company be
and hereby are authorized and directed to execute the 1995 Annual Report
Form 10-K ("Form 10-K") and such amendments thereto as they may deem
necessary or desirable; that the name of any officer or director of the
Company required to sign such Form 10-K or any amendment thereto, may be
signed by C. W. Mueller and/or Donald E. Brandt and/or James C. Thompson,
and/or the duly appointed substitute thereof, pursuant to duly executed
powers of attorney providing said named persons with, among other things,
full power of substitution and revocation; and that the officers of this
Company be and hereby are authorized and directed to file such Form 10-K
and any amendments thereto with the Securities and Exchange Commission when
executed by or on behalf of the proper officers and the directors of the
Company.
I hereby certify that the foregoing
is a true and correct copy of resolution
adopted at the regular meeting of the
Board of Directors of Union Electric
Company, held pursuant to due notice on
Friday, December 8, 1995, at the General
Office Building of the Company, St.
Louis, Missouri, and that such
resolution is still in full force and
effect.
March 22, 1996
/s/ James C. Thompson
Secretary
[CORPORATE SEAL]
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Charles W. Mueller
hereby appoints Donald E. Brandt and/or James C. Thompson the true and lawful
attorneys-in-fact of the undersigned, for and in the name, place and stead of
the undersigned, to affix the name of the undersigned as President (Principal
Executive Officer and a Director of Union Electric Company to the 1995 Annual
Report Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ C.W. Mueller (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Charles W. Mueller, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
Barbara Lungwitz
Notary Public - Notary Seal
[SEAL] STATE OF MISSOURI
City of St. Louis
My Commission Expires Sept. 2, 1999
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Donald E. Brandt
hereby appoints Charles W. Mueller and/or James C. Thompson the true and
lawful attorneys-in-fact of the undersigned, for and in the name, place and
stead of the undersigned, to affix the name of the undersigned as Senior Vice
President (Principal Accounting and Financial Officer) of Union Electric
Company to the 1995 Annual Report Form 10-K and any amendments thereto to be
filed with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, and, for the performance of the same acts, each with power to
appoint in his place and stead and as his substitute, one or more
attorneys-in-fact for the undersigned, with full power of revocation; hereby
ratifying and confirming all that said attorneys-in-fact may do by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ Donald E. Brandt (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Donald E. Brandt, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
Barbara Lungwitz
Notary Public - Notary Seal
[SEAL] STATE OF MISSOURI
City of St. Louis
My Commission Expires Sept. 2, 1999
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Willam E.
Cornelius hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or
James C. Thompson the true and lawful attorneys-in-fact of the undersigned, for
and in the name, place and stead of the undersigned, to affix the name of
the undersigned as a Director of Union Electric Company to the 1995 Annual
Report Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ William E. Cornelius (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared William E. Cornelius, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
Barbara Lungwitz
Notary Public - Notary Seal
[SEAL] STATE OF MISSOURI
City of St. Louis
My Commission Expires Sept. 2, 1999
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Thomas A. Hays
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ Thomas A. Hays (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Thomas A. Hayes, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
Barbara Lungwitz
Notary Public - Notary Seal
[SEAL] STATE OF MISSOURI
City of St. Louis
My Commission Expires Sept. 2, 1999
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Thomas H.
Jacobsen hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or
James C. Thompson the true and lawful attorneys-in-fact of the undersigned, for
and in the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 6th day of February, 1996.
/s/ Thomas H. Jacobsen (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 6th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Thomas H. Jacobsen, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/S/ JEANNE M. HANNAH
-----------------------------------
JEANNE M. HANNAH, NOTARY PUBLIC
ST. LOUIS COUNTY, STATE OF MISSOURI
MY COMMISSION EXPIRES 8/9/96
[SEAL]
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Richard A. Liddy
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 9th day of February, 1996.
/s/ Richard A. Liddy (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 9th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Richard A. Liddy, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Betty J. Olscher
-----------------------------------
Betty J. Olscher
NOTARY PUBLIC - NOTARY SEAL
STATE OF MISSOURI
ST. LOUIS COUNTY
MY COMMISSION EXP. MAR. 14, 1997
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned John Peters
MacCarthy hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or
James C. Thompson the true and lawful attorneys-in-fact of the undersigned, for
and in the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ John Peters MacCarthy (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared John Peters MacCarthy, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
[SEAL] STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Paul L. Miller,
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ Paul L. Miller, Jr. (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared John Peters MacCarthy, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
[SEAL] STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Robert H. Quenon
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 6th day of February, 1996.
/s/ Robert H. Quenon (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 6th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Robert H. Quenon, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
[SEAL] STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Harvey Saligman
hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James C.
Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ Harvey Saligman (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Harvey Saligman, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
[SEAL] STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS: That the undersigned Janet McAfee
Weakley hereby appoints Charles W. Mueller and/or Donald E. Brandt and/or James
C. Thompson the true and lawful attorneys-in-fact of the undersigned, for and in
the name, place and stead of the undersigned, to affix the name of the
undersigned as a Director of Union Electric Company to the 1995 Annual Report
Form 10-K and any amendments thereto to be filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, and, for the
performance of the same acts, each with power to appoint in his place and stead
and as his substitute, one or more attorneys-in-fact for the undersigned, with
full power of revocation; hereby ratifying and confirming all that said
attorneys-in-fact may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 15th day of February, 1996.
/s/ Janet M. Weakley (L.S.)
---------------------------
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
On this 15th day of February, 1996, before me, the undersigned Notary
Public in and for said State, personally appeared Janet M. Weakley, known
to me to be the person described in and who executed the foregoing power of
attorney and acknowledged to me that he executed the same as his free act and
deed for the purposes therein stated.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal.
/s/ Barbara Lungwitz
-----------------------------------
BARBARA LUNGWITZ
NOTARY PUBLIC - NOTARY SEAL
[SEAL] STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES SEPT. 2, 1999
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,435,437
<OTHER-PROPERTY-AND-INVEST> 73,838
<TOTAL-CURRENT-ASSETS> 448,017
<TOTAL-DEFERRED-CHARGES> 64,597
<OTHER-ASSETS> 732,580
<TOTAL-ASSETS> 6,754,469
<COMMON> 510,619
<CAPITAL-SURPLUS-PAID-IN> 717,669
<RETAINED-EARNINGS> 1,090,909
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,319,197
624
218,497
<LONG-TERM-DEBT-NET> 1,701,006
<SHORT-TERM-NOTES> 19,600
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 35,000
26
<CAPITAL-LEASE-OBLIGATIONS> 62,607
<LEASES-CURRENT> 34,462
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,363,450
<TOT-CAPITALIZATION-AND-LIAB> 6,754,469
<GROSS-OPERATING-REVENUE> 2,102,707
<INCOME-TAX-EXPENSE> 209,541
<OTHER-OPERATING-EXPENSES> 1,451,270
<TOTAL-OPERATING-EXPENSES> 1,660,811
<OPERATING-INCOME-LOSS> 441,896
<OTHER-INCOME-NET> 846
<INCOME-BEFORE-INTEREST-EXPEN> 442,742
<TOTAL-INTEREST-EXPENSE> 128,635
<NET-INCOME> 314,107
13,250
<EARNINGS-AVAILABLE-FOR-COMM> 300,857
<COMMON-STOCK-DIVIDENDS> 250,714
<TOTAL-INTEREST-ON-BONDS> 115,128
<CASH-FLOW-OPERATIONS> 639,512
<EPS-PRIMARY> 2.95
<EPS-DILUTED> 2.95
</TABLE>
