UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From to
Commission file number 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
incorporation or organization) Identification No.)
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
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 .
Shares outstanding of each of registrant's classes of common stock as of April
30, 1998:
Common Stock, $5 par value - 102,123,834
<PAGE>
Union Electric Company
Index
Page No.
Part I Financial Information (Unaudited)
Management's Discussion and Analysis ..................... 2
Balance Sheet
- March 31, 1998 and December 31, 1997 ................... 6
Statement of Income
- Three months and 12 months ended
March 31, 1998 and 1997 ................................ 7
Statement of Cash Flows
- Three months ended March 31, 1998 and 1997 ............. 8
Notes to Financial Statements ............................ 9
Part II Other Information
<PAGE>
PART I. FINANCIAL INFORMATION (UNAUDITED)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
Union Electric Company (AmerenUE or the Registrant) is a subsidiary of Ameren
Corporation (Ameren), a newly created holding company which is registered under
the Public Utility Holding Company Act of 1935 (PUHCA). In December 1997,
AmerenUE and CIPSCO Incorporated (CIPSCO) combined to form Ameren, with AmerenUE
and CIPSCO's subsidiaries, Central Illinois Public Service Company (AmerenCIPS)
and CIPSCO Investment Company (CIC), becoming wholly-owned subsidiaries of
Ameren (the Merger).
The following discussion and analysis should be read in conjunction with the
Notes to Financial Statements beginning on page 9, and the Management's
Discussion and Analysis of Financial Condition and Results of Operations (MD&A),
the Audited Financial Statements and the Notes to Financial Statements appearing
in the Registrant's 1997 Annual Report included in its 1997 Form 10-K.
RESULTS OF OPERATIONS
Earnings
First quarter 1998 earnings of $28 million declined $1 million compared to 1997
first quarter earnings. Earnings for the 12 months ended March 31, 1998 were
$292 million, a $7 million increase from the preceding 12-month period.
Excluding the extraordinary charge recorded in the fourth quarter of 1997 to
write off the generation-related regulatory assets and liabilities of the
Registrant's Illinois retail electric business, earnings for the 12-month period
ended March 31, 1998, were $327 million.
Earnings fluctuated due to many conditions, the primary ones being: weather
variations, credits to electric customers, sales growth, fluctuating operating
costs, the write-off of certain generation-related regulatory assets and
liabilities, and merger-related costs. The significant items affecting revenues,
costs and earnings during the three-month and 12-month periods ended March 31,
1998, and 1997 are detailed below.
Electric Operations
<TABLE>
<CAPTION>
Electric Operating Revenues Variations for periods ended March 31, 1998
from comparable prior-year periods
- -------------------------------- ------------------ ---- --------------------
(Millions of Dollars) Three Months Twelve Months
- -------------------------------- ------------------ ---- --------------------
<S> <C> <C>
Credit to customers $ 2 $ 28
Effect of abnormal weather (10) 5
Growth and other 15 20
Interchange sales (12) (20)
- -------------------------------- ------------------ ---- --------------------
$ (5) $ 33
- -------------------------------- ------------------ ---- --------------------
</TABLE>
The $5 million decrease in first quarter electric revenues compared to the
year-ago quarter was primarily due to milder weather and decreased interchange
sales. Weather-sensitive residential kilowatthour sales decreased 2 percent,
while commercial sales remained flat and industrial sales increased 2 percent,
reflecting a strong regional economy. Interchange sales declined 14 percent due
to decreased sales opportunities.
The increase in electric revenues for the 12 months ended March 31, 1998,
compared to the prior 12-month period was primarily due to a lower estimated
Missouri customer credit recorded during the period, partially offset by a 13
percent decline in interchange sales. Residential sales remained flat, while
commercial and industrial sales increased 1 percent and 3 percent, respectively,
due to the strong regional economy.
2
<PAGE>
<TABLE>
<CAPTION>
Fuel and Purchased Power Variations for periods ended March 31, 1998
from comparable prior-year periods
- ---------------------------------------- ------------------ ---------------------
(Millions of Dollars) Three Months Twelve Months
- ---------------------------------------- ------------------ ---------------------
<S> <C> <C>
Fuel:
Variation in generation $ 3 $ 18
Price 2 (11)
Generation efficiencies and other - -
Purchased power variation (9) (16)
- ---------------------------------------- ------------------ ---------------------
$ (4) $ (9)
- ---------------------------------------- ------------------ ---------------------
</TABLE>
The decrease in fuel and purchased power costs for the three months ended March
31, 1998 versus the comparable prior year quarter was primarily due to reduced
purchased power costs resulting from relatively flat native load sales and
decreased interchange sales.
The decrease in fuel and purchased power costs for the 12 months ended March 31,
1998 versus the year-ago period was driven mainly by reduced purchased power
costs, resulting from relatively flat native load sales and lower interchange
sales as well as lower fuel prices, offset in part by greater generation.
Gas Operations
The $4 million decrease in gas revenues for the three months ended March 31,
1998 compared to the comparable prior-year period was driven by lower gas costs
reflected in the purchased gas adjustment clause, partially offset by the annual
$11.5 million Missouri gas rate increase effective February 1998. Gas revenues
for the 12-month period ended March 31, 1998 decreased $6 million compared to
the same year-ago period due to lower gas costs reflected in the purchased gas
adjustment clauses as well as lower dekatherm sales, partially offset by the
Missouri gas rate increase.
Gas costs for the three months ended March 31, 1998 decreased $8 million
compared to the year-ago quarter primarily due to lower gas prices while
dekatherm sales remained flat. The $12 million decline in gas costs for the 12
months ended March 31, 1998 compared to the prior 12-month period was due to
lower gas prices and a decline in dekatherm sales.
Other Operating Expenses
Other operating expense variations reflected recurring factors such as growth,
inflation, labor and benefit increases.
Other operations expenses for the three months and 12 months ended March 31,
1998 increased $5 million and $25 million, respectively, compared to the same
year-ago periods due to increases in information system-related costs, automated
meter costs and advertising expenses.
Maintenance expenses for the first quarter of 1998 decreased $1 million compared
to the year-ago quarter due to less scheduled fossil plant maintenance. The $8
million decrease in maintenance expenses for the 12-month period ended March 31,
1998 compared to the prior 12-month period was due to the absence of a Callaway
Plant refueling in the period ended March 31, 1998, partially offset by
increased scheduled fossil plant maintenance. In April 1998, the Callaway Plant
commenced its scheduled refueling outage. The refueling outage was completed in
early May 1998.
Depreciation and amortization expense for the three-month and 12-month periods
ended March 31, 1998, increased $3 million and $8 million, respectively, versus
the comparable 1997 periods, primarily due to increased depreciable property and
amortization of the Missouri portion of merger-related costs which were recorded
as a regulatory asset upon Merger close under the conditions of the Merger
agreement.
In March 1998, Ameren announced plans to reduce its other operating expenses,
including plans to eliminate approximately 400 employee positions by mid-1999
through a hiring freeze and a targeted voluntary separation plan. The Registrant
expects that the voluntary separation plan will result in a charge to earnings
in the third quarter of 1998 once it is known the number of employees that will
accept the terms of the plan. At this time, the Registrant is unable to estimate
the expected charge to earnings resulting from the voluntary separation plan.
Taxes
Income taxes charged to operating expenses for the three months ended March 31,
1998 increased $3 million versus the comparable 1997 period primarily due to
higher pretax income and a higher effective tax rate. The $5 million increase in
3
<PAGE>
income taxes charged to operating expenses for the 12 months ended March 31,
1998 compared to the year-ago period was primarily due to higher pre-tax income.
Other Income and Deductions
Miscellaneous, net increased $14 million for the 12-month period ended March 31,
1998 compared to the year-ago period primarily due to the reversal of the
Missouri portion of merger-related costs which were recorded as a regulatory
asset upon Merger close under conditions of the Merger agreement.
Interest
Interest charges for the three months ended March 31, 1998, decreased $1 million
versus the prior-year period, primarily due to the redemption of $40 million of
First Mortgage Bonds in March 1997. The $4 million increase in interest expense
for the 12 months ended March 31, 1998 compared to the prior 12-month period was
primarily due to higher debt outstanding during the year at higher interest
rates.
Balance Sheet
The $39 million decrease in trade accounts receivable and unbilled revenues was
due primarily to lower revenues in February and March 1998 compared to November
and December 1997.
Changes in accounts and wages payable and other taxes accrued result from the
timing of various payments to taxing authorities and suppliers.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities totaled $62 million for the three months
ended March 31, 1998, compared to $66 million during the same 1997 period.
Cash flows used in investing activities totaled $45 million and $73 million for
the three months ended March 31, 1998 and 1997, respectively. Construction
expenditures for the three months ended March 31, 1998 for constructing new or
improving existing facilities, and complying with the Clean Air Act were $43
million. In addition, the Registrant expended $4 million for the acquisition of
nuclear fuel. Capital requirements for the remainder of 1998 are expected to be
principally for construction expenditures and the acquisition of nuclear fuel.
Cash flows used in financing activities were $11 million for the three months
ended March 31, 1998, compared to $17 million provided by financing activities
during the same 1997 period. The Registrant's principal financing activities for
the three months ended March 31, 1998 included the issuance of long-term debt of
$65 million, the issuance of short-term debt of $22 million, the redemption of
$25 million of long-term debt and the payment of dividends.
The Registrant plans to continue utilizing short-term debt to support normal
operations and other temporary requirements. The Registrant is authorized by the
Securities and Exchange Commission under PUHCA to have up to $1 billion of
short-term unsecured debt instruments outstanding at any one time. Short-term
borrowings consist of bank loans (maturities generally on an overnight basis)
and commercial paper (maturities generally within 10 to 45 days). At March 31,
1998, the Registrant had committed bank lines of credit aggregating $154 million
(of which $111 million were unused at such date) which make available interim
financing at various rates of interest based on LIBOR, the bank certificate of
deposit rate or other options. The lines of credit are renewable annually at
various dates throughout the year. At March 31, 1998, the Registrant had $43
million of short-term borrowings.
The Registrant also has a bank credit agreement due 1999 which permits the
borrowing of up to $300 million on a long-term basis. At March 31, 1998, $75
million of such borrowings were outstanding.
Additionally, the Registrant has a lease agreement which provides for the
financing of nuclear fuel. At March 31, 1998, the maximum amount which could be
financed under the agreement was $120 million. Cash provided from financing for
the first quarter of 1998 included issuances under the lease for nuclear fuel of
$1 million, offset in part by $10 million of redemptions. At March 31, 1998,
$109 million was financed under the lease.
RATE MATTERS
As a result of the Electric Service Customer Choice and Rate Relief Law of 1997
providing for electric utility restructuring in Illinois, AmerenUE filed a
proposal with the Illinois Commerce Commission to eliminate the electric
fuel
4
<PAGE>
adjustment clause for Illinois retail customers, thereby including a
historical level of fuel costs in base rates. The ICC approved AmerenUE's filing
on April 28, 1998.
ACCOUNTING MATTERS
In February 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits." SFAS 132 revises employers'
disclosures about pension and other postretirement benefit plans. SFAS 132 is
effective for fiscal years beginning after December 15, 1998, although earlier
application is encouraged. SFAS 132 is not expected to have a material impact on
the Registrant's financial position or results of operations upon adoption.
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position (SOP)
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." SOP 98-1 provides guidance on accounting for the costs of
computer software developed or obtained for internal use. Under SOP 98-1,
certain costs which are currently expensed by the Registrant may be capitalized
and amortized over some future period. SOP 98-1 is effective for fiscal years
beginning after December 15, 1998, although earlier application is encouraged.
At this time, the Registrant is unable to determine the impact of SOP 98-1 on
its financial position or results of operations upon adoption.
SAFE HARBOR STATEMENT
Statements made in this Form 10-Q which are not based on historical facts, are
forward-looking and, accordingly, involve risks and uncertainties that could
cause actual results to differ materially from those discussed. Although such
forward-looking statements have been made in good faith and are based on
reasonable assumptions, there is no assurance that the expected results will be
achieved. These statements include (without limitation) statements as to future
expectations, beliefs, plans, strategies, objectives, events, conditions and
financial performance. In connection with the "Safe Harbor" provisions of the
Private Securities Litigation Reform Act of 1995, the Registrant is providing
this cautionary statement to identify important factors that could cause actual
results to differ materially from those anticipated. Factors include, but are
not limited to, the effects of regulatory actions; changes in laws and other
governmental actions; competition; future market prices for electricity; average
rates for electricity in the Midwest; business and economic conditions; weather
conditions; fuel prices and availability; generation plant performance; monetary
and fiscal policies; and legal and administrative proceedings.
5
<PAGE>
UNION ELECTRIC COMPANY
BALANCE SHEET
UNAUDITED
(Thousands of Dollars, Except Shares)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1998 1997
- ------ ---------- -----------
<S> <C> <C>
Property and plant, at original cost:
Electric $8,838,528 $8,832,039
Gas 200,127 197,959
Other 36,023 36,023
---------- ----------
9,074,678 9,066,021
Less accumulated depreciation and amortization 3,924,812 3,866,925
---------- ----------
5,149,866 5,199,096
Construction work in progress:
Nuclear fuel in process 139,306 134,804
Other 74,060 68,074
---------- ----------
Total property and plant, net 5,363,232 5,401,974
---------- ----------
Investments and other assets:
Nuclear decommissioning trust fund 147,304 122,438
Other 42,839 33,315
---------- ----------
Total investments and other assets 190,143 155,753
---------- ----------
Current assets:
Cash and cash equivalents 8,998 3,232
Accounts receivable - trade (less allowance for doubtful
accounts of $4,104 and $3,645, respectively) 164,993 179,708
Unbilled revenue 47,233 71,156
Other accounts and notes receivable 53,689 41,028
Materials and supplies, at average cost -
Fossil fuel 45,762 49,574
Other 98,060 97,375
Other 18,359 11,040
---------- ----------
Total current assets 437,094 453,113
---------- ----------
Regulatory assets:
Deferred income taxes 610,893 611,740
Other 174,894 179,705
---------- ----------
Total regulatory assets 785,787 791,445
---------- ----------
Total Assets $6,776,256 $6,802,285
========== ==========
CAPITAL AND LIABILITIES
Capitalization:
Common stock, $5 par value, authorized 150,000,000 shares -
outstanding 102,123,834 shares $ 510,619 $ 510,619
Other paid-in capital, principally premium on
common stock 701,896 716,879
Retained earnings 1,126,473 1,159,956
---------- ----------
Total common stockholders' equity 2,338,988 2,387,454
Preferred stock not subject to mandatory redemption 155,197 155,197
Long-term debt 1,875,497 1,846,482
---------- ----------
Total capitalization 4,369,682 4,389,133
---------- ----------
Current liabilities:
Current maturity of long-term debt 30,687 28,797
Short-term debt 43,000 21,300
Accounts and wages payable 95,182 188,014
Accumulated deferred income taxes 42,715 35,809
Taxes accrued 142,426 94,167
Other 136,821 142,859
---------- ----------
Total current liabilities 490,831 510,946
---------- ----------
Accumulated deferred income taxes 1,261,256 1,264,800
Accumulated deferred investment tax credits 148,516 149,891
Regulatory liability 169,507 175,638
Other deferred credits and liabilities 336,464 311,877
---------- ----------
Total Capital and Liabilities $6,776,256 $6,802,285
========== ==========
6
</TABLE>
<PAGE>
UNION ELECTRIC COMPANY
STATEMENT OF INCOME
UNAUDITED
(Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
------------------------------- --------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $ 436,317 $ 440,967 $ 2,183,921 $ 2,150,917
Gas 42,094 46,110 94,243 100,626
Other 174 181 496 509
----------- ----------- ----------- -----------
Total operating revenues 478,585 487,258 2,278,660 2,252,052
OPERATING EXPENSES:
Operations
Fuel and purchased power 111,777 116,191 495,581 504,758
Gas 19,979 27,509 55,923 67,731
Other 100,109 95,477 409,588 384,781
----------- ----------- ----------- -----------
231,865 239,177 961,092 957,270
Maintenance 48,045 49,198 216,273 224,195
Depreciation and amortization 64,521 61,444 251,038 243,158
Income taxes 24,432 21,335 195,863 190,483
Other taxes 47,602 50,517 209,034 212,799
----------- ----------- ----------- -----------
Total operating expenses 416,465 421,671 1,833,300 1,827,905
OPERATING INCOME 62,120 65,587 445,360 424,147
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during
construction 1,017 877 4,601 5,667
Miscellaneous, net (519) (1,081) 7,896 (6,269)
----------- ----------- ----------- -----------
Total other income and deductions 498 (204) 12,497 (602)
INCOME BEFORE INTEREST CHARGES 62,618 65,383 457,857 423,545
INTEREST CHARGES:
Interest 34,160 35,180 137,656 133,966
Allowance for borrowed funds used during construction (1,844) (1,427) (7,093) (6,787)
----------- ----------- ----------- -----------
Net interest charges 32,316 33,753 130,563 127,179
INCOME BEFORE EXTRAORDINARY CHARGE 30,302 31,630 327,294 296,366
----------- ----------- ----------- -----------
EXTRAORDINARY CHARGE (NET OF
INCOME TAXES) -- -- (26,967) --
----------- ----------- ----------- -----------
NET INCOME 30,302 31,630 300,327 296,366
PREFERRED STOCK DIVIDENDS 2,204 2,204 8,817 12,141
----------- ----------- ----------- -----------
NET INCOME AFTER PREFERRED
STOCK DIVIDENDS $ 28,098 $ 29,426 $ 291,510 $ 284,225
=========== =========== =========== ===========
7
</TABLE>
<PAGE>
UNION ELECTRIC COMPANY
STATEMENT OF CASH FLOWS
UNAUDITED
(Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1998 1997
<S> <C> <C>
Cash Flows From Operating:
Net income $ 30,302 $ 31,630
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 62,242 59,165
Amortization of nuclear fuel 9,617 9,834
Allowance for funds used during construction (2,861) (2,304)
Deferred income taxes, net (1,922) (296)
Deferred investment tax credits, net (1,375) (1,543)
Changes in assets and liabilities:
Receivables, net 25,977 44,750
Materials and supplies 3,127 8,238
Accounts and wages payable (92,832) (105,857)
Taxes accrued 48,259 45,966
Other, net (18,690) (24,028)
--------- ---------
Net cash provided by operating activities 61,844 65,555
Cash Flows From Investing:
Construction expenditures (43,186) (71,942)
Allowance for funds used during construction 2,861 2,304
Nuclear fuel expenditures (4,422) (3,722)
--------- ---------
Net cash used in investing activities (44,747) (73,360)
Cash Flows From Financing:
Dividends on common stock (61,581) (64,849)
Dividends on preferred stock (2,204) (2,204)
Redemptions -
Nuclear fuel lease (10,407) (4,615)
Long-term debt (25,000) (40,000)
Preferred stock -- (63,924)
Issuances -
Nuclear fuel lease 1,161 11,910
Short-term debt 21,700 22,600
Long-term debt 65,000 158,000
--------- ---------
Net cash provided by (used in) financing activities (11,331) 16,918
Net increase in cash and cash equivalents 5,766 9,113
Cash and cash equivalents at beginning of year 3,232 4,897
--------- ---------
Cash and cash equivalents at end of period $ 8,998 $ 14,010
========= =========
Cash paid during the periods:
Interest (net of amount capitalized) $ 19,210 $ 20,981
Income taxes, net $ (3,072) $ 1
8
</TABLE>
<PAGE>
UNION ELECTRIC COMPANY
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1998
Note 1 - Effective December 31, 1997, following the receipt of all required
state and federal regulatory approvals, Union Electric Company (AmerenUE or the
Company) and CIPSCO Incorporated (CIPSCO) combined to form Ameren Corporation
(Ameren)(the Merger).
Note 2 - Financial statement note disclosures, normally included in financial
statements prepared in conformity with generally accepted accounting principles,
have been omitted in this Form 10-Q pursuant to the Rules and Regulations of the
Securities and Exchange Commission. However, in the opinion of the Registrant,
the disclosures contained in this Form 10-Q are adequate to make the information
presented not misleading. See Notes to Financial Statements included in the 1997
Form 10-K for information relevant to the financial statements contained in this
Form 10-Q, including information as to the significant accounting policies of
the Registrant.
Note 3 - In the opinion of the Registrant the interim financial statements filed
as part of this Form 10-Q reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results for the
periods presented. Registrant's financial statements were prepared to permit the
information required in the Financial Data Schedule (FDS), Exhibit 27, to be
directly extracted from the filed statements. The FDS amounts correspond to or
are calculable from the amounts reported in the financial statements or notes
thereto.
Note 4 - Due to the effect of weather on sales and other factors which are
characteristic of public utility operations, financial results for the periods
ended March 31, 1998 and 1997 are not necessarily indicative of trends for any
three-month or twelve-month period.
Note 5 - On July 21, 1995, the Missouri Public Service Commission (MoPSC)
approved an agreement involving the Registrant's Missouri electric rates. The
Agreement included a three-year experimental alternative regulation plan that
provides that earnings in excess of a 12.61 percent regulatory return on equity
(ROE) will be shared equally between customers and shareholders and earnings
above 14 percent ROE will be credited to customers. The formula for computing
the credit uses twelve-month results ending June 30, rather than calendar year
earnings. During the three months ended March 31, 1998, the Registrant recorded
an estimated $10 million credit for the third year of the plan compared to $20
million recorded for 1997. This credit, which the Registrant expects to pay to
Missouri customers later this year, was reflected as a reduction in electric
revenues. The final amount of the credit will depend on several factors,
including the Registrant's earnings for 12 months ending June 30, 1998.
A new three-year experimental alternative regulation plan was included in the
joint agreement approved by the MoPSC in its February 1997 order approving the
Merger. Like the current plan, the new plan requires that earnings over a 12.61
percent ROE up to a 14 percent ROE will be shared equally between customers and
stockholders. The new three-year plan will also return to customers 90 percent
of all earnings above a 14 percent ROE up to a 16 percent ROE. Earnings above 16
percent ROE would be credited entirely to customers.
Note 6 - Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income" became effective on January 1, 1998. SFAS 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in the financial statements with
the same prominence as other financial statement components. Adoption of SFAS
130 did not have a material effect on the financial position, results of
operations, liquidity or presentation of financial information of the
Registrant.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of stockholders of the Registrant held on
April 28, 1998, the following matter was presented to the meeting for a vote and
the results of such voting are as follows:
<TABLE>
<CAPTION>
Item (1) Election of Directors.
Non-Voted
Name For Withheld Brokers
<S> <C> <C> <C>
Paul A. Agathen......................... 104,211,083 17,752 0
Donald E. Brandt........................ 104,210,108 18,552 0
Charles W. Mueller...................... 104,211,083 17,752 0
Gary L. Rainwater....................... 104,210,683 18,152 0
Charles J. Schukai...................... 104,210,314 17,852 0
</TABLE>
10
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 12 - Computation of Ratio of Earnings to
Fixed Charges and Preferred Stock
Dividend Requirements, 12 Months
Ended March 31, 1998.
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K. During the quarter, the Registrant filed
a report on Form 8-K dated January 20, 1998 reporting the impact of utility
restructuring legislation in Illinois and the expectation of lower earnings for
1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
UNION ELECTRIC COMPANY
(Registrant)
May 13, 1998 By /s/ Donald E. Brandt
---------------------------
Donald E. Brandt
Senior Vice President
Finance and Corporate Services
11
UNION ELECTRIC COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
12 Months
Year Ended December 31, Ended
-------------------------------------------------------------- March 31,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
Thousands of Dollars Except Ratios
<S> <C> <C> <C> <C> <C> <C>
Net Income $ 297,160 $ 320,757 $ 314,107 $ 304,876 $ 301,655 $ 300,327
Add- Extraordinary items net of tax -- -- -- -- 26,967 26,967
--------- --------- --------- --------- --------- ---------
Net Income from continuing operations $ 297,160 $ 320,757 $ 314,107 $ 304,876 $ 328,622 $ 327,294
Add- Federal and state income taxes:
Current 146,900 232,497 222,072 198,405 234,846 238,740
Deferred (net) 40,039 (20,208) (6,770) 4,160 (33,926) (35,514)
Deferred investment tax credits, net (7,626) (6,182) (6,181) (6,182) (10,451) (10,282)
Income tax applicable to nonoperating income 3,403 (2,280) (1,387) (173) 9,294 9,057
--------- --------- --------- --------- --------- ---------
182,716 203,827 207,734 196,210 199,763 202,001
--------- --------- --------- --------- --------- ---------
Net income before income taxes 479,876 524,584 521,841 501,086 528,385 529,295
--------- --------- --------- --------- --------- ---------
Add- fixed charges:
Interest on long term debt 124,430 135,608 129,239 128,375 135,004 134,018
Rentals 1,314 1,299 3,330 3,458 3,727 3,587
Amortization of net debt premium, discount,
expenses and losses 5,170 5,504 5,502 4,269 3,672 3,638
--------- --------- --------- --------- --------- ---------
130,914 142,411 138,071 136,102 142,403 141,243
--------- --------- --------- --------- --------- ---------
Earnings as defined 610,790 666,995 659,912 637,188 670,788 670,538
========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges 4.66 4.68 4.78 4.68 4.71 4.74
Earnings required for preferred dividends:
Preferred stock dividends 14,087 13,252 13,250 13,249 8,817 8,817
Adjustment to pre-tax basis 7,450 7,262 7,558 7,363 4,509 4,320
--------- --------- --------- --------- --------- ---------
21,537 20,514 20,808 20,612 13,326 13,137
Fixed charges plus preferred stock dividend
requirements 152,451 162,925 158,879 156,714 155,729 154,380
========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges plus
preferred stock dividend requirements 4.00 4.09 4.15 4.06 4.30 4.34
========= ========= ========= ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
Exhibit 27
UNION ELECTRIC COMPANY
10-Q MARCH 31, 1998
FINANCIAL DATA SCHEDULE UT
PUBLIC UTILITY COMPANIES AND PUBLIC UTILITY HOLDING COMPANIES
APPENDIX E TO ITEM 601 (C) OF REGULATION S-K
(Thousands of Dollars)
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 5,363,232
<OTHER-PROPERTY-AND-INVEST> 147,304
<TOTAL-CURRENT-ASSETS> 437,094
<TOTAL-DEFERRED-CHARGES> 42,839
<OTHER-ASSETS> 785,787
<TOTAL-ASSETS> 6,776,256
<COMMON> 510,619
<CAPITAL-SURPLUS-PAID-IN> 701,896
<RETAINED-EARNINGS> 1,126,473
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,338,988
0
155,197
<LONG-TERM-DEBT-NET> 1,797,250
<SHORT-TERM-NOTES> 43,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 78,247
<LEASES-CURRENT> 30,687
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,332,887
<TOT-CAPITALIZATION-AND-LIAB> 6,776,256
<GROSS-OPERATING-REVENUE> 478,585
<INCOME-TAX-EXPENSE> 24,432
<OTHER-OPERATING-EXPENSES> 392,033
<TOTAL-OPERATING-EXPENSES> 416,465
<OPERATING-INCOME-LOSS> 62,120
<OTHER-INCOME-NET> 498
<INCOME-BEFORE-INTEREST-EXPEN> 62,618
<TOTAL-INTEREST-EXPENSE> 32,316
<NET-INCOME> 30,302
2,204
<EARNINGS-AVAILABLE-FOR-COMM> 28,098
<COMMON-STOCK-DIVIDENDS> 61,581
<TOTAL-INTEREST-ON-BONDS> <F1> 0
<CASH-FLOW-OPERATIONS> 61,844
<EPS-PRIMARY> 0.00<F2>
<EPS-DILUTED> 0.00<F2>
<FN>
<F1> Required on fiscal year-end only
<F2> Information not normally disclosed in financial statements and notes.
</FN>
</TABLE>
