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 the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ........ to ........
Commission Registrant; State of Incorporation; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
___________ ___________________________________ __________________
1-10628 CIPSCO INCORPORATED 37-1260920
(An Illinois Corporation)
607 East Adams Street
Springfield, Illinois 62739
217-523-3600
1-3672 CENTRAL ILLINOIS PUBLIC SERVICE COMPANY 37-0211380
(An Illinois Corporation)
607 East Adams Street
Springfield, Illinois 62739
217-523-3600
Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject
to such filing requirements for the past 90 days.
Yes X No
_____ _____
Indicate the number of shares outstanding of each of the issuers' classes
of common stock, as of the latest practicable date:
CIPSCO INCORPORATED Common stock, no par value, 34,069,542 shares
outstanding July 31, 1996
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Common stock, no par value, 25,452,373
shares outstanding and held by
CIPSCO INCORPORATED at July 31, 1996
CIPSCO INCORPORATED
AND
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996
CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CIPSCO INCORPORATED
Consolidated Statements of Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Statements of Income
Balance Sheets
Statements of Cash Flows
CONDENSED NOTES TO FINANCIAL STATEMENTS of
CIPSCO Incorporated and Central Illinois
Public Service Company
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations for CIPSCO Incorporated and
Central Illinois Public Service Company
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
Exhibit 12
The unaudited interim financial statements presented herein include the
consolidated statements of CIPSCO Incorporated and Subsidiaries ("Company")
as well as separate financial statements for Central Illinois Public
Service Company ("CIPS"). The unaudited statements have been prepared by
the Company and CIPS, respectively, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company and CIPS believe the disclosures are adequate to make the
information presented not misleading. Both the Company's consolidated
financial statements and the CIPS financial statements should be read in
conjunction with the financial statements and notes thereto included in the
combined Annual Report on Form 10-K of CIPSCO Incorporated and CIPS for the
year ended December 31, 1995.
In the opinion of the Company and CIPS, their respective interim financial
statements filed as part of this Form 10-Q reflect all adjustments
necessary to present fairly the results for the respective periods. Due to
the effect of weather and other factors which are characteristic of CIPS'
utility operations, financial results for the periods ended June 30, 1996
and 1995 are not necessarily indicative of trends for any twelve-month
period.
This financial and other information is not given in connection with any
sale or offer to buy any security.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
CIPSCO INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
For the Periods Ended June 30, 1996 and 1995
(in thousands except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
_______________________ __________________
1996 1995 1996 1995
________ ________ ________ ________
<S> <C> <C> <C> <C>
Operating Revenues:
Electric.......................... $169,922 $163,500 $341,210 $316,688
Gas............................... 20,941 18,603 85,359 74,290
Investment........................ 2,909 1,841 5,082 3,428
________ ________ ________ _______
Total operating revenues....... 193,772 183,944 431,651 394,406
________ ________ ________ _______
Operating Expenses:
Fuel for electric generation...... 50,567 39,977 106,715 90,856
Purchased power................... 11,810 19,132 24,931 26,238
Gas costs......................... 11,484 8,937 52,681 43,069
Other operation................... 34,572 35,012 69,207 76,536
Maintenance....................... 19,535 18,467 30,971 30,672
Depreciation and amortization..... 22,217 20,674 43,130 41,275
Taxes other than income taxes..... 13,371 12,587 29,384 28,349
________ ________ ________ ________
Total operating expenses....... 163,556 154,786 357,019 336,995
________ ________ ________ ________
Operating Income.................... 30,216 29,158 74,632 57,411
________ ________ ________ ________
Interest and Other Charges:
Interest on long-term debt of
subsidiary........................ 8,281 8,160 16,560 16,298
Other interest charges............ 484 (39) 927 360
Allowance for funds used during
construction...................... (150) (223) (175) (408)
Preferred stock dividends of
subsidiary........................ 925 971 1,864 1,939
Miscellaneous, net................ 860 (1,022) 1,062 (1,337)
________ ________ ________ ________
Total interest and other
charges............................. 10,400 7,847 20,238 16,852
________ ________ ________ ________
Income Before Income Taxes.......... 19,816 21,311 54,394 40,559
_________ ________ ________ ________
Income Taxes........................ 7,834 8,425 21,294 15,105
________ ________ ________ ________
Net Income.......................... $ 11,982 $ 12,886 $ 33,100 $ 25,454
======== ======== ======== ========
Average Shares of Common Stock
Outstanding......................... 34,070 34,070 34,070 34,070
Earnings per Average Share of
Common Stock........................ $ .35 $ .38 $ .97 $ .75
The accompanying condensed notes to financial statements are an integral
part of these statements.
</TABLE>
<TABLE>
CIPSCO INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
June 30,1996 and December 31, 1995
(in thousands)
June 30, December 31,
1996 1995
_____________ ____________
(unaudited)
ASSETS
<S> <C> <C>
Utility Plant, at original cost:
Electric..................................................... $2,342,630 $2,296,402
Gas.......................................................... 233,403 229,118
__________ __________
2,576,033 2,525,520
Less-Accumulated depreciation................................ 1,165,985 1,132,355
__________ __________
1,410,048 1,393,165
Construction work in progress................................ 51,974 72,490
__________ __________
1,462,022 1,465,655
__________ __________
Current Assets:
Cash......................................................... 2,697 1,088
Temporary investments, at cost which approximates
market....................................................... 8,787 7,147
Accounts receivable, net..................................... 78,623 65,267
Accrued unbilled revenues.................................... 23,752 27,234
Materials and supplies, at average cost...................... 40,281 40,246
Fuel for electric generation, at average cost................ 34,012 42,634
Gas stored underground, at average cost...................... 7,091 9,774
Prepayments.................................................. 9,402 10,649
Other current assets......................................... 8,251 8,197
__________ __________
212,896 212,236
__________ __________
Investments and Other Assets:
Marketable securities........................................ 48,878 45,967
Leveraged leases and energy investments...................... 60,243 59,114
Other........................................................ 48,302 44,939
__________ __________
157,423 150,020
__________ __________
$1,832,341 $1,827,911
========== ==========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholders' equity.................................. $ 649,947 $ 651,532
Preferred stock of subsidiary................................ 80,000 80,000
Long-term debt of subsidiary................................. 464,077 478,926
__________ __________
1,194,024 1,210,458
__________ __________
Current Liabilities:
Long-term debt of subsidiary due within one year............. 15,000 -
Short-term borrowings........................................ 38,482 47,921
Accounts payable............................................. 52,109 60,603
Accrued wages................................................ 10,358 9,335
Accrued taxes................................................ 14,677 11,266
Accrued interest............................................. 9,459 9,525
Other........................................................ 52,725 33,265
__________ __________
192,810 171,915
__________ __________
Deferred Credits:
Accumulated deferred income
taxes........................................................ 326,341 325,181
Investment tax credits....................................... 50,560 52,234
Regulatory liabilities, net.................................. 68,606 68,123
__________ __________
445,507 445,538
__________ __________
$1,832,341 $1,827,911
========== ==========
The accompanying condensed notes to financial statements are an integral
part of these statements.
</TABLE>
<TABLE>
CIPSCO INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Periods Ended June 30, 1996 and 1995
(in thousands)
(unaudited)
Six Months Ended
June 30,
_________________________
1996 1995
__________ __________
<S> <C> <C>
Operating Activities:
Net income................................................... $ 33,100 $ 25,454
Adjustments to reconcile net income to net cash provided:
Depreciation and amortization.............................. 43,130 41,275
Allowance for equity funds used during construction
(AFUDC).................................................... (77) (377)
Deferred income taxes, net................................. 95 2,619
Investment tax credit amortization......................... (1,674) (1,681)
Cash flows impacted by changes in assets and liabilities:
Accounts receivable, net and accrued unbilled revenues..... (9,874) 20,825
Fuel for electric generation............................... 8,622 (15,798)
Other inventories.......................................... 2,648 3,172
Prepayments................................................ 1,247 (1,792)
Other assets............................................... (3,417) (823)
Accounts payable and other................................. 10,966 8,228
Accrued wages, taxes and interest.......................... 4,368 5,931
Other........................................................ 559 (4,078)
__________ __________
Net cash provided by operating activities.................. 89,693 82,955
__________ __________
Investing Activities:
Utility construction expenditures, excluding AFUDC........... (38,208) (42,162)
Allowance for borrowed funds used during construction........ (98) (31)
Changes in temporary investments............................. (1,640) (8,241)
Long-term marketable securities.............................. (2,466) (62)
Long-term leveraged leases and energy investments............ (1,129) (1,064)
__________ __________
Net cash used in investing activities...................... (43,541) (51,560)
__________ __________
Financing Activities:
Common stock dividends paid.................................. (35,092) (34,410)
Proceeds from issuance of long-term debt of subsidiary....... - 20,000
Repayment of long-term debt of subsidiary.................... _ (15,000)
Proceeds from issuance of (repayment of) short-term
borrowings................................................... (9,439) (2,192)
Issuance expense, discount and premium....................... (12) (142)
__________ __________
Net cash used in financing activities...................... (44,543) (31,744)
__________ __________
Net increase (decrease) in cash.............................. 1,609 (349)
Cash at beginning of period.................................. 1,088 1,963
__________ __________
Cash at end of period........................................ $ 2,697 $ 1,614
========== ==========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest, net of amounts capitalized....................... $ 16,273 $ 15,497
Income taxes............................................... $ 22,802 $ 15,128
The accompanying condensed notes to financial statements are an integral
part of these statements.
</TABLE>
<TABLE>
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Statements of Income
For the Periods Ended June 30, 1996 and 1995
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
_______________________ _______________________
1996 1995 1996 1995
________ ________ ________ ________
<S> <C> <C> <C> <C>
Operating Revenues:
Electric....................................... $169,929 $163,506 $341,224 $316,701
Gas............................................ 20,942 18,604 85,361 74,292
________ ________ ________ ________
Total operating revenues.................... 190,871 182,110 426,585 390,993
________ ________ ________ ________
Operating Expenses:
Fuel for electric generation................... 50,567 39,977 106,715 90,856
Purchased power................................ 11,810 19,132 24,931 26,238
Gas costs...................................... 11,484 8,937 52,681 43,069
Other operation................................ 34,250 34,708 68,541 75,844
Maintenance.................................... 19,534 18,467 30,969 30,672
Depreciation and amortization.................. 22,090 20,554 42,876 41,034
Taxes other than income taxes.................. 13,363 12,575 29,371 28,326
Income taxes:
Current...................................... 8,896 7,097 25,486 16,604
Deferred, net................................ (966) 1,630 (3,748) (712)
Deferred investment tax credits, net......... (837) (840) (1,674) (1,681)
________ ________ ________ ________
Total operating expenses.................... 170,191 162,237 376,148 350,250
________ ________ ________ ________
Operating Income................................. 20,680 19,873 50,437 40,743
________ ________ ________ ________
Other Income and Deductions:
Allowance for equity funds used during
construction................................... 66 206 77 377
Nonoperating income taxes...................... (40) (553) (338) (820)
Miscellaneous, net............................. (829) 1,185 (1,000) 1,699
________ ________ ________ ________
Total other income and deductions........... (803) 838 (1,261) 1,256
________ ________ ________ ________
Income Before Interest Charges................... 19,877 20,711 49,176 41,999
________ ________ ________ ________
Interest Charges:
Interest on long-term debt..................... 8,281 8,160 16,560 16,298
Other interest charges......................... 484 (56) 927 337
Allowance for borrowed funds used during
construction................................... (84) (17) (98) (31)
________ ________ ________ ________
Total interest charges..................... 8,681 8,087 17,389 16,604
________ ________ ________ ________
Net Income....................................... 11,196 12,624 31,787 25,395
Preferred Stock Dividends........................ 925 971 1,864 1,939
________ ________ ________ ________
Earnings for Common Stock........................ $ 10,271 $ 11,653 $ 29,923 $ 23,456
======== ======== ======== ========
The accompanying condensed notes to financial statements are an integral
part of these statements.
</TABLE>
<TABLE>
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Balance Sheets
June 30, 1996 and December 31, 1995
(in thousands)
June 30, December 31,
1996 1995
_____________ ____________
(unaudited)
ASSETS
<S> <C> <C>
Utility Plant, at original cost:
Electric..................................................... $2,342,630 $2,296,402
Gas.......................................................... 233,403 229,118
__________ __________
2,576,033 2,525,520
Less-Accumulated depreciation................................ 1,165,985 1,132,355
__________ __________
1,410,048 1,393,165
Construction work in progress................................ 51,974 72,490
__________ __________
1,462,022 1,465,655
__________ __________
Current Assets:
Cash......................................................... 2,650 1,006
Accounts receivable, net..................................... 78,805 65,574
Accrued unbilled revenues.................................... 23,752 27,234
Materials and supplies, at average cost...................... 40,281 40,246
Fuel for electric generation, at average cost................ 34,012 42,634
Gas stored underground, at average cost...................... 7,091 9,774
Prepayments.................................................. 8,302 10,268
Other current assets......................................... 8,253 8,226
__________ __________
203,146 204,962
__________ __________
Other Assets................................................... 47,293 44,188
__________ __________
$1,712,461 $1,714,805
========== ==========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholder's equity.................................. $ 566,304 $ 570,419
Preferred stock.............................................. 80,000 80,000
Long-term debt............................................... 464,077 478,926
__________ __________
1,110,381 1,129,345
__________ __________
Current Liabilities:
Long-term debt due within one year........................... 15,000 -
Short-term borrowings........................................ 38,482 47,921
Accounts payable............................................. 51,412 60,791
Accrued wages................................................ 10,358 9,320
Accrued taxes................................................ 15,033 11,155
Accrued interest............................................. 9,459 9,525
Other........................................................ 52,726 33,264
__________ __________
192,470 171,976
__________ __________
Deferred Credits:
Accumulated deferred income taxes............................ 290,444 293,127
Investment tax credits....................................... 50,560 52,234
Regulatory liabilities, net.................................. 68,606 68,123
__________ __________
409,610 413,484
__________ __________
$1,712,461 $1,714,805
========== ==========
The accompanying condensed notes to financial statements are an integral
part of these statements.
</TABLE>
<TABLE>
Central Illinois Public Service Company
Statements of Cash Flows
For the Periods Ended June 30, 1996 and 1995
(in thousands)
(unaudited)
Six Months Ended
June 30,
_________________________
1996 1995
__________ __________
<S> <C> <C>
Operating Activities:
Net income................................................... $ 31,787 $ 25,395
Adjustments to reconcile net income to net cash provided:
Depreciation and amortization.............................. 42,876 41,034
Allowance for equity funds used during construction
(AFUDC).................................................... (77) (377)
Deferred income taxes, net................................. (3,748) (712)
Investment tax credit amortization......................... (1,674) (1,681)
Cash flows impacted by changes in assets and liabilities:
Accounts receivable, net and accrued unbilled revenues..... (9,749) 20,827
Fuel for electric generation............................... 8,622 (15,798)
Other inventories.......................................... 2,648 3,172
Prepayments................................................ 1,966 (1,195)
Other assets............................................... (3,132) (2,527)
Accounts payable and other liabilities..................... 10,083 7,611
Accrued wages, taxes and interest.......................... 4,850 4,734
Other........................................................ 813 (3,837)
_________ _________
Net cash provided by operating activities.................. 85,265 76,646
_________ _________
Investing Activities:
Construction expenditures, excluding AFUDC................... (38,208) (42,162)
Allowance for borrowed funds used during construction........ (98) (31)
_________ _________
Net cash used in investing activities...................... (38,306) (42,193)
Financing Activities:
Proceeds from issuance of long-term debt..................... - 20,000
Repayment of long-term debt.................................. - (15,000)
Repayment of short-term borrowings........................... (9,439) (2,192)
Dividends paid:
Preferred stock............................................ (1,864) (1,939)
Common stock............................................... (34,000) (35,000)
Issuance expense, discount and premium....................... (12) (142)
_________ _________
Net cash used in financing activities...................... (45,315) (34,273)
_________ _________
Net increase (decrease) in cash.............................. 1,644 180
Cash at beginning of period.................................. 1,006 1,320
_________ _________
Cash at end of period........................................ $ 2,650 $ 1,500
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest, net of amounts capitalized....................... $ 16,273 $ 15,497
Income taxes............................................... $ 25,238 $ 18,829
The accompanying condensed notes to financial statements are an integral
part of these statements.
</TABLE>
CIPSCO INCORPORATED AND SUBSIDIARIES
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(unaudited)
Note 1. GENERAL
________________
The consolidated financial statements presented herein include the accounts
of CIPSCO INCORPORATED (CIPSCO), CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
(CIPS), and CIPSCO INVESTMENT COMPANY AND SUBSIDIARIES (CIC). CIPSCO and
Subsidiaries are referred to as the "Company." CIPSCO has two first-tier
subsidiaries: CIC, an investment subsidiary, and CIPS, an electric and gas
public utility.
The financial statements of CIPS, a subsidiary of CIPSCO, include only the
accounts of CIPS.
Note 2. COMMITMENTS AND CONTINGENCIES
______________________________________
ENVIRONMENTAL REMEDIATION COSTS - CIPS has identified 13 former
manufactured gas plant sites (environmental remediation sites) which
contain potentially harmful materials. In 1990, one site was added to the
United States Environmental Protection Agency (USEPA) Superfund list. CIPS
is implementing an approved long-term remedial plan for the site. Costs
and associated legal expenses related to studies and remediation work have
been incurred at other sites.
Over the past several years, CIPS has received cash settlements from
certain of its insurance carriers arising from litigation instituted by
CIPS (which is now concluded) seeking indemnification for, among other
things, costs incurred by CIPS in connection with the sites. Effective
with April 1993 billings to customers, CIPS began recovery of clean-up
costs associated with the sites through environmental adjustment clause
riders approved by the Illinois Commerce Commission (the "Illinois
commission"). As required by the Illinois commission, the riders provided
for (1) recovery of cleanup costs from ratepayers (with a credit or offset
to the extent such recovered cleanup costs are reimbursed from insurance
carriers or other parties) and (2) a prudence review (including
determination of what constitutes recoverable environmental cleanup costs
and the amount of such expenditures). The Illinois Supreme Court has ruled
that cleanup costs are recoverable in rates and that use of a rider
mechanism to recover such costs is appropriate. Through December 31, 1993,
CIPS collected $2.9 million under the riders. No amounts have been
collected under the riders since January 1994.
The estimated incurred costs relating to studies and remediation at the 13
sites and associated legal expenses are being accrued and deferred pursuant
to the Illinois commission's orders rather than expensed currently, pending
recovery through rates or from other parties. Through June 30, 1996, $47.8
million had been deferred representing costs incurred and estimates of
costs of completing studies at various sites and estimates of future
remediation costs to be incurred at the Superfund and other sites. The
total of the costs deferred, net of recoveries from insurers and through
the rate riders described above, was $10.2 million at June 30, 1996.
The Illinois commission has initiated reconciliation proceedings to review
CIPS' environmental remediation activities for 1993, 1994 and 1995, and to
determine whether the revenues collected under the riders in 1993 were
consistent with the amount of remediation costs prudently incurred.
Amounts found to have been incorrectly included under the riders would be
subject to refund.
Management believes that any costs incurred in connection with the sites
that are not recovered from others will be recovered through the
environmental rate riders. Accordingly, management believes that costs
incurred in connection with these sites will not have a material adverse
effect on financial position, results of operations, or liquidity of the
Company or CIPS.
FERC ORDERS 888 and 889 - On April 24, 1996, the Federal Energy Regulatory
Commission ("FERC") issued orders 888 and 889 related to its "mega-NOPR"
rulemaking. Citing a goal of enhancing competition in the wholesale market
for generation sales, Order 888 requires transmission-owning public
utilities, such as CIPS, to provide transmission access and service to
others in a manner similar and comparable to that which the utility has by
virtue of transmission ownership. In its Order 888, the FERC adopted a
single pro forma tariff for use by the utility and its transmission
customers in obtaining transmission service. Order 888 also provides for
the recovery of stranded costs at the wholesale level, based on a revenues
lost calculation, which result from the transition to an open access
business environment. In conjunction with the application at the FERC
regarding the merger of CIPSCO and Union Electric Company ("UE") (see Item
5. Other Information), CIPS and UE have filed open access tariffs in
compliance with FERC policy. Because these tariffs were filed under
provisions of the rulemaking prior to the issuance of Order 888, these
tariffs will be revised to comply with the final rule in Order 888. The
compliance tariffs for CIPS and UE will only become effective upon
completion of the merger. In the meantime, CIPS filed an open access
tariff under Rule 888 for transmission service.
Order 889 sets forth the standards of conduct and information requirements
that must be put in place and observed by transmission-owning public
utilities doing business under the open access rule. These include the
establishment by each utility of an "open access same-time information
system", or OASIS. This system will provide all information, on a real time
basis, for the utility and its customers to apply for and obtain transmission
service. Using OASIS, the utility must obtain transmission service for its
own use in the same manner its customer will obtain service, thus assuring
mitigation of market power through control of transmission facilities.
CIPS is preparing to implement the requirements of Order 889.
CLEAN AIR ACT - CIPS' current compliance strategy to meet Phases I and II
of the Clean Air Act Amendments of 1990 (Amendments) is to rely primarily
on switching to a lower sulfur coal at some of its units. CIPS does not
currently expect to rely on increased scrubbing at its Newton Unit 1. The
estimated capital costs of compliance are included in the
five-year construction forecast. On June 20, 1996 CIPS and Amax Coal Sales
Company, a Cyprus Amax Minerals Company ("Cyprus Amax"), a coal supplier
for CIPS' Newton Power Station Unit 1, executed a letter of intent which
contemplates that the parties will enter into a modification of their
existing contract. Under the contract as modified, CIPS would make a $70
million prepayment to Cyprus Amax (scheduled for November 1996)
for future deliveries, and would be able to substitute low-sulfur,
out-of-state coal (which may be procured from Cyprus Amax, its affiliates
or other providers) for the high-sulfur Illinois coal CIPS is currently
obligated to purchase from Cyprus Amax. CIPS would also receive options
for future purchases of low-sulfur, out-of-state coal from
Cyprus Amax or its affiliates in 1997, 1998 and 1999 (the "Contract
Modification"). Effectiveness of the Contract Modification is subject to
execution of definitive agreements by the parties. In addition, CIPS and
Cyprus Amax have agreed that for the remainder of 1996, CIPS will cease
taking delivery of high-sulfur coal under the existing contract and will
make certain alternate low-sulfur, out-of-state coal purchases from Cyprus
Amax or its affiliates. By switching to low-sulfur coal, CIPS will avoid
the need for substantial rennovation to the Newton Unit 1 scrubber. Under
the letter of intent, CIPS would not be required to proceed with the
Contract Modification if CIPS determines that the regulatory treatment of
the transaction is unsatisfactory. On July 17, 1996, CIPS filed an
Application (Docket 96-0345) seeking a review by the Illinois commission of
certain matters related to the Contract Modification, including recovery of
the $70 million prepayment (and associated carrying charges) in rates
over a six-year period, the purchases of out-of-state coal,
continued recovery in rates of the investment in and return on the
scrubber and seeking approval of CIPS' proposed
accounting treatment for the transaction. CIPS cannot predict what
action the Illinois commission will take in this matter. If the Illinois
commission grants substantially all the relief requested, then
this transaction will not have a material adverse effect on financial
position, results of operations or liquidity of the Company or CIPS.
LABOR ISSUES - The International Union of Operating Engineers Local 148 and
the International Brotherhood of Electrical Workers Local 702 have both
filed unfair labor practice charges with the National Labor Relations Board
(NLRB) relating to the legality of the lockout by CIPS of both unions
during 1993. The Peoria Regional Office of the NLRB has issued complaints
against CIPS concerning its lockout of both unions. Both unions seek,
among other things, back pay and other benefits for the period of the
lockout. CIPS estimates the amount of back pay and other benefits for both
unions to be less than $15 million. An administrative law judge of the
NLRB has ruled that the lockout of both unions was unlawful. On July 23,
1996, the Company appealed to the NLRB. Management believes the lockout
was both lawful and reasonable and that the final resolution of the
disputes will not have a material adverse effect on financial position,
results of operations or liquidity of the Company or CIPS.
OTHER ISSUES - CIPS is involved in other legal and administrative
proceedings before various courts and agencies with respect to rates,
taxes, gas and electric fuel cost reconciliations, service area disputes,
environmental torts and other matters. Although unable to predict the
outcome of these matters, management believes that appropriate liabilities
have been established and that final disposition of these actions will not
have a material adverse effect on financial position, results of operations
or liquidity of the Company or CIPS.
Note 3. REGULATORY ASSETS AND LIABILITIES
__________________________________________
Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting for
Effects of Certain Types of Regulation," applies to regulated entities
whose rates are designed to recover the cost of providing service to
customers through the ratemaking process. SFAS No. 71 allows certain costs
that would normally be reflected in net income to be deferred on the
balance sheet as regulatory assets. These costs are then amortized as the
related amounts are reflected in rates. Under current accounting
pronouncements, if a loss with respect to such an asset becomes probable,
any unamortized balance, net of tax, would reduce net income. (See Note
4.)
The Company continually reviews regulatory assets and liabilities. As
shown below, the Company is in a net regulatory liability position at June
30, 1996, and currently believes that there would be no material adverse
impact on results of operations, financial position or liquidity if the
Company or CIPS were to discontinue application of SFAS No. 71.
The components of regulatory assets and liabilities at June 30, 1996 are:
Description Amount
___________ ______
(in thousands)
Regulatory Assets:
Deferred environmental remediation costs $ 10,230
Take-or-Pay costs 966
Unamortized costs related to reacquired debt 12,802
________
Total Regulatory Assets - in
Other Assets on Balance Sheet $ 23,998
========
Regulatory Liabilities:
Clean Air Act allowances, net $ 2,372
SFAS 109 - Income Taxes, net 66,234
________
Total Regulatory Liabilities, Net $ 68,606
========
Regulatory Liabilities Net of Regulatory Assets $ 44,608
========
Note 4. SFAS NO. 121
_____________________
Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of," effective January 1, 1996, established accounting standards
for the impairment of long-lived assets. SFAS No. 121 also required that
regulatory assets which are no longer probable of recovery through future
revenue to be charged to earnings. The adoption of SFAS No. 121 has had no
impact and is not expected to have an impact on the financial position,
results of operations or liquidity of the Company or CIPS.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Company and Union Electric Company entered into a Merger Agreement
dated August 11, 1995 (the "Merger Agreement"). Information concerning the
agreement is included in Part II, Item 5. Other Information of this report.
On July 12, 1996, a joint agreement was filed with the Missouri Public Service
Commission that recommends approval of the merger between the Company and
Union Electric Company. Union Electric Company, the Missouri Public Service
Commission staff, the office of the Public Counsel, several customer groups
and others signed the agreement.
The following discussion and analysis of financial condition and results of
operations is for CIPSCO Incorporated and Subsidiaries ("Company") unless
otherwise stated.
THE OUTLOOK
CIPS currently estimates that its total construction expenditures for the
1996-2000 period will be about $510 million. Projected external financing
requirements for the 1996-2000 period are expected to be $258 million which
includes $133 million for scheduled debt retirements and up to $125
million (less than $100 million in 1996) to fund the construction
program and certain other capital requirements. Other capital requirements
includes the $70 million prepayment related to the proposed coal contract
modification with Cyprus Amax discussed in Note 2 to the Notes to Condensed
Financial Statements of this report under "Clean Air Act." Remaining capital
requirements for the 1996-2000 period are expected to be met through
internally generated funds. The estimated construction expenditures and
other capital requirements as well as anticipated financing plans take into
account the current strategy for compliance with the Clean Air Act, as
amended, and the proposed coal contract modification.
In 1995 CIPS issued $20 million First Mortgage Bonds, Medium-Term Note
Series 1995-1, 6.49%, due June 1, 2005. The proceeds of this issue
together with other funds were used for general corporate purposes and to
replace funds used to retire maturing debt. CIPS has an effective shelf
registration statement on file with the Securities and Exchange Commission
which permits the issuance of an aggregate of up to $29 million of first
mortgage bonds, medium-term notes and/or preferred stock.
For the first six months of 1996, CIPS' total capital requirements were
provided from internal sources.
Common stock dividends paid for the twelve months ended June 30, 1996,
resulted in a payout ratio of 88% of the Company's earnings to common
shareholders. Common stock dividends paid to the Company's common
shareholders equalled 45% of net cash provided by operating activities for
the same period.
In connection with consummation of the merger contemplated by the Merger
Agreement, it is expected that the Company will incur $9.3 million of
transaction costs. Through June 30, 1996, these transaction costs totalled
$6.2 million. The Company expects that these costs for 1996 will
approximate $4.7 million (not tax deductible) or 14 cents per share.
FINANCIAL CONDITION
Financial condition and changes in total Shareholder Equity of the Company
and CIPS for the six-month periods ended June 30, 1996 and 1995 are as
follows:
Six Months Ended
June 30,
_________________________
(in thousands)
The Company: 1996 1995
_________ _________
Common Shareholders' Equity
Net income $ 33,100 $ 25,454
Common stock dividends paid (35,092) (34,410)
Other 407 1,710
________ ________
Change in Shareholders' Equity $ (1,585) $ (7,246)
======== ========
Six Months Ended
June 30,
_________________________
(in thousands)
CIPS: 1996 1995
_________ _________
Common Shareholder's Equity
Earnings for common stock $ 29,923 $ 23,456
Common stock dividends paid (34,000) (35,000)
Other (38) (68)
________ ________
Change in Shareholder's Equity $ (4,115) $(11,612)
======== ========
OVERVIEW
The Company's earnings per share were $.35 for the quarter ended June 30,
1996, compared to $.38 per share earned during the same period in 1995.
The decrease primarily reflects increased costs due to timing of scheduled
power plant maintenance and expenses related to CIPSCO's pending merger
with Union Electric Company. The Company's earnings per share were $.97
for the six months ended June 30, 1996, compared to $.75 per share earned
during the same period in 1995. The increase primarily reflects higher
sales due to weather and lower expenses in 1996. The 1995 expenses for the
six months include $.10 per share for the voluntary workforce reduction
program recorded in February 1995.
The following table summarizes the components of consolidated net income
and CIPS earnings for common stock for the three months and six month
periods ended June 30, 1996 and 1995 (see Results of Operations for further
discussion). In this table, electric operating margin equals electric
operating revenues less revenue taxes, fuel for electric generation and
purchased power. Gas operating margin equals gas operating revenues less
revenue taxes and gas costs.
Second Quarter Six Months Ended
Ended June 30, June 30,
__________________ ___________________
1996 1995 1996 1995
________ ________ ________ ________
CIPS
Electric operating
margin $101,948 $ 99,236 $197,924 $188,449
Gas operating margin 7,952 8,506 27,651 26,618
Other deductions and
interest expenses (98,704) (95,118) (193,788) (189,672)
CIPS preferred stock
dividends (925) (971) (1,864) (1,939)
________ ________ ________ ________
Total earnings
for common stock 10,271 11,653 29,923 23,456
________ ________ ________ ________
NON-UTILITY
Investment revenues 2,875 1,676 5,015 3,059
Other deductions
and expenses (1,164) (443) (1,838) (1,061)
________ ________ ________ ________
Total non-utility
net income 1,711 1,233 3,177 1,998
________ ________ ________ ________
Consolidated net income $ 11,982 $ 12,886 $ 33,100 $ 25,454
======== ======== ======== ========
RESULTS OF OPERATIONS
The results of operations of the Company and CIPS for the three months and
six months ended June 30, 1996, compared to the same periods in 1995 are
presented below.
The Company
Net Income
(in thousands) Earnings Per Share
________________________ ________________________
Three Months Six Months Three Months Six Months
____________ __________ ____________ __________
1996 $11,982 $33,100 $ .35 $ .97
1995 12,886 25,454 .38 .75
_______ _______ _____ _____
Increase (Decrease) $ (904) $ 7,646 $(.03) $ .22
Percent
Increase (Decrease) (7)% 30% (8)% 29%
CIPS
Earnings for Common Stock
(in thousands)
__________________________
Three Months Six Months
____________ __________
1996 $10,271 $29,923
1995 11,653 23,456
_______ _______
Increase (Decrease) $(1,382) $ 6,467
======= =======
Percent
Increase (Decrease) (12)% 28 %
OPERATING REVENUES
The changes in electric and gas revenues described below are for the
Company. The only differences between changes in electric and gas
operating revenues for the Company and for CIPS are intercompany revenues
that are eliminated in the consolidated financial statements. These
intercompany amounts are immaterial.
Electric revenues increased 4% in the second quarter of 1996 compared to
the second quarter of 1995 reflecting higher retail KWH sales due
principally to weather conditions in 1996. KWH sales to residential and
commercial customers increased 10% and 5%, respectively, due to the higher
heating and cooling degree days in the second quarter of 1996. Industrial
electric sales increased 3% in the second quarter of 1996 compared to the
same quarter in 1995 due to economic growth in the service territory.
Public authorities and other revenues increased 11% in the second quarter
of 1996 compared to the same period of 1995 due to an
increase in gains on disposition of clean air emission credits which are
included in revenues, but returned to customers through the fuel adjustment
clause. Power supply agreement revenues for the second quarter of 1996 are
7% above those of the second quarter 1995 due to increased capacity and
transportation revenues related to these agreements. Economy and emergency
interchange sales decreased 31% in the second quarter of 1996 over the same
period in 1995 due to unfavorable market conditions in the interchange
marketplace. Sales to cooperatives and municipals increased in the second
quarter of 1996 compared to the same quarter in 1995 due primarily to
weather conditions in 1996. One cooperative, Soyland Power Cooperative,
with whom CIPS has a power supply apreement for up to 102 megawatts
through 1999, is experiencing financial difficulties. These sales are
recorded under Power Supply Agreements. As of June 30, 1996, Soyland
was current in the payment of all of its obligations to CIPS.
Electric revenues increased 8% in the first six months of 1996 compared to
the same period of 1995 reflecting higher KWH sales due principally to
weather conditions in 1996. KWH sales to residential and commercial
customers increased 9% and 5%, respectively, due to the weather while
industrial electric sales, which are less weather sensitive, had 2% growth.
Public authorities and other revenues increased 3% in the first six months
of 1996 compared to the same period of 1995 due to timing of miscellaneous
revenues, which are included in this category. Power supply agreement
revenues for the six months ended June 30, 1996, are 4% above those of the
same period in 1995 due to increased capacity and transportation revenues
related to these agreements. Economy and emergency interchange sales
increased 5% in the first six months of 1996 over the same period in 1995
due to favorable market conditions in the interchange marketplace. Sales
to cooperatives and municipals increased in the six months ended June 30,
1996 compared to the same period in 1995 due primarily to favorable weather
conditions in 1996.
<TABLE>
The changes in electric revenue and KWH sales are shown below:
CHANGES IN ELECTRIC REVENUE AND
KILOWATTHOUR SALES
INCREASE (DECREASE) FROM PRIOR YEAR
(in thousands)
______________________________________ ________________________________
Second Quarter Six Months
______________________________________ ________________________________
Revenue Rev % KWH KWH % Revenue Rev % KWH KWH %
________ _____ _________ _____ ________ _____ _________ _____
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Residential $ 3,955 8 % 53,266 10 % $ 7,255 7 % 116,401 9 %
Commercial 1,878 4 29,864 5 4,570 6 67,278 5
Industrial 1,662 6 19,182 3 1,869 3 21,894 2
Public Authorities
and Other 460 11 1,041 3 321 3 (3,732) (4)
________ _______ ________ _______
Total Retail $ 7,955 6 % 103,353 6 % $ 14,015 6 % 201,841 5 %
Power Supply
Agreements $ 1,068 7 % 18,780 6 % $ 1,463 4 % 13,207 2 %
Interchange Sales
(economy/emergency) (3,049) (16) (360,443) (31) 8,033 29 76,642 5
Cooperatives and
Municipals 448 9 6,329 5 1,011 10 16,581 7
________ _______ ________ _______
Total Sales for
Resale $ (1,533) (4)% (335,334) (21) % $ 10,507 15 % 106,430 4 %
________ _______ ________ _______
Total $ 6,422 4 % (231,981) (7) % $ 24,522 8 % 308,271 5 %
======== ======== ======== =======
</TABLE>
Gas revenues increased 13% in the second quarter and 15% in the first six
months of 1996 compared to the same periods in 1995 due to colder weather
in 1996 and higher purchased gas costs which flow through to revenues
through the Purchased Gas Adjustment Clause (PGA). Residential gas
revenues improved 11% for the second quarter and 13% for the first six
months of 1996 compared to 1995 due to colder weather in 1996. The
commercial and industrial gas revenue improved 19% and 27%, respectively,
in the second quarter and 18% and 38% in the first six months of 1996 over
the same periods in 1995 due to both the increase in purchased gas costs
discussed above, and to more customers buying from CIPS in 1996 rather than
transporting their own gas. Gas transportation revenues declined 4% in the
second quarter but remained about the same in the first six months of 1996
even though therms transported declined 2% over the same periods in 1995.
The transportation revenue remains about the same in 1996 even though sales
decreased because curtailment fines and penalties were charged to
interruptible gas customers in 1996 who used more gas than contractually
allowed.
<TABLE>
The changes in gas revenues and therm sales are shown below.
CHANGES IN GAS REVENUE AND THERM SALES
INCREASE (DECREASE) FROM PRIOR YEAR
(in thousands)
_________________________________________ _________________________________________
Second Quarter Six Months
_________________________________________ _________________________________________
Revenue Rev % Therms Therms Revenue Rev % Therms Therms
% %
________ _____ ______ ______ _______ _____ ______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Residential $ 1,258 11 % 1,919 11 % $ 6,569 13 % 14,485 17 %
Commercial 656 19 892 16 2,835 18 5,952 20
Industrial 458 27 198 4 1,644 38 4,780 37
Transportation (66) (4) (471) (2) (2) - (1,219) (2)
Miscellaneous 32 33 - - 23 (9) - -
________ ______ ________ ______
Total $ 2,338 13 % 2,538 4 % $ 11,069 15 % 23,998 12 %
======== ====== ======== ======
</TABLE>
OPERATIONS
__________
Fuel for electric generation increased 26% in the second quarter and 17% in
the first six months of 1996 compared to the same periods in 1995. The
increases correspond to increased generation of 22% and 16% respectively,
due to higher retail sales levels in the second quarter and in the first
six months of 1996.
Purchased power costs declined 38% for the second quarter and 5% for the
first six months ended June 30, 1996 compared with the same periods in 1995
reflecting decreases in marketable purchases made for resale to interchange
economy and emergency customers and increased generation as described
above.
Gas costs increased 28% for the second quarter and 22% for the first six
months of 1996 when compared to the same periods in 1995 due to increased
gas requirements for the CIPS system and because of a higher average cost
per therm for purchased gas.
Other operation expenses declined 1% in the second quarter due to declines
in administrative and general expenses between periods. Other operation
expenses declined 10% in the first six months of 1996 compared to 1995
primarily due to a $6.3 million charge in February 1995 relating to the
cost of a workforce reduction program and lower medical and benefit costs
in 1996.
Maintenance expenses increased 6% for the second quarter of 1996 and 1% for
the first six months of 1996 compared to the same periods of 1995 due
primarily to the scheduled timing of power plant maintenance projects
between periods.
Depreciation and amortization expense increased 7% in the second quarter
and 4% for the first six months of 1996 when compared to 1995 due to normal
plant additions.
Taxes other than income taxes increased 6% in the second quarter and 4% in
the first six months of 1996 when compared to 1995 due to higher revenue
taxes from increased sales. These revenue taxes are collected from
customers in gas and electric revenues.
Significant changes in the balance sheet accounts at June 30, 1996 compared
to balances at December 31, 1995 are:
Fuel for electric generation, at average cost, decreased 20% for the first
six months of 1996 due to increased generation usage and lower purchases of
compliance coal at one station.
Gas stored underground, at average cost, decreased 27% during the first six
months due to high demands on the system and utilization of the stored gas
to meet the customer demands.
Short-term borrowings declined 20% in the first six months of 1996
reflecting an improved cash position.
Accrued taxes increased 30% reflecting the liability due on federal and
state income taxes due to higher pretax income for the six months ended
June 30, 1996.
Other liabilities increased 58% for the first six months of 1996 due
primarily to overrecovered PGA revenues to be refunded to customers and
postretirement medical costs accrued monthly during the period but not
funded until year-end.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
(1) On August 2, 1996, the Company received notice that the Illinois
Attorney General had filed a complaint with the Illinois Pollution
Control Board alleging various violations of wastewater discharge
permit conditions at the Hutsonville Power Station. The complaint
seeks monetary penalties and the award of attorney fees. The Company,
the Illinois Environmental Protection Agency, and the Attorney
General are continuing to work on a plan to resolve these issues.
While the Company cannot predict the final outcome of these efforts,
it does not believe that the final resolution will have a material
adverse effect on financial position, results of operations or
liquidity of the Company or CIPS.
(2) Reference is made to Item 3. Legal Proceedings on Page 25 in the CIPSCO
and CIPS combined 1995 Annual Report on Form 10-K (the "1995 Form
10-K") for information regarding the complaint filed in the matter
of the CIPS Taylorville gas plant site. On April 17, 1996, the Seventh
Judicial Circuit Court, Sangamon County, Illinois granted approval of
the petition by CIPS requesting transfer of this case to the Circuit
Court for the Fourth Judical Circuit, Christian County, Illinois.
Item 5. Other Information
(1) Reference is made to the first full paragraph under Item 1.
Business - Competition -- Electric Business on page 10 in the
1995 Form 10-K for information regarding economic development
rates and special contracts with certain customers. The Illinois
General Assembly has passed a bill which authorizes the Illinois
commission to approve utility rate schedules that enable the
utility to provide service to customers under contracts that are
treated as proprietary and confidential by the Illinois
commission. The Governor is expected to approve this
legislation.
(2) Reference is made to the third full paragraph under Item 1.
Business - Competition -- Electric Business on page 11 in the
1995 Form 10-K for information regarding proposed "open access"
programs filed with the Illinois commission by two neighboring
electric utilities. On March 18, 1996, CIPS filed a petition
with the Illinois commission seeking authorization to participate
in the approved experimental "open access" programs as a
potential supplier. CIPS is awaiting approval from the Illinois
commission.
(3) Reference is made to the last paragraph under Item 1. Business -
Employees on page 23 in the 1995 Form 10-K for information
regarding the workforce of CIPS and contracts with those
employees represented by labor unions. Management completed
negotiations with IUOE-148, the labor union which represents
approximately 450 employees, resulting in a new three-year
contract ratified by union membership to be effective through
June 30, 1999. Also, management completed negotiations with
IBEW-702, the labor union which represents approximately 900
employees. A tentative agreement was reached which is subject
to ratification by the labor union membership.
(4) AMEREN CORPORATION -- Unaudited Pro Forma Combined Condensed
Financial Information of CIPSCO and Union Electric Company.
On August 11, 1995, CIPSCO and Union Electric Company ("UE") entered
into an Agreement and Plan of Merger, which was subsequently approved
by the shareholders of both parties. The merger ("Merger") is further
conditioned on, among other things, receipt of regulatory and govern-
mental approvals; is expected to be consummated in early 1997; and
will result in a newly formed holding company, Ameren Corporation.
The following unaudited pro forma financial information combines the
historical balance sheets and statements of income of CIPSCO and Union
Electric, including their respective subsidiaries, after giving effect
to the Merger. The unaudited pro forma combined condensed balance
sheet at June 30, 1996 gives effect to the Merger as if it had
occurred at June 30, 1996. The unaudited pro forma combined condensed
statements of income for the six-month periods ended June 30, 1996
and 1995, and the twelve-month period ended June 30, 1996 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 state-
ments and related notes thereto of CIPSCO and Union Electric. 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. In addition, due to
the effect of weather on sales and other factors which are character-
istic of public utility operations, financial results for the six-month
periods ended June 30, 1996 and 1995 are not necessarily indicative
of trends for any twelve-month period.
<TABLE>
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
BALANCE SHEET
AT JUNE 30, 1996
(Thousands of Dollars)
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 $ 8,622,939 $ 2,342,630 $ 374,741 $11,340,310
Gas 178,845 233,403 - 412,248
Other 34,763 - - 34,763
___________ ___________ ___________ ___________
8,836,547 2,576,033 374,741 11,787,321
Less accumulated depreciation and amortization 3,613,616 1,165,985 260,354 5,039,955
___________ ___________ ___________ ___________
5,222,931 1,410,048 114,387 6,747,366
Construction work in progress:
Nuclear fuel in process 148,706 - - 148,706
Other 127,445 51,974 2,886 182,305
___________ ___________ ___________ ___________
Total property and plant, net 5,499,082 1,462,022 117,273 7,078,377
Regulatory asset - deferred income taxes (Note 6) 701,612 43,339 - 744,951
Other assets:
Unamortized debt expense 42,335 15,781 624 58,740
Nuclear decommissioning trust fund 81,778 - - 81,778
Investments in nonregulated activities - 109,121 - 109,121
Other 24,325 32,521 (3,284) 53,562
___________ ___________ ___________ __________
Total other assets 148,438 157,423 (2,660) 303,201
Current assets:
Cash and temporary investments 15,970 11,484 2,889 30,343
Accounts receivable, net 196,568 78,623 20,164 295,355
Unbilled revenue 122,837 23,752 - 146,589
Materials and supplies, at average cost -
Fossil fuel 54,830 41,103 6,817 102,750
Other 96,311 40,281 4,707 141,299
Other 29,515 17,653 3,467 50,635
___________ ___________ ___________ __________
Total current assets 516,031 212,896 38,044 766,971
___________ ____________ ___________ ___________
Total Assets $ 6,865,163 $ 1,875,680 $ 152,657 $ 8,893,500
=========== =========== =========== ===========
CAPITAL AND LIABILITIES
Capitalization:
Common stock (Note 2) $ 510,619 $ 356,812 $ (866,059) $ 1,372
Other stockholders' equity (Note 2) 1,778,385 293,135 866,059 2,937,579
___________ ___________ ___________ ___________
Total common stockholders' equity 2,289,004 649,947 - 2,938,951
Preferred stock of subsidiary 219,121 80,000 - 299,121
Long-term debt 1,825,208 464,077 130,000 2,419,285
___________ ___________ ___________ ___________
Total capitalization 4,333,333 1,194,024 130,000 5,657,357
Minority interest in consolidated subsidiary - - 3,534 3,534
Accumulated deferred income taxes 1,325,046 326,341 (6,937) 1,644,450
Accumulated deferred investment tax credits 163,430 50,560 - 213,990
Regulatory liability 210,160 111,945 - 322,105
Accumulated provision for nuclear decommissioning 83,451 - - 83,451
Other deferred credits and liabilities 152,541 - 4,753 157,294
Current liabilities:
Current maturity of long-term debt 76,599 15,000 - 91,599
Short-term debt 70,000 38,482 - 108,482
Accounts payable 108,665 52,109 17,925 178,699
Wages payable 33,599 10,358 - 43,957
Taxes accrued 141,162 14,677 69 155,908
Interest accrued 45,033 9,459 420 54,912
Other 122,144 52,725 2,893 177,762
___________ ___________ ___________ ___________
Total current liabilities 597,202 192,810 21,307 811,319
___________ ___________ ___________ ___________
Total Capital and Liabilities $ 6,865,163 $ 1,875,680 $ 152,657 $ 8,893,500
=========== =========== =========== ===========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
</TABLE>
<TABLE>
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1996
(Thousands of Dollars Except Shares and Per Share Amounts)
UE CIPSCO Pro Forma
(As Reported) (As Reported) Adjustments Pro Forma
(Notes 1,4,10) (Notes 1,4,7) (Notes 2,9) Combined
_____________ _____________ ____________ ____________
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $ 910,234 $ 341,210 $ 96,703 $ 1,348,147
Gas 58,478 85,359 - 143,837
Other 259 5,082 789 6,130
____________ ___________ __________ ____________
Total operating revenues 968,971 431,651 97,492 1,498,114
OPERATING EXPENSES:
Operations
Fuel and purchased power 176,978 131,646 54,864 363,488
Gas Costs 34,571 52,681 - 87,252
Other 186,203 69,207 9,396 264,806
____________ ___________ __________ ____________
397,752 253,534 64,260 715,546
Maintenance 110,462 30,971 9,232 150,665
Depreciation and amortization 119,285 43,130 7,601 170,016
Income taxes (Note 7) 72,865 21,294 4,048 98,207
Other taxes 103,207 29,384 1,028 133,619
____________ ___________ __________ ____________
Total operating expenses 803,571 378,313 86,169 1,268,053
OPERATING INCOME 165,400 53,338 11,323 230,061
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during
construction 3,823 77 - 3,900
Minority interest in consolidated
subsidiary - - (2,482) (2,482)
Miscellaneous, net (1,586) (1,062) (3,719) (6,367)
____________ ___________ ___________ ____________
Total other income and deductions,
net 2,237 (985) (6,201) (4,949)
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS 167,637 52,353 5,122 225,112
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest 67,528 17,487 5,122 90,137
Allowance for borrowed funds used during
construction (3,978) (98) - (4,076)
Preferred dividends of subsidiaries
(Note 8) 6,625 1,864 - 8,489
____________ ___________ __________ ____________
Net interest charges and preferred
dividends 70,175 19,253 5,122 94,550
NET INCOME $ 97,462 $ 33,100 $ - $ 130,562
============ =========== ========== ============
EARNINGS PER SHARE OF COMMON STOCK
(BASED ON AVERAGE SHARES OUTSTANDING) $0.95 $0.97 $0.95
===== ===== =====
AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,069,542 1,022,086 137,215,462
============ =========== ========== ============
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
</TABLE>
<TABLE>
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1995
(Thousands of Dollars Except Shares and Per Share Amounts)
UE CIPSCO Pro Forma
(As Reported) (As Reported) Adjustments Pro Forma
(Note 1) (Notes 1,3,7) (Notes 2,9) Combined
_____________ _____________ ____________ ____________
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $ 908,829 $ 316,688 $ 91,488 $ 1,317,005
Gas 51,614 74,290 - 125,904
Other 247 3,428 143 3,818
____________ ___________ __________ ____________
Total operating revenues 960,690 394,406 91,631 1,446,727
OPERATING EXPENSES:
Operations
Fuel and purchased power 170,079 117,094 48,169 335,342
Gas costs 28,216 43,069 - 71,285
Other 183,940 76,536 10,011 270,487
____________ ___________ __________ ____________
382,235 236,699 58,180 677,114
Maintenance 111,088 30,672 9,471 151,231
Depreciation and amortization 115,778 41,275 8,050 165,103
Income taxes (Note 7) 74,070 15,105 4,209 93,384
Other taxes 103,053 28,349 1,030 137,432
____________ ___________ __________ ____________
Total operating expenses 786,224 352,100 80,940 1,219,264
OPERATING INCOME 174,466 42,306 10,691 227,463
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during
construction 2,908 377 - 3,285
Minority interest in consolidated
subsidiary - - (2,164) (2,164)
Miscellaneous, net 1,533 1,337 (3,314) (444)
____________ ___________ __________ ____________
Total other income and deductions,
net 4,441 1,714 (5,478) 677
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS 178,907 44,020 5,213 228,140
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest 67,988 16,658 5,213 89,859
Allowance for borrowed funds used during
construction (3,340) (31) - (3,371)
Preferred dividends of subsidiaries
(Note 8) 6,626 1,939 - 8,565
____________ ___________ __________ ____________
Net interest charges and preferred
dividends 71,274 18,566 5,213 95,053
NET INCOME $ 107,633 $ 25,454 $ - $ 133,087
============ =========== ========== ============
EARNINGS PER SHARE OF COMMON STOCK
(BASED ON AVERAGE SHARES OUTSTANDING) $1.05 $0.75 $0.97
===== ===== =====
AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,069,542 1,022,086 137,215,462
============ =========== ========== ============
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
</TABLE>
<TABLE>
AMEREN CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED
STATEMENTS OF INCOME
TWELVE MONTHS ENDED JUNE 30, 1996
(Thousands of Dollars Except Shares and Per Share Amounts)
UE CIPSCO Pro Forma
(As Reported) (As Reported) Adjustments Pro Forma
(Notes 1,4,10) (Notes 1,3,4,7) (Notes 2,9) Combined
_____________ _______________ ____________ ____________
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric $ 2,015,858 $ 728,006 $ 187,754 $ 2,931,618
Gas 94,678 140,676 - 235,354
Other 452 10,825 1,000 12,277
____________ ___________ __________ ____________
Total operating revenues 2,110,988 879,507 188,754 3,179,249
OPERATING EXPENSES:
Operations
Fuel and purchased power 372,057 262,778 104,201 739,036
Gas costs 57,607 83,667 - 141,274
Other 370,133 148,039 18,533 536,705
____________ __________ ___________ ____________
799,797 494,484 122,734 1,417,015
Maintenance 220,982 68,295 17,702 306,979
Depreciation and amortization 236,745 85,118 15,299 337,162
Income taxes (Note 7) 208,336 51,961 7,696 267,993
Other taxes 212,299 57,647 1,909 271,855
____________ ___________ __________ ____________
Total operating expenses 1,678,159 757,505 165,340 2,601,004
OPERATING INCOME 432,829 122,002 23,414 578,245
OTHER INCOME AND DEDUCTIONS:
Allowance for equity funds used during
construction 7,742 589 - 8,331
Minority interest in consolidated
subsidiary - - (4,876) (4,876)
Miscellaneous, net (9,099) (4,697) (8,313) (22,109)
____________ ___________ __________ ____________
Total other income and deductions,
net (1,357) (4,108) (13,189) (18,654)
INCOME BEFORE INTEREST CHARGES
AND PREFERRED DIVIDENDS 431,472 117,894 10,225 559,591
INTEREST CHARGES AND PREFERRED DIVIDENDS:
Interest 134,282 34,598 10,225 179,105
Allowance for borrowed funds used during
construction (6,744) (140) - (6,884)
Preferred dividends of subsidiaries
(Note 8) 13,249 3,775 - 17,024
____________ ___________ __________ ____________
Net interest charges and preferred
dividends 140,787 38,233 10,225 189,245
NET INCOME $ 290,685 $ 79,661 $ - $ 370,346
============ =========== ========== ============
EARNINGS PER SHARE OF COMMON STOCK
(BASED ON AVERAGE SHARES OUTSTANDING) $2.85 $2.34 $2.70
===== ===== =====
AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,069,542 1,022,086 137,215,462
============ =========== ========== ============
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
</TABLE>
AMEREN CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. Reclassifications have been made to certain "as reported" account
balances reflected in CIPSCO's and Union Electric'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 Union Electric 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 six months ended June 30, 1995 includes CIPSCO's
pre-tax charges of $5.8 million for a voluntary separation program. Net
income for the twelve months ended June 30, 1996 includes CIPSCO's pre-tax
write-off of $5.7 million of system development expenses.
4. The allocation between Union Electric 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
have been reflected in the pro forma combined condensed financial
statements. However, net income for the six months ended June 30, 1996
includes merger transaction costs and costs to achieve such savings of $4.4
million, net of income taxes, for Union Electric and $2.1 million, net of
income taxes, for CIPSCO. Net income for the twelve months ended June 30,
1996 includes merger transaction costs and costs to achieve such savings of
$13.2 million, net of income taxes, for Union Electric and $6.8 million,
net of income taxes, for CIPSCO.
5. Intercompany transactions (including purchased and exchanged power
transactions) between Union Electric 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 Union Electric Preferred Stock is not issued by a
subsidiary; subsequent to the Merger, the Union Electric Preferred Stock
will be issued by a subsidiary of Ameren. As a result, Union Electric'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. Union Electric 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 Union Electric, CIPSCO and EEI have been
eliminated.
10. Net income for the six and twelve months ended June 30, 1996 includes
credits for Missouri electric customers which reduced revenues and pre-tax
income of Union Electric by $45 million and $76 million, respectively.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
Exhibit 12 Computation of Ratio of Earnings to
Fixed Charges and Computation of Ratio
of Earnings to Fixed Charges plus
Preferred Stock Dividend Requirements
Before Income Taxes for CIPS.
Exhibit 27.1 Financial Data Schedule for CIPSCO
(required for electronic filing only in
accordance with Item 601(c)(1) of
Regulation S-K).
Exhibit 27.2 Financial Data Schedule for CIPS
(required for electronic filing only
in accordance with Item 601(c)(1) of
Regulation S-K).
(B) Reports on Form 8-K:
Date of Report Item Reported
______________ _____________
May 20, 1996 Item 5. Other Events.
Reports information regarding the
ruling by an administrative law judge of the
National Labor Relations Board in the matter of
the labor dispute between CIPS and the
International Brotherhood of Electrical Workers
Local No. 702.
June 20, 1996 Item 5. Other Events.
Reports information regarding the
intention of CIPS and Amax Coal Sales Company to
enter into an agreement between the parties to
modify the existing contract for coal supplied to
Newton Power Station Unit 1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant, CIPSCO Incorporated, has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
CIPSCO Incorporated
Date: August 13, 1996 /s/ F. J. Kinsinger
_______________________________________
F. J. Kinsinger
Controller
(Chief Accounting Officer)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant, Central Illinois Public Service Company, has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
Central Illinois Public Service Company
Date: August 13, 1996 /s/ F. J. Kinsinger
_______________________________________
F. J. Kinsinger
Controller
(Principal Accounting Officer)
CIPSCO INCORPORATED AND
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
EXHIBIT INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1996
Exhibit No. Description
___________ ___________
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges and
Computation of Ratio of Earnings to Fixed Charges
plus Preferred Stock Dividend Requirements Before
Income Taxes for CIPS.
Exhibit 27.1 Financial Data Schedule for CIPSCO
Exhibit 27.2 Financial Data Schedule for CIPS
<TABLE>
Exhibit 12
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
PLUS PREFERRED STOCK DIVIDEND REQUIREMENTS BEFORE INCOME TAXES
(in thousands)
12 Months Ended
__________________________________________________________________________________
December 31,
June 30, _____________________________________________________________
1996 1995 1994 1993 1992 1991
_____________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
Net income.................................... $ 77,024 $ 70,631 $ 81,913 $ 84,011 $ 72,601 $ 75,683
Add--Federal and state income taxes:
Current.................................... 50,158 41,276 38,097 50,441 6,110 36,316
Deferred (net)............................ 2,590 5,627 13,190 1,674 33,998 7,573
Investment tax credit amortization....... (3,355) (3,361) (3,367) (3,366) (3,336) (3,464)
Income tax applicable to nonoperating
activities............................... 459 941 603 631 2,989 2,413
_______ _______ _______ _______ _______ _______
49,852 44,483 48,523 49,380 39,761 42,838
_______ _______ _______ _______ _______ _______
Net income before income taxes............. 126,876 115,114 130,436 133,391 112,362 118,521
_______ _______ _______ _______ _______ _______
Add--Fixed charges
Interest on long-term debt............... 31,415 31,168 31,164 32,823 35,534 36,652
Interest on provision for revenue refunds - - - - (803) 4,261
Other interest............................ 1,442 853 358 479 392 1,231
Amortization of net debt premium and
discount................................. 1,718 1,703 1,678 1,598 863 338
_______ _______ _______ _______ _______ ________
34,575 33,724 33,200 34,900 35,986 42,482
_______ _______ _______ _______ _______ ________
Earnings as defined......................... $161,451 $148,838 $163,636 $168,291 $148,348 $161,003
======= ======= ======= ======= ======= ========
Ratio of earnings to fixed charges......... 4.67 4.41 4.93 4.82 4.12 3.79
Earnings required for preferred dividends:
Preferred stock dividends................... $ 3,775 $ 3,850 $ 3,510 $ 3,718 $ 4,549 $ 5,396
Adjustment to pre-tax basis.............. 2,443 2,425 2,079 2,185 2,491 3,054
_______ _______ _______ _______ _______ _______
$ 6,218 $ 6,275 $ 5,589 $ 5,903 $ 7,040 $ 8,450
_______ _______ _______ _______ _______ _______
Fixed charges plus preferred stock
dividend requirements...................... $ 40,793 $ 39,999 $ 38,789 $ 40,803 $ 43,026 $ 50,932
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges plus
preferred stock dividend requirements.... 3.96 3.72 4.22 4.12 3.45 3.16
* An additional charge equivalent to earnings required to adjust
dividends on preferred stock to a pre-tax basis (See below.)
{ Net income before income taxes }
{ ______________________________ -100% } X preferred dividends = earnings
required for preferred dividends
{ Net income }
</TABLE>
-33-
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE STATEMENT OF INCOME, STATEMENT OF
CASH FLOWS, BALANCE SHEET AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<CIK> 0000018654
<NAME> CIPS
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,462,022
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 203,146
<TOTAL-DEFERRED-CHARGES> 0<F1>
<OTHER-ASSETS> 47,293
<TOTAL-ASSETS> 1,712,461
<COMMON> 121,283
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 445,021
<TOTAL-COMMON-STOCKHOLDERS-EQ> 566,304
0
80,000
<LONG-TERM-DEBT-NET> 464,077
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 38,482
<LONG-TERM-DEBT-CURRENT-PORT> 15,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 548,598
<TOT-CAPITALIZATION-AND-LIAB> 1,712,461
<GROSS-OPERATING-REVENUE> 426,585
<INCOME-TAX-EXPENSE> 20,064
<OTHER-OPERATING-EXPENSES> 356,084
<TOTAL-OPERATING-EXPENSES> 376,148<F2>
<OPERATING-INCOME-LOSS> 50,437
<OTHER-INCOME-NET> (923)
<INCOME-BEFORE-INTEREST-EXPEN> 49,176
<TOTAL-INTEREST-EXPENSE> 17,389
<NET-INCOME> 31,787
1,864
<EARNINGS-AVAILABLE-FOR-COMM> 29,923
<COMMON-STOCK-DIVIDENDS> 34,000
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 85,448
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1> INFORMATION NOT NORMALLY DISCLOSED IN FINANCIAL STATEMENTS AND NOTES.
<F2> INCLUDES INCOME TAX EXPENSE.
<F3> NET INCOME BEFORE PREFERRED STOCK DIVIDEND OF SUBSIDIARY
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE STATEMENT OF INCOME, STATEMENT OF
CASH FLOWS, BALANCE SHEET AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<CIK> 0000860520
<NAME> CIPSCO Inc.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,462,022
<OTHER-PROPERTY-AND-INVEST> 109,121
<TOTAL-CURRENT-ASSETS> 212,896
<TOTAL-DEFERRED-CHARGES> 0<F1>
<OTHER-ASSETS> 48,302
<TOTAL-ASSETS> 1,832,341
<COMMON> 356,812
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 293,135
<TOTAL-COMMON-STOCKHOLDERS-EQ> 649,947
0
80,000
<LONG-TERM-DEBT-NET> 464,077
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 38,482
<LONG-TERM-DEBT-CURRENT-PORT> 15,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 584,835
<TOT-CAPITALIZATION-AND-LIAB> 1,832,341
<GROSS-OPERATING-REVENUE> 431,651
<INCOME-TAX-EXPENSE> 21,294
<OTHER-OPERATING-EXPENSES> 357,019
<TOTAL-OPERATING-EXPENSES> 378,313<F2>
<OPERATING-INCOME-LOSS> 53,338<F2>
<OTHER-INCOME-NET> (1,062)
<INCOME-BEFORE-INTEREST-EXPEN> 52,276
<TOTAL-INTEREST-EXPENSE> 17,312
<NET-INCOME> 34,964<F3>
1,864
<EARNINGS-AVAILABLE-FOR-COMM> 33,100
<COMMON-STOCK-DIVIDENDS> 35,092
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 89,693
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
<FN>
<F1> INFORMATION NOT NORMALLY DISCLOSED IN FINANCIAL STATEMENTS AND NOTES.
<F2> INCLUDES INCOME TAX EXPENSE.
<F3> NET INCOME BEFORE PREFERRED STOCK DIVIDEND OF SUBSIDIARY
</TABLE>
