SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
X THE SECURITIES EXCHANGE ACT OF 1934
------
For the quarterly period ended June 30, 1996
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 1-9894
WPL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1380265
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
222 West Washington Avenue, Madison, Wisconsin 53703
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 608-252-3311
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
-------- --------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock Outstanding at June 30, 1996: 30,795,260 shares
<PAGE>
CONTENTS
PAGE
PART I. Financial Information:
Consolidated Financial Statements of WPL Holdings,
Inc.
Consolidated Balance Sheets as of June 30, 1996
and 1995 and December 31, 1995 . . . . . . . . . . 2,3
Consolidated Statements of Income for the Three and
Twelve Months Ended June 30, 1996 and 1995 . . . . . 4
Consolidated Statements of Cash Flows for the Three
and Twelve Months Ended June 30, 1996 and 1995 . . . 5
Notes to Consolidated Financial Statements . . . . . . 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 7
PART II. Other Information . . . . . . . . . . . . . . . . . . . . . 16
Signatures . . . . . . . . . . . . . . . . . . . . . . 17
Exhibit Index . . . . . . . . . . . . . . . . . . . . 18
<TABLE>
WPL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
June 30, June 30, December 31,
1996 1995 1995
(Thousands of Dollars)
<S> <C> <C> <C>
ASSETS
UTILITY PLANT:
Plant in service--
Electric........................... $1,686,564 $1,636,679 $1,666,134
Gas................................ 220,824 211,062 217,678
Water.............................. 23,217 22,006 22,518
Common............................. 143,099 128,897 136,943
--------- --------- ---------
2,073,704 1,998,644 2,043,273
Less: Accumulated provision for
depreciation....................... 929,494 853,853 887,562
--------- --------- ---------
1,144,210 1,144,791 1,155,711
Construction work in progress......... 52,936 33,486 36,996
Nuclear fuel, net..................... 17,247 16,949 18,867
--------- --------- ---------
Total utility plant................. 1,214,393 1,195,226 1,211,574
--------- --------- ---------
OTHER PROPERTY AND EQUIPMENT:
Other property and equipment.......... 126,589 153,191 171,211
Less: Accumulated provision for
depreciation.................. 13,316 25,237 26,442
--------- --------- ---------
113,273 127,954 144,769
--------- --------- ---------
INVESTMENTS:
Nuclear decommissioning trust funds... 84,747 64,342 73,357
Other investments..................... 11,997 12,085 12,105
--------- --------- ---------
96,744 76,427 85,462
--------- --------- ---------
CURRENT ASSETS:
Cash and equivalents.................. 9,635 11,071 11,386
Accounts receivable less allowance
for doubtful accounts of $1,162,
$1,890 and $1,735, respectively.... 81,253 61,484 94,648
Fossil fuel, at average cost.......... 14,548 12,689 14,625
Materials and supplies, at average
cost............................... 21,304 21,421 20,723
Gas in storage, at average cost....... 4,615 5,178 6,319
Prepayments and other................. 34,425 30,993 27,987
--------- --------- ---------
Total current assets.......... 165,780 142,836 175,688
--------- --------- ---------
Restricted cash......................... 5,941 7,218 3,266
--------- --------- ---------
OTHER ASSETS:
Regulatory assets..................... 166,403 159,660 171,699
Deferred charges and other............ 75,888 100,371 79,956
--------- --------- ---------
Total other assets............ 242,291 260,031 251,655
TOTAL ASSETS............................ $1,838,422 $1,809,692 $1,872,414
========= ======= =========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
<TABLE>
WPL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
June 30, June 30, December 31,
1996 1995 1995
(Thousands of Dollars)
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Common stock, $.01 par value,
authorized--100,000,000 shares;
issued and outstanding--
30,795,260 shares.................... $ 308 $ 308 $ 308
Premium on capital stock & capital
surplus.............................. 307,422 307,659 305,223
Reinvested earnings..................... 307,885 288,021 291,939
--------- --------- ---------
Total common equity............. 615,615 595,988 597,470
PREFERRED STOCK NOT MANDATORILY
REDEEMABLE:
Cumulative, without par value,
authorized 3,750,000 shares
maximum aggregate stated value
$150,000,000;
Cumulative, without par value,
$100 stated value; 449,765
shares outstanding............ 44,977 44,977 44,977
Cumulative, without par value,
$25 stated value; 559,630
shares outstanding............ 14,986 14,986 14,986
--------- --------- ---------
Total preferred stock........... 59,963 59,963 59,963
LONG TERM DEBT, NET....................... 423,701 431,027 430,362
--------- --------- ---------
Total capitalization............ 1,099,279 1,086,978 1,087,795
--------- --------- ---------
CURRENT LIABILITIES:
Current maturities of long-term debt.... 3,453 2,871 3,397
Variable rate demand bonds.............. 56,975 56,975 56,975
Short-term debt......................... 57,534 93,364 109,525
Accounts payable........................ 73,717 59,540 94,898
Accrued payroll and vacation............ 12,332 16,527 14,299
Accrued taxes........................... 17,680 6,197 6,483
Accrued interest........................ 7,589 8,992 9,214
Other................................... 43,195 24,030 26,783
--------- --------- ---------
Total current liabilities....... 272,475 268,496 321,574
--------- --------- ---------
OTHER LIABILITIES AND CREDITS:
Accumulated deferred income taxes....... 238,048 226,688 241,150
Accumulated deferred investment
tax credits..................... 37,887 39,800 38,842
Accrued environmental remediation costs. 76,611 79,044 76,852
Other................................... 114,122 108,686 106,201
--------- --------- ---------
Total other liabilities and
credits........................ 466,668 454,218 463,045
--------- --------- ---------
TOTAL CAPITALIZATION AND
LIABILITIES.............................. $1,838,422 $1,809,692 $1,872,414
========= ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
<TABLE>
WPL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
<CAPTION>
Three Months Ended Twelve Months Ended
June 30, June 30,
1996 1995 1996 1995
(In Thousands of Dollars Except for Per Share Data)
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric..................... $137,084 $126,093 $574,664 $526,523
Gas.......................... 28,002 22,450 161,251 139,882
Fees, rents and other........ 43,207 27,447 148,646 118,370
------- ------- ------- -------
208,293 175,990 884,561 784,775
------- ------- ------- -------
OPERATING EXPENSES:
Electric production fuels.... 27,339 27,898 114,820 116,148
Purchased power.............. 16,429 10,234 58,406 37,368
Purchased gas................ 15,690 12,359 98,815 88,136
Other operation.............. 75,172 59,956 282,586 254,354
Maintenance.................. 10,940 13,216 38,486 42,516
Depreciation and
amortization................ 22,712 21,552 89,311 82,682
Taxes other than income...... 8,884 9,348 33,572 34,772
------- ------- ------- -------
177,166 154,563 715,996 655,976
------- ------- ------- -------
OPERATING INCOME............... 31,127 21,427 168,565 128,799
------- ------- ------- -------
INTEREST EXPENSE AND OTHER:
Interest on debt............. 10,059 10,211 42,081 39,450
Allowance for funds used
during construction
(credit).................... (583) (602) (2,484) (3,437)
Other (income) and
deductions, net............. (6,128) 141 (13,287) 1,565
------- ------- ------- -------
3,348 9,750 26,310 37,578
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME
TAXES......................... 27,779 11,677 142,255 91,221
------- ------- ------- -------
INCOME TAXES:
Current...................... 11,578 662 43,115 22,548
Deferred..................... (688) 2,825 5,807 10,304
Amortization of investment
tax credits................. (478) (479) (1,914) (1,921)
------- ------- ------- -------
10,412 3,008 47,008 30,931
PREFERRED STOCK DIVIDENDS
OF SUBSIDIARY................. 828 827 3,311 3,310
------- ------- ------- -------
INCOME FROM CONTINUING
OPERATIONS.................... 16,539 7,842 91,936 56,980
------- ------- ------- -------
DISCONTINUED OPERATIONS:
Loss from operations of
discontinued subsidiary,
net of applicable tax benefits
of $0, $593, $591, and $1,130,
respectively - 903 903 1,810
Loss on diposal of subsidiary,
net of applicable taxes of $0,
$0, $3,271, and $0, respectively - - 10,974 -
------- ------- ------- -------
- 903 11,877 1,810
------- ------- ------- -------
NET INCOME.................... $16,539 $6,939 $80,059 $55,170
======= ======= ======= =======
EARNINGS PER SHARE:
Income from continuing
operations................. $ 0.54 $ 0.26 $ 2.99 $ 1.85
Discontinued operations..... 0.00 (0.03) (0.39) (0.06)
------- ------- ------- -------
Net income.................. $ 0.54 $ 0.23 $ 2.60 $ 1.79
======= ======= ======= =======
CASH DIVIDENDS PER SHARE OF
COMMON STOCK................. $0.4925 $0.485 $1.948 $1.925
======= ======= ======= =======
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING........... 30,795 30,744 30,779 30,774
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
<TABLE>
WPL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
Three Months Ended Twelve Months Ended
June 30, June 30,
1996 1995 1996 1995
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Cash flows from (used for)
operating activities:
Net income ...................... $16,539 $6,939 $80,059 $55,170
Adjustments to reconcile net
income to net cash from
operating activities:
Depreciation and amortization... 21,052 22,221 86,982 82,822
Deferred income taxes and
investment tax credits......... (1,165) 2,367 3,925 6,538
Amortization of nuclear fuel.... 2,160 1,196 8,712 7,362
Allowance for equity funds
used during construction....... (377) (451) (1,610) (2,601)
(Gain) loss on sale of
subsidiaries................... - - 7,725 -
(Gain) loss on sale of other
property and equipment......... (5,676) - (5,676) -
Changes in assets and
liabilities:
Accounts receivable and
unbilled revenues.............. 544 10,271 (19,448) (1,155)
Production fuels, materials, and
supplies....................... (2,663) 1,438 (1,742) 4,535
Gas in storage.................. (3,567) (3,234) 563 (568)
Prepayments and other........... (11,310) (8,537) (3,432) (1,613)
Accounts payable and accruals... (5,109) (3,173) 6,922 5,029
Accrued taxes................... (6,423) (11,222) 11,483 2,623
Other, net...................... (10,522) (27,197) 2,499 19,210
------- ------- ------- -------
Net cash from (used for)
operating activities........ (6,517) (9,382) 176,962 177,352
------- ------- ------- -------
Cash flows from (used for)
financing activities:
Long-term debt maturities,
redemptions and sinking
fund requirements............... (2,615) 2,999 (6,805) 27,500
Net change in short term debt.... (362) 61,301 (35,830) 22,306
Retirement of first mortgage
bonds........................... - (18,000) - (18,000)
Common stock cash dividends,
less dividends reinvested....... (15,167) (14,925) (60,174) (57,433)
Other, net....................... 615 1,989 218 168
------- ------- ------- -------
Net cash from (used for)
financing activities........ (17,529) 33,364 (102,591) (25,459)
------- ------- ------- -------
Cash flows from (used for)
investing activities:
Proceeds from sale of other
property and equipment.......... 36,264 - 36,264 -
Additions to utility plant,
excluding AFUDC................. (28,710) (22,790) (104,941) (125,530)
Allowance for borrowed funds
used during construction........ (206) (151) (876) (836)
Dedicated decommissioning
funding......................... (2,224) (862) (20,405) (13,372)
Proceeds from sale of
subsidiaries.................... - - 22,130 -
Purchase of other property and
equipment....................... 22,852 (912) 5,712 (9,294)
Other, net....................... (2,230) 610 (13,691) (988)
------- ------- ------- -------
Net cash from (used for)
investing activities........ 25,746 (24,105) (75,807) (150,020)
------- ------- ------- -------
Net increase (decrease) in cash
and equivalents................... 1,700 (123) (1,436) 1,873
Cash and equivalents at beginning
of period......................... 7,935 11,194 11,071 9,198
------- ------- ------- -------
Cash and equivalents at end of
period............................ $ 9,635 $ 11,071 $9,635 $11,071
======= ======= ======= =======
Supplemental disclosures of cash
flow information:
Cash paid during the period for:
Interest on debt................. $ 7,338 $ 6,565 $ 43,143 $43,720
Preferred stock dividends of
subsidiary...................... $ 828 $ 828 $ 3,310 $ 3,310
Income taxes..................... $16,879 $ 5,671 $ 43,148 $17,876
Noncash financing activities:
Dividends reinvested............ $ - $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been
prepared by WPL Holdings, Inc. (the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. The consolidated financial statements include
the Company and its wholly owned consolidated subsidiaries including
Wisconsin Power and Light Company (WP&L). These financial statements
should be read in conjunction with the financial statements and the
notes thereto included in the Company's latest Annual Report on Form
10-K.
In the opinion of management, all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation of
(a) the consolidated results of operations for the three and twelve
month periods ended June 30, 1996 and 1995, (b) the consolidated
financial position at June 30, 1996 and 1995 and December 31, 1995,
and (c) the consolidated statement of cash flows for the three and
twelve month periods ended June 30, 1996 and 1995 have been made.
2. In April 1996, WP&L repurchased in a private transaction $5.0
million of its Series V first mortgage bonds, due December 1, 2025,
coupon rate of 9.30%. In order to purchase these bonds, the Company
issued short term debt.
3. During the first quarter of 1996, the Financial Accounting
Standards Board issued an Exposure Draft on Accounting for
Liabilities Related to Closure and Removal of Long-Lived Assets which
deals with, among other issues, the accounting for decommissioning
costs. If current electric utility industry accounting practices for
such decommissioning are changed: (1) annual provisions for
decommissioning could increase, (2) the estimated cost for
decommissioning could be recorded as a liability rather than as
accumulated depreciation, with recognition of an increase in the
recorded amount of nuclear plant, and (3) trust fund income from the
external decommissioning trusts could be reported as investment
income rather than as a reduction to decommissioning expense. Given
the preliminary nature of the process, the Company cannot currently
determine what impact, if any, this process may have on the Company's
financial condition or results of operations.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED June 30, 1996 VS. June 30, 1995:
OVERVIEW
The Company reported consolidated second quarter net income from
continuing operations of $16.5 million or 54 cents per share compared to
$7.8 million or 26 cents per share for the same period in 1995. The
increase in earnings primarily reflects the operation of the Company's
utility subsidiary, WP&L. During the second quarter a $3.4 million after-
tax gain was recognized on the sale of a combustion turbine. Weather-
driven natural gas sales growth, increased electric sales to other
utilities, and continued customer growth contributed to higher margins as
compared with the second quarter of last year.
Electric margin increased by $5.4 million due to increased sales and
lower aggregate costs per kWh. Gas margin increased $2.2 million due to a
change in the mix of sales from lower margin to higher margin customer
classes. WP&L operations and maintenance declined during the second quarter
due primarily to the timing of nuclear plant refueling.
Heartland Development Corporation, ("HDC"), parent company of the
Company's non-regulated operations, reported a loss from continuing
operations of $2.2 million for the second quarter of 1996 compared with a
loss from continuing operations of $1.3 million for the same period in
1995. The second quarter performance was primarily the result of losses on
commodity transactions incurred by the energy services subsidiary.
<TABLE>
Electric Operations
<CAPTION>
Revenues
and Costs % kWhs Sold % Customers at %
(In Thousands) Change (In Thousands) Change End of Quarter Change
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential and
Farm $43,776 $43,247 1% 633,695 622,251 2% 334,035 327,319 2%
Industrial 36,450 36,080 1% 1,003,872 991,595 1% 810 778 4%
Commercial 24,519 24,168 1% 421,098 412,304 2% 45,300 44,227 2%
Wholesale and
Class A 31,367 20,319 54% 1,290,219 628,782 105% 92 83 11%
Other 972 2,279 (30%) 15,591 14,856 5% 1,742 1,497 16%
------- ------- --------- --------- ------- -------
Total 137,084 126,093 9% 3,364,475 2,669,788 26% 381,979 373,904 2%
------- ------- ========= ========= === ======= ======= ===
Electric
Production Fuels 27,339 27,898 (6%)
Purchased Power 16,429 10,234 66%
------ ------
Margin $93,316 $87,961 6%
====== ====== ===
</TABLE>
Electric revenues increased $11.0 million, or 9 percent, as compared to
the second quarter of 1995. The increase was the result of a 26 percent
increase in kWh sales primarily due to increased bulk power sales during
the second quarter 1996.
Electric margin increased $5.4 million, or 6 percent, during the second
quarter of 1996 compared to the second quarter of 1995 primarily due to
higher sales (as discussed above). Aggregate costs of production fuels and
purchased power increased as a result of a 26 percent increase in kWh
sales. Because of this increase in sales and the availability of
competitively priced off-system power, purchased power increased 66
percent.
<TABLE>
Gas Operations
<CAPTION>
Revenues
and Costs % Therms Sold % Customers at %
(In Thousands) Change (In Thousands) Change End of Quarter Change
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential and Farm $14,703 $10,697 37% 23,245 18,843 23% 131,093 126,581 4%
Firm 7,855 5,839 35% 15,493 13,419 15% 16,160 15,733 3%
Interruptible 611 606 1% 1,659 1,942 -15% 258 236 9%
Transport. and
Other 4,833 5,308 -9% 34,342 40,188 -15% 266 243 9%
------- ------- ------- ------- ------- -------
Total 28,002 22,450 25% 74,739 74,392 0% 147,777 142,793 3%
------- ------- ======= ======= === ======= ====== ===
Purchased Gas 15,690 12,359 27%
------- ------- ---
Margin 12,312 10,091 22%
======= ======= ===
</TABLE>
Gas revenues increased $5.6 million, or 25 percent, in the second
quarter of 1996 as compared to 1995. The increased revenues were the
result of higher commodity costs passed on to customers and a change in
the sales mix while total therm sales remained relatively unchanged, the
mix of these sales indicates a decline of 15 percent in transportation and
interruptible sales with a corresponding increase of 23 percent and 15
percent in higher margin residential and firm sales, respectively. The
gas incentive program authorized by the Public Service Commission of
Wisconsin also resulted in a loss of $0.1 million pre-tax during the
second quarter of 1996 compared with additional savings of $0.3 million
pre-tax for the same period in 1995.
Fees, Rents and Other Revenues
Fees, rents and other revenues primarily reflect sales and revenues
of the Company's non-regulated subsidiaries, consolidated under HDC, as
adjusted for discontinued operations. The increase in fees, rents and
other revenues of $15.8 million is primarily due to higher energy
marketing revenues of $14.3 million due to an increase in power marketing
activity at the energy marketing company.
In addition to the revenues of the non-regulated businesses, fees,
rents and other revenues also include revenue from the water utility
operations of WP&L. These revenues represent $1 million for the three
months ended June 30, 1996 and 1995.
Other Operation and Maintenance
The increase in other operation and maintenance expense of $12.9
million is primarily due to the increased activity in the energy marketing
business. In addition, losses were incurred in gas and electric marketing
transactions in the energy services subsidiary.
Depreciation and Amortization
Depreciation and amortization expense increased $1.2 million as a
result of property additions.
Income Taxes
Income taxes increased between second quarters consistent with
higher taxable income.
Other (Income) and Deductions, Net
Other (income) and deductions, net increased $6.3 million due to the
$5.7 million pre-tax gain on the sale of a combustion turbine.
TWELVE MONTHS ENDED June 30, 1996 VS. June 30, 1995:
OVERVIEW
The Company reported consolidated net income from continuing
operations of $91.9 million or $2.99 per share for the twelve months
ended June 30, 1996 as compared to $57.0 million or $1.85 per share for
the same period in 1995. Earnings per share for the twelve month periods
ended June 30, 1996 and June 30, 1995 were $2.60 and $1.79, respectively,
reflecting the impact of the discontinued operation of A&C Enercom
Consultants, Inc. The increase in earnings primarily reflects the
operations of the Company's utility subsidiary, WP&L. Weather-driven
sales growth along with continued customer growth in the service territory
contributed to increased electric and gas margins as compared with the
twelve months ended June 30, 1995. In addition a $3.4 million after-tax
gain on the sale of a combustion turbine was recognized during the twelve
months ended June 30, 1996.
Electric margin increased by $26.6 million, or 7 percent, from
increased sales and lower costs per kWh for both electric production fuels
and purchased power. Gas margins increased $10.7 million, or 21 percent,
as a result of increased therm sales. In addition, other operation and
maintenance expenses at the utility decreased primarily due to higher
early retirement and severance expenses during the twelve month period
ended June 30, 1995 and a shift in the refueling cycle at the Kewaunee
Nuclear Power Plant from the second quarter of 1995 to the fourth quarter
of 1996.
Partially offsetting the increases to income was a $6.6 million
increase in depreciation expense primarily resulting from property
additions and higher decommissioning related expenses.
HDC reported a loss from continuing operations of $0.9 million for
the twelve months ended June 30, 1996 compared with a loss from continuing
operations of $3.7 million for the same period in 1995. The change is due
to the gains on the sales of Heartland Retirement Services during the
first quarter of 1996 and Heartland Fuels Corporation during the last
quarter of 1995. During the fourth quarter of 1995, a $13.2 million loss
on discontinued operations resulted from the sale of A&C Enercom
Consultants, Inc. which is discussed in the "Discontinued Operations"
section of the MD&A.
<TABLE>
Electric Operations
<CAPTION>
Revenues
and Cost % kWh Sold % Customers at %
(In Thousands) Change (In Thousands) Change End of Quarter Change
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential
and Farm $204,141 $192,023 6% 3,013,326 2,779,130 9% 334,035 327,319 2%
Industrial 143,488 140,133 2% 3,933,209 3,816,898 3% 810 778 4%
Commercial 104,590 100,234 4% 1,809,125 1,700,213 6% 45,300 44,227 2%
Wholesale and
Class A 117,570 85,219 38% 4,278,026 2,575,668 66% 92 83 11%
Other 4,875 8,914 (45)% 56,209 53,636 5% 1,742 1,497 16%
------- ------- ---------- ---------- ------- -------
Total 574,664 526,523 7% 13,089,895 10,925,545 20% 381,979 373,904 2%
------- ------- ========== ========== === ======= ======= ===
Electric
production fuels 114,820 116,148 (1)%
Purchased Power 58,406 37,368 61%
------- -------
Margin $401,438 $373,007 8%
======= ======= ===
</TABLE>
Electric revenues increased $48.1 million, or 7 percent, as compared to
the twelve months ended June 30, 1995. The increase was the result of a 20
percent increase in kWh sales primarily due to a much warmer summer in
1995, colder winter weather in 1996, higher sales to other utilities and
customer growth.
Electric margin increased 8 percent during the twelve months ended June
30, 1996 compared to the same period in 1995 primarily due to higher
sales combined with reduced costs per kWh for electric production fuels
and purchased power. Although total fuel and purchased power costs
declined on a per kWh basis, total purchased power expense increased by 61
percent. This increase is due to the Company's higher level of bulk power
sales as well as the opportunity to purchase low-cost energy. Partially
offsetting increased purchased power costs are slightly lower delivered
coal and nuclear fuel costs.
<TABLE>
Gas Operations
<CAPTION>
Revenues
and Costs % Therms Sold % Customers at %
(In Thousands) Change (In Thousands) Change End of Quarter Change
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential and $84,954 $66,029 29% 142,221 114,956 24% 131,093 126,581 4%
Firm 47,481 37,474 27% 99,772 82,297 21% 16,160 15,733 3%
Interruptible 3,607 6,246 (42)% 10,673 19,148 (44)% 258 236 9%
Transport. and
Other 25,208 30,135 (16)% 174,725 159,560 10% 266 243 9%
------- ------- ------- ------- ------- -------
Total 161,250 139,884 15% 427,391 375,961 14% 147,777 142,793 3%
======= ======= ======= ======= === ======= ======= ===
Purchased Gas 98,815 88,138 12%
------- -------
Margin $62,435 $51,746 21%
======= ======= ===
</TABLE>
Gas revenues increased $21.4 million, or 15 percent, during the twelve
months ended June 30, 1996 as compared to the twelve months ended June 30,
1995. The higher revenues were the result of a 14 percent rise in therm
sales primarily due to colder weather and residential and firm customer
growth. The higher sales volumes as well as favorable management of gas
supply costs resulted in a $10.7 million, or 21 percent, increase in gas
margin.
With the elimination of the purchased gas adjustment clause effective
January 1, 1995, the fluctuations in the commodity cost of gas above or
below a prescribed commodity price index will increase or decrease WP&L's
margin on gas sales. Both benefits and exposures are subject to customer
sharing provisions. WP&L's share is capped at $1.1 million, pre-tax. For
the twelve months ended June 1996, the gas incentive program resulted in
additional savings of $1.0 million pre-tax.
Fees, Rents and Other Revenues
Fees, rents and other revenues primarily reflect sales and revenues of
the Company's non-regulated subsidiaries, consolidated under HDC, as
adjusted for discontinued operations.
The increase in fees, rents and other revenues is primarily due to
higher energy marketing revenues. The increase was partially offset by
lower revenues in the environmental, engineering business and housing
subsidiary.
In addition to the revenues of the non-regulated businesses, fees, rents
and other revenues also include revenue from the water utility operations
of WP&L. These revenues represent $4.2 and $4.1 million for the twelve
months ended June 30, 1996 and 1995, respectively.
Other Operation and Maintenance
The increase in other operation and maintenance expense of $24.2 million
is primarily due to the increased activity in the energy marketing
business and losses incurred in gas and electric marketing transactions in
the energy services subsidiary. The increase in expenses at HDC was
offset by a $22.0 million reduction in expense at the utility company.
The decrease in the utility operations is a result of higher early
retirement and severance expenses during the twelve months ended June 30,
1995, related to the Company's reengineering efforts. In addition, nuclear
plant refueling costs which occurred during the twelve month period ending
June 30, 1995 are not expected to occur until the fourth quarter of 1996.
Depreciation and Amortization
Depreciation and amortization expense increased $6.6 million as a
result of property additions, and greater amortization of contributions in
aid of construction (a reduction of expense) in the second quarter of
1995 compared with the same period in 1996.
Interest on Debt
The increase in interest expense is primarily due to the increase in
debt at the housing subsidiary relating to construction projects during
the second half of 1995.
Income Taxes
Income taxes increased for the twelve month period ended June 30, 1996,
as a result of higher taxable income.
Other (Income) and Deductions, Net
Other (income) and deductions, net increased primarily as a result two
significant gains recognized during the twelve months ended June 30, 1996.
In the second quarter of 1996 the sale of a combustion turbine resulted in
a pre-tax gain of $5.7 million and in the first quarter of 1996 a $3.3
million pre-tax gain resulted from the sale of a HDC real estate
investment, Heartland Retirement Services.
Discontinued Operations
During the fourth quarter of 1995, the Company sold A&C Enercom
Consultants, Inc. ("A&C"), its utility energy and marketing consulting
business. For the twelve months ended June 30, 1996, the loss from
operations of A&C was $.9 million, net of tax, and the loss on the
disposal of A&C was $11.0 million, net of tax. For the twelve months ended
June 30, 1995, the loss from operations was $1.8 million, net of tax, and
there was no loss on the disposal of A&C.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity is primarily determined by the level of cash
generated from operations and the funding requirements of WP&L's ongoing
construction and maintenance programs. WP&L finances its construction
expenditures through internally generated funds supplemented, and when
required, by outside financing. (Also see: Note 2 in the "Notes to
Financial Statements," page 6.)
During the three and twelve months ended June 30, 1996 and June 30,
1995, the Company generated sufficient cash flows from operations, the
sale of other property and equipment and short-term borrowings to cover
operating expenses, cash dividends and investing activities. Cash flows
from operations decreased to $(6.5) million for the three months ended
June 30, 1996, compared to $(9.4) million for the same period last year.
For the twelve month period ended June 30, 1996, cash flows from operations
decreased to $177.0 million from $177.4 million during the same period in
1995. During the twelve months ended June 30, 1996, the Company received
$58.4 million from sales of a combustion turbine and several non-
regulated investments.
Financing and Capital Structure
The level of short-term borrowing fluctuates based primarily on seasonal
corporate needs, the timing of long-term financing and capital market
conditions. WP&L generally borrows on a short-term basis to provide
interim financing of construction and capital expenditures in excess of
available internally-generated funds. To maintain flexibility in its
capital structure and to take advantage of favorable short-term rates, the
Company also uses proceeds from the sales of accounts receivable and
unbilled revenues to finance a portion of its long-term cash needs. Bank
lines of credit of $70 million at June 30, 1996 are available to support
these borrowings.
The Company's capitalization at June 30,1996, including the current
maturities of long-term debt, variable rate demand bonds and short-term
debt, consisted of 56 percent common equity, 6 percent preferred stock and
38 percent long-term debt.
Capital Expenditures
The Company's largest subsidiary, WP&L is a capital-intensive business
and requires large investments in long-lived assets. Therefore, the
Company's most significant capital requirements relate to construction
expenditures. Construction expenditures for the three months ended June
30, 1996 were $29.3 million. The estimated construction expenditures for
the remainder of 1996 are $99.2 million.
The Company has a 41.0 percent ownership interest in the Kewaunee
Nuclear Power Plant (KNPP). The operating partner of this plant is
Wisconsin Public Service Corporation (WPSC). The steam generator tubes at
KNPP are susceptible to corrosion and cracking phenomena seen throughout
the nuclear industry. Steam Generator A is currently 24.94% effectively
plugged and Steam Generator B is 17.69% effectively plugged for an average
of 21.32%. The current Kewaunee safety analysis report allows an
effective tube plugging limit of up to 25% average for both steam
generators, not to exceed 25% in either steam generator. Analyses are
currently being performed which the operating partner believes will
increase the effective plugging limit to 30%. The small reduction in
capacity which has resulted from this tube plugging has not had a material
impact on the financial performance of the Company.
As a result of the need to address the repair or replacement of the
steam generators, the owners of KNPP have been evaluating, and are con-
tinuing to evaluate, various alternatives to deal with the degradation of
the steam generator tubes. As part of this evaluation, the owners have or
will take the following actions:
(a) The Nuclear Regulatory Commission ("NRC") has been requested to
redefine the pressure boundary point of the repaired steam
generator tubes, which have been removed from service by plugging,
in order to allow the return of many of the tubes to service; thus,
permitting KNPP to return to full licensed power.
(b) The NRC will be requested to increase the steam generator effective
plugging limit from 25% to 30%.
(c) A request will be submitted to the NRC to allow the owners to
pursue welded repair technologies to repair existing sleeved tubes
in an effort to return plugged tubes to service.
(d) The partners continue to evaluate the economics of replacement of
the steam generators. The replacement of steam generators is
estimated to cost approximately $100 million, exclusive of
additional purchased power costs associated with an extended
shutdown.
WP&L believes that the best near term economic alternative for the
owners of KNPP is to continue to pursue tube recovery and repair
processes. WP&L will reassess its views of available alternatives based
on the condition of the steam generator tubes during the fall 1996
refueling outage.
Currently, the owners of KNPP have different views of the future
market value of energy which impact on the desirability of replacing the
steam generators. During the first quarter of 1996 WPSC filed an
application with the Public Service Commission of Wisconsin (PSCW) seeking
approval to replace the steam generators in 1999. WP&L believes that
analysis and final action on this application will take approximately two
years to complete. The joint owners continue to analyze and discuss
various options related to the future of KNPP, including various ownership
transfer alternatives. The net book value of WP&L's share of KNPP as of
June 30, 1996 was $57 million.
WP&L has applied to the PSCW for accelerated depreciation of this
remaining book value of KNPP such that by the end of the year 2002
there would be full recovery of all plant investment. The request for this
acceleration reflects the condition of the present steam generators and
the evolution of the electric generation marketplace towards a more
competitive model.
Rates and Regulatory Matters
In the PSCW rate order UR-109, effective January 1, 1995, the PSCW
approved certain incentive programs. Based on the 1995 performance of the
SO2 emissions and service reliability incentive programs a $2.5 million
refund to retail electric customers was made after the second quarter of
1996. The refund associated with the gas portion of the program has not
been approved by the PSCW.
Industry Outlook
The PSCW's inquiries into the future structure of the natural gas and
electric utility industries are ongoing. The stated goal of the PSCW in
the natural gas docket is to move all gas supply activities out of the
existing regulated distribution utilities and allow independent units to
compete for the business. The goal of the electric restructuring process
is to create open access transmission and distribution services for all
customers with competitive generation and customer service markets.
Additional proceedings as well as consultation with the legislature are
planned prior to a target implementation date after the year 2000.
On April 24, 1996, the Federal Energy Regulatory Commission ("FERC")
issued two rules ( No. 888 and 889) that will promote competition by
opening access to the nation's wholesale power market. The new rules
require public utilities that own, control or operate transmission
systems to provide other companies with the same transmission
access/service that they provide to themselves. The FERC proposes that
each public utility replace its soon-to-be- filed single open access
tariff with a capacity reservation tariff by December 31, 1997. The
Company presently has on file with the FERC a pro forma open access
transmission tariff, filed on July 8, 1996, in compliance with FERC order
No. 888.
INFLATION
The impacts of inflation on WP&L are currently mitigated through current
rate making methodologies. Although rates will be held flat until at
least 1997, management expects that any impact of inflation will be
mitigated by customer growth and productivity improvements.
OTHER
Proposed Merger
The Company, IES Industries Inc. ("IES"), and Interstate
Power Co. ("IPC") have entered into an Agreement and Plan of Merger
("Merger Agreement"), dated November 10, 1995, as amended, providing for:
a) IPC becoming a wholly-owned subsidiary of the Company, and b) the merger
of IES with and into the Company, which merger will result in the combina-
tion of IES and the Company as a single holding company (collectively, the
"Proposed Merger"). The holding company will be renamed Interstate Energy
Corporation ("Interstate Energy)".
The Joint Proxy Statement/Prospectus of the Company, IES and IPC was
filed with the Securities and Exchange Commission on July 11, 1996. The
Merger Agreement contemplated an adjustment of the IES Ratio to 1.01 shares
of Interstate Energy Common Stock from the initial ratio of 0.98 in the event
that prior to the consummation of the transaction, McLeod, Inc., a Delaware
corporation in which IES has a significant ownership interest ("McLeod"),
(a) completed a firm commitment underwritten initial public offering of
its Class A common stock at a per share price of at least $13.00 in which
McLeod received gross proceeds of at least $75 million and (b)
immediately following the public offering the Class A common stock was
registered under Section 12 of the Exchange Act. On June 14,1996, McLeod
completed an initial public offering of 13.8 million shares of its Class A
common stock at a price of $20 per share. The McLeod offering satisfied
the conditions of the McLeod contingency and the IES Ratio was adjusted to
the 1.01.
The shareowner vote on the merger is expected to occur at annual
meetings to be held by each of the Company, IES and IPC on September 5,
1996. The corporate headquarters of Interstate Energy will be in Madison,
Wisconsin.
On August 5, 1996, MidAmerican Energy Company, an electric and natural
gas utility company based in Des Moines, Iowa, announced that it had made
an unsolicited bid to acquire IES in a cash and stock transaction. The
Company cannot currently determine what, if any, impact the unsolicited bid
of MidAmerican may have on the transaction contemplated by the Merger
Agreement.
Union Contract
WP&L and International Brotherhood of Electrical Workers, Local 965
reached agreement on a new three year collective bargaining contract on
June 14. The new agreement includes increases in the base wage during the
first, second and third years of the contract of 3 percent, 3 percent and
3.25 percent, respectively. The new agreement is effective retroactive to
June 1, 1996, with wages retroactive to May 26, which is the beginning of
a pay period. At the end of the second quarter, the contract covered 1,587
of WP&L's employees which represents approximately 69 percent of the total
employees at WP&L.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
1. Exhibits
2A Amendment No. 1 to Agreement and Plan of Merger and Stock
Option Agreements, dated May 22, 1996, by and among the
Company, IES Industries Inc., Interstate Power Company,
AMW Acquisition, Inc., WPLH Acquisition Co. and Interstate
Power Company [Incorporated by reference to Exhibit 2.1
to the Company's Current Report on Form 8-K, dated May 22,
1996]
3A Amendment to By-Laws of the Company
3B By-laws of the Company as revised July 25,1996
27 Financial Data Schedule
2. Reports on Form 8-K: The Company filed a Current Report on
Form 8-K, dated May 22, 1996, reporting under Item 5 that it
had entered into an amendment to the Merger Agreement (and
related documents), dated as of November 10, 1995, by and
among the Company, IES Industries Inc., Interstate Power
Company and AMW Acquisition, Inc.
<PAGE>
SIGNATURE
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.
WPL Holdings, Inc.
Date: August 14, 1996 /s/ Edward M. Gleason
Edward M. Gleason, Vice President -
Treasurer, and Corporate Secretary
(principal financial officer and
officer authorized to sign on behalf
of the registrant)
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
2A Amendment No. 1 to Agreement and Plan of Merger and Stock
Option Agreements, dated May 22, 1996, by and among the
Company, IES Industries Inc., Interstate Power Company,
AMW Acquisition, Inc., WPLH Acquisition Co. and Interstate
Power Company [Incorporated by reference to Exhibit 2.1
to the Company's Current Report on Form 8-K, dated May 22,
1996]
3A Amendment to By-Laws of the Company
3B By-Laws of the Company as revised July 25,1996
27 Financial Data Schedule
Amendment to the By-Laws of
WPL Holdings, Inc.
(Effective July 25, 1996)
Section 1 of Article III of the Bylaws of WPL Holdings, Inc. was
amended to read in its entirety as follows:
Section 1 - The Annual Meeting of the Shareowners shall be
held on the fourth Wednesday in May of each year (or if such day
be a legal holiday in Wisconsin, then upon the following day);
or on such other day of each year as the Board of Directors may
determine. Each such meeting shall be held at the hour of 10:00
o'clock A.M. at the office of the Company in Madison, Wisconsin,
unless the Board of Directors shall otherwise order. The Annual
Meeting shall be held for the purposes of electing Directors and
transacting such other business as may properly come before the
meeting.
BYLAWS OF
WPL HOLDINGS, INC.
Revised At July 25, 1996
ARTICLE I
Seal
The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Wisconsin".
ARTICLE II
Stocks and Transfers
Section 1 - Each holder of fully paid stock shall be entitled to a
certificate or certificates of stock, stating the number of shares owned
by such shareowner and the designation of the Class and Series in which
issued. All stock certificates shall be signed by the President or the
Vice President and by the Secretary of the Company, and be sealed with the
corporate seal of the Company, which seal may be facsimile, engraved or
printed. If and when a Transfer Agent and/or a Registrar shall have been
appointed by the Board with respect to the shares of any class of stock,
or series thereof, of the Company, the certificates representing such
shares shall also be countersigned by such Transfer Agent and/or
countersigned and registered by such Registrar, as the case may be.
Certificates which have been countersigned by a Transfer Agent and
countersigned and registered by a Registrar, in both cases duly appointed
by the Board of Directors for such purpose, may bear the signatures of the
President or the Vice President and the Secretary of the Company in
facsimile, engraved or printed; provided, that no certificate bearing the
facsimile signatures of the Officers of the Company shall be valid or
effective for any purpose unless and until it shall have been so
countersigned and registered. In case any such Officer who has signed any
stock certificate, or whose facsimile signature has been placed thereon,
shall have ceased to be such Officer before such certificate is issued,
such certificate may be issued by the Company with the same effect as if
such Officer had not ceased to be such at the date of its issue.
Section 2 - The stock of the Company shall be divided into such
Classes, with such relative rights and preferences, as shall be provided
by the Articles of Organization of the Company as the same may from time
to time be amended in accordance with the laws of Wisconsin.
Section 3 - Shares of stock shall be transferable only on the books
of the Company; and upon proper endorsement and surrender of the
outstanding certificates representing the same. Subject to such
conditions as the Board of Directors may, by Resolution, establish: (a)
If an outstanding certificate of stock shall be lost, destroyed or stolen,
the holder thereof may have a new certificate issued, upon producing
evidence satisfactory to the Officers of the Company, of such loss,
destruction or theft; and upon furnishing to the Company a bond of
indemnity, surety bond, or such other assurance as the Officers may
require. (b) Where any outstanding certificates of stock are deemed
abandoned by the holder thereof, pursuant to the unclaimed property or
escheatment laws of any state having jurisdiction thereof, the Officers of
the Company are authorized and directed to cause the transfer and delivery
of said certificates or to cause the issuance of replacement certificates,
to such person or persons as may be entitled thereto in accordance with
such escheatment laws.
Section 4 - Transfer books may be closed by order of the Board of
Directors for short periods, not exceeding forty days at any one time, for
any legal purpose, as the Board of Directors shall deem advisable.
ARTICLE III
Meetings of Shareowners
Section 1 - The Annual Meeting of the Shareowners shall be held on
the fourth Wednesday in May of each year (or if such day be a legal
holiday in Wisconsin, then upon the following day); or on such other day
of each year as the Board of Directors may determine. Each such meeting
shall be held at the hour of 10:00 o'clock A.M. at the office of the
Company in Madison, Wisconsin, unless the Board of Directors shall
otherwise order. The Annual Meeting shall be held for the purposes of
electing Directors and transacting such other business as may properly
come before the meeting.
Section 2 - Special Meetings of the shareowners may be called by the
Chairperson of the Board; the Chief Executive Officer; or by the Board of
Directors; or by the Secretary when requested by the owners of shares of
outstanding voting stock having in the aggregate a number of votes at
least equal to one-fifth of the aggregate number of votes possessed by all
such owners; or in such other manner as may be provided by statute.
Section 3 - Notice of the time and place of each Annual or Special
Meeting of Shareowners shall be sent by mail to the recorded address of
each shareowner not less than ten days before the date of the meeting,
except in cases where other special method of notice may be required by
statute, in which case the statutory method shall be followed. The notice
of a special meeting shall state the object of the meeting. Notice of any
meeting of the shareowners may be waived by any shareowners.
Section 4 - At all meetings of shareowners, the representation of
owners of that number of shares of stock entitled to vote at such meeting
having in the aggregate a number of votes at least equal to a majority of
the aggregate number of votes entitled to vote at such meeting shall be
necessary to constitute a quorum for the transaction of any business,
other than (a) adjourning from time to time until a quorum shall be
obtained, or (b) adjourning sine die, and for any such adjournment a
majority vote of whatever shares of stock shall be represented shall be
sufficient.
Section 5 - The Chairperson of the Board when he or she is the Chief
Executive Officer, and when he or she is not the Chief Executive Officer
or in his or her absence or at his or her request the President, and in
the absence of both the Chairperson of the Board and the President then a
Vice President, and if no Vice President be in attendance at the meeting
then a Director selected by the Directors attending the meeting, or if no
selection is made then the Director in attendance with the longest tenure
in such office, shall preside at each meeting of shareowners, and the
Secretary of the Company shall act as Secretary of each shareowner
meeting.
Section 6 - Any shareowner having the right to vote at a meeting of
shareowners may exercise such right by voting in person or by proxy at
such meeting.
ARTICLE IV
Board of Directors
Section 1 - The number of Directors constituting the Board of
Directors shall be a minimum of seven (7) and a maximum of thirteen (13).
Whenever a vacancy(ies) occurs on the Board of Directors such that there
are less than seven (7) Directors remaining, the remaining Directors shall
constitute the Board of Directors until the vacancy(ies) are filled by a
vote of the majority of the Directors remaining in office, even if less
than a quorum, said vacancy(ies) to be filled as soon as reasonably
possible. When there are seven (7) or more Directors and a vacancy
occurs, including a vacancy created by an increase in the number of
Directors, it shall be filled or not filled at the discretion of the Board
of Directors. The Board may elect a Chairperson of the Board, who may be
the same person as the Chief Executive Officer or the President.
Section 2 - No person who has attained 70 years of age shall be
eligible for election or reelection to the Board of Directors. Any
Director who has attained 70 years of age shall resign from the Board of
Directors effective as of the next Annual Meeting of Shareowners. Except
for the Chief Executive Officer, any Officer or employee of the Company
serving as a Director who retires, resigns or is removed or terminated
from his or her office or employment with the Company shall simultaneously
resign from the Board of Directors. In the event the CEO resigns or
retires from his or her office or employment with the Company, he or she
shall simultaneously submit his or her resignation from the Board of
Directors if requested by the Nominating Committee. In the event that the
CEO is removed from his or her office by the Board of Directors, or is
involuntarily terminated from employment with the Company, he or she shall
simultaneously submit his or her resignation from the Board of Directors.
Any Director who is unavailable for reasonably regular attendance at
meetings of the Board shall resign as a Director.
Section 3 - The Board of Directors may hold regular or special
meetings in or outside the State of Wisconsin.
Section 4 - Regular meetings of the Board of Directors shall be held
at such time and place and in such manner as may be determined by the
Board, at such hour as the notice of meeting may provide, but in no event
shall the Board meet less than once a year.
Section 5 - Special meetings of the Board may be called at any time
by the Chairperson, the Chief Executive Officer, or in the absence of the
Chairperson when Chief Executive Officer, by the President, or by a Vice
President when acting as Chief Executive Officer, or by any two Directors,
by mailing to each Director, not less than three days before the time of
such meeting, a written notice stating the time and place and manner of
holding such meeting.
Section 6 - (a) Any or all members of the Board of Directors, or any
committee thereof, may participate in a regular or special meeting by, or
to conduct the meeting through, the use of any means of communication by
which any of the following occurs:
1) All participating directors may simultaneously hear each
other during the meeting.
2) All communication during the meeting is immediately
transmitted to each participating director, and each
participating director is able to immediately send messages
to all other participating directors.
(b) If a meeting is conducted by the means of communication
described herein, all participating directors shall be
informed that a meeting is taking place at which official
business may be transacted.
(c) A director participating in a meeting by means of such
communication is deemed to be present in person at the
meeting.
Section 7 - Notice of any meeting of the Board may be waived by any
Director.
Section 8 - A majority of the Board of Directors shall constitute a
quorum for the transaction of business at any meeting of the Board, but a
fewer number may adjourn the meeting to some other day or sine die. The
person designated by Section 5 of Article III above shall preside at
meetings of the Board of Directors, and the Secretary shall act as
Secretary. The members of the Board who are Officers or employees of the
Company shall receive no separate fee for serving as a Director of the
Company. Other members of the Board shall be paid such fees as the Board
shall from time to time determine by resolution.
ARTICLE V
Committees
Section 1 - The Board of Directors may, by resolution passed by a
majority of the whole Board, designate from their number an Executive
Committee of such number, not less than three, as the Board may fix from
time to time. The Executive Committee may make its own rules of procedure
and shall meet where and as provided by such rules, or by resolution of
the Board of Directors. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. During the intervals
between the meetings of the Board of Directors, the Executive Committee
shall have all the powers of the Board in the management of the business
and affairs of the Company, including power to authorize the seal of the
Company to be affixed to all papers which may require it, and, by majority
vote of all its members, exercise any and all such powers in such manner
as such Committee shall deem best for the interests of the Company, in all
cases in which specific directions shall not have been given by the Board
of Directors.
Section 2 - The Board of Directors may, by resolution passed by a
majority of the whole Board, designate from their number various
Committees from time to time as corporate needs may dictate. The
Committees may make their own rules of procedure and shall meet where and
as provided by such rules, or by resolution of the Board of Directors. A
majority of the members of the Committee shall constitute a quorum for the
transaction of business.
Section 3 - An Audit Committee is hereby established, and shall
consist of at least three (3) members all of whom shall be outside members
of the Board of Directors. The Chairperson and the members of the
Committee shall be elected annually by a majority vote of the members of
the Board of Directors. Vacancies on said Committee may be filled at any
time by action of the Board of Directors. Said Committee shall meet at
the call of any one of its members, but in no event shall it meet less
than once a year. Such meeting may be held on a day separate from or the
same as the regular monthly meeting of the Board of Directors. Subsequent
to each such Committee meeting, a report of the actions taken by such
Committee shall be made to the Board of Directors.
The functions of said Committee shall be to:
1. Recommend to the shareowners the independent auditors of the
Company.
2. Discuss with the independent auditors the scope of their audit.
3. Discuss with the independent auditors and the management the
Company's accounting principles, policies and practices and its
reporting policies and practices.
4. Discuss with the independent auditors the results of their audit.
5. Discuss with the independent auditors the adequacy of the
Company's or any of its subsidiaries accounting, financial and
operating controls.
6. Discuss with appropriate officers and staff the scope and results
of internal audits and initiate such accounting principles,
policies and practices, and reporting policies and practices as
it may deem necessary or proper.
7. Approve or disapprove annually, each defined group of non-audit
services performed by the independent auditors, which
consideration may occur before or after performance, giving due
regard to the possible effect of such performance upon the
independence of the independent auditors; and, if considered
prior to such performance, shall include a limitation upon the
magnitude of such services.
Section 4 - A Compensation and Personnel Committee is hereby
established. Said Committee shall consist of at least three (3) Directors
who are not and never have been officers, employees or legal counsel of
the Company. The Chairperson and the members of the Compensation and
Personnel Committee shall be elected annually by a majority vote of the
members of the Board of Directors. Vacancies on said Committee may be
filled at any time by action of the Board of Directors. The Committee
shall have the following powers and responsibilities:
1. Review and recommend to the Board new employee benefit plans
or changes, i.e. pension, life, hospital, disability, etc.
2. Review major provisions of any negotiated union contract
prior to or during negotiations.
3. Review and approve any executive officer employment
contracts.
4. Review human resource development programs.
5. Review management development programs.
6. Review the internal equity and external competitiveness of
all executive, management and salary pay grades.
7. Review and authorize salary adjustments for all management
payroll, and non-executive officers' pay grades as a group.
All salary ranges and performance for executive officers
shall be reviewed individually by the Committee.
8. Review as a group overall adjustments for all non-management
payroll salary grades.
9. Review personnel budgets.
Said Committee shall meet at such times as it determines, but at
least twice each year, and shall meet at the request of the Chief
Executive Officer, President or any Committee member. Such meeting may be
held on a day separate from or the same as the regular monthly meeting of
the Board of Directors. Subsequent to each such Committee meeting, a
report of the actions taken by such Committee shall be made to the Board
of Directors.
Section 5 - Nominating and Governance Committee shall be established
and shall consist of at least three (3) members, all of whom shall be
outside members of the Board of Directors. The Chairperson and the
members of the Committee shall be elected annually by a majority vote of
the members of the Board of Directors. Vacancies on said Committee may be
filled at any time by action of the Board of Directors. Said Committee
shall meet at the call of any one of its members, but in no event shall it
meet less than once a year for the express purpose of recommending
nominees for election to the Board at the Annual Meeting of Shareowners.
The Committee shall have the following responsibilities:
1. Nomination of Directors for membership on the Board.
2. Selection of new Board members.
3. Selection of Board committee members and chairpersons.
4. Evaluation of overall Board effectiveness.
5. Develop recommendations on Director compensation.
6. Prepare CEO performance report.
7. Consider and develop recommendations on specific governance
matters.
Section 6 - The Executive and other Committees shall keep regular
minutes of their proceedings and report the same to the Board when
required.
Section 7 - A majority of the members of a committee shall constitute
a quorum for the transaction of business at any meeting of a committee of
the Board, but a fewer number may adjourn the meeting to some other day or
sine die. Each committee shall arrange for the keeping of its own
minutes.
ARTICLE VI
Officers
Section 1 - The Board of Directors shall elect a Chief Executive
Officer, a President, such number of Vice Presidents with such
designations as the Board of Directors at the time may decide upon, a
Secretary, a Treasurer and a Controller. The same person may
simultaneously hold more than one such office. The Board of Directors in
its discretion may also elect one or more Assistant Secretaries, one or
more Assistant Treasurers, one or more Assistant Controllers, and such
other Officers as may from time to time be provided for by the Board of
Directors. All Officers unless sooner removed shall hold their respective
offices until their successors, willing to serve, shall have been elected
but any Officer may be removed from office at any time at the pleasure of
the Board of Directors. All Officers shall be bonded in such form, in
such amounts, and with such sureties as determined by the Board of
Directors.
Section 2 - Subject to the control of the Board of Directors the
Chief Executive Officer designated by the Board of Directors shall have
and be responsible for the general management and direction of the
business of the Company, shall establish the lines of authority and
supervision of the Officers and employees of the Company, shall have the
power to appoint and remove and discharge any and all agents and employees
of the Company not elected or appointed directly by the Board of
Directors, and shall assist the Board in the formulation of policies of
the Company. The Chairperson of the Board if Chief Executive Officer may
delegate any part of his or her duties to the President, or to one or more
of the Vice Presidents of the Company.
Section 3 - The Chairperson of the Board if not designated as the
Chief Executive Officer of the Company shall assist the Board in the
formulation of policies and may make recommendations therefore.
Information as to the affairs of the Company in addition to that contained
in the regular reports shall be furnished to him or her on request. He or
she may make suggestions and recommendations to the Chief Executive
Officer regarding any matters relating to the affairs of the Company and
shall be available for consultation and advice.
Section 4 - The President when he or she is not designated as and
does not have the powers of the Chief Executive Officer shall have such
other powers and duties as usually devolve upon the President of a Company
and such other and further powers and duties as may from time to time be
prescribed by the Board of Directors or be delegated to him or her by the
Chairperson of the Board. In the absence or inability of the Chairperson
of the Board to act as Chief Executive Officer the powers and duties of
the Chief Executive Officer shall temporarily devolve upon the President.
Section 5 - The Vice Presidents shall have such powers and duties as
may be prescribed for him or her by the Board of Directors and by the
Chief Executive Officer.
Section 6 - The Secretary shall attend all meetings of the Board of
Directors, shall keep a true and faithful record thereof in proper books
to be provided for that purpose, and shall be responsible for the custody
and care of the corporate seal, corporate records and minute books of the
Company, and of all other books, documents and papers as in the practical
business operation of the Company shall naturally belong in the office or
custody of the Secretary, or shall be placed in his or her custody by the
Chief Executive Officer or by the Board of Directors. He or she shall
also act as Secretary of all shareowners' meetings, and keep a record
thereof. He or she shall, except as may be otherwise required by statute
or by these bylaws, sign, issue and publish all notices required for
meetings of shareowners and of the Board of Directors. He or she shall be
responsible for the custody of the stock books of the Company and shall
keep a suitable record of the addresses of shareowners. He or she shall
also be responsible for the collection, custody and disbursement of the
funds received for dividend reinvestment. He or she shall sign stock
certificates, bonds and mortgages, and all other documents and papers to
which his or her signature may be necessary or appropriate, shall affix
the seal of the corporation to all instruments requiring the seal, and
shall have such other powers and duties as are commonly incidental to the
office of Secretary, or as may be prescribed for him or her by the Chief
Executive Officer or by the Board of Directors.
Section 7 - The Treasurer shall have charge of, and be responsible
for, the collection, receipt, custody and disbursement of the funds of the
Company, and shall deposit its funds in the name of the Company in such
banks, trust companies, or safety vaults as the Board of Directors may
direct, and shall keep a proper record of cash receipts and disbursements.
He or she may, in the absence of the Secretary and Assistant Secretaries
sign stock certificates. He or she shall be responsible for the custody
of such books, receipted vouchers and other books and papers as in the
practical business operation of the Company shall naturally belong in the
office or custody of the Treasurer, or shall be placed in his or her
custody by the Chief Executive Officer, or by the Board of Directors. He
or she shall sign checks, drafts, and other paper providing for the
payment of money by the Company for operating purposes in the usual course
of business, and shall have such other powers and duties as are commonly
incidental to the office of Treasurer, or as may be prescribed for him or
her by the Chief Executive Officer or by the Board of Directors.
Section 8 - The Controller shall be the principal accounting Officer
of the Company. He or she shall have general supervision over the books
of accounts of the Company. He or she shall examine the accounts of all
Officers and employees from time to time and as often as practicable, and
shall see that proper returns are made of all receipts from all sources.
All bills, properly made in detail and certified, shall be submitted to
him or her, and he or she shall audit and approve the same if found
satisfactory and correct, but he or she shall not approve any voucher
unless charges covered by the voucher have been previously approved
through work orders, requisition or otherwise by the head of the
department in which it originated, or unless he or she shall be otherwise
satisfied of its propriety and correctness. He or she shall have full
access to all minutes, contracts, correspondence and other papers and
records of the Company relating to its business matters, and shall be
responsible for the custody of such books and documents as shall naturally
belong in the custody of the Controller and as shall be placed in his or
her custody by the Chief Executive Officer or by the Board of Directors.
The Controller shall have such other powers and duties as are commonly
incidental to the office of Controller, or as may be prescribed for him or
her by the Chief Executive Officer or by the Board of Directors.
Section 9 - The Assistant Secretaries, Assistant Treasurers and
Assistant Controllers shall respectively assist the Secretary, Treasurer
and Controller of the Company in the performance of the respective duties
assigned to such principal Officer, and in assisting his or her principal
Officer each assistant Officer shall to that extent and for such purpose
have the same powers as his or her principal Officer. The powers and
duties of any such principal Officer shall temporarily devolve upon an
assistant Officer in case of the absence, disability, death, resignation
or removal from office of such principal Officer.
Section 10 - In the event of the untimely death or absence or
inability to act of the Chief Executive Officer, his or her powers and
duties shall devolve temporarily in the following manner: first, any
former Chief Executive Officer who is a member of the board, next, to the
Board member with the longest tenure on the Board. Within sixty (60)
days, the temporary Chief Executive Officer shall notify the outside
members of the Board of the absence or inability to act of the Chief
Executive Officer and shall convene a meeting of the outside members of
the Board, who shall act as a Committee. The Committee shall determine
and evaluate all the facts pertinent to the Chief Executive Officer's
absence or inability to act, and then make such recommendations to the
Board of Directors as it deems appropriate under the circumstances. The
Board of Directors shall meet and act upon said recommendations within
thirty (30) days following the determinations of said Committee.
ARTICLE VII
Cash Management
Section 1 - Deposits - The funds of the Company shall be deposited to
its credit in such banks or trust companies ("depositories") as the
Treasurer shall designate or in the manner provided in Paragraph 5 of
Section 2 of this Article. All deposits in any depository shall be made
initially to the general account of the Company and not to any special
account, fund or deposit. All special accounts, funds or deposits shall
be created and maintained solely by transfers of funds from the general
account.
Section 2 - Withdrawals and Check Signing -
1. Funds shall be withdrawn only by Company check or draft except:
(a) to effect transfers of funds between Company accounts
maintained at one or more depositories, (b) as provided in
paragraph 5 of this Section 2 and Section 3 of this Article, or
(c) as provided by resolution of the Board of Directors.
2. No debts shall be contracted except for current expenses unless
authorized by the Board of Directors or the Executive Committee,
and no invoices shall be paid by the Treasurer unless audited and
approved by the Controller or by a person or committee
specifically authorized by the Board of Directors or the
Executive Committee to audit and approve invoices for payment.
3. Checks, drafts and notes drawn on any account or deposit of the
Company shall be valid instruments when signed on behalf of the
Company by the President or the Treasurer. Instruments may be
signed by the facsimile signature of the President or the
Treasurer.
4. For the purposes of this Section, a facsimile signature of any
Officer of the Company shall mean a stamp or perforation of that
Officer's signature. Each depository is authorized to honor
instruments signed in this manner provided the facsimile
resembles a specimen on file which has been certified by the
Secretary or other duly authorized Officer of the Company.
5. In addition to the provisions of Section 1 of this Article VII
the Treasurer of the Company is authorized to establish petty
cash funds, on an imprest basis. Each such account shall be
designated as a "Cashier's Trust Account" and shall be separately
maintained and accounted for by the cashier or other employee
assigned such responsibility by the Treasurer.
(a) Checks drawn on a Cashier's Trust Account may be signed and
countersigned on behalf of the Company by such employees as
the Treasurer or President may from time to time authorize
and designate; provided, however, that no such check shall
be signed and countersigned by the same person.
(b) No payment out of petty cash funds, whether by cash or
check, shall exceed $2,500.
6. Checks drawn on special accounts which the Company creates or
maintains for the payment of dividends may be signed by the
manual or facsimile signature of its Chief Executive Officer or
President and shall not require any countersignature.
7. All bonds and notes issued under an indenture or mortgage shall
be executed on behalf of the Company by the manual or facsimile
signature of its Chief Executive Officer, President or the
Treasurer and its Secretary unless otherwise provided by
resolution of the Board of Directors.
Section 3 - Special Withdrawals - The President or Treasurer of the
Company, or any person authorized in writing by any of the foregoing
Officers, is authorized to direct any depository:
(a) to charge amounts directly to the account of the Company
without the issuance of a check or draft of the Company, for
the purpose of paying principal of and interest on bonds and
notes issued by the Company, and
(b) to accept and process data submitted via electronic means or
by wire transfer for purposes of receipt or disbursement of
funds;
provided that such direction is in writing and describes the type of such
transactions permitted to be made by such depository.
ARTICLE VIII
Miscellaneous
Section 1 - All dividends shall be declared by a vote of the Board of
Directors.
Section 2 - The fiscal year of the Company shall close at the end of
December of each calendar year.
Section 3 - All or any shares of stock of any corporation owned by
this Company may be voted at any meeting of the shareowners of such
corporation by the Chief Executive Officer of this Company or such other
person as may be designated by the Board of Directors for that purpose,
upon any question that may be presented at such meeting, and the Chief
Executive Officer or such other person may, on behalf of the Company,
waive any notice of the calling of such meeting required by any statute or
by-law and consent to the holding of any such meeting without notice. The
Chief Executive Officer or such other person as may be designated by the
Board of Directors to vote stock owned by this Company shall have
authority to give to any person a written proxy, in the name of this
Company and under its corporate seal, to vote at any meeting of the
shareowners of any corporation all or any shares of stock of such
corporation owned by this Company, upon any question that may be presented
at such meeting, with full power to waive any notice of the calling of
such meeting required by any statute or by-law and to consent to the
holding of any such meeting without notice.
ARTICLE IX
Amendment or Repeal of Bylaws
These bylaws may be altered, amended or repealed by the Board of
Directors at any regular or special meeting of the Board, or at any Annual
Meeting or Special Meeting of Shareowners by the affirmative vote of
owners of shares of outstanding voting stock of the Company having in the
aggregate a number of votes at least equal to a majority of the aggregate
number of votes possessed by all such owners (provided it shall have been
stated in the notice calling any such Special Meeting of Shareowners that
it is proposed at such meeting to alter, amend or rescind the bylaws), or
in such other manner as may be provided by law or in the Restated Articles
of Organization.
ARTICLE X
Indemnification and Liability of
Corporate Directors and Officers
Section 1 - Definitions Applicable to Article X - In this Article X:
1. "Corporation" means WPL Holdings, Inc.
2. "Director or Officer" means any of the following:
a. A natural person who is or was a Director or Officer of the
Corporation.
b. A natural person who, while a Director or Officer of the
Corporation, is or was serving at the Corporation's request
as a Director, Officer, partner, trustee, member of any
governing or decision-making committee, employee or agent of
another corporation or foreign corporation, partnership,
joint venture, trust or other enterprise.
c. A natural person who, while a Director or Officer of the
Corporation, is or was serving an employee benefit plan
because his or her duties to the Corporation also impose
duties on, or otherwise involve services by, the person to
the plan or to participants in or beneficiaries of the plan.
d. Unless the context requires otherwise, the estate or personal
representative of a Director or Officer.
3. "Expenses" include fees, costs, charges, disbursements, attorney
fees and any other expenses incurred in connection with a
proceeding.
4. "Liability" includes the obligation to pay a judgment,
settlement, penalty, assessment, forfeiture or fine, including an
excise tax assessed with respect to an employee benefit plan, and
reasonable expenses.
5. "Party" includes a natural person who was or is, or who is
threatened to be made, a named defendant or respondent in a
proceeding.
6. "Proceeding" means any threatened, pending or completed civil,
criminal, administrative or investigative action, suit,
arbitration or other proceeding, whether formal or informal,
which involves foreign, federal, state or local law and which is
brought by or in the right of the Corporation or by any other
person.
Section 2 - Mandatory Indemnification -
1. The Corporation shall indemnify a Director or Officer, to the
extent he or she has been successful on the merits or otherwise
in the defense of a proceeding, for all reasonable expenses
incurred in the proceeding if the Director or Officer was a party
because he or she is a Director or Officer of the Corporation.
2. a. In cases not included under sub. 1., the Corporation shall
indemnify a Director or Officer against liability incurred by the
Director or Officer in a proceeding to which the Director or
Officer was a party because he or she is a Director or Officer of
the Corporation, unless liability was incurred because the
Director or Officer breached or failed to perform a duty he or
she owes to the Corporation and the breach or failure to perform
constitutes any of the following:
1) A willful failure to deal fairly with the Corporation or
its shareholders in connection with a matter in which the
Director or Officer has a material conflict of interest.
2) A violation of criminal law, unless the Director or
Officer had reasonable cause to believe his or her
conduct was lawful or no reasonable cause to believe his
or her conduct was unlawful.
3) A transaction from which the Director or Officer derived
an improper personal profit.
4) Willful misconduct.
b. Determination of whether indemnification is required under
this subsection shall be made under Section 3.
c. The termination of a proceeding by judgment, order,
settlement or conviction, or upon a plea of no contest or an
equivalent plea, does not, by itself, create a presumption
that indemnification of the Director or Officer is not
required under this subsection.
3. A Director or Officer who seeks indemnification under this
section shall make a written request to the Corporation.
4. a. Indemnification under this Article X is not required to the
extent limited by the articles of incorporation under
Section 180.048, Wis. Stats.
b. Indemnification under this Article X is not required if the
Director or Officer has previously received indemnification
or allowance of expenses from any person, including the
Corporation, in connection with the same proceeding.
Section 3 - Determination of Right to Indemnification - Unless
otherwise provided by the articles of incorporation or bylaws or by
written agreement between the Director or Officer and the Corporation, the
Director or Officer seeks indemnification under Section 2, 2. shall select
one of the following means for determining his or her right to
indemnification:
1. By a majority vote of a quorum of the Board of Directors
consisting of Directors not at the time parties to the same or
related proceedings. If a quorum of disinterested Directors
cannot be obtained, by majority vote of a committee duly
appointed by the Board of Directors and consisting solely of 2 or
more Directors not at the time parties to the same or related
proceedings. Directors who are parties to the same or related
proceedings may participate in the designation of members of the
committee.
2. By independent legal counsel selected by a quorum of the Board of
Directors or its committee in the manner prescribed in 1., above,
if unable to obtain such a quorum or committee, by a majority
vote of the full Board of Directors, including Directors who are
parties to the same or related proceedings.
3. By a panel of three arbitrators consisting of one arbitrator
selected by those Directors entitled under 2., above, to select
independent legal counsel, one arbitrator selected by the
Director or Officer seeking indemnification and one arbitrator
selected by the two arbitrators previously selected.
4. By an affirmative vote of shares as provided in Section 180.28,
Wis. Stats., shares owned by, or voted under the control of,
persons who are at the time parties to the same or related
proceedings, whether as plaintiffs or defendants or in any other
capacity, may not be voted in making the determination.
5. By a court under Section 180.051, Wis. Stats., as created by 1987
Wisconsin Act 13.
6. By any other method provided for in any additional right to
indemnification permitted under Section 5, below.
Section 4 - Allowance of Expenses as Incurred - Upon written request
by a Director or Officer who is a party to a proceeding, the Corporation
may pay or reimburse his or her reasonable expenses as incurred if the
Director or Officer provides the Corporation with all of the following:
1. A written affirmation of his or her good faith belief that he or
she has not breached or failed to perform his or her duties to
the Corporation.
2. A written undertaking, executed personally or on his or her
behalf, to repay the allowance and/if required by the
Corporation, to pay reasonable interest on the allowance to the
extent that it is ultimately determined under Section 3, above,
that indemnification under Section 2, above, is not required and
that indemnification is not ordered by a court. The undertaking
under this subsection shall be an unlimited general obligation of
the Director or Officer and may be accepted without reference to
his or her ability to repay the allowance. The undertaking may
be secured or unsecured.
Section 5 - Additional Rights to Indemnification and Allowance of
Expenses
1. Except as provided in 2. below, Sections 2 and 4 above, do not
preclude any additional right to indemnification or allowance of
expenses that a Director or Officer may have under any of the
following:
a. The articles of incorporation or bylaws.
b. A written agreement between the Director or Officer and the
Corporation.
c. A resolution of the Board of Directors.
d. A resolution, after notice, adopted by a majority vote of all
the Corporation's voting shares then issued and outstanding.
2. Regardless of the existence of an additional right under
subsection 1., above, the Corporation may not indemnify a
Director or Officer, or permit a Director or Officer to retain
any allowance of expenses unless it is determined by or on behalf
of the Corporation that the Director or Officer did not breach or
fail to perform a duty he or she owes to the Corporation which
constitutes conduct under Section 2, 2. a. 1), 2), 3) or 4). A
Director or Officer who is a party to the same or related
proceeding for which indemnification or an allowance of expenses
is sought may not participate in a determination under this
subsection.
3. No provision of this Article X shall affect the Corporation's
power to pay or reimburse expenses incurred by a Director or
Officer in any of the following circumstances:
a. As a witness in a proceeding to which he or she is not a
party.
b. As a plaintiff or petitioner in a proceeding because he or
she is or was an employee, agent, Director or Officer of the
Corporation.
Section 6 - Insurance - The Corporation may purchase and maintain
insurance on behalf of an individual who is an employee, agent, Director
or Officer of the Corporation against liability asserted against or
incurred by the individual in his or her capacity as an employee, agent,
Director or Officer or arising from his or her status as an employee,
agent, Director or Officer, regardless of whether the Corporation is
required or authorized to indemnify or allow expenses to the individual
against the same liability under Sections 2, 3, 4 or 5 of this Article X.
Section 7 - Indemnification and Insurance Against Securities Law
Claims - Sections 1 through 6, inclusive, apply to the extent applicable
to any other proceeding, to any proceeding involving a federal or state
statute, rule or regulation regulating the offer, sale or purchase of
securities, securities brokers or dealers, or investment companies or
investment advisers.
Section 8 - Reliance by Directors or Officers -
1. Unless the Director or Officer has knowledge that makes reliance
unwarranted, a Director or Officer, in discharging his or her
duties to the Corporation, may rely on information, opinions,
reports or statements, any of which may be written or oral,
formal or informal, including financial statements and other
financial data, if prepared or presented by any of the following:
a. An Officer or employee of the Corporation whom the Director
or Officer believes in good faith to be reliable and
competent in the matters presented.
b. Legal counsel, public accountants or other persons as to
matters the Director or Officer believes in good faith are
within the person's professional or expert competence.
c. In the case of reliance by a Director, a committee of the
Board of Directors of which the Director is not a member if
the Director believes in good faith that the committee merits
confidence.
2. This section does not apply to a Director's reliance under
Section 180.40(3), Wis. Stats., as in effect on the date of
adoption hereof.
Section 9 - Consideration of Interests in Addition to Shareholders'
Interests - In discharging his or her duties to the Corporation and in
determining what he or she believes to be in the best interests of the
Corporation, a Director or Officer may, in addition to considering the
effects of any action on shareholders, consider the following:
1. The effects of the action on employees, suppliers and customers
of the Corporation.
2. The effects of the action on communities in which the Corporation
operates.
3. Any other factors the Director or Officer considers pertinent.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF WPL HOLDINGS, INC. AS OF AND FOR THE
TWELVE MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1214393
<OTHER-PROPERTY-AND-INVEST> 122947
<TOTAL-CURRENT-ASSETS> 165780
<TOTAL-DEFERRED-CHARGES> 242291
<OTHER-ASSETS> 5941
<TOTAL-ASSETS> 1838422
<COMMON> 308
<CAPITAL-SURPLUS-PAID-IN> 307422
<RETAINED-EARNINGS> 307885
<TOTAL-COMMON-STOCKHOLDERS-EQ> 615615
0
59963
<LONG-TERM-DEBT-NET> 423701
<SHORT-TERM-NOTES> 34534
<LONG-TERM-NOTES-PAYABLE> 56975
<COMMERCIAL-PAPER-OBLIGATIONS> 23000
<LONG-TERM-DEBT-CURRENT-PORT> 3453
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 678156
<TOT-CAPITALIZATION-AND-LIAB> 1838422
<GROSS-OPERATING-REVENUE> 884561
<INCOME-TAX-EXPENSE> 47008
<OTHER-OPERATING-EXPENSES> 282586
<TOTAL-OPERATING-EXPENSES> 715996
<OPERATING-INCOME-LOSS> 168565
<OTHER-INCOME-NET> 13287
<INCOME-BEFORE-INTEREST-EXPEN> 181852
<TOTAL-INTEREST-EXPENSE> 39597
<NET-INCOME> 83370
3311
<EARNINGS-AVAILABLE-FOR-COMM> 91936
<COMMON-STOCK-DIVIDENDS> 60174
<TOTAL-INTEREST-ON-BONDS> 43143
<CASH-FLOW-OPERATIONS> 176962
<EPS-PRIMARY> 2.99
<EPS-DILUTED> 0<F1>
<FN>
<F1>Applicable accounting rules do not require WPL Holdings, Inc. to report
earnings per share on a fully diluted basis.
</FN>
</TABLE>
