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, 1995
or
[ ] 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 0-1125
MADISON GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Wisconsin 39-0444025
(State or other jurisdiction (IRS Employer
of incorporation or Identification No.)
organization)
133 South Blair Street, Madison, Wisconsin 53701-1231
(Address of principal executive offices and zip code)
(608) 252-7000
(Registrant's telephone number including area code)
Common Stock outstanding at August 11, 1995: 10,719,812 shares
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, and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Madison Gas and Electric Company and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED INCOME
(Thousands of Dollars)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
STATEMENTS OF INCOME
Operating Revenues:
Electric . . . . . . . . . . . . $35,980 $36,434 $70,592 $71,696
Gas . . . . . . . . . . . . . . 12,540 13,938 52,381 60,809
Total Operating Revenues . . . 48,520 50,372 122,973 132,505
Operating Expenses:
Fuel for electric generation . . 7,023 7,561 13,040 14,239
Purchased power . . . . . . . . 1,781 2,130 3,643 3,796
Natural gas purchased . . . . . 6,558 8,372 32,497 39,550
Other operations . . . . . . . . 15,051 14,628 29,961 29,140
Maintenance . . . . . . . . . . 3,918 3,727 6,517 6,462
Depreciation and amortization . 6,206 5,606 12,450 11,208
Other general taxes . . . . . . 2,130 2,104 4,346 4,419
Income tax items . . . . . . . . 1,085 1,376 5,621 7,169
Total Operating Expenses . . . 43,752 45,504 108,075 115,983
Net Operating Income . . . . . . . 4,768 4,868 14,898 16,522
AFUDC - equity funds . . . . . . . 15 21 37 55
Other income, net . . . . . . . . . 785 545 2,226 1,096
Income before interest expense . . 5,568 5,434 17,161 17,673
Interest expense:
Interest on long-term debt . . . 2,592 2,632 5,181 5,252
Other interest . . . . . . . . . 202 32 589 145
AFUDC - borrowed funds . . . . . (8) (12) (19) (31)
Net Interest Expense . . . . . 2,786 2,652 5,751 5,366
Net Income . . . . . . . . . . . . 2,782 2,782 11,410 12,307
Preferred stock dividends (Note 4a) - 120 64 239
Earnings on common stock . . . . . $2,782 $2,662 $11,346 $12,068
Earnings per share of common stock
(Note 3) . . . . . . . . . . . . . $0.26 $0.25 $1.06 $1.13
STATEMENTS OF RETAINED INCOME
Balance - beginning of period . . . $80,883 $77,285 $77,358 $72,865
Earnings on common stock . . . . . 2,782 2,662 11,346 12,068
Cash dividends on common stock
(Note 3) . . . . . . . . . . . . . (5,037) (4,983) (10,076) (9,969)
Balance - end of period . . . . . . $78,628 $74,964 $78,628 $74,964
<FN>
The accompanying notes are an integral part of the above statements.
/TABLE
<PAGE>
<TABLE>
Madison Gas and Electric Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOW
(Thousands of Dollars)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating Activities:
Net income . . . . . . . . . . . . $2,782 $ 2,782 $11,410 $12,307
Items not affecting working
capital:
Depreciation and amortization . 6,206 5,606 12,450 11,208
Deferred income taxes . . . . . (182) 360 (240) 911
Amortization of nuclear fuel . . 356 467 1,130 1,095
Amortization of investment tax
credits . . . . . . . . . . . . (192) (196) (389) (387)
AFUDC - equity funds . . . . . . (15) (21) (37) (55)
Other . . . . . . . . . . . . . 393 250 905 237
Net funds provided from
Operations . . . . . . . . . 9,348 9,248 25,229 25,316
Changes in working capital,
excluding cash equivalents, sinking
funds, maturities, and interim
loans:
Decrease/(increase) in current
assets . . . . . . . . . . . . . 8,117 (3,310) 14,652 1,014
Decrease in current liabilities . (5,983) (6,935) (3,038) (2,950)
Other noncurrent items, net . . . (2,265) (2,565) 19 2,816
Cash provided by Operating
Activities . . . . . . . . . . . 9,217 (3,562) 36,862 26,196
Financing Activities:
Acquisition of nonregulated
subsidiary . . . . . . . . . . . - - (8,036) -
Cash dividends on common and
preferred stock . . . . . . . . . (5,037) (5,103) (10,140) (10,208)
Decrease in First Mortgage Bonds . (71) (74) (242) (71)
Decrease in preferred stock . . . - - (5,300) -
Decrease in bond - construction
funds . . . . . . . . . . . . . . 1,734 1,365 3,493 4,799
(Decrease)/increase in interim
loans . . . . . . . . . . . . . . (2,500) 14,000 (16,100) (9,500)
Cash used for Financing
Activities . . . . . . . . . . . (5,874) 10,188 (36,325) (14,980)
Investing Activities:
Additions to utility plant and (3,993) (4,822) (8,086) (8,496)
nuclear fuel . . . . . . . . . . .
AFUDC - borrowed funds . . . . . . (8) (12) (19) (31)
Increase in decommissioning fund . (1,089) (731) (1,982) (1,257)
Cash used for Investing
Activities . . . . . . . . . . . (5,090) (5,565) (10,087) (9,784)
Change in Cash and Cash Equivalents
(Note 5) . . . . . . . . . . . . . . (1,747) 1,061 (9,550) 1,432
Cash and cash equivalents at
beginning of period . . . . . . . 3,731 1,762 11,534 1,391
Cash and cash equivalents at end of
period . . . . . . . . . . . . . . $1,984 $ 2,823 $ 1,984 $ 2,823
<FN>
The accompanying notes are an integral part of the above statements.
/TABLE
<PAGE>
<TABLE>
Madison Gas and Electric Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
<CAPTION>
June 30, Dec. 31,
1995 1994
<S> <C> <C>
ASSETS
Utility Plant, at original cost, in service:
Electric . . . . . . . . . . . . . . . . . . . . . $485,449 $479,346
Gas . . . . . . . . . . . . . . . . . . . . . . . 171,244 167,710
Gross plant in service . . . . . . . . . . . . . 656,693 647,056
Less accumulated provision for depreciation . . . (334,971) (323,511)
Net plant in service . . . . . . . . . . . . . . 321,722 323,545
Construction work in progress . . . . . . . . . . 9,273 11,920
Nuclear decommissioning fund (Note 2) . . . . . . 29,797 27,815
Nuclear fuel, net . . . . . . . . . . . . . . . . 7,415 8,386
Total Utility Plant . . . . . . . . . . . . . . 368,207 371,666
Other property and investments (Note 6) . . . . . . . 18,091 9,843
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . 1,984 11,534
Accounts receivable, less reserves of $946 and $921,
respectively . . . . . . . . . . . . . . . . . . . 21,339 25,998
Unbilled revenue . . . . . . . . . . . . . . . . . 5,327 10,411
Materials and supplies, at average cost . . . . . 6,198 6,424
Fossil fuel, at average cost . . . . . . . . . . . 2,557 2,130
Stored natural gas, at average cost . . . . . . . 3,963 8,551
Prepaid taxes . . . . . . . . . . . . . . . . . . 5,753 5,838
Other prepayments . . . . . . . . . . . . . . . . 1,019 1,456
Total Current Assets . . . . . . . . . . . . . . 48,140 72,342
Deferred charges . . . . . . . . . . . . . . . . . . 34,305 33,908
Total Assets . . . . . . . . . . . . . . . . $468,743 $487,759
CAPITALIZATION AND LIABILITIES
Capitalization (see statement) . . . . . . . . . . . $317,204 $325,389
Current Liabilities:
Preferred stock sinking fund requirements . . . . - 200
Long-term debt sinking fund requirements (Note 4b) 195 430
Maturity of 5.45%, 1996 series (Note 4b) . . . . . 7,840 -
Interim loans - commercial paper outstanding . . . 12,500 28,600
Accounts payable . . . . . . . . . . . . . . . . . 11,972 18,360
Accrued interest . . . . . . . . . . . . . . . . . 2,796 2,803
Other . . . . . . . . . . . . . . . . . . . . . . 8,821 5,470
Total Current Liabilities . . . . . . . . . . . 44,124 55,863
Other Credits:
Accumulated deferred income taxes . . . . . . . . 56,290 56,595
Regulatory liability . . . . . . . . . . . . . . . 25,269 25,204
Investment tax credit - deferred . . . . . . . . . 12,615 12,998
Other . . . . . . . . . . . . . . . . . . . . . . 13,241 11,710
Total Other Credits . . . . . . . . . . . . . . 107,415 106,507
Commitments . . . . . . . . . . . . . . . . . . . . . - -
Total Capitalization and Liabilities . . . . $468,743 $487,759
<FN>
The accompanying notes are an integral part of the above balance sheets.
/TABLE
<PAGE>
<TABLE>
Madison Gas and Electric Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CAPITALIZATION
(Thousands of Dollars)
(Unaudited)
<CAPTION>
June 30, Dec. 31,
1995 1994
<S> <C> <C>
Common Shareholders' Equity:
Common stock - par value $8 per share:
Authorized 28,000,000 shares
Outstanding 10,719,812 shares . . . . . . . . . $85,758 $85,758
Amount received in excess of par value . . . . . . 26,372 26,372
Retained income . . . . . . . . . . . . . . . . . 78,628 77,359
Total Common Shareholders' Equity . . . . . . . 190,758 189,489
Redeemable Preferred Stock cumulative, $25 par value,
authorized 1,175,000 and 1,191,000 shares,
respectively (Note 4a)
Series E, 8.70%, 0 and 212,000 shares outstanding,
respectively, less current sinking fund
requirements of $0 and $200, respectively . . . . . - 5,100
First Mortgage Bonds:
5.45%, 1996 series . . . . . . . . . . . . . . . . 7,840 7,920
7 3/4%, 2001 series . . . . . . . . . . . . . . . 11,302 11,478
6 1/2%, 2006 series:
Pollution Control Revenue Bonds,
principal amount $8,775 and $8,780 respectively,
less construction fund of $1,663 and $1,618
respectively . . . . . . . . . . . . . . . . . . 7,112 7,162
8.50%, 2022 series . . . . . . . . . . . . . . . . 40,000 40,000
6.75%, 2027A series:
Industrial Development Revenue Bonds,
principal amount $28,000, less construction fund
of $2,934 and $6,472 respectively . . . . . . . . 25,066 21,528
6.70%, 2027B series:
Industrial Development Revenue Bonds . . . . . . 19,300 19,300
7.70%, 2028 series . . . . . . . . . . . . . . . . 25,000 25,000
First Mortgage Bonds Outstanding . . . . . . . . 135,620 132,388
Unamortized discount and premium on bonds, net . . (1,139) (1,158)
Long-term debt sinking fund requirements (Note 4b) (195) (430)
Maturity of 5.45%, 1996 series (Note 4b) . . . . . (7,840) -
Total First Mortgage Bonds . . . . . . . . . . . 126,446 130,800
Total Capitalization . . . . . . . . . . . . $317,204 $325,389
<FN>
The accompanying notes are an integral part of the above statements.
/TABLE
<PAGE>
Notes to Consolidated Financial Statements (Unaudited)
June 30, 1995
The consolidated financial statements included herein have been
prepared by the Company, without audit, 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
believes that the disclosures made are adequate to make the
information presented not misleading. In the opinion of Company
management, all adjustments (consisting of only normal recurring
adjustments) necessary to fairly present results have been made.
It is suggested that these consolidated financial statements be
read in conjunction with the financial statements and the notes
thereto set forth on pages 20 through 25 of the Company's 1994
Annual Report to Shareholders and in the Company's 1994 Annual
Report on Form 10-K.
1. Summary of Significant Accounting Policies
The accounting and financial policies relative to the
following items have been described in the "Notes to
Consolidated Financial Statements" in the Company's 1994
Annual Report to Shareholders and have been omitted herein
because they have not changed materially through the date of
this report.
a. Basis of consolidation
b. Revenue recognition
c. Utility plant
d. Nuclear fuel
e. Joint plant ownership
f. Cash and cash equivalents
g. Depreciation
h. Income taxes
i. Accounts receivable
j. Pension plans
k. Postretirement benefits other than pensions
l. Fair value of financial instruments
m. Capitalization matters: common stock, notes payable to
banks, commercial paper, and lines of credit
n. Rate matters
o. Commitments
p. Segments of business
2. Nuclear Decommissioning
Nuclear decommissioning costs are accrued over the estimated
service life of the Kewaunee Nuclear Power Plant (Kewaunee),
which is through the year 2013. These costs are currently
recovered from customers in rates and are deposited in
external trusts. For 1995, the decommissioning costs
recovered in rates will be $3.1 million. These trusts are
shown on the balance sheet in the utility plant section, and
as of June 30, 1995, these trusts totaled $29.8 million.
<PAGE>
Notes to Consolidated Financial Statements (continued)
Decommissioning costs are recovered through depreciation
expense, exclusive of earnings on the trusts. Net earnings on
the trusts are included in other income. The long-term,
after-tax earnings assumption on these trusts is 6.2 percent.
As of June 30, 1995, the accumulated provision for
depreciation included accumulated provisions for
decommissioning totaling $29.8 million.
The Company's share of Kewaunee decommissioning costs is
estimated to be $64.3 million in current dollars based on a
site-specific study performed in 1992 using immediate
dismantlement as the method of decommissioning.
Decommissioning costs are assumed to inflate at an average
rate of 6.1 percent. Physical decommissioning is expected to
occur during the period 2014 through 2021, with additional
expenditures being incurred during the period 2022 through
2050 related to the storage of spent nuclear fuel at the site.
3. Per-Share Amounts
Earnings per share of common stock are computed on the basis
of the weighted average of the daily number of shares
outstanding. For the three months and for the six months
ended June 30, 1995 and 1994, there were 10,719,812 shares.
Dividends declared and paid per share of common stock for the
periods ended June 30, 1995 and 1994, were, respectively, for
the three months $0.47 and $0.465; for the six months, $0.94
and $0.93.
4. Capitalization Matters
a. Redeemable preferred stock.
On February 21, 1995, the Company retired 16,000 Series E
shares for $400,000 in satisfying its annual sinking fund
retirement obligation. The Company repurchased all
remaining shares outstanding of its Series E, 8.70%,
preferred stock on the same day. The total amount of
approximately $5.5 million was financed with short-term
borrowings.
b. First Mortgage Bonds.
The annual sinking fund requirements of the outstanding
First Mortgage Bonds are $430,000 in 1995. As of June 30,
1995, $195,000 is still needed to satisfy the 1995
requirements.
The 5.45%, First Mortgage Bonds, 1996 series will be
maturing on June 1, 1996, requiring $7.8 million to retire
this series of bonds.
<PAGE>
Notes to Consolidated Financial Statements (continued)
5. Supplemental Cash Flow Information
For purposes of the Consolidated Statements of Cash Flow, the
Company considers cash equivalents to be those investments
that are highly liquid with maturity dates of less than three
months.
Cash payments for interest, net of amounts capitalized, and
income taxes were as follows:
Three Months Six Months
Ended June 30, Ended June 30,
(Thousands of dollars) 1995 1994 1995 1994
Interest, net of
amounts capitalized . . $3,995 $3,781 $5,872 $5,332
Income taxes paid . . . $6,980 $5,376 $8,980 $6,001
6. Acquisition of Nonregulated Subsidiary
In January 1995 the Company purchased certain assets of
American Energy Management, Inc. (AEM), a national energy
marketing firm that provides gas marketing, energy management,
energy auditing, and conservation services to customers in ten
states. The acquisition has been accounted for as a purchase,
and the results of AEM have been included in the accompanying
consolidated financial statements since the date of
acquisition. Pro forma results are not presented because the
amounts do not significantly differ from historical results.
The costs of the acquisition have been allocated on the basis
of the estimated fair market value of the assets acquired and
the liabilities assumed. The resulting goodwill is being
amortized over 25 years. Additionally, the former owner has
an option to purchase 20 percent of AEM at any time prior to
the year 2000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Company's internally generated funds were greater than the
funds used for construction and nuclear fuel expenditures during
all of the periods ended June 30, 1995. It is anticipated that
1995 construction and nuclear fuel expenditures will be
$25 million. The Company also expects to capitalize about
$2 million to $3 million of spending on conservation programs
with internally generated funds. Approximately $3 million of the
Company's electric construction program during this period will
be met with construction fund draw-downs.
During the first quarter of 1995, the Company purchased all of
its outstanding 8.70%, Series E, preferred stock and acquired AEM
with internally generated cash.
Bank lines of credit available to the Company are currently
$25 million.
The Company's capitalization ratios were as follows:
June 30, Dec. 31,
1995 1994
Common shareholders' equity . . 56.5% 53.4%
Redeemable preferred stock* . . - 1.5
Long-term debt* . . . . . . . . 39.8 37.0
Short-term debt . . . . . . . . 3.7 8.1
*Includes current maturities and current sinking fund
requirements.
The Company's bonds are currently rated Aa2 by Moody's Investors
Service, Inc., and AA by Standard & Poor's Corporation. The
Company's dealer-issued commercial paper carries the highest
ratings assigned by Moody's and Standard & Poor's.
Business Environment
On May 1, 1995, Northern States Power Company and Wisconsin
Energy Corporation announced a proposed merger. If approved, the
two companies would form a holding company called Primergy
Corporation, creating the tenth largest utility company in the
United States. The merger is subject to approval by the
shareholders of both companies and various regulatory agencies
including the Securities and Exchange Commission, the Nuclear
Regulatory Commission, the Federal Energy Regulatory Commission,
and state regulatory agencies. The outcome of this merger and
the impacts it may have on the Company are unknown at this time.
Regulatory Environment
The Public Service Commission of Wisconsin (PSCW) has opened a
docket to examine the costs and benefits of changing electric
utility company structure and regulation. The PSCW's schedule is
to report its findings to the legislature by the end of 1995. It
is unknown at this time what impact, if any, this examination
will have on the Company.
<PAGE>
Management's Discussion and Analysis (continued)
Results of Operations
Electric Sales and Revenues
The unseasonably warm weather experienced in June of this year
along with a slight increase in the electric customer base
contributed to increased electric sales for the three months
ended June 30, 1995, compared to the same period last year (see
table below).
Electric retail sales increased approximately 5 percent for the
six months ended June 30, 1995, compared to the same time period
a year ago.
<TABLE>
Electric Sales in Megawatt-Hours
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1995 1994 % Change 1995 1994 % Change
<S> <C> <C> <C> <C> <C> <C>
Residential........ 156,625 151,795 3.18% 334,509 335,409 (0.27)%
Large commercial
and industrial<FN>.... 232,904 239,684 (2.83) 453,430 463,424 (2.16)
Small commercial
and industrial..... 176,931 173,725 1.85 336,057 335,565 0.15
Other<FN>............. 78,831 42,993 83.36 151,268 82,440 83.49
Total retail....... 645,291 608,197 6.10 1,275,264 1,216,838 4.80
Sales for resale... 3,101 5,285 (41.32) 13,909 29,899 (53.48)
Total sales........ 648,392 613,482 5.69 1,289,173 1,246,737 3.40
<FN>
*The significant increase in other electric sales is due to a shift in a
major customer from the large commercial and industrial class.
</TABLE>
Despite the increase in electric sales for both the three- and
six-month periods, electric operating revenues decreased
$0.4 million or 1.2 percent for this year's second quarter, and
$1.1 million or 1.5 percent for the six months ended June 30,
1995, as compared to the same periods the previous year. The
decrease in electric operating revenues was the result of the
Company's latest rate reduction, which became effective
January 1, 1995. Electric rates were effectively reduced by
$5.1 million or 3.3 percent.
<PAGE>
Management's Discussion and Analysis (continued)
Gas Sales and Revenues
For the six months ended June 30, 1995, gas revenues decreased
about $8 million or 14 percent compared to the same 1994 period.
The decrease in gas revenues can be attributed, in part, to the
warm weather experienced in the first quarter of this year as
compared to the cold first quarter in 1994. For the three months
ended June 30, 1995, gas revenues decreased about $1 million or
10 percent as compared to the same period last year. The
decrease for both the three- and six-month periods ended June 30,
1995, compared to last year is also attributable to a shift in a
major customer from system rates to transportation rates (see
table). Transport customers' revenue is recorded only as margin
(revenue less cost of gas).
The following table illustrates gas deliveries as compared to the
previous year:
<TABLE>
Gas Deliveries in Thousands of Therms
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1995 1994 % Change 1995 1994 % Change
<S> <C> <C> <C> <C> <C> <C>
Residential...... 12,533 11,486 9.12% 50,717 54,109 (6.27)%
Commercial and
Industrial....... 13,930 15,956 (12.70) 51,338 61,177 (16.08)
Total retail..... 26,463 27,442 (3.57) 102,055 115,286 (11.48)
Transport........ 9,516 5,448 74.67 16,641 6,765 <FN>
Total gas
deliveries....... 35,979 32,890 9.39 118,696 122,051 (2.75)
<FN>
*Variance more than 100%.
</TABLE>
Electric Fuel and Natural Gas Costs
Fuel cost for electric generation and purchased power costs
decreased approximately $0.9 million or 9 percent for the second
quarter of 1995 compared to last year's second quarter. This was
mainly attributable to the low cost purchased power the Company
was able to buy. Purchased power cost per megawatt-hour
decreased $4 or 17 percent for the three months ended June 30,
1995, compared to the same period a year ago.
Fuel costs and purchased power decreased approximately
$1.4 million or 7 percent for the six-month period ended June 30,
1995, when compared to the same period last year. This was due
to a decrease in fuel cost at the Company's Columbia Energy
Center along with a decrease in purchased power costs.
The unseasonably warm June caused power demands to increase
significantly. On June 20, 1995, the Company set a record for
peak demand of 570 megawatts for one hour. The old record of
551 megawatts for one hour was set in June 1994.
<PAGE>
Management's Discussion and Analysis (continued)
Natural gas costs for the six-month period ended June 30, 1995,
decreased $7.1 million or 18 percent compared to the same
six-month period a year ago. This is mainly due to a lower
demand resulting from the warm weather experienced in this year's
first quarter, compared to the cold weather in the first quarter
of 1994, and the shift in a major customer from system rates to
transport rates.
The heating degree days (HDD) for this year's first quarter,
measured by the number of degrees the mean daily temperature is
below 65 degrees Fahrenheit, were 3,416 HDD compared to 4,010 HDD
for the same period last year, or a 17 percent decrease in HDD.
Natural gas costs for the three months ended June 30, 1995,
versus the 1994 comparative period decreased $1.8 million or
22 percent. This is due to a decrease in the cost per therm of
approximately $0.06 or 19 percent and the shift in a major
customer from system rates to transport rates as described
earlier.
Other Operating Expenses
Depreciation expense for the three months and six months ended
June 30, 1995, when compared to the same time periods in 1994,
increased $0.6 million and $1.2 million or 11 percent,
respectively. This is attributable to an increase in
decommissioning costs (see footnote 2).
Income taxes decreased for both the three- and six-month periods
ended June 30, 1995, compared to the same 1994 periods. For the
three months ended, income taxes decreased approximately
$0.3 million or 21 percent, and for the six months ended, income
taxes decreased $1.5 million or 22 percent. This is due to a
decrease in pretax operating income for both periods.
Other Items
Other income increased $1.1 million for the six months ended June
30, 1995, compared to the same period last year due to earnings
realized from the Company's nonregulated business.
Other interest expense increased for both the three- and
six-month periods ended June 30, 1995, when compared to the same
periods a year ago. This is due to higher levels of short-term
debt outstanding during 1995 periods than in 1994 because of the
repurchase of the Series E preferred stock earlier this year.
<PAGE>
PART II. OTHER INFORMATION
Item 4 Results of Votes of Security Holders
The Company's Annual Meeting of Shareholders was
held on May 1, 1995, in Middleton, Wisconsin.
Proxies for the meeting were solicited pursuant to
Regulation 14A of the Securities Exchange Act. The
election of nominees for directors of Class III to
hold office until 1998 were voted upon by
shareholders at the meeting. The table below
briefly describes the results of the shareholders'
votes extending Class III Directors' terms until
1998.
For Withhold
Authority
Richard E. Blaney 8,792,872 91,282
Frederic E. Mohs 8,796,005 90,078
Phillip C. Stark 8,792,723 93,360
Item 5 Other Information
During the scheduled maintenance and refueling
outage of the Kewaunee Nuclear Power Plant
(Kewaunee), inspection of the steam generators
revealed higher levels of tube degradation than was
anticipated. Thus, the degraded tubes were removed
from service by plugging. Prior to the recent
shutdown, the equivalent of approximately 12 percent
of the tubes in the steam generators were plugged
with no loss of capacity. When Kewaunee was
returned to service on May 18, 21 percent of the
tubes were plugged, resulting in a capacity
reduction during Kewaunee's current operating cycle
which extends into the fall of 1996. The Company's
share (17.8 percent) of net Kewaunee output has been
reduced from 93 megawatts to approximately
91 megawatts. The small reduction in capacity
resulting from the plugging of steam generator tubes
should not affect earnings significantly because of
the availability of reserve capacity in our system.
The study of tube repair alternatives continues.
Item 6(a) Exhibits
Exh. No. Indenture of Mortgage and Deed of Trust Between the
4 Company and Firstar Trust Company, as Trustee (and
supplements). Reference was provided in the
Company's 1994 Annual Report on Form 10-K
(Commission File No. 0-1125).
Exh. No. Ratio of Earnings to Fixed Charges
12
Exh. No. Appendix E to Item 601(c) of Regulation S-K: Public
27 Utility Companies Financial Data Schedule UT
<PAGE>
Other Information (continued)
Exhibit Index
Sequentially
Exhibit No. Exhibit Numbered Page
4 Indenture of Mortgage and NA
Deed of Trust Between the
Company and Firstar Trust
Company
12 Ratio of Earnings to Fixed 16
Charges 16
27 Regulation S-K: Financial Data 17
Schedule UT 17
Item 6(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
for which this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MADISON GAS AND ELECTRIC COMPANY
(Registrant)
Date: August 11, 1995 /s/ David C. Mebane
David C. Mebane
Chairman, President and Chief
Executive Officer
(Duly Authorized Officer)
Date: August 11, 1995 /s/ Joseph T. Krzos
Joseph T. Krzos
Vice President - Finance
(Chief Financial and Accounting Officer)
<PAGE>
Ratio of Earnings to Fixed Charges Exhibit 12
Six Months Ended
June 30, 1995
(000s)
Earnings
Income before interest expense . . . . . $17,161
Add:
Income tax items . . . . . . . . . . . . 5,621
Income tax on other income . . . . . . . 1,266
Amortization of debt discount, premium 127
expense . . . . . . . . . . . . . . . . .
AFUDC - borrowed funds . . . . . . . . . 19
Interest on rentals . . . . . . . . . . . 108
Total Earnings . . . . . . . . . . . . $24,302
Fixed Charges
Interest on long-term debt . . . . . . . $ 5,181
Other interest . . . . . . . . . . . . . 589
Amortization of debt discount, premium 127
expense . . . . . . . . . . . . . . . . .
Interest on rentals . . . . . . . . . . . 108
Total Fixed Charges . . . . . . . . . . $ 6,005
Ratio of Earnings to Fixed Charges . . . 4.05x
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-Q. Items 1 through 22 are as of June 30, 1995. Items 23 through 38 are for
the six months ended June 30, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
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0
0
<LONG-TERM-DEBT-NET> 126,446
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<EARNINGS-AVAILABLE-FOR-COMM> 11,346
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