<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994 Commission file number 0-8320
MID-PLAINS TELEPHONE, INC.
(Exact Name of Registrant as Specified in Its Charter)
WISCONSIN 39-0274450
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1912 Parmenter Street, P.O. Box 620070, Middleton, Wisconsin 53562-0070
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (608) 831-1000
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Name of each exchange on which
Title of each class Registered
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock $3.33-1/3 Par Value
11% Subordinated Debentures, Due July 1, 1995
(Title of Class)
Indicate by checkmark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
Indicate by checkmark 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
As of March 10, 1995, there were 1,976,050 shares of Common Stock
outstanding. The aggregate market value (based upon unrelated party
non-broker transactions which the Company was familiar with) of Common Stock
held by nonaffiliates on that date was $69,161,750.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Shareholders for the fiscal
year ended December 31, 1993 are incorporated by reference into Parts I, II
and IV of this Form 10-K.
Portions of the registrant's Proxy Statement for the Annual Meeting to be
held April 24, 1995 are incorporated by reference into Part III of this
Form 10-K.<PAGE>
MID-PLAINS TELEPHONE, INC.
FORM 10-K
Part I.
Item 1. BUSINESS.
(a) Mid-Plains Telephone, Inc., (Mid-Plains), which was incorporated
in 1901, is a public utility providing telecommunications
services primarily in Middleton, Cross Plains and the west side
of Madison, Wisconsin.
Mid-Plains has a wholly-owned subsidiary, Mid-Plains
Communications Systems, Inc., (MPCS), which, in southern
Wisconsin and northern Illinois, markets and installs
deregulated communications systems and provides maintenance
services related to their continued use. In October, 1994
MPCS began providing long distance service.
There was no material change in the nature of the business
conducted by the Company during 1994.
Information regarding the recent development of the Company's
business in the number of access lines is shown below:
<TABLE>
Access
Year Lines in Service
<S> <C>
1994 26,281
1993 24,414
1992 23,103
</TABLE>
(b) Mid-Plains operates in two industry segments: telecommunica-
tions services (telephone utility) and sales and service of
communications systems (non-telephone utility). The financial
information regarding Mid-Plains' industry segments is provided
in the Company's Annual Report to Shareholders, page 21 (Footnote 9)
for the year ended December 31, 1994, incorporated herein and
filed as Exhibit 13.
(c) Mid-Plains' principal line of business is providing
telecommunications services. Operating revenues fall into four major
classes: local network revenues, network access and long distance
services, system sales and services, and other (billing and
collection, directory, other nonregulated and miscellaneous).
<PAGE>
Revenues from each of these classes over the last three years
are as follows:
<TABLE>
Years Ended December 31,
1994 1993 1992
In Thousands
<S> <C> <C> <C>
Local Network Services $3,548 $2,520 $2,126
% of Total Revenues 17% 13% 12%
Network Access and
Long Distance Services $9,916 $9,596 $8,804
% of Total Revenues 46% 51% 49%
Other $2,096 $2,143 $2,168
% of Total Revenues 10% 11% 12%
System Sales and Services $5,900 $4,782 $4,977
% of Total Revenues 27% 25% 27%
</TABLE>
The business of Mid-Plains is not seasonal to any significant extent.
Mid-Plains telephone utility operations are subject to regulation by
the Public Service Commission of Wisconsin (PSCW). Mid-Plains provides
local exchange network service to customers within its 115.8 square
mile service area located in Dane County, Wisconsin. The customers
have local extended area services (EAS) and access to the nationwide
direct dial toll service network. Although the Company's customers
have access to the nationwide direct toll network, the Company does
not have toll operators. The operator service is provided primarily
through Ameritech.
During 1993, the Wisconsin Legislature changed the definition of
small telecommunications utilities to include utilities with less
than 50,000 access lines. This change reduces regulation for Mid-Plains,
allowing greater flexibility in regulatory matters. Legislation is
pending which will make this change permanent.
In 1994, the Wisconsin Legislature enacted the Telecommunications Act
of 1993. This legislation results in open competition for Ameritech
and GTE and further relaxes regulation for other telecommunications
utilities in Wisconsin.
The Telecommunications industry continues to undergo various
regulatory, competitive and technological changes. Wisconsin
regulation of local exchange carriers (LEC's) is moving from
traditional cost-based rate-of-return regulation to incentive-based
alternative regulation. Coincident with this is the encouragement of
<PAGE>
local exchange competition and the emergence of companies providing
competitive access and other services that will compete with LEC's.
In addition, local service competition will be enhanced by the
convergence of telecommunications, cable, wireless, video, computer
and other technologies. While these changes may eventually cause
regulatory risks and adverse revenue and earnings pressures on Mid-
Plains, competition should also bring more creative uses for the
market and new opportunities.
Information regarding the Company's major customers is provided in
Mid-Plains' Annual Report to Shareholders, page 17 (Footnote 1) for
the year ended December 31, 1994, incorporated herein and filed as
Exhibit 13.
The Company encounters substantial competition from other companies
in the sale and servicing of communication systems and in the sale
and provision of long distance service.
Order backlog is not a significant consideration in the Company's
business, and the Company has no contracts or subcontracts which may
be subject to renegotiation of profits or termination at the election
of the Federal government.
Information regarding this Company's working capital practice is
provided in Mid-Plains Annual Report to Shareholders, page 11,
for the year ended December 31, 1994, incorporated herein and filed
as Exhibit 13.
The number of employees on the Company's payroll as of December 31,
1994, was 153.
Item 2. PROPERTIES.
The Company owns telecommunications property including: general
support assets (18%), central office assets (33%), cable wire
facilities assets (47%), and other assets (2%), all as necessary to
provide services in its serving area. Between January 1, 1992 and
December 31, 1994, the Company made property additions in the amount
of $10.3 million and retirements of $1.7 million. Virtually all of
this property is subject to liens securing long-term debt. In the
opinion of management, the Company's telecommunications plant is
substantially in good repair and suitably equipped.
Item 3. LEGAL PROCEEDINGS.
There are no material pending legal actions, either for or against
the Company.
<PAGE>
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were none in the fourth quarter.
EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth the names and ages of all executive
officers of Mid-Plains and all positions and offices within the
Company presently held by such executive officers. Executive
officers are elected annually for one year and hold office until
their successors are elected. None of the executive officers of Mid-
Plains has any family relationship with any other executive officer
or director of the Company.
<TABLE>
Name Age Position Held
<S> <C> <C>
Dean W. Voeks 52 President and Director
Howard G. Hopeman 51 Vice-President and
Chief Financial Officer
Rick J. Mason 39 Vice-President, Operations
Daniel J. Stein 40 Executive Vice-President and
General Manager of subsidiary,
Mid-Plains Communications Systems,
Inc.
Fredrick E. Urben 53 Vice-President, Administration &
Human Relations, Secretary &
Treasurer, and Director
</TABLE>
Dean W. Voeks has served as President and Director of Mid-Plains
since January, 1991. He has been an officer of Mid-Plains since
1987. He has been President and a Director of Mid-Plains
Communications System, Mid-Plains subsidiary, since 1991.
Howard G. Hopeman has served as Vice-President and Chief Financial
Officer since 1989. He has been a Director and Secretary & Treasurer
of Mid-Plains Communications Systems, Mid-Plains' subsidiary, since
1994.
Rick J. Mason joined Mid-Plains in September, 1992 as Vice-President
Operations. Previously he was employed by TDS Telcom from 1981 to
1992 and held various managerial positions.
<PAGE>
Daniel J. Stein has served as Executive Vice-President and General
Manager of the subsidiary, Mid-Plains Communications Systems, Inc.,
for the past eight years. He became a Director of the subsidiary in
1987.
Fredrick E. Urben is Vice-President Administration & Human Relations,
and Secretary & Treasurer. He has been an officer of Mid-Plains
since 1972 and a Director since 1977.
PART II.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Reference is made to Mid-Plains' Annual Report To Shareholders, page
opposite page 1, and page 17 (Footnote 2) and page opposite page 24,
for the year ended December 31, 1994, incorporated herein and filed
as Exhibit 13.
Item 6. SELECTED FINANCIAL DATA.
Reference is made to Mid-Plains' Annual Report To Shareholders, page
opposite page 1, for the year ended December 31, 1994, incorporated
herein and filed as Exhibit 13.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Reference is made to Mid-Plains' Annual Report To Shareholders, pages
10-11, for the year ended December 31, 1994, incorporated herein and
filed as Exhibit 13.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Reference is made to the Company's Annual Report To Shareholders,
pages 12-22, for the year ended December 31, 1994, incorporated
herein and filed as Exhibit 13.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
<PAGE>
Part III.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required as to the Directors of the Registrant is
incorporated by reference and is contained in Mid-Plains' definitive
proxy statement for its 1995 Annual Meeting of Shareholders filed or
to be filed not later than 120 days after the end of the fiscal year
covered by this report. Information as to the Executive Officers of
the Registrant appears in Part I of this Form 10K Annual Report as an
unnumbered item under the caption "Executive Officers of the
Registrant".
The information as to the delinquent filers pursuant to Item 405 of
Regulation S-K is incorporated by reference and is contained in Mid-
Plains' definitive proxy statement for its 1995 Annual Meeting of
Shareholders filed or to be filed not later than 120 days after the
end of the fiscal year covered by this report.
Item 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated by reference
and is contained in Mid-Plains' definitive proxy statement for its
1995 Annual Meeting of Shareholders filed or to be filed not later
than 120 days after the end of the fiscal year covered by this
report.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) Security ownership of certain beneficial owners.
Pursuant to restrictions in Mid-Plains' By-Laws, no person,
including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, may be, nor is any
person in fact the beneficial owner of more than five percent of
any class of the Company's voting securities.
(b) Security ownership of certain beneficial owners.
The information required by this item is incorporated by
reference and is contained in Mid-Plains' definitive proxy
statement for its 1995 Annual Meeting of Shareholders filed or
to be filed not later than 120 days after the end of the fiscal
year covered by this report.
(c) Changes in control.
Mid-Plains does not know of any arrangements, including the
pledge by any person, of the Company's securities, the operation
of which may at a subsequent date result in a change of control
of the Company.
<PAGE>
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated by reference
and is contained in Mid-Plains' definitive proxy statement for its
1995 Annual Meeting of Shareholders filed or to be filed not later
than 120 days after the end of the fiscal year covered by this
report.
Part IV.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K.
(a) 1. FINANCIAL STATEMENTS. Reference is made to the
Registrant's Annual Report To Shareholders, pages 12-22,
for the year ended December 31, 1994, incorporated herein
and filed as Exhibit 13.
Consolidated Balance Sheets at December 31, 1994 and 1993.
Consolidated Statements for each of the three years ended
December 31, 1994 --
Statements of Income
Statements of Shareholders' Equity
Statements of Cash Flows
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants
Responsibility For Financial Statements
2. FINANCIAL STATEMENTS SCHEDULES.
All schedules are omitted because of the absence of
conditions under which they are required.
Separate financial statements and supplemental schedules of
Mid-Plains are omitted since Mid-Plains is primarily an
operating company and its subsidiary, included in the
consolidated financial statements being filed, does not
have a minority equity interest or indebtedness to any
person other than Mid-Plains in an amount which exceeds
five percent of the total assets as shown by the
consolidated financial statements filed herein.
<PAGE>
3. EXHIBITS. Exhibits filed (or to be filed) as a part of
this Form 10-K Annual Report are as follows:
<TABLE>
Exhibit Number Description
<S> <C>
12 Computation of Ratio of
Earnings to Fixed Charges
13 MID-PLAINS TELEPHONE, INC.
Annual Report to Shareholders
for 1994
21 Subsidiary of the Registrant
27 Financial Data Schedule
</TABLE>
EXHIBITS INCORPORATED BY REFERENCE
Compilation of Articles of Incorporation current
in effect as of December 31, 1990 (See Exhibit
6, Form 10-K for the fiscal year ending
December 31, 1990).
By-laws of the Company in effect as of December
30, 1990 (See Exhibit 7, Form 10-K for the
fiscal year ending December 31, 1990).
January 16, 1992 Amendment to Bylaws (See
Exhibit 5, Form 10-K for the fiscal year ended
December 31, 1991).
Third Supplemental Indenture, Mid-Plains
Telephone, Inc., to M&I First National Bank,
West Bend, Wisconsin, Successor Trustee, dated
as of July 1, 1990 (See Exhibit 8, Form 10-K for
the fiscal year ending December 31, 1990).
(b) REPORTS ON FORM 8-K. There were no reports on Form 8-K filed
with the Securities and Exchange Commission during the fourth
quarter of the year ended December 31, 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MID-PLAINS TELEPHONE, INC.
(Registrant)
Date: March 30, 1995 By /s/Dean W. Voeks
Dean W. Voeks, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the Company and in the capacities and on the dates indicated.
/s/Dean W. Voeks President and Director March 30, 1995
Dean W. Voeks (Principal Executive
Officer)
/s/Howard G. Hopeman Vice-President and March 30, 1995
Howard G. Hopeman Chief Financial Officer
(Principal Financial
and Accounting Officer)
/s/Fredrick E. Urben Vice-President, March 30, 1995
Fredrick E. Urben Administration & Human
Relations, Secretary &
Treasurer and Director
/s/Charles Maulbetsch Director March 30, 1995
Charles Maulbetsch
/s/S. C. Ehlers Director March 30, 1995
S. C. Ehlers
The above signatures include a majority of the signatures of the
Board of Directors.
<PAGE>
<PAGE>
<TABLE>
EXHIBIT 12
MID-PLAINS TELEPHONE, INC.
<CAPTION>
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended December 31,
1994 1993 1992 1991 1990
In Thousands:
<S> <C> <C> <C> <C> <C>
Net Income $2,889 $2,882 $2,680 $1,922 $1,807
Income Tax
Expense 1,715 1,551 1,562 1,026 944
Interest Charges 896 955 1,004 1,062 880
Total Earnings $5,500 $5,388 $5,246 $4,010 $3,631
Interest
Expense 896 955 1,004 1,062 880
Ratio of Earnings
To Interest
Expense 6.14 5.64 5.23 3.77 4.13
</TABLE>
<PAGE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS<F1>
Dollars in thousands, except per share data
1994 1993 1992 1991 1990 1984
<S> <C> <C> <C> <C> <C> <C>
Access Lines 26,281 24,414 23,103 21,416 19,721 $12,634
Total Assets $33,889 $33,676 $31,079 $29,361 $28,199 $14,723
Shareholders'
Equity $18,232 $16,766 $15,158 $13,943 $13,260 $ 4,435
Long-Term Debt,
Including
Current
Maturities $ 6,954 $ 7,756 $ 8,482 $ 9,141 $ 9,738 $ 4,051
Short-Term
Notes Payable
to Banks $ 1,300 $ 2,400 $ 1,400 $ 1,200 $ -- $ --
Ratio of
Earnings to
Interest
Expense<F2> 6.14 5.64 5.23 3.77 4.13 6.69
Revenues and
Sales $21,460 $19,041 $18,075 $15,728 $14,659 $ 9,875
Net Income $ 2,889 $ 2,882 $ 2,680 $ 1,922 $ 1,807 $ 1,462
Earnings Per
Share $ 1.47 $ 1.47 $ 1.38 $ .99 $ .94 $ .90
Cash Dividends
Per Share $ .860 $ .780 $ .860 $ .705 $ .653 $ .523
Average Common
Shares
Outstanding 1,969,628 1,958,846 1,948,860 1,941,627 1,929,563 1,630,566
Number of
Shareholders 2,222 2,135 2,067 2,015 1,925 1,604
<FN>
<F1>Earnings per share, cash dividends and average common shares
outstanding have been adjusted retroactively for the 3-for-1 stock
split in 1990.
<F2>For the purpose of this ratio, earnings have been calculated by
adding net income, interest expense and income taxes.
</FN>
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
Mid-Plains operates in two business segments: telephone operations and the
sales and service of communications systems (non-telephone). Telephone
operations continue to have rapid growth with access lines increasing by 7.7%
for 1994 and 5.7% for 1993. System sales and service operations continue to
serve a strong customer base. The Company's consolidated operating revenues
reached a new high in 1994 growing to $21.5 million from $19.0 million in 1993
and $18.1 million in 1992.
TELEPHONE SERVICE OPERATING RESULTS
The telephone segment contributed operating income of $5.0 million, $5.0
million, and $4.8 million to the consolidated operating income in 1994, 1993,
and 1992, respectively.
OPERATING REVENUES
Telephone service revenues increased by $1.3 million and $1.2 million in 1994
and 1993, respectively.
For 1994, local network services increase by $0.6 million due to the
elimination of certain regulatory liabilities (see Note 8 to the Financial
Statements). In addition, 1994 revenues were affected by Extended Community
Calling, resulting in a $0.3 million increase in local service network which
was offset by decreases of $0.4 million and $0.2 million in network access and
other revenues, respectively.
For 1993, revenue increases were due primarily to a $0.3 million increase
in local network revenues due to the recording of regulatory liabilities and
increased network access caused by increased network usage.
Network access and long distance services revenues include both
interstate and intrastate revenues. For 1994, approximately 59% of such
revenues were interstate as compared to 56% in 1993 and 57% in 1992.
OPERATING EXPENSES
Telephone operating expenses which includes plant, depreciation, customer,
corporate, and general taxes, increased by $1.3 million and $1.0 million in
1994 and 1993, respectively. The changes in plant, customer and corporate
expenses in 1994 were due primarily to the elimination of $0.3 million of
regulatory assets (see Note 8 to the Financial Statements), start-up costs of
$0.2 million associated with the provisioning of toll services, and internal
growth. In addition, 1994 reflects shift of $0.3 million to corporate from
plant and customer due to planning and other changes. In 1993, the changes
were due primarily to growth in internal operations and included a $0.3
million increase in expense related to regulatory liabilities described above.
Depreciation increased $0.2 million in 1994 and $0.1 million in 1993 as a
result of increased depreciable property.
SYSTEM SALES AND SERVICE OPERATING RESULTS
The non-telephone segment contributed operating income of $0.5 million, $0.4
million, and $0.5 million to the consolidated operating income in 1994, 1993,
and 1992, respectively.
OPERATING REVENUES
System sales and service revenues increased by $1.1 million in 1994 and
decreased by $0.2 million in 1993 primarily as a result of increased system
sales and maintenance in 1994 and decreased system maintenance in 1993.
OPERATING EXPENSES
Cost of sales and services, as a percentage of operating revenues, were 58% in
1994, 56% in 1993, and 61% in 1992. The decrease in 1993 was due primarily to
improved margins on sales and service revenues. Operating expenses increased
by $0.3 million in 1994 and $0.2 million in 1993.
OTHER ITEMS
Interest expense decreases in 1994 and 1993 were due to a reduction in long-
term debt and fluctuations in short-term debt and interest rates.
The effective income tax rate was 37.3%, 34.8% and 36.8% in 1994, 1993 and
1992, respectively. In 1993, Mid-Plains adopted new accounting rules for
income taxes (SFAS 109) (see Note 1 to the Financial Statements). The effect
of this accounting change was insignificant.
LIQUIDITY AND CAPITAL RESOURCES
OVERVIEW
Mid-Plains Telephone, Inc. requires funds primarily for its construction
program, the maturity and retirement of long-term debt, dividend payments and
investments. The capital resources available to meet these requirements are
provided through internally generated funds and external financings. Net cash
provided from operations of the Company and its subsidiary for the years 1992
- 1994 was approximately $16.1 million. External financings for the same
period totaled approximately $0.8 million.
CAPITAL REQUIREMENTS AND RESOURCES
The primary capital requirement of the Company consists of expenditures under
its construction program. Total construction expenditures for the years 1992
- 1994 were approximately $10.3 million. Total construction expenditures for
1995 are estimated to be $6.2 million. In 1994, Mid-Plains transferred to
short term debt $2.5 million of five-year debentures which are due on July 1,
1995. It is expected that capital requirements for construction expenditures
and repayment of the debentures will be provided for with cash flow from
operations, the issuance of long-term debt and short term bank notes.
In 1994, the cellular partnership in which Mid-Plains has a limited
interest made a capital call due July 1, 1995. Mid-Plains is analyzing
whether or not to invest $2.0 million as explained in Note 7 of the Financial
Statements.
At December 31, 1994, the Company had available unused lines-of-credit of
$5 million. The Company has experienced no difficulty in obtaining funds for
its construction program or other purposes and anticipates none in the future.
EXTERNAL FINANCINGS
External financings for the years 1992 - 1994 were $0.8 million consisting of
$0.7 million raised through the sale of common stock under the employee stock
purchase plan and a net increase in short-term bank notes of $0.1 million.
In connection with its long-term debt, the Company is subject to certain
restrictions on its debt, equity and investments. The Company's ratio of
shareholder's equity to total capitalization (shareholder's equity plus long-
term and short-term debt) was 69% at December 31, 1994, as compared to 62% at
December 31, 1993, and 61% at December 31, 1992. The Company's long-term goal
is to maintain a common equity level of about 50 to 60%. The Company expects
its 1995 equity level to exceed this range at December 31, 1994.
OTHER MATTERS
REGULATORY ENVIRONMENT
For regulatory purposes, Mid-Plains is currently considered as a small
telecommunications utility and is subject to reduced regulation (expiring in
1997 if not extended) which allows for greater flexibility in regulatory
matters. Mid-Plains used this reduced regulation to increase its local rates
without a formal proceeding in January 1995. This will result in an increase
in annual revenues of approximately $1.1 million.
The telecommunications industry continues to undergo various regulatory,
competitive and technological changes. Wisconsin regulation is moving from
traditional cost-based rate-of-return regulation to incentive-based
alternative regulation. Coincident with this is the encouragement of local
exchange competition (LEC's) and the emergence of companies providing
competitive access and other services that will compete with LEC's. In
addition, local service competition will be enhanced by the convergence of
telecommunications, cable, wireless, video, computer and other technologies.
While these changes may eventually cause regulatory risks and adverse revenue
and earnings pressures on Mid-Plains, competition will also bring more
creative uses of the market and new opportunities. Mid-Plains will continue
to monitor the ongoing changes in regulation, competition and technology and
consider which developments provide the most favorable opportunities for Mid-
Plains to pursue.<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
Mid-Plains Telephone, Inc.
<TABLE>
Year Ended December 31,
1994 1993 1992
In Thousands Except For Per Share Data
<S> <C> <C> <C>
OPERATING REVENUES
Telephone operations -
Local network services $ 3,548 $ 2,520 $ 2,126
Network access and long
distance services 9,916 9,596 8,804
Other 2,096 2,143 2,168
System sales and services 5,900 4,782 4,977
21,460 19,041 18,075
OPERATING EXPENSES
Telephone operations -
Plant operations 2,567 2,509 2,290
Depreciation 2,307 2,092 1,970
Customer operations 2,411 2,135 1,714
Corporate operations 2,381 1,732 1,590
General taxes 868 815 748
System sales and services -
Cost of sales and services 3,429 2,699 3,025
Operating expenses 2,015 1,682 1,489
15,978 13,664 12,826
OPERATING INCOME 5,482 5,377 5,249
Other income 18 11 (3)
Interest expense (896) (955) (1,004)
INCOME BEFORE INCOME TAX EXPENSE 4,604 4,433 4,242
Income tax expense 1,715 1,551 1,562
NET INCOME $ 2,889 $ 2,882 $ 2,680
Earnings per share $ 1.47 $ 1.47 $ 1.38
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
Mid-Plains Balance Sheet
<TABLE>
December 31, December 31,
In Thousands 1994 1993
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 186 $ 1,606
Accounts receivable
Due from subscribers 811 779
Customer sales and service 725 661
Other, principally connecting
companies 1,848 1,576
Refundable income taxes 184 252
Inventories
Plant materials and supplies 281 238
Communication systems and parts 863 957
Other 393 214
5,291 6,283
PROPERTY, PLANT AND EQUIPMENT
Telephone, in service and under
construction, at original cost 41,041 37,172
Less accumulated depreciation (15,383) (13,346)
25,658 23,826
INVESTMENTS AND OTHER ASSETS
Cellular limited partnership interest 2,379 2,379
Other 561 1,188
2,940 3,567
$33,889 $33,676
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 3,380 $ 801
Notes payable to banks 1,300 2,400
Accounts payable 2,798 1,989
Other 648 756
8,126 5,946
LONG-TERM DEBT 3,574 6,955
DEFERRED CREDITS
Deferred income taxes 2,742 2,097
Unamortized investment tax credits 300 372
Other 915 1,540
3,957 4,009
SHAREHOLDERS' EQUITY
Common stock, $3.33-1/3 par value;
3,000,000 shares authorized;
issued 1,974,400 and 1,964,633
shares, respectively 6,581 6,549
Additional paid-in capital 4,806 4,568
Retained earnings 6,845 5,649
18,232 16,766
$33,889 $33,676
The accompanying notes are an integral part of the consolidated financial
statements.
/TABLE
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Mid-Plains Telephone, Inc.
Common Stock Additional Total
Shares Par Paid-in Retained Shareholders'
Issued Value Capital Earnings Equity
In Thousands
<S> <C> <C> <C> <C> <C>
Balances,
December 31, 1991 1,944 $6,481 $4,170 $3,292 $13,943
Net income 2,680 2,680
Cash dividend -
$.86 a share (1,677) (1,677)
Stock purchase plan 10 32 180 212
Balances,
December 31, 1992 1,954 6,513 4,350 4,295 15,158
Net income 2,882 2,882
Cash dividend -
$.78 a share (1,528) (1,528)
Stock purchase plan 11 36 218 254
Balances,
December 31, 1993 1,965 6,549 4,568 5,649 16,766
Net income 2,889 2,889
Cash dividend -
$.86 a share (1,693) (1,693)
Stock purchase plan 9 32 238 270
Balances,
December 31, 1994 1,974 $6,581 $4,806 $6,845 $18,232
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Mid-Plains Telephone, Inc.
Year Ended December 31,
1994 1993 1992
In Thousands
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $2,889 $2,882 $2,680
Add (Deduct) adjustments to
reconcile net income to net
cash from operations:
Depreciation 2,390 2,161 2,021
Deferred income taxes 485 421 117
Change in accounts and
other receivables (369) (100) (691)
Change in inventories 51 (207) (81)
Change in accounts payable 809 (64) 680
Change in other assets
and liabilities (139) 178 (53)
Net cash from operating activities 6,116 5,271 4,673
FINANCING ACTIVITIES
Repay long-term debt (802) (726) (659)
Short-term bank notes:
Borrowings 400 1,400 200
Repayments (1,500) (400) --
Dividends paid (1,693) (1,528) (1,677)
Stock purchase plan 270 254 212
Net cash used in financing activities (3,325) (1,000) (1,924)
INVESTING ACTIVITIES
Additions to property, plant
and equipment (4,233) (3,413) (2,635)
Investment in cellular partnership -- -- 91
Other, net 22 (17) (1)
Net cash used in investing activities (4,211) (3,430) (2,545)
CASH AND CASH EQUIVALENTS
Net increase (decrease) during year (1,420) 841 204
Beginning of year 1,606 765 561
End of year $ 186 $1,606 $ 765
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Mid-Plains Telephone, Inc.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of Mid-Plains Telephone, Inc. and its
subsidiary ("Mid-Plains") conform to generally accepted accounting
principles and where applicable, conform to the accounting principles
prescribed by the Public Service Commission of Wisconsin (PSCW).
PRINCIPLES OF CONSOLIDATION
Mid-Plains' consolidated financial statements include the accounts
of Mid-Plains Telephone, Inc. and its wholly-owned subsidiary,
Mid-Plains Communications Systems, Inc. All significant inter-company
items have been eliminated in consolidation.
PROPERTY, PLANT AND EQUIPMENT
Telephone property is stated at original cost of construction.
Normal retirements of telephone property are charged against
accumulated depreciation along with the costs of removal less salvage,
with no gain or loss recognition. Renewals and betterments of plant and
equipment are capitalized while repairs, as well as renewals of minor
items, are charged to operating expenses.
Depreciation of telephone plant is provided for primarily on the
straight-line method using class rates acceptable to the PSCW. The
composite rates were 6.1%, 6.0%, and 6.2% for the years 1994, 1993,
and 1992, respectively.
When non-telephone property is sold or retired, a gain or loss is
recognized. Depreciation is provided on the straight-line method over
estimated service lives.
INVENTORIES
Inventories are stated at the lower of cost or market. The cost of
materials and supplies inventory, which is used primarily for the
construction of telephone plant, is determined principally by the
average cost method.
The cost of communications systems and parts inventory, held
primarily for sale and servicing of deregulated telephone systems, is
determined principally by the first-in, first-out (FIFO) method.
INCOME TAXES
Mid-Plains files a consolidated federal income tax return.
Income tax expense is based on reported earnings before income
taxes. Deferred income taxes reflect the impact of temporary
differences between the amount of assets and liabilities recognized for
financial reporting purposes and such amounts recognized for tax
purposes. In 1993, Mid-Plains adopted the provision of SFAS No. 109,
"Accounting for Income Taxes" (SFAS 109), which changed the method by
which companies account for income taxes. Among other things, the
statement requires that the deferred tax balances be adjusted to
reflect new tax rates when they are enacted into law. The adoption of
SFAS 109 did not have a material effect on Mid-Plains' 1993 income tax
expense.
In accordance with SFAS 109, deferred income taxes have been
established for all temporary differences between the book and tax
basis of assets and liabilities. In addition, deferred tax balances
are adjusted to reflect tax rates, based on currently enacted tax laws,
that will be in effect in the years in which the temporary differences
are expected to reverse.
Investment tax credits which were deferred prior to the TRA '86 are
being amortized over the service life of the related property.
EARNINGS PER SHARE
Earnings per share are computed by dividing net income by the
weighted average number of shares of common stock outstanding. The
number of shares used in this calculation were: 1994 - 1,969,628;
1993 - 1,958,846; and 1992 - 1,948,860.
REVENUE RECOGNITION
Mid-Plains recognizes revenues when earned, regardless of the
period in which they are billed.
TELEPHONE REVENUES
Mid-Plains is required to provide service (and grant
credit) to subscribers within its defined service territory.
Revenues from long-distance services are derived from charges for
access to Mid-Plains' local exchange network, subscriber line charges
and contractual arrangements for billing and collection and other
services. Interstate access revenues are based on an average schedule
company settlement formula administered by the National Exchange Carrier
Association (NECA) as regulated by the FCC. Intrastate access revenues
are based on an individual company tariff access charge structure
regulated by the PSCW.
The percentage of revenues for long-distance services provided to
carriers which exceeded 10% of telephone revenues were: AT&T
Communications, Inc. 30% in 1994, 32% in 1993, and 31% in 1992;
Ameritech 13% in 1994, 20% in 1993, and 21% in 1992; and MCI 11% in
1994 and 11% in 1993. No other customer accounted for more than 10%
of total revenues.
SYSTEM SALES AND SERVICES REVENUES
Revenues from system sales and services are derived from the sale,
installation and servicing of deregulated communications systems.
Mid-Plains grants credit to customers, substantially all of whom are
located in southern Wisconsin.
Customer contracts for sales and installations are accounted for
using the completed-contract method which recognizes income only if the
contract is completed, or substantially so.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash and certificates of deposit
with original maturities of three months or less. Cash and cash
equivalents are stated at cost which approximates market value. At
December 31, 1994 and 1993, Mid-Plains had bank deposits in excess of
Federally insured limits of approximately $343,000 and $1,830,000,
respectively.
SUPPLEMENTAL CASH FLOW DISCLOSURES
Mid-Plains, during 1994, 1993, and 1992, paid interest in the
amount of approximately $ 888,000, $955,000, and $1,010,000,
respectively, and income taxes in the amount of approximately
$1,137,000, $1,327,000, and $1,723,000, respectively.
2. LONG-TERM DEBT
Long-term debt is comprised of the following:
<TABLE>
December 31, December 31,
1994 1993
In Thousands
<S> <C> <C>
Wisconsin Investment Board First
Mortgage Notes -
8-1/2% notes, payable in monthly
installments, from May 1, 1974
to October 1, 1998 $ 548 $ 671
9-3/4% note, payable in quarterly
installments, from September 19,
1987 to June 29, 1997 1,038 1,389
10-1/2% notes, payable in quarterly
installments, from February 7, 1991
to November 7, 2000 2,871 3,198
Registered Subordinated Debentures -
11% due July 1, 1995 2,497 2,498
6,954 7,756
Less current portion 3,380 801
Long-term debt $ 3,574 $ 6,955
</TABLE>
Substantially all of Mid-Plains' telephone plant is pledged under
the mortgage notes of the Company.
In connection with its long-term debt, Mid-Plains is subject to
restrictions on debt, other investments, and on the amount of retained
earnings available for cash dividends. At December 31, 1994,
$4,653,000 of its retained earnings were not restricted and thus are
available for the payment of dividends.
Long-term debt maturing within each of the next five years is as
follows: 1995 - $3,379,784, 1996 - $973,290, 1997 - $833,728, 1998 -
$606,617, and 1999 - 550,213.
<PAGE>
3. SHORT-TERM FINANCING
The table below contains information related to short-term financing.
<TABLE>
Year Ended December 31,
1994 1993 1992
In Thousands
<S> <C> <C> <C>
Balance of notes payable to
banks at end of year $1,300 $2,400 $1,400
Weighted average interest rate
at end of year 8.50% 6.00% 6.00%
Maximum amount outstanding
during year $2,400 $2,400 $1,400
Average amount outstanding
during year<F1> $1,392 $1,569 $1,308
Weighted average interest
rate during the year<F1> 6.91% 5.94% 6.33%
<FN>
<F1> The average was computed based on month-end balances.
</FN>
</TABLE>
At December 31, 1994, Mid-Plains had available unused
lines-of-credit of $5,000,000, for general corporate purposes.
Mid-Plains' lines of credit, which may be terminated at the option
of the banks or the Company, do not require compensating balances.
4. INCOME TAXES
<TABLE>
The components of income tax expense are as follows:
Year Ended December 31,
1994 1993 1992
In Thousands
<S> <C> <C> <C>
Current:
Federal $1,018 $ 881 $1,152
State 263 236 292
Total current 1,281 1,117 1,444
Deferred:
Federal 395 391 145
State 110 123 53
Total Deferred 505 514 198
Investment tax credits (71) (80) (80)
Total income tax expense $1,715 $1,551 $1,562
/TABLE
<PAGE>
<TABLE>
The components of Mid-Plains' deferred tax asset (liability) were as
follows:
Year Ended December 31,
1994 1993
In Thousands
<S> <C> <C>
Deferred tax asset:
Unamortized investment tax credit $ 152 $ 193
Deferred compensation 92 79
Deferred income 82 62
Other 88 49
Deferred tax asset 414 383
Deferred tax liability:
Property, plant and equipment
depreciation (2,182) (1,793)
Cellular interest (775) (539)
Other (29) (38)
Deferred tax liabilities (2,986) (2,370)
Net deferred tax liability (2,572) (1,987)
Less: Current deferred tax asset (170) (110)
Long-term deferred tax liability $(2,742) $(2,097)
</TABLE>
During 1992, deferred income taxes were provided for significant
temporary differences in recognition of certain expenses for tax and
financial statement purposes. These items consisted of the following:
<TABLE>
Year Ended December 31,
1992
In Thousands
<S> <C>
Depreciation $146
Cellular interest 131
Amortization of excess deferred tax (45)
Other (34)
Total $198
</TABLE>
<TABLE>
The following is a reconciliation of the statutory federal income
tax rate of 34% to Mid-Plains' effective income tax rate.
Year Ended December 31,
1994 1993 1992
<S> <C> <C> <C>
Statutory federal income tax
rate 34.0% 34.0% 34.0%
State income taxes, net of
federal benefit 5.3 5.4 5.6
Amortization of investment tax
credits (1.6) (1.8) (1.9)
Amortization of excess deferred
federal taxes ( .7) (.8) (1.1)
Other differences .3 (2.0) .2
Effective income tax rate 37.3% 34.8% 36.8%
/TABLE
<PAGE>
5. BENEFIT PLANS
PENSION PLAN
Mid-Plains has a pension plan covering most of the employees of its
telephone operations. The plan is non-contributory and provides for
benefits to be paid to eligible employees at retirement based primarily
upon years of service with Mid-Plains and compensation rates near
retirement. Mid-Plains' funding policy is to contribute annually an
amount up to the maximum amount that can be deducted for federal income
tax purposes. Plan assets consist of fixed income securities.
Mid-Plains applies the Financial Accounting Standards Board's SFAS
87, Employers' Accounting for Pensions, using a measurement date of
September 30 for financial reporting purposes. In 1993 and prior years,
the funded amount was recognized for ratemaking and adjustments made to
revenues to reflect resulting regulatory liabilities. As explained in
Footnote 8, this regulatory liability has been eliminated. Beginning in
1994, pension costs for ratemaking are based on costs calculated under
SFAS 87.
The funded status of the plan at October 1 for the year ended
December 31 is as follows:
<TABLE>
1994 1993
In Thousands
<S> <C> <C>
Vested benefit obligation $ 4,435 $ 4,196
Non-vested benefit obligation 139 121
Total actuarial present value of
accumulated benefit obligation $ 4,574 $ 4,317
Projected benefit obligation for
service rendered to date $(7,006) $(6,960)
Plan assets at fair value as of
October 1 5,116 5,541
Plan assets less than
projected benefit obligation (1,890) (1,419)
Unrecognized loss on assets 2,006 1,290
Unrecognized net asset at transition (135) (156)
Unrecognized prior service cost 278 703
Amount contributed to plan for fourth
quarter 158 156
Prepaid pension cost at December 31 $ 417 $ 574
</TABLE>
<PAGE>
<TABLE>
The net periodic pension cost consists of the following:
1994 1993 1992
In Thousands
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 548 $ 451 $ 322
Interest cost on projected benefit
obligation 449 391 302
Actual return on plan assets 230 (564) (581)
Net amortization and deferral (584) 310 309
Net pension cost calculated under
SFAS 87 $ 643 $ 588 $ 352
Rates used for calculations -
Discount Rate - interest rate used to
adjust for the time value of money 6.50% 6.50% 6.50%
Assumed rate of increase in
compensation levels 5.33% 5.84% 6.00%
Expected long-term rate of return
on pension assets 7.75% 7.75% 7.75%
</TABLE>
401(K) BENEFIT PLAN
Mid-Plains offers a defined contribution 401(k) benefit plan to
substantially all employees. The cost of the 401(k) plan was as follows:
1994 - $177,518, 1993 - $162,495, and 1992 - $154,971.
RETIREE HEALTH INSURANCE PLAN
Mid-Plains has a retiree health insurance plan for telephone
operations employees retiring after 1992. The plan, which is unfunded,
provides for limited coverage to retirees between the age of 60 and 65,
based on accumulated sick leave in excess of 720 hours. The cost of the
plan was $25,672 in 1994, $26,300 in 1993, and $33,567 in 1992.
STOCK PURCHASE PLAN
Mid-Plains has a stock purchase plan which allows employees and
directors to purchase limited quantities of Mid-Plains Telephone, Inc.
stock. Common stock for the plan is based on the Public Service
Commission of Wisconsin's (PSCW) authorization to sell limited quantities
of unissued stock at or above a minimum price set by the PSCW. Mid-Plains
has a pricing policy under which employees, other than officers, may
purchase shares at a discounted market price and officers and directors
may buy shares at full market price.
DEFERRED COMPENSATION PLAN
Mid-Plains has an unfunded deferred compensation plan whereby an
officer or director can defer a portion of current officers' salaries or
director fees. For income tax purposes, a deduction is allowed at the
time compensation is paid to the participants.
<PAGE>
6. COMMITMENTS
Construction expenditures for 1995 are estimated at $6.2 million.
7. INVESTMENT, LIMITED PARTNERSHIP
Mid-Plains has an 18% share in a cellular partnership with
Ameritech which provides cellular telephone service in Madison,
Janesville/Beloit and bordering areas. The investment is accounted
for using the cost method. Mid-Plains received a $91,000 capital
distribution in 1992 which reduced its investment. No distributions
were received in 1993 or 1994.
On June 30, 1994, Ameritech made a capital call due July 1,
1995. Mid-Plains may contribute $2.0 million and maintain its current
share or not participate and have its share diluted to approximately
4%. Management is analyzing these and other options with respect to
Mid-Plains' investment in the partnership.
8. REGULATORY MATTERS
In 1994, the Wisconsin Legislature enacted the Telecommunications
Act of 1993. As a result of this and other regulatory and legislative
activities, management has concluded that the recovery of
certain regulatory assets and payment of certain regulatory
liabilities related to employee and retiree benefits will not be
realized. The elimination of these regulatory assets of $360,000
and regulatory liabilities of $574,000 are reflected as increases in
operating expenses and revenues, respectively. These changes in
estimates increased net income by $130,000, ($.07 per share).
In January, 1995, Mid-Plains increased its local rates which
will increase annual revenues by approximately $1.1 million.
<PAGE>
9. SEGMENT INFORMATION
Mid-Plains operates in two industry segments: telephone services
and the sales and service of communications systems.
<TABLE>
Year Ended December 31,
1994 1993 1992
In Thousands
<S> <C> <C> <C>
Operating Revenues
Telephone operations $15,560 $14,259 $13,098
System sales and services 5,900 4,782 4,977
$21,460 $19,041 $18,075
Operating Income
Telephone operations $ 5,026 $ 4,976 $ 4,786
System sales and services 456 401 463
$ 5,482 $ 5,377 $ 5,249
Identifiable assets
Telephone operations $31,508 $31,235 $29,272
System sales and services 2,381 2,441 1,807
$33,889 $33,676 $31,079
Depreciation
Telephone operations $ 2,307 $ 2,092 $ 1,970
System sales and services 83 69 51
$ 2,390 $ 2,161 $ 2,021
Capital expenditures
Telephone operations $ 4,089 $ 3,219 $ 2,496
System sales and services 144 194 139
$ 4,233 $ 3,413 $ 2,635
</TABLE>
10. QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
<TABLE>
Quarter Ended
March 31 June 30 Sept. 30 Dec.31
In Thousands Except For Per Share Data
<S> <C> <C> <C> <C>
1994
Operating Revenues $4,868 $5,640 $5,099 $5,853
Operating Income $1,230 $1,421 $1,421 $1,410
Net Income $ 633 $ 751 $ 768 $ 737
Earnings per Share $ .33 $ .38 $ .39 $ .37
1993
Operating Revenues $4,796 $4,672 $4,583 $4,990
Operating Income $1,473 $1,356 $1,303 $1,245
Net Income $ 792 $ 714 $ 670 $ 706
Earnings per Share $ .41 $ .36 $ .34 $ .36
/TABLE
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors,
Mid-Plains Telephone, Inc.:
We have audited the accompanying consolidated balance sheets of Mid-
Plains Telephone, Inc. (a Wisconsin Corporation) and subsidiary as of
December 31, 1994 and 1993, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Mid-Plains
Telephone, Inc. and Subsidiary as of December 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1994, in conformity with generally accepted
accounting principles.
/s/Kiesling Associates
KIESLING ASSOCIATES
Madison, Wisconsin
January 20, 1995<PAGE>
RESPONSIBILITY FOR FINANCIAL STATEMENTS
The management of Mid-Plains Telephone, Inc. is responsible for the
financial information and representations in this Annual Report.
Management believes the financial statements have been prepared in
conformity with generally accepted accounting principles and the other
information in the Annual Report is consistent with those statements.
In preparing the financial statements, management is required to include
amounts based on estimates and judgements which it believes are reasonable
under the circumstances.
To fulfill these responsibilities, management maintains a system of
internal operating, accounting, and financial controls. These controls
provide reasonable, but not absolute, assurance that assets are
safeguarded from loss or unauthorized use, transactions are properly
recorded, and the resulting financial statements are reliable. The design,
monitoring and revision of the system of internal control involves, among
other things, our judgment with respect to the relative cost and expected
benefits of specific control measures.
The financial statements have been audited by Kiesling Associates,
independent public accountants, who have expressed their opinion with
respect to the fairness of these financial statements.
The Board of Directors pursues its responsibility for the financial
statements through its Audit Committee, comprised entirely of outside
directors. The Audit Committee meets periodically with management and the
independent public accountants to review matters relating to financial
reporting, internal controls, and auditing. The Audit Committee's outside
directors also meet separately with the independent public accountants to
ensure their free access to the Audit Committee.
/s/Dean W. Voeks /s/Howard G. Hopeman
DEAN W. VOEKS HOWARD G. HOPEMAN
President Vice-President and Chief Financial Officer
January 20, 1995 January 20, 1995
<PAGE>
COMMON STOCK PRICE RANGES AND DIVIDEND<F1>
<TABLE>
TRANSACTIONS<F2> PRICE PER SHARE<F2> DIVIDENDS
NUMBER SHARES HIGH LOW PAID
<S> <C> <C> <C> <C> <C>
1994
4th Quarter 2 488 $35.00 $35.00 $.21
3rd Quarter 6 6425 35.00 32.00 .21
2nd Quarter 11 4785 40.00 33.00 .21
1st Quarter 14 4609 35.00 28.00 .23
1993
4th Quarter 5 1320 $33.00 $28.00 $.21
3rd Quarter 2 800 30.00 28.00 .19
2nd Quarter 6 7107 30.00 27.00 .19
1st Quarter 4 2514 27.00 25.00 .19
<FN>
<F1>There were 2,226 shareholders as of February 1, 1995. Mid-
Plains has regularly paid dividends to its shareholders and
expects it will continue to do so in the future. Mid-Plains'
By-Laws limit the common stock any one shareholder may hold to
five percent of the authorized capital stock of the Company.
<F2>There are no principal market makers for Mid-Plains stock.
Prices are based only on unrelated party transactions for which
the seller and/or buyer have responded to a Company injury. For
1994, transactions include both those handled privately (non-
broker) and those handled by stock brokers. For 1993, only non-
broker transactions are included. The change in 1994 was made
because of the limited availability of price information due to
sporadic trading of Mid-Plains stock. Non-broker prices do not
include retail markup, markdown or commissions which are
included in broker prices.
</FN>
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 21
MID-PLAINS TELEPHONE, INC.
SUBSIDIARY OF REGISTRANT
The Company has one wholly-owned subsidiary, MID-PLAINS
COMMUNICATIONS SYSTEMS, INC., a corporation organized under the
laws of the State of Wisconsin. The financial statements of this
subsidiary are included in the Company's consolidated financial
statements.
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 186
<SECURITIES> 0
<RECEIVABLES> 3,384
<ALLOWANCES> 0
<INVENTORY> 1,144
<CURRENT-ASSETS> 5,291
<PP&E> 41,041
<DEPRECIATION> 15,383
<TOTAL-ASSETS> 33,889
<CURRENT-LIABILITIES> 8,126
<BONDS> 0
<COMMON> 6,581
0
0
<OTHER-SE> 11,651
<TOTAL-LIABILITY-AND-EQUITY> 33,889
<SALES> 0
<TOTAL-REVENUES> 21,460
<CGS> 0
<TOTAL-COSTS> 15,978
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 896
<INCOME-PRETAX> 4,604
<INCOME-TAX> 1,715
<INCOME-CONTINUING> 2,889
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,889
<EPS-PRIMARY> 1.47
<EPS-DILUTED> 1.47
<PAGE>
</TABLE>
