<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 2 to Form 8-K/A filed on November 14, 1995)
CURRENT REPORT
Pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 1, 1996
UTILICORP UNITED INC.
(Exact name of registrant as specified in charter)
DELAWARE 1-3562 44-0541877
- -------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
3000 Commerce Tower, 911 Main, Kansas City, Missouri 64105
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (816) 421-6600
(Former name of former address, if changed since last report) NOT APPLICABLE
--------------
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 6, 1995, Power Partnership Limited, of which the company owns
49.9 percent, acquired United Energy Limited (United Energy), an Australian
electric distribution utility, from the State of Victoria. United Energy
had assets of approximately $707 million at June 30, 1995 and revenues of
approximately $527 million for the year ended June 30, 1995. United
Energy's service territory includes part of metropolitan Melbourne,
Victoria and has approximately 520,000 customers. The company paid
approximately $245 million in cash for its 49.9 percent ownership interest.
The company's cash contribution was primarily borrowed from a group of
Australian-based banks payable in Australian dollars. This transaction is
structured through a series of wholly-owned U.S. and Australian companies.
The company will manage the operations of United Energy on behalf of Power
Partnership Limited and will receive a management fee that consists of a
base amount (costs incurred by the company plus $1 million Australian,
indexed to the consumer price index) and variable amount based on the
financial performance of United Energy. The management agreement
has a duration of 10 years beginning from the date of closing.
The company will account for its investment in United Energy using
the equity method in its consolidated financial statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements for Businesses Acquired.
1. Audited Financial Statements of United Energy Limited as of and for
the period May 11, 1994, to June 30, 1995, together with Report of
Independent Public Accountants.
2. Unaudited Financial Statements of United Energy Limited as of and for
the three months ended September 30, 1995.
(b) Pro Forma Financial Information.
1. Unaudited Pro Forma Condensed Consolidated Statements of Income for the
nine months ended September 30, 1995 and the year ended December 31, 1994.
(c) Exhibits.
The Exhibits to this Report are listed below.
2.1* Asset Purchase Agreement between Power Partnership PTY LTD and United
Energy Limited.
2.2* Asset Sale Agreement between United Energy Limited and Power
Partnership PTY LTD.
2.3* Share Sales Agreement between the State of Victoria, Power Partnership
PTY LTD and the Covenantors.
23 Consent of Arthur Andersen, Melbourne, Australia.
99 Convenience Translation of Profit and Loss, Balance Sheet and
Statement of Cash Flows for financial statements filed in
item 7(a) of the Form 8-K/A.
* Exhibits marked with an asterisk were previously 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 hereunto duly authorized.
UTILICORP UNITED INC.
---------------------
(Registrant)
April 1, 1996 /s/ James S.Brook
- --------------------------- ------------------------------
Date James S. Brook
Vice President
(Principal Accounting Officer)
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
A.C.N. 064 651 029
FINANCIAL STATEMENTS AND REPORTS
FOR THE PERIOD FROM
11 MAY 1994 TO 30 JUNE 1995
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
A.C.N. 064 651 029
CONTENTS
PAGE
----
PROFIT AND LOSS ACCOUNT 1
BALANCE SHEET 2
STATEMENT OF CASH FLOWS 3
NOTES TO THE FINANCIAL STATEMENTS 4
INDEPENDENT AUDIT REPORT
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD FROM 11 MAY 1994 TO 30 JUNE 1995
<TABLE>
<CAPTION>
11 May 1994
to 30 June 1995
Note $000
<S> <C> <C>
OPERATING PROFIT BEFORE ABNORMAL ITEMS, 2 82,104
EXTRAORDINARY ITEMS AND INCOME TAX
Abnormal items 3 (52,567)
----------
OPERATING PROFIT BEFORE EXTRAORDINARY 29,537
ITEMS AND INCOME TAX
Income tax attributable to operating profit 4 (32,555)
----------
OPERATING LOSS AFTER INCOME TAX (3,018)
LOSS ON EXTRAORDINARY ITEMS 5 (23,000)
----------
OPERATING LOSS AND EXTRAORDINARY ITEMS AFTER INCOME TAX (26,018)
DIVIDENDS PAID (10,400)
----------
ACCUMULATED LOSSES AT THE END OF THE FINANCIAL PERIOD (36,418)
----------
----------
</TABLE>
The profit and loss account is to be read in conjunction with
the notes to and forming part of the financial statements.
-1-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
BALANCE SHEET
AT 30 JUNE 1995
<TABLE>
<CAPTION>
1995
Note $000
<S> <C> <C>
CURRENT ASSETS
Cash 6 26
Receivables 7 45,818
Investments 8 695
Other 9 68,390
Inventories 10 7,641
----------
TOTAL CURRENT ASSETS 122,570
----------
NON-CURRENT ASSETS
Receivables 7 1,210
Investments 8 56
Other 9 303
Property, plant and equipment 11 870,750
----------
TOTAL NON-CURRENT ASSETS 872,319
----------
TOTAL ASSETS 994,889
----------
CURRENT LIABILITIES
Creditors and borrowings 12 887,856
Provisions 13 99,834
----------
TOTAL CURRENT LIABILITIES 987,690
----------
NON-CURRENT LIABILITIES
Provisions 13 43,617
----------
TOTAL LIABILITIES 1,031,307
----------
NET LIABILITIES (36,418)
----------
----------
SHAREHOLDER'S EQUITY
Share capital 14 -
Accumulated losses (36,418)
----------
TOTAL SHAREHOLDER'S DEFICIENCY (36,418)
----------
----------
</TABLE>
The balance sheet is to be read in conjunction with the notes
to and forming part of the financial statements.
-2-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM 11 MAY 1994 TO 30 JUNE 1995
<TABLE>
<CAPTION>
11 May 1994
to 30 June 1995
Note $000
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 714,963
Payments to suppliers and employees 18 (552,950)
Interest received 3,133
Interest paid (43,501)
----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 18 121,645
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of investments 9,000
Payments for investments (751)
Proceeds from sale of property, plant
and equipment 4,137
Payments for property, plant and
equipment (35,405)
----------
NET CASH USED IN INVESTING ACTIVITIES (23,019)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 469,639
Repayment of borrowings (566,461)
Dividends paid (10,400)
----------
NET CASH USED IN FINANCING ACTIVITIES (107,222)
----------
NET DECREASE IN CASH HELD (8,596)
CASH ON ALLOCATION 18 6,198
----------
CASH AT THE END OF THE FINANCIAL PERIOD 18 (2,398)
----------
----------
</TABLE>
The statement of cash flows is to be read in conjunction with
the notes to and forming part of the financial statements.
-3-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM 11 MAY 1994 TO 30 JUNE 1995
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The significant policies which have been adopted in the
preparation of these financial statements are:
(A) BASIS OF PREPARATION
The financial statements of the Company have been drawn up in
accordance with relevant Australian Accounting Standards for the
purpose of inclusion in United States of America Securities and
Exchange Commission's Form 8K/A. For convenience purposes, not
all Australian statutory reporting requirements are reflected in
these financial statements. They have been prepared on the basis
of historical costs and do not take into account changing money
values or current valuations of non-current assets except where stated.
The statements of profit and loss account and cash flows are for the
period 11 May 1994 to 30 June 1995. Although the Company was
incorporated on 11 May 1994, no activity occurred between 11 May 1994
and 30 June 1994.
(B) ALLOCATION STATEMENTS
The Company was incorporated in Victoria on 11 May 1994 by the
subscription of 5 ordinary shares of $1 each. The Company
commenced operations on 3 October 1994 when substantially all
assets and liabilities were vested in the Company pursuant to
Allocation Statements made under Sections 117 and 137 of the
ELECTRICITY INDUSTRY ACT 1993. Those assets and liabilities
included the effect of profits or losses of the relevant
businesses from 1 July 1994 to 3 October 1994.
Sub-section 96(3) of THE ACT provided that the Company must
prepare reports and financial statements for the period from the
year ending 30 June 1995 as if the operations vested in it had
been conducted by the Company from 1 July 1994 to 30 June 1995.
That section also provides that the entities which had formerly
conducted those operations must provide to the Company all
accounting records, documents and other information necessary to
enable it to prepare reports and financial statements for the
year ended 30 June 1995.
On 7 March 1995, an amended Allocation Statement as of 1 July 1994
was prepared and approved by the Treasurer of Victoria. These
financial statements have been prepared on the basis of the amended
Allocation Statement values (Note 18).
-4-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
These financial statements relate to the profit and loss statement of
the Company for the period from 11 May 1994 to 30 June 1995 and are
prepared as if the operations now conducted by the Company had been
conducted by it for the year ended 30 June 1995. In preparing these
financial statements, the Directors have relied upon accounting
records, documents and other information provided by Electricity
Services Victoria, Box Hill City Council and the Doncaster and
Templestowe City Council in respect of the period from 1 July 1994 to
3 October 1994. Whilst those records have been reviewed by the
Company, it must be recognised that they were not prepared by the
Company.
The financial statements are prepared as if the balance sheet of
the Company as at 1 July 1994 was a balance sheet derived from
combining the balance sheets contained in the amended Allocation
Statements. These balance sheets were prepared by the State from
the accounting records of Electricity Services Victoria and the
two Councils as at 30 June 1994 after having made various
adjustments to asset and liability values considered appropriate
by the State. By virtue of Sections 121 and 141 of the
ELECTRICITY INDUSTRY ACT 1993 the value to the Company of the
assets and liabilities vested in it are deemed to be those
values, with appropriate adjustments made to reflect the position
at 3 October 1994.
(C) REVENUE RECOGNITION
(i) SALES REVENUE
Sales revenue represents revenue earned (net of discounts and
allowances) from the sale of electricity and related services.
Sales revenue is recorded when electricity and related services
are provided. Accrued electricity revenue is determined having
regard to the period since a customer's last billing date, and
the customer's previous consumption patterns. As billing periods
range from one month to three months, accrued electricity revenue
can range from approximately 15 days to one and a half months
revenue.
(ii) INVESTMENT REVENUE
Interest and rental income is recognised as it accrues, unless
collectability is in doubt. Revenue recognition policies for
investments are described in Note 1(G).
(iii) ASSET SALES
The gross proceeds of asset sales are included as other revenue
of the Company (refer Note 2(A)). The profit or loss on disposal
of assets is brought to account at the date an unconditional
contract of sale is signed.
-5-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
(D) TAXATION
(i) INCOME TAX
The Company has been advised that it will be subject to the
Victorian Tax Equivalent System (VTES) from 1 July 1994.
The Company adopts the liability method of tax effect accounting
in accordance with Australian Accounting Standards.
Income tax expense is calculated on accounting profit adjusted for
income and expenses never to be assessed or allowed for taxation
purposes. The tax effect of timing differences, which arise from
items being brought to account in different periods for income tax
and accounting purposes, is carried forward in the balance sheet
as a future income tax benefit or a provision for deferred income
tax. The rates used are those expected to apply when the timing
differences reverse. For the period from 11 May 1994 to 30 June
1995, the Australian corporate tax rate of 33% has been used to
calculate income tax expense and income tax payable.
Following the Federal budget of 9 May 1995, the Australian corporate
tax rate has been increased to 36% with effect from 1 July 1995. This
has resulted in an increase to income tax expense of $966,000.
Future income tax benefits are not brought to account unless
realisation is assured beyond reasonable doubt. Future income tax
benefits relating to tax losses are only brought to account when their
realisation is virtually certain.
A press release was issued by the Australian Tax Office on 3 July 1995
regarding the tax treatment of tax exempt entities that become
taxable. This press release advised that the Australian Taxation
Office intended legislating that a "rule the books approach" would be
adopted for tax exempt entities that move into the Federal tax system.
It is intended that this "rule the books approach" will apply to the
depreciable value of assets as well as to provisions. As the
realisation of the future income tax benefit associated with a number
of provisions cannot be assured beyond reasonable doubt it has been
written off to income tax expense. This has resulted in an increase
in income tax expense of $12,072,000. Additionally, Cogeneration,
Tariff H, Establishment and Debt Refinancing Provisions have been
treated as non deductible. This has resulted in an increase in income
tax expense of $13,130,000.
(ii) DEPRECIATION ON PROPERTY, PLANT AND EQUIPMENT
The Company has received a ruling from the State Department of the
Treasury that, under the Tax Equivalent System, the allocation
value of the assets is acceptable as the basis for depreciating
property, plant and equipment allocated to the Company as at
1 July 1994.
(iii) CAPITAL GAINS TAX
Capital gains tax is brought to account in the profit and loss
account in the period in which an asset is sold.
-6-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
(E) NON-CURRENT ASSETS
The carrying amounts of all non-current assets are reviewed at
least annually to determine whether they are in excess of their
recoverable amount at the reporting date. If the carrying amount
of a non-current asset exceeds the recoverable amount, the asset
is written down to the lower amount. In assessing recoverable
amounts the relevant cash flows have not been discounted to their
present value. In respect of the carrying value of Land and
Buildings, refer to Note 1(I).
(F) INVENTORIES
Inventories are carried at the lower of average cost and net
realisable value.
Cost is based on average cost and includes expenditure incurred in
acquiring the inventories and bringing them to their existing
condition and location.
Net realisable value is determined on the basis of normal selling
and/or usage patterns.
(G) INVESTMENTS
Investments are carried in the Company's accounts at cost.
Investment income is brought to account in the profit and loss
account on an accruals basis.
(H) HEDGES
(i) Energy Purchases
The Company is party to wholesale market vesting contracts which
are financial hedging instruments entered into with electricity
generators. These contracts provide a hedge in respect of the
purchase cost of electricity for a defined volume. There are two
distinct contract types which are accounted for as outlined below:-
TWO WAY FIRM CONTRACTS
Under Two Way Firm Contracts, payments are made between the Company
and the generators for the difference between the wholesale
electricity market price and the vesting contract strike price. These
hedges are capped at a specified maximum wholesale price. Amounts
payable or receivable under these hedges are brought to account on an
accruals basis and recognised in the profit and loss account as "net
payments made under vesting contracts". Two Way Firm Contracts in
place for the financial year 1994/95 cover 95% of estimated demand.
ONE WAY NON-FIRM CONTRACTS
Under One Way Non-Firm Contracts, payments are made by the generators
to the Company when the wholesale electricity market price exceeds the
specified maximum wholesale price. Option fees are payable by the
Company to the generators for the estimated hedging value of the One
Way Non-Firm Contracts and are calculated as an estimate of the
forecast value of electricity sold in the Pool at prices between the
specified maximum wholesale price and the specified value of lost
load. Amounts receivable and option fees payable under these hedges
are brought to account on an accruals basis and are recognised in the
profit and loss account as "net payments made under vesting
contracts".
(ii) Interest
The Company maintains interest rate swaps as an integral part of
its debt portfolio in order to provide effective hedges on
floating interest rate loans. Amounts payable or receivable under
these hedges are brought to account on an accruals basis and
recognised in the profit and loss account as interest charges.
-7-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
(I) PROPERTY, PLANT AND EQUIPMENT
(i) ACQUISITION
Items of property, plant and equipment are recorded at cost and
depreciated as outlined below. In respect of assets allocated to
the Company on 1 July 1994, cost is represented by the values
allocated under the amended Allocation Statements (refer Note
1(B)) of 7 March 1995.
Expenditure incurred on distribution assets is capitalised where
the expenditure increases the service potential of the assets, and
is recoverable through future earnings associated with those assets.
The cost of property, plant and equipment constructed by the Company
includes the cost of materials and direct labour and an appropriate
proportion of fixed and variable overheads.
Non refundable contributions received from customers towards the cost
of capital works, whether on existing or new assets, are netted
against the cost of the capital works, and the net amount is
depreciated.
(ii) LAND AND BUILDINGS
Land and buildings are recorded at the values allocated under the
amended Allocation Statements of 7 March 1995 (refer Note 1(B)). An
independent valuation of certain of the Company's non distribution
land and buildings supports these values.
(iii) DEPRECIATION
Items of property, plant and equipment, including buildings but
excluding freehold land, are depreciated over their estimated
useful lives ranging from 2 to 60 years. The straight line method
of depreciation is used.
Assets are depreciated from the date of acquisition or, in respect
of internally constructed assets, from the time an asset is
completed and held ready for use.
(iv) LEASED PLANT AND EQUIPMENT
Leases of property, plant and equipment are classified as
operating leases as the lessors retain substantially all of the
risks and benefits of ownership. Operating leases are not
capitalised. Payments made under operating leases are charged
against profits in equal instalments over the accounting periods
covered by the lease term except where an alternative basis is
more representative of the pattern of benefits to be derived from
the leased property.
(J) PROVISIONS
(i) EMPLOYEE ENTITLEMENTS
The provision for employee entitlements relates to amounts
expected to be paid to employees for long service leave and annual
leave and is based on legal and contractual entitlements and
assessments having regard to experience of staff departures and
leave utilisation. All on-costs, including payroll tax, workers'
compensation premiums and superannuation are included in the
determination of provisions. Provision for annual leave and the
current portion of the long service leave provisions are measured
at their nominal amounts. The non-current portion of the long
service leave provisions is measured at the present value of
estimated future cash flows.
The measurement of the leave provision at present value and the
inclusion of on costs represents a change in accounting policy so as
to satisfy the requirements of AASB1028 - Accounting for Employee
Entitlements. This provision was previously measured at nominal
values. The impact of this change in policy for the company is to
reduce operating profit by $2,504,000.
-8-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
(ii) COGENERATION AGREEMENT
The Company has become party to certain cogeneration agreements
which were assigned to the Company under the Allocation
Statements. These agreements provide for the buyback of
cogenerated electricity from customers which is excess to their
requirements. The cogenerated electricity is purchased at
contracted rates, which is generally higher than the average
purchase price of electricity in the wholesale market. A
provision for cogeneration losses, amounting to $7,170,000 was
recognised in the Allocation Statement as at 1 July 1994. This
provision was established to recognise estimated future net
opportunity costs as a result of foregone margins on agreements
with estimated future losses.
The Company has adopted a policy of recognising estimated future
financial losses on cogeneration agreements, determined on the basis
of the net sales revenue earned from the sale of the cogenerated
electricity. The agreed purchase price and an allocation of operating
costs, including depreciation and finance charges, are deducted from
the average selling price to establish the net loss made on
cogeneration agreements. As a result the Company has provided for a
further abnormal charge of $2,843,000 (Note 3).
(iii) ESTABLISHMENT COSTS
A provision for establishment costs, amounting to $30,000,000 was
recognised in the Allocation Statements as at 1 July 1994. This
provision is to be fully utilised for planned costs arising from
voluntary employee departures as a result of the Company re-
engineering its business operations.
Other costs provided for during the period from 11 May 1994 to 30
June 1995 are those non recurring costs considered necessary in
starting up the Company. They include information technology of
$1,080,000, and other costs of $3,460,000. In addition a further
provision of $4,524,899 for planned costs arising from voluntary
employee departures was made. These amounts total $9,064,889 and
have been provided for as an abnormal expense (Note 3).
The value of the provision at 30 June 1995 was $24,911,234 (Note
13).
(iv) ENVIRONMENTAL COSTS
The Company is subject to a number of environmental requirements
under the Environmental Protection Act. A provision for
environmental costs, amounting to $7,450,000 was recognised in
the Allocation Statements as at 1 July 1994 for restoration and
rehabilitation of sites allocated to the Company which are used
for business purposes.
An independent environmental review was concluded in May 1995 to
assess the potential environmental liabilities, including costs
for remediation, of sites owned and operated by the Company based
on the continuation of the existing use of the sites and other
environmental risks. The Company has conducted its own review of
its liability arising from asbestos in heat banks during May
1995. As a consequence of these reviews a provision for
environmental costs of $6,100,000 is maintained (Note 13).
(v) BAD AND DOUBTFUL DEBTS
Trade debts in respect of electricity sales are written off when
the debt has been outstanding for ninety days after the issue of
a final notice to the customer. At that time, the debt is passed
to a collection agency. The collectibility of trade debts is
assessed at period end and a general provision is maintained.
(vi) REGULATORY COMPLIANCE COSTS
The Company must comply with the Electricity Industry Act 1993
and the regulations established by the Office of the Regulator-
General (ORG) for the electricity industry. These regulations
include licences, codes of practice and pool rules. The ORG and
the Victorian Government have waived the liability of the Company
that may arise from any non-compliance by the Company for the
year ended 30 June 1995. The costs of achieving compliance of
$4,493,000 have been provided for as an abnormal charge (Note 3).
-9-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
(vii) LOSS ON DEBT REFINANCING
The Company has negotiated a facility with a consortium of banks
to refinance debt instruments due to the Treasury Corporation of
Victoria (TCV). As the Company implemented this facility on 6
September 1995, provision has been made for the abnormal loss of
$16,448,000 that resulted on the refinancing of the TCV debt at 30
June 1995 (Note 13).
(viii) TARIFF H CUSTOMERS
Under the Electricity Industry Act 1993, the Company is obliged to
supply electricity at rates that are generally lower than other
tariffs, to customers that are designated as qualifying for
Tariff H.
The Company has adopted a policy of recognising estimated future
financial losses on its obligations to Tariff H customers,
determined on the basis of the net sales revenue earned from the
sales of electricity to these customers. The cost of sales and an
allocation of operating costs, including depreciation and finance
charges, are deducted from the selling price to establish the net
loss made on Tariff H obligations. As a result, the Company has
provided for a future abnormal loss of $12,782,000 (Note 3).
(ix) PRIVATISATION - DOUBLE TAXATION
As a result of the privatisation of the Company by the Victorian
Government on 6 September 1995, the company appears likely to be
subject to a "once off" double tax of $23,000,000 on unbilled
revenue at 6 September 1995, being both State Equivalent Tax and
Federal Income Tax. From an accounting perspective, as the
privatisation of the company has occurred prior to the date of
signing these accounts, the directors have separately provided for
the additional tax associated with the privatisation process as an
extraordinary item as it is not likely to reoccur. Unbilled
revenue and the related State Equivalent Tax during the period 1
July 1995 to 6 September 1995 will be accounted during this period
as normal operating income and related income tax and have not
been adjusted for in the accounts at 30 June 1995.
(k) SUPERANNUATION FUNDS
The Company contributes to an industry superannuation fund in
respect of its employees. Contributions are charged against
income as incurred. Company and employee contributions are based
on various percentages of their gross salaries.
After serving a qualifying period, all employees are entitled to
benefits on termination, disability or death. The fund provides
both defined benefits and accumulation benefits. The Company has
been advised of that the funds' assets fully cover the present
value of expected future benefit payments that arise from
membership of the fund at 30 June 1995.
Contributions to defined benefit superannuation plans maintained
by the company are expensed in the year they are paid or become
payable. No amount is recognised in the accounts in respect of
the net surplus or deficiency of each plan.
(L) CUSTOMER DEPOSITS
Customer deposits are recognised as liabilities and represent
refundable payments received in advance from customers held as
security over future electricity usage and refundable deposits
received in advance as finance on capital projects.
(M) BUSINESS PROCESS RE-ENGINEERING (BPR) COSTS
The Company's business processes are being re-engineered to
optimise efficiency. Costs are brought to account as incurred and
written off as abnormal items. In the period from 11 May 1994 to
30 June 1995, $5,325,000 of BPR costs were incurred and written
off as abnormal items (Note 3).
-10-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
<TABLE>
<CAPTION>
11 May 1994
to 30 June 1995
Note $000
<S> <C> <C>
2. OPERATING PROFIT
(A) OPERATING REVENUE AND EXPENSES
Operating loss has been arrived at after including:
OPERATING REVENUE
Sales revenue 706,914
Other revenue
- Distribution 2,054
- Servicing 8,337
- Other 6,461
Interest received or due and receivable: -
- Related entities 3,258
- Other persons 62
Rental income 100
Gross proceeds from the sale of property, plant & equipment 4,137
---------
731,323
---------
---------
OPERATING EXPENSES
Finance charges paid or due and payable to:
- Related entity 40,639
- Other persons 4,792
Bad debts written off 2,879
Depreciation of property, plant and equipment 38,666
Amounts set aside to/(written back from) provision for:
- Employee entitlements 123
- Doubtful debts 1,926
Lease rental expense - operating leases 2,161
Net payments under vesting contracts 18,398
(B) SALE OF NON-CURRENT ASSETS
Losses on sale of property, plant and equipment 661
</TABLE>
-11-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
<TABLE>
<CAPTION>
11 May 11 May
1994 1994 to
to 30 30 June
June 1995 1995
$000 $000
3. ABNORMAL ITEMS Income
Note Tax Effect
----------
$000
<S> <C> <C> <C>
ITEMS CREDITED
Write back of Provision for Environmental 1(Jiv) (1,350)
Costs
ITEMS CHARGED
Increase in Cogeneration Provision 1(Jii) 2,843
Increase in Establishment Provision 1(Jiii) 9,065
Business Process Re-engineering costs 1(M) 1,757 5,325
Initial adjustment resulting from the 1(Ji) 2,504
application of AASB 1028
Debt refinancing costs 457
Loss on Debt Refinancing 1(Jvii) 16,448
Loss on obligation to Tariff H Customers 1(Jviii) 12,782
Regulatory Compliance Costs 1(Jvi) 4,493
--------- ----------
1,757 52,567
--------- ----------
--------- ----------
</TABLE>
-12-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
<TABLE>
11 May 1994 to 30
June 1995
Note $000
<S> <C> <C>
4. INCOME TAX
Prima facie income tax expense calculated 9,747
at 33% on the operating profit
Increase in income tax expense due to
non deductible items included in profit:
Depreciation of buildings 348
Write back of Future Income Tax Benefit 1(Di) 12,072
Effect of tax rate changes 1(Di) 966
Provisions 1(Di) 13,130
Other 92
Decrease in income tax due to deductible
expenses not charged against profit:
Payments under voluntary departure (3,156)
packages
Building and structural improvement (63)
allowance
Adjustments to opening balances (581)
---------
Income tax expense on operating profit 32,555
---------
---------
Total income tax expense is made up of:-
Movement in provision for deferred 27,399
income tax
Movement in future income tax benefit 5,156
---------
32,555
---------
---------
</TABLE>
-13-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
<TABLE>
<CAPTION>
1995
Note $000
<S> <C> <C>
5. EXTRAORDINARY ITEM
Double income tax expense attributable
to accrued revenues 1(Jix) 23,000
--------
--------
6. CASH
Current account 26
--------
--------
7. RECEIVABLES
CURRENT
Trade debtors 46,723
Less: Provision for doubtful trade debtors (2,460)
Receivables - related entities 1,555
--------
45,818
--------
--------
NON-CURRENT
Receivables - related entity 1,210
--------
--------
8. INVESTMENTS
CURRENT
Term deposits 695
--------
--------
NON-CURRENT
Other securities - unquoted at cost 56
--------
--------
9. OTHER ASSETS
CURRENT
Prepayments 1,057
Accrued revenue 1(C) 63,907
Future Income Tax Benefit 1(Di) 3,426
& 4
--------
68,390
--------
--------
NON-CURRENT
Other 303
--------
--------
10. INVENTORIES
Raw materials and stores - at cost 8,067
Less: Provision for obsolescence (426)
--------
Raw materials and stores - net realisable value 7,641
--------
--------
</TABLE>
-14-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
<TABLE>
<CAPTION>
1995
Note $000
<S> <C> <C>
11. PROPERTY, PLANT AND EQUIPMENT
Freehold land - at cost 1(I) 32,446
--------
Buildings - At cost 1(I) 18,107
Less: Accumulated depreciation 1,029
--------
17,078
Total Land and Buildings 49,524
--------
Plant and equipment - at cost 1(I) 840,255
Less: Accumulated depreciation 37,637
--------
Total plant and equipment 802,618
--------
Capital works in progress - at cost 1(I) 18,608
--------
Total property, plant and equipment -
at net book value 870,750
--------
--------
12. CREDITORS AND BORROWINGS
CURRENT
Trade creditors and accruals 107,032
Loan from related entities - unsecured 421,332
Customer deposits 10,272
Unsecured Loans 3,438
Bank overdraft - unsecured 2,424
Shareholder's loan - unsecured 343,358
--------
887,856
--------
--------
13. PROVISIONS
CURRENT
Loss on obligation to Tariff H customers 1(Jviii) 4,589
Loss on debt refinancing 1(Jvii) 16,448
Compliance costs 1(Jvi) 4,493
Employee entitlements 1(Ji) 15,256
Environmental costs 1(Jiv) 1,389
Establishment costs 1(Jiii) 4,845
Deferred income tax 1(Di) 27,581
Privatisation double taxation 1(Jix) 23,000
Cogeneration loss 1(Jii) 1,563
Other 670
--------
99,834
--------
--------
NON-CURRENT
Employee entitlements 1(Ji) 1,731
Environmental costs 1(Jiv) 4,711
Establishment costs 1(Jiii) 20,066
Cogeneration loss 1(Jii) 8,450
Loss on obligation to Tariff H customers 1(Jviii) 8,193
Other 466
--------
43,617
--------
--------
</TABLE>
-15-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
<TABLE>
<CAPTION> 1995
$000
<S> <C>
14. SHARE CAPITAL
AUTHORISED CAPITAL
499,999,940 shares of $1.00 each 500,000
6000 redeemable preference shares of 1 cent each -
--------
500,000
--------
--------
ISSUED AND PAID-UP CAPITAL
5 ordinary shares of $1.00 each, fully paid -
--------
On 6 September 1995, the Company issued 4 million
ordinary shares of $1 each, at par and 6000
redeemable preference shares of 1 cent, each at
a premium of $599,999,940. On 6 September 1995,
the Company redeemed the 6000 redeemable
preference shares for $600,000,000.
15. SEGMENT REPORTING
The Company operates solely in Victoria as a
distributor and retailer of electricity
16. COMMITMENTS
CAPITAL EXPENDITURE COMMITMENTS
Contracted but not provided for and payable:
NOT LATER THAN ONE YEAR 1,661
LATER THAN ONE YEAR BUT NOT LATER THAN TWO YEARS -
LATER THAN TWO YEARS BUT NOT LATER THAN FIVE YEARS -
LATER THAN FIVE YEARS -
OPERATING LEASE COMMITMENTS
Future operating lease rentals of property,
plant and equipment, not provided for in the
financial statements and payable:
NOT LATER THAN ONE YEAR 2,050
LATER THAN ONE YEAR BUT NOT LATER THAN TWO YEARS 1,737
LATER THAN TWO YEARS BUT NOT LATER THAN FIVE YEARS 4,779
LATER THAN FIVE YEARS 3,901
</TABLE>
-16-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
17. ENERGY TRADING
The Company purchases electricity from the Victorian Power Exchange at
wholesale market prices. The Company is subject to various fees and
charges levied by the Victorian Government under the Electricity
Industry Act 1993. The Company is also subject to various fees and
charges levied by the Victorian Power Exchange, PowerNet Victoria, the
Generators of electricity, and other Distribution Businesses, under
various contractual agreements.
The operations, systems and procedures of the Industry Pool will be
subject to an independent audit as part of the Industry control and
regulatory framework, including a review of the distribution boundaries
which cross over Distribution Businesses. At the time of preparing
this report the independent audit which will address metering and
settlement procedures has not been completed.
Accordingly, the Company has recognised liabilities for fees and
charges owing to the above parties as at 30 June 1995, based on
information available as at the date of preparing these financial
statements.
18. NOTES TO THE STATEMENT OF CASH FLOWS
(I) RECONCILIATION OF CASH
For the purposes of the Statement of Cash Flows, cash includes cash on
hand and at bank and short term deposits at call, net of outstanding
bank overdrafts. Cash at 1 July 1994 is as shown on the Allocation
Statement (IV). Cash at the reporting date as shown in the Statement of
Cash Flows is reconciled to the related items in the balance sheet as
follows:
30 June 1995
Note $000
Cash 6 26
Bank overdraft 12 (2,424)
---------
(2,398)
---------
---------
(II) Included in payments to suppliers and employees is an amount of
$9,613,653 in respect of payments for voluntary employee departures
during the financial year. These payments were allocated to the
Establishment provision (Note 1J(iii)).
-17-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
11 May 1994
to 30 June 1995
$000
(III) RECONCILIATION OF OPERATING LOSS
AND EXTRAORDINARY ITEMS AFTER INCOME
TAX TO NET CASH PROVIDED BY OPERATING
ACTIVITIES
Operating loss and extraordinary items
after income tax (26,018)
Add (less) items classified as
investing/financing activities:
Loss on sale of non-current assets 661
Add (less) non-cash items:
Depreciation 38,666
Movement in provision for:
Privatisation Double Taxation 23,000
Compliance costs 4,493
Employee entitlements 1,071
Doubtful trade debts 1,926
Environmental costs (1,350)
Loss on debt refinancing 16,448
Establishment costs (5,094)
Cogeneration costs 2,843
Loss on Tariff H customers 12,782
Deferred income tax 27,399
Future income tax benefits 5,156
Other (19)
----------
Net cash provided by operating activities
before change in assets and liabilities 101,964
Change in assets and liabilities
during the reporting period:
Increase in receivables (11,038)
Decrease in inventory 3,028
Decrease in accrued revenue 813
Increase in prepayments (299)
Decrease in deferred charges 222
Increase in creditors and accruals 24,597
Increase in customer deposits 2,358
---------
Net cash provided by operating activities 121,645
(IV) ALLOCATION STATEMENT
The amended Allocation Statement (Note 1B) has been used to determine
cash flows during the period from 11 May 1994 to 30 June 1995. The
amended Allocation Statement is as follows:-
1 July 1994
$000
Cash 6,198
Receivables 39,599
Inventories 10,669
Investments 9,000
Other 72,902
Property, plant and equipment 878,809
Creditors and borrowings (955,294)
Provisions (61,883)
-----------
-
-----------
-----------
-18-
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 19 for Reconciliation to U.S. GAAP
(V) FINANCING ARRANGEMENTS
The Company had no formal financing arrangements at
30 June 1995. The finance provided through the
Treasury Corporation of Victoria of $421,332,000 is
unsecured. $85,000,000 of this finance was subject
to interest rate swaps with the Treasury
Corporation of Victoria (refer Note 1(H)(ii)). The
loan from the State Electricity Commission,
Victoria of $343,358,000 was unsecured and was
interest free. On 6 September 1995 Power
Partnership Pty. Ltd. acquire the entire share
capital of the Company. As part of the
acquisition, the Company's debts were refinanced
(refer Note 1Jvii).
18. SUBSEQUENT EVENTS - SALE OF UNITED ENERGY TO POWER PARTNERSHIP
On 6 September 1995 Power Partnership Pty. Ltd., acquired all of the
assets and stock of United Energy for approximately $1.5526 million.
All the debts owed to the Victorian Government were paid by Power
Partnership. Power Partnership is owned by three companies, UtiliCorp
Australia Holdings Limited (49.9%), State Authorities Superannuation
Board (9.23%) and Australian Mutual Provident Society (40.872%).
19. RECONCILIATION TO U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
(Unaudited)
The following is a summary of the significant adjustments to operating loss for
the year ended 30 June 1995 and to shareholder's equity deficiency at 30 June
1995 which would be required if U.S. GAAP had been applied instead of Australian
accounting principles.
<TABLE>
<CAPTION>
Description Operating loss Shareholder's
----------- and Extraordinary Items Equity Deficiency
--------------------------------------------
<S> <C> <C>
Balance as reported in the
Australian based financial
statements $(26,018) $(36,418)
Reversal of Co-generation
provision 2,843 2,843
Reversal of Tariff H customers'
provision 12,782 12,782
Reversal of Loss on refinancing 16,448 16,448
-------- --------
Balances in accordance with
U.S. GAAP $ 6,055 $(4,345)
-------- --------
-------- --------
</TABLE>
-19-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the members of United Energy Limited
SCOPE
We have audited the financial statements of United Energy Limited for the
period 11 May 1994 to 30 June 1995, as set out on pages 1 to 19 and prepared
for the purpose of inclusion in United States of America Securities and
Exchange Commission Form 8K/A. The company's directors are responsible for
the preparation and presentation of the financial statements and of the
information they contain. We have conducted an independent audit of these
financial statements in order to express an opinion on them for the purpose
of inclusion in the United States of America Securities and Exchange
Commission Form 8K/A.
Our audit has been conducted in accordance with U.S. generally accepted
auditing standards to provide reasonable assurance as to whether the
financial statements are free of material misstatement. Our procedures
included examination, on a test basis, of evidence supporting the amounts and
other disclosures in the financial statements and the evaluation of
accounting policies and significant accounting estimates. These procedures
have been undertaken to form an opinion as to whether, in all material
respects, the financial statements are presented fairly in accordance with
Australian Accounting Standards so as to present a view of the company
which is consistent with our understanding of its financial position, the
results of its operations and its cash flows.
The audit opinion expressed in this report has been formed on the above basis.
OPINION:
In our opinion, the financial statements of United Energy Limited are
properly drawn up:
(a) so as to give a true and fair view of the state of affairs of the
company as at 30 June 1995 and of the profit and cash flows for the
period ended on that date; and
(b) in accordance with relevant accounting standards.
Arthur Andersen
Chartered Accountants
Melbourne, Australia
10 November 1995
<PAGE>
UTILICORP UNITED INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND
FOR THE YEAR ENDED DECEMBER 31, 1994
IN U.S. DOLLARS
(UNAUDITED)
<PAGE>
UTILICORP UNITED INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1995
IN U.S. DOLLARS
(unaudited)
<TABLE>
<CAPTION>
(unaudited)
- -----------------------------------------------------------------------------------------------------------------------------
Oil & Gas
Prod.
Historical Properties Historical Adjusted
IN MILLIONS, UtiliCorp Disposition United Pro forma United Pro forma
EXCEPT PER SHARE United (see Note 2B) Energy Note Adjustments Energy Combined
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $1,934.6 $(51.2) $ - $1,883.4
Cost of sales 1,247.9 (1.4) - 1,248.5
- -----------------------------------------------------------------------------------------------------------------------------
Gross profit 686.7 (49.8) - 636.9
- -----------------------------------------------------------------------------------------------------------------------------
Operating, administrative
& maintenance expense 373.9 (20.7) 353.2
Depreciation, depletion
& amortization 114.5 (26.6) 87.9
- -----------------------------------------------------------------------------------------------------------------------------
Income from Operations 198.3 (2.5) - 195.8
- -----------------------------------------------------------------------------------------------------------------------------
Long term debt interest
expense 77.7 2A(b) 13.3 13.3 91.0
Short term debt interest
expense and other, net 12.7 (10.6) 2A(d) (17.9) (17.9) (15.8)
Equity in earnings of
investments and
partnerships (14.0) 7.8 2A(a) 4.3 1.6 (12.4)
2A(b) 4.5
2A(c) .8
2A(e) (15.8)
Minority interests 2.2 - 2.2
- -----------------------------------------------------------------------------------------------------------------------------
Earnings before income
taxes 119.7 8.1 (7.8) 10.8 3.0 130.8
- -----------------------------------------------------------------------------------------------------------------------------
Income taxes 47.4 3.1 (2.8) 2A(f) 3.9 1.1 51.6
- -----------------------------------------------------------------------------------------------------------------------------
Net income 72.3 5.0 (5.0) 6.9 1.9 79.2
- -----------------------------------------------------------------------------------------------------------------------------
Preference Dividends 1.5 - - - - 1.5
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Available for
Common Shares $ 70.8 $ 5.0 $(5.0) $ 6.9 1.9 $ 77.7
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Weighted Average Common
Shares Outstanding:
Primary 44.93 44.93
Fully diluted 45.35 45.35
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Per Common Share:
Primary $ 1.57 $ 1.72
Fully diluted 1.57 1.72
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to pro forma condensed consolidated statements of income.
<PAGE>
UTILICORP UNITED INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1994
In U.S. Dollars
(unaudited)
<TABLE>
<CAPTION>
(unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
Oil & Gas Prod.
Historical Properties Historical Adjusted
IN MILLIONS, EXCEPT UtiliCorp Disposition United Pro forma United Pro forma
PER SHARE United (see Note 2B) Energy Notes Adjustments Energy Combined
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales $2,398.1 $(68.3) $ - $2,329.8
Cost of sales 1,575.8 (2.1) - 1,573.7
- -----------------------------------------------------------------------------------------------------------------------------------
Gross profit 822.3 (66.2) - 758.1
- -----------------------------------------------------------------------------------------------------------------------------------
Operating, administrative
& maintenance expense 448.8 (29.1) 419.7
Depreciation, depletion &
amortization 145.5 (41.2) 104.3
- -----------------------------------------------------------------------------------------------------------------------------------
Income from Operations 228.0 4.1 - 232.1
- -----------------------------------------------------------------------------------------------------------------------------------
Long term debt interest
expense 89.5 2A(b) 17.8 17.8 107.3
Short term debt interest
expense and other, net 6.9 (12.7) 2A(d) (23.9) (23.9) (29.7)
Equity in earnings of
investments and
partnerships (18.3) 9.7 2A(a) 5.7 13.2 (5.1)
2A(b) 8.6
2A(c) 1.1
2A(e) (11.9)
Minority interests 3.4 - 3.4
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings before
income taxes 146.5 16.8 (9.7) 2.6 (7.1) 156.2
- -----------------------------------------------------------------------------------------------------------------------------------
Income taxes 52.1 6.5 (3.5) 2A(f) .9 (2.6) 56.0
- -----------------------------------------------------------------------------------------------------------------------------------
Net income 94.4 10.3 (6.2) 1.7 (4.5) 100.2
- -----------------------------------------------------------------------------------------------------------------------------------
Preference Dividends 3.0 - - - - 3.0
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings Available for
Common Shares $ 91.4 $10.3 $(6.2) $ 1.7 (4.5) $ 97.2
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Weighted Average Common
Shares Outstanding:
Primary 43.97 43.97
Fully diluted 45.18 45.18
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings Per Common Share:
Primary $ 2.08 $ 2.21
Fully diluted 2.06 2.19
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to pro forma condensed consolidated statements of income.
<PAGE>
UTILICORP UNITED INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited pro forma condensed consolidated statements
of income of UtiliCorp United Inc., (the company) is presented to reflect (a)
the acquisition of an ownership interest in United Energy Limited (United
Energy) on September 6, 1995, and the related financings and (b) the sale of
certain oil and gas producing properties on September 27, 1995, as if such
transactions had occurred as of the beginning of the periods presented. As
no financial information is available for United Energy for periods earlier
than July 1, 1994, the pro forma condensed consolidated statements of income
for the company for the year ended December 31, 1994 has been prepared using
the results of United Energy for the period from May 11, 1994, to June 30,
1995 as if such results were for the year ended December 31, 1994.
UtiliCorp United -- Represents the condensed consolidated statements
of income of the company for (a) the nine months ended September 30, 1995 and
(b) the year ended December 31, 1994 as they appear in the third quarter Form
10-Q and Annual Report on Form 10-K.
United Energy -- Represents the condensed consolidated statements of
income of United Energy for (a) the nine months ended September 30, 1995 and
(b) the period from May 11, 1994, to June 30, 1995 as reflected on United
Energy's statement of profit and loss adjusted to U.S. generally accepted
accounting principles and adjusted for the company's equity ownership
percentage and acquisition financing.
Oil and Gas Producing Properties -- Represents the income and expense
activity related to the sold properties for (a) the nine months ended September
30, 1995 and (b) the year ended December 31, 1994.
The condensed consolidated balance sheet of the company as of September
30, 1995 reflects the United Energy acquisition and sale of certain oil and
gas producing properties.
NOTE 2 PRO FORMA ADJUSTMENTS
A. For United Energy the pro forma adjustments are as described below.
(a) Goodwill/intangible assets related to the purchase of United Energy
are amortized on a straight-line basis over a 40 year life.
(b) Interest expense related to United Energy's pre-acquisition activities
was removed and interest expense related to the acquisition was
included.
(c) Additional depreciation expense related to an increase in property,
plant and equipment to reflect balances at fair value.
(d) Additional interest income from securities between the company and
United Energy.
(e) All material adjustments to conform to U.S. Generally Accepted
Accounting Principles have been made.
(f) Income tax expense adjustment impact certain pro forma adjustments
above.
B. For the sale of oil and gas properties, the pro forma adjustments are as
described below.
(a) Removal of historical revenue and expense activities included in the
applicable periods.
(b) Reduction of short-term interest expense related to the application
of sale proceeds. Proceeds from the sale of oil and gas properties
were used to reduce short-term debt borrowings.
(c) Income tax expense adjustment for impact on removal of oil and gas
activities.
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 2 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1995
UNAUDITED
<TABLE>
<S> <C>
Current assets $ 130.2
Non-current assets:
Property, plant and equipment, net 1,021.1
License fee 600.0
Other 8.7
--------
Total non-current assets 1,629.8
Total Assets $1,760.0
--------
--------
Current liabilities $ 172.0
Non-current liabilities:
Bank Borrowings 865.0
Loan from Power Partnership Ltd. 659.9
Other 43.6
--------
Total non-current liabilities 1,568.5
Shareholders' Equity 19.5
Total Liabilities and Equity $1,760.0
--------
--------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 2 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995
UNAUDITED
<TABLE>
<S> <C>
Revenue $ 192.7
Cost of sales 121.2
Operating expenses 35.5
Provision amortization (2.8)
Other income (4.7)
Interest expense 19.2
--------
47.2
Income before taxes 24.3
Income taxes 3.2
--------
Net income $ 21.1
--------
--------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 2 for Reconciliation to U.S. GAAP
UNITED ENERGY LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995
UNAUDITED
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 21.1
Non-Cash Adjustments:
Depreciation 10.3
Changes in Current Assets and Liabilities:
Current assets (7.6)
Current liabilities (71.9)
--------
Cash used in operating activities (48.1)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (10.4)
Tax on repurchase of property, plant and equipment (31.6)
Other 4.0
--------
Cash used for investing activities (38.0)
CASH FLOWS FROM FINANCING ACTIVITIES: -
Retirement of long-term debt (764.0)
Issuance of long-term debt 865.0
Redemption of shares (600.0)
Dividends (91.8)
Loss on re-financing (16.4)
Deferred financing charges (7.2)
Issuance of related party debt 659.9
--------
Cash provided from financing activities 45.5
CHANGE IN CASH AND CASH EQUIVALENTS (40.6)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD (2.4)
--------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ (43.0)
--------
--------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
UNITED ENERGY LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
UNAUDITED
Note 1
The financial statements of United Energy Limited (UE) for the three
months ended and as of September 30, 1995, are not audited. In addition,
such statements are denominated in Australian dollars. The acquisition,
related adjustments, including acquisition financing, have been reflected in
the attached statements. No adjustments have been made to reflect the
statements in accordance with U.S. Generally Accepted Accounting Principles
(GAAP).
Note 2
The following table summarizes the significant adjustments to the condensed
consolidated statement of income for the three months ended September 30, 1995
which would be required if GAAP had been applied instead of Australian
accounting principles.
<TABLE>
<CAPTION>
(AUS $)
DESCRIPTION NET INCOME
----------- ----------
<S> <C>
Balance as reported in the Australian based financial
statements $21.1
Amortization of license fee and goodwill (1.3)
Add back of franchise fee expense 9.9
Add back certain provision amortization (2.8)
-----
Balance in accordance with U.S. GAAP $26.9
-----
-----
</TABLE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the prospectuses constituting part of these Registration
Statements on Form S-3 (No. 33-60406, No. 33-59237, No. 33-47289, No.
33-39466 and No. 33-57167) and on Form S-8 (No. 33-45525, No. 33-50260, No.
33-45074 and No. 33-52094) of UtiliCorp United Inc. of our report dated
November 10, 1995, which is included in this Form 8-K/A. It should be noted
that we have not audited any financial statements of United Energy Limited
subsequent to June 30, 1995, or performed any audit procedures subsequent to
the date of our report.
Melbourne, Australia ARTHUR ANDERSEN
March 29, 1996
<PAGE>
UNITED ENERGY LIMITED
CONVENIENCE TRANSLATION INTO U.S. DOLLARS
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD FROM 11 MAY 1994 TO 30 JUNE 1995
(UNAUDITED)
<TABLE>
<CAPTION>
11 May 1994 to
30 June 1995
$"000
<S> <C>
OPERATING PROFIT BEFORE A ABNORMAL ITEMS,
EXTRAORDINARY ITEMS AND INCOME TAX 63,902
Abnormal items (40,913)
--------
OPERATING LOSS BEFORE EXTRAORDINARY ITEMS
AND INCOME TAX 22,989
Income tax attributable to operating loss (25,338)
--------
OPERATING LOSS AFTER INCOME TAX (2,349)
Loss on extraordinary items (17,901)
--------
OPERATING LOSS AND EXTRAORDINARY ITEMS
AFTER INCOME TAX (20,250)
DIVIDENDS PAID (8,094)
--------
ACCUMULATED LOSSES AT THE END OF THE
FINANCIAL PERIOD (28,344)
========
</TABLE>
See note to Convenience Translation.
<PAGE>
UNITED ENERGY LIMITED
CONVENIENCE TRANSLATION INTO U.S. DOLLARS
BALANCE SHEET
AT 30 JUNE 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1995
$"000
<S> <C>
CURRENT ASSETS
Cash 20
Receivables 35,660
Investments 541
Other 53,228
Inventories 5,947
--------
TOTAL CURRENT ASSETS 95,396
--------
NON-CURRENT ASSETS
Receivables 942
Investments 44
Other 236
Property, plant and equipment 677,705
--------
TOTAL NON-CURRENT ASSETS 678,927
--------
TOTAL ASSETS 774,323
--------
CURRENT LIABILITIES
Creditors and borrowings 691,018
Provisions 77,701
--------
TOTAL CURRENT LIABILITIES 768,719
--------
NON-CURRENT LIABILITIES
Provisions 33,948
--------
TOTAL LIABILITIES 802,667
--------
NET LIABILITIES (28,344)
========
SHAREHOLDER'S EQUITY
Share capital -
Accumulated losses (28,344)
--------
TOTAL SHAREHOLDER'S EQUITY DEFICIENCY (28,344)
========
</TABLE>
See note to Convenience Translation.
<PAGE>
UNITED ENERGY LIMITED
CONVENIENCE TRANSLATION INTO U.S. DOLLARS
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM 11 MAY 1994 TO 30 JUNE 1995
(UNAUDITED)
<TABLE>
<CAPTION>
11 May 1994 to
30 June 1995
$"000
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 556,456
Payments to suppliers and employees (430,361)
Interest received 2,438
Interest paid (33,857)
--------
NET CASH PROVIDED BY OPERATING ACTIVITIES 94,676
--------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on sale of investments 7,005
Payments for investments (585)
Proceeds from sale of property, plant and equipment 3,220
Payments for property, plant and equipment (27,556)
--------
NET CASH USED IN INVESTING ACTIVITIES (17,916)
--------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 365,520
Repayment of borrowings (440,877)
Dividends paid (8,094)
--------
NET CASH USED IN FINANCING ACTIVITIES (83,451)
--------
NET DECREASE IN CASH HELD (6,691)
CASH AT THE BEGINNING OF THE FINANCIAL YEAR 4,824
--------
CASH AT THE END OF THE FINANCIAL YEAR (1,867)
========
</TABLE>
See note to Convenience Translation.
<PAGE>
UNITED ENERGY LIMITED
CONVENIENCE TRANSLATION INTO U.S. DOLLARS
CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets 101.3
Non-Current Assets:
Property, plant and equipment, net 794.7
License fee 467.0
Other 6.8
-------
1,268.5
TOTAL ASSETS 1,369.8
=======
LIABILITIES
Current Liabilities 133.9
Non-Current Liabilities:
Bank Borrowings 673.2
Loan from Power Partnership Ltd 513.6
Other 33.9
-------
1,220.7
SHAREHOLDERS' EQUITY 15.2
TOTAL LIABILITIES & EQUITY 1,369.8
=======
</TABLE>
See note to Convenience Translation.
<PAGE>
UNITED ENERGY LIMITED
CONVENIENCE TRANSLATION INTO U.S. DOLLARS
CONDENSED INCOME STATEMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Revenue 150.0
Cost of Sales 94.3
Operating Expenses 27.6
Tariff H & Cogen amortization (2.2)
Other Income (3.7)
Interest Expense 14.9
-------
36.6
Income before taxes 18.9
Income taxes 2.5
-------
NET INCOME 16.4
=======
</TABLE>
See note to Convenience Translation.
<PAGE>
UNITED ENERGY LIMITED
CONVENIENCE TRANSLATION INTO U.S. DOLLARS
CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
CASHFLOWS FROM OPERATING ACTIVITIES:
Net Income 16.4
Non-Cash adjustments:
Depreciation 8.1
Changes in Assets and Liabilities:
Current Assets (5.9)
Current Liabilities (56.0)
Changes in other assets and liabilities, net
-------
CASH USED IN OPERATING ACTIVITIES (37.4)
CASHFLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant & equipment (8.1)
Tax on repurchase of property, plant
and equipment (24.6)
Other 3.1
-------
CASH USED FOR INVESTING ACTIVITIES (29.6)
CASHFLOWS FROM FINANCING ACTIVITIES:
Redemption of Shares (467.0)
Dividends (71.4)
Retirement of long term debt (594.6)
Issuance of long-term 673.2
Loss of re-financing (12.8)
Deferred financing changes (5.6)
Issuance of related party debt 513.6
-------
CASH PROVIDED FROM FINANCING ACTIVITIES 35.4
CHANGE IN CASH AND CASH EQUIVALENTS (31.6)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD (1.9)
-------
CASH AND CASH EQUIVALENTS AT END OF PERIOD (33.5)
=======
</TABLE>
See note to Convenience Translation.
<PAGE>
United Energy Limited
Note to Convenience Translation
Unaudited
The profit and loss Account and Statement of Cash Flows for the period from
May 11, 1994 to June 30, 1995 and month ended September 30, 1995 and balance
sheet as of June 30, 1995 and September 30, 1995 have been translated from
Australian dollars to U.S. dollars using the March 22, 1996 exchange rate of
one Australian dollar to $.7783 U.S. dollar. A more current exchange rate was
used to translate these statements due an increase in the value of the
Australian dollar relative to the U.S. dollar.
