<PAGE>
FORM 10-Q
SECURlTlES AND EXCHANGE COMMlSSlON
WASHINGTON, D. C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended
June 30, 1995 Commission File Number 1-8644
IPALCO ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Indiana 35-1575582
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
25 Monument Circle
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 317-261-8261
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to the filing requirements for at least the
past 90 days. Yes X No
--------- ---------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding At June 30, 1995
----- ----------------------------
Common (Without Par Value) 37,820,171 Shares
<PAGE>1
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
- -------------------------------
Statements of Consolidated Income - Three Months Ended and
Six Months Ended June 30, 1995 and 1994 2
Consolidated Balance Sheets - June 30, 1995 and
December 31, 1994 3
Statements of Consolidated Cash Flows -
Six Months Ended June 30, 1995 and 1994 4
Notes to Consolidated Financial Statements 5-6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-11
PART II. OTHER INFORMATION 12-14
- ---------------------------
<PAGE>2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Income
(In Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
UTILITY OPERATING REVENUES:
Electric $ 151,814 $ 153,004 $ 316,161 $ 321,906
Steam 7,838 8,133 19,009 20,409
------------- ------------- ------------- -------------
Total operating revenues 159,652 161,137 335,170 342,315
------------- ------------- ------------- -------------
UTILITY OPERATING EXPENSES:
Operation:
Fuel 39,174 40,736 82,841 85,324
Other 27,813 25,964 55,228 52,594
Power purchased 5,033 4,692 8,912 9,860
Purchased steam 1,434 1,819 3,418 4,019
Maintenance 16,257 20,831 30,948 35,846
Depreciation and amortization 21,510 20,727 42,891 40,948
Taxes other than income taxes 7,450 7,383 16,085 15,370
Income taxes - net 10,383 9,545 25,971 27,394
------------- ------------- ------------- -------------
Total operating expenses 129,054 131,697 266,294 271,355
------------- ------------- ------------- -------------
UTILITY OPERATING INCOME 30,598 29,440 68,876 70,960
------------- ------------- ------------- -------------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during construction 1,298 749 2,349 1,612
Other - net (2,723) (4,085) (4,325) (4,769)
Income taxes - net 862 1,751 1,513 2,419
------------- ------------- ------------- -------------
Total other deductions - net (563) (1,585) (463) (738)
------------- ------------- ------------- -------------
INCOME BEFORE INTEREST AND OTHER CHARGES 30,035 27,855 68,413 70,222
------------- ------------- ------------- -------------
INTEREST AND OTHER CHARGES:
Interest 12,737 11,988 25,717 24,345
Allowance for borrowed funds used during construction (1,382) (1,067) (2,682) (2,217)
Preferred dividend requirements of subsidiary 796 796 1,591 1,591
------------- ------------- ------------- -------------
Total interest and other charges - net 12,151 11,717 24,626 23,719
------------- ------------- ------------- -------------
NET INCOME $ 17,884 $ 16,138 $ 43,787 $ 46,503
============= ============= ============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 37,819 37,748 37,817 37,725
============= ============= ============= =============
EARNINGS PER SHARE OF COMMON STOCK $ 0.47 $ 0.43 $ 1.16 $ 1.23
============= ============= ============= =============
<PAGE>2 continued
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.54 $ 0.53 $ 1.08 $ 1.06
============= ============= ============= =============
See notes to consolidated financial statements.
</TABLE>
<PAGE>3
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
<CAPTION>
June 30 December 31
ASSETS 1995 1994
------ ----------------- -----------------
<S> <C> <C>
UTILITY PLANT:
Utility plant in service $ 2,474,059 $ 2,415,531
Less accumulated depreciation 951,395 916,943
----------------- -----------------
Utility plant in service - net 1,522,664 1,498,588
Construction work in progress 216,639 191,010
Property held for future use 22,201 22,174
----------------- -----------------
Utility plant - net 1,761,504 1,711,772
OTHER ASSETS: ----------------- -----------------
Nonutility property - at cost, less accumulated depreciation 98,767 76,671
Other investments 7,471 9,637
----------------- -----------------
Other assets - net 106,238 86,308
----------------- -----------------
CURRENT ASSETS:
Cash and cash equivalents 8,999 8,148
Financial investments - 7,025
Accounts receivable (less allowance for doubtful
accounts - 1995, $1,044 and 1994, $855) 48,063 48,659
Fuel - at average cost 42,876 37,749
Materials and supplies - at average cost 57,731 57,236
Prepayments and other current assets 3,634 9,132
----------------- -----------------
Total current assets 161,303 167,949
----------------- -----------------
DEFERRED DEBITS:
Unamortized Petersburg Unit 4 carrying charges 32,689 32,521
Unamortized redemption premiums and expenses on debt 28,609 27,787
Other regulatory assets 65,801 53,661
Miscellaneous 14,117 11,080
----------------- -----------------
Total deferred debits 141,216 125,049
----------------- -----------------
TOTAL $ 2,170,261 $ 2,091,078
================= =================
<PAGE>3 continued
CAPITALIZATION AND LIABILITIES
------------------------------
CAPITALIZATION:
Common shareholders' equity:
Common stock $ 383,139 $ 381,228
Premium on 4% cumulative preferred stock 1,363 1,363
Retained earnings 422,299 419,354
----------------- -----------------
Total common shareholders' equity 806,801 801,945
Cumulative preferred stock of subsidiary 51,898 51,898
Long-term debt (less current maturities and
sinking fund requirements) 654,585 665,971
----------------- -----------------
Total capitalization 1,513,284 1,519,814
----------------- -----------------
CURRENT LIABILITIES:
Notes payable - banks and commercial paper 84,700 29,753
Current maturities and sinking fund requirements 15,150 350
Accounts payable and accrued expenses 105,654 102,360
Dividends payable 21,545 21,096
Payrolls accrued 4,079 4,475
Taxes accrued 20,319 18,569
Interest accrued 15,054 14,933
Other current liabilities 12,453 8,823
----------------- -----------------
Total current liabilities 278,954 200,359
----------------- -----------------
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES:
Accumulated deferred income taxes - net 289,105 280,684
Unamortized investment tax credit 52,128 53,762
Accrued postretirement benefits 34,535 34,854
Miscellaneous 2,255 1,605
----------------- -----------------
Total deferred credits and other long-term liabilities 378,023 370,905
----------------- -----------------
COMMITMENTS AND CONTINGENCIES (NOTE 6)
TOTAL $ 2,170,261 $ 2,091,078
================= =================
See notes to consolidated financial statements.
</TABLE>
<PAGE>4
<TABLE>
IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Statements of Consolidated Cash Flows
(In Thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30
1995 1994
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income before preferred dividend requirements of subsidiary $ 45,378 $ 48,094
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 45,064 43,430
Income from financial investments - (744)
Deferred income taxes and investment tax credit adjustments - net 2,307 (1,574)
Allowance for funds used during construction (5,031) (3,829)
Debt issuance costs and premiums on redemptions of debt (1,406) (3,616)
Decrease (increase) in certain assets:
Accounts receivable 596 1,536
Fuel, materials and supplies (5,622) (156)
Other current assets 5,498 1,118
Increase (decrease) in certain liabilities:
Accounts payable 3,294 9,670
Taxes accrued 1,750 (4,990)
Other current liabilities 4,041 6,210
--------------- ---------------
Net cash provided by operating activities 95,869 95,149
--------------- ---------------
CASH FLOWS FROM INVESTING:
Withdrawals from financial investments 7,025 1,500
Construction expenditures - utility (86,602) (67,087)
Construction expenditures - nonutility (23,433) (2,328)
Other (10,246) 1,066
--------------- ---------------
Net cash used in investing activities (113,256) (66,849)
--------------- ---------------
CASH FLOWS FROM FINANCING:
Issuance of long-term debt 43,750 180,000
Retirement of long-term debt (40,350) (78,429)
Short-term debt - net 54,947 (81,700)
Dividends paid (42,021) (40,809)
Issuance of common stock related to incentive compensation plans 1,912 1,767
--------------- ---------------
Net cash provided by (used in) financing activities 18,238 (19,171)
--------------- ---------------
Net increase in cash and cash equivalents 851 9,129
Cash and cash equivalents at beginning of period 8,148 10,713
--------------- ---------------
Cash and cash equivalents at end of period $ 8,999 $ 19,842
=============== ===============
<PAGE>4 continued
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 23,051 $ 18,682
=============== ===============
Income taxes $ 16,389 $ 28,269
=============== ===============
See notes to consolidated financial statements.
</TABLE>
<PAGE>5
IPALCO ENTERPRISES, INC. AND SUBSIDIARIES
-----------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
1. IPALCO Enterprises, Inc. (IPALCO) owns all of the outstanding common
stock of its subsidiaries (collectively referred to as Enterprises).
The consolidated financial statements include the accounts of IPALCO,
its utility subsidiary, Indianapolis Power & Light Company (IPL) and
its unregulated subsidiary, Mid-America Capital Resources, Inc. (Mid-
America). Mid-America is the parent company of nonutility energy-
related businesses.
In the opinion of management these statements reflect all adjustments,
consisting of only normal recurring accruals, including elimination of
all significant intercompany balances and transactions, which are
necessary to a fair statement of the results for the interim periods
covered by such statements. Due to the seasonal nature of the electric
utility business, the annual results are not generated evenly by
quarter during the year. Certain amounts from prior year financial
statements have been reclassified to conform to the current year
presentation. These financial statements and notes should be read in
conjunction with the audited financial statements included in
Enterprises' 1994 Annual Report on Form 10-K.
2. COMMON STOCK
Shares Amount
------ ------
Balance at December 31, 1994 37,755,966 $381,227,527
Restricted stock issued (January 1995) 58,205 1,746,150
Exercise of stock options (April 1995) 6,000 165,722
---------- ------------
Balance at June 30, 1995 37,820,171 $383,139,399
========== ============
3. LONG-TERM DEBT
On February 9, 1995, IPL issued First Mortgage Bonds, 6 5/8% Series,
due 2024, in the principal amount of $40 million. The net proceeds
were used to redeem on March 15, 1995, IPL's $40 million First Mortgage
Bonds, 10 5/8% Series, due 2014, at a redemption price of 102%.
Accrued interest was also paid at the time of redemption.
4. RATE MATTERS
On July 21, 1995, IPL and the other parties to IPL's pending $88-
million retail electric rate case presented a Settlement Agreement to
the Indiana Utility Regulatory Commission (IURC). Under terms of this
agreement, which requires IURC approval, new rates will be implemented
in two steps to produce additional annual revenues of $35 million in
step 1 and $25 million in step 2. If the IURC approves the Settlement
Agreement, the step 1 increase is expected to become effective
approximately September 1, 1995. The step 2 increase becomes effective
June 30, 1996, conditioned on IPL certifying that the flue gas
desulfurization units (scrubbers) at the Petersburg Generating Station are
in service. IPL last received an electric general rate increase order
in 1986.
<PAGE>6
5. LINES OF CREDIT
On March 10, 1995, Mid-America extended its line of credit with Union
Bank of Switzerland to $30 million, of which $19 million was unused at
June 30, 1995.
6. COMMITMENTS AND CONTINGENCIES (See Item 1. Legal Proceedings of Part II
-- Other Information)
<PAGE>7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Material changes in the consolidated financial condition and results
of operations of IPALCO Enterprises, Inc. (Enterprises), except where
noted, are attributed to the operations of Indianapolis Power & Light
Company (IPL). Consequently, the following discussion is centered on IPL.
LIQUIDITY AND CAPITAL RESOURCES
Overview
- --------
The Board of Directors of Enterprises on May 30, 1995, declared a
quarterly dividend on common stock of 54 cents per share. The dividend was
paid July 15, 1995, to shareholders of record June 23, 1995.
IPL's capital requirements are primarily related to construction
expenditures needed to meet customers needs for electric and steam, as well
as expenditures for compliance for the federal Clean Air Act. Construction
expenditures (excluding allowance for funds used during construction) totaled
$53.9 million during the second quarter ended June 30, 1995, representing a
$12.9 million increase from the comparable period in 1994. This increase is
mostly related to the construction of scrubbers at IPL's Petersburg Generating
Station scheduled to be in-service in mid-1996. Internally generated cash
provided by IPL's operations and the issuance of short-term debt were
primarily used for construction expenditures during the second quarter of
1995. Construction expenditures (excluding allowance for funds used during
construction) totaled $110.0 million during the six months ended June 30,
1995, representing a $40.6 million increase from the comparable period in 1994
due primarily to the construction of IPL's Petersburg Generating Station
scrubbers and chilled water systems at two of the unregulated subsidiaries
during 1995. Internally generated cash provided by IPL's operations and the
issuance of short-term debt were used for construction expenditures during
the first six months of 1995. Assuming IURC approval of IPL's electric rate
settlement, IPL anticipates improved liquidity and currently faces no
liquidity problems.
The five-year construction program has had no changes to what was
previously reported in IPALCO's 1994 Form 10-K report. (See "Cost of
Construction Program" in Item 7 of Management's Discussion and Analysis of
Financial Condition and Results of Operations in IPALCO's 1994 Form 10-K
report for further discussion).
On February 9, 1995, IPL issued First Mortgage Bonds in the principal
amount of $40 million to replace comparable bonds that were at a higher
rate.
Future Rate Relief
- ------------------
On July 21, 1995, IPL and the other parties to IPL's pending $88-
million retail electric rate case presented a Settlement Agreement to the
IURC. The agreement will raise IPL's retail electric rates $60 million a
year in two steps. Step 1 will produce additional annual revenues of $35
million beginning approximately September 1, 1995, if the agreement is
approved by the IURC. Step 2 will generate additional annual revenues of $25
million beginning June 30, 1996, conditioned upon certification that IPL's
<PAGE>8
two new scrubbers at the Petersburg Generating Station are in service.
Under terms of the agreement, IPL will not seek another increase until
after July 1, 1997, at the earliest. IPL also has agreed not to file a
request to build any large, base-load generating capacity before January 1,
2000. This provision can be waived in extreme circumstances. In addition,
the parties agreed to resolve pending litigation involving IPL's Clean Air
Act compliance plan.
IPL last received an order from the IURC authorizing an increase in
electric basic rates and charges in August, 1986.
New Indiana Regulation
- ----------------------
On April 26, 1995, changes to existing Indiana utility regulatory laws
were enacted which increase the period to be used in Indiana's quarterly
earnings test from one year to five years and allow the IURC to consider
alternate forms of regulation. The quarterly earnings test is applicable
to all Indiana electric and gas utilities. The extension of the test
period will allow utilities, which can be significantly affected by weather
conditions, to average high and low periods when computing the quarterly
earnings test.
RESULTS OF OPERATIONS
Comparison of Quarters Ended June 30, 1995 and June 30, 1994
------------------------------------------------------------
Earnings per share during the second quarter of 1995 were $.47 or $.04
above the $.43 attained in the comparable 1994 period. The following
discussion highlights the factors contributing to the second quarter
results.
Operations
- ----------
Electric operating revenues decreased $1.2 million this quarter
compared to the same period one year ago. Cooling degree days in the
Indianapolis area were down 25 percent for the second quarter, compared to
the same period in 1994. Kilowatthour (KWH) sales to less weather-
sensitive industrial customers, however, increased 2.4%. Contributing to
the decreased revenues was a decrease of $1.7 million in fuel cost
adjustment recoveries. This decrease was partially offset by increases in
retail electric KWH sales of $.3 million and miscellaneous revenues of $.2
million. The following table is a summary of KWH sales to each customer
class:
<PAGE>9
Retail KWH Sales By Customer Class
In Millions of KWHs
Three Months Ended June 30,
1995 1994 % Change
------- ------- --------
Residential 816.9 844.3 (3.2)%
Commercial 480.2 491.0 (2.2)
Industrial 1,580.1 1,543.2 2.4
Other 15.4 17.4 (11.5)
------- -------
Total Retail 2,892.6 2,895.9 (0.1)
======= =======
Fuel costs decreased $1.6 million due to a decrease in prices of $2.1
million, partially offset by an increase in deferred fuel costs of $.3
million and an increase in fuel consumption of $.2 million. Other
operating expenses increased $1.8 million primarily due to increased
administrative and general expenses of $1.2 million and increased electric
distribution expenses of $.6 million. Power purchased increased $.3
million due to increased purchases of short-term energy for 1995.
Purchased steam decreased $.4 million due to a decrease in prices and
therms purchased from an independent resource recovery system located
within the City of Indianapolis.
Maintenance expenses decreased $4.6 million, reflecting decreased
expenditures for unit overhaul costs at the Petersburg Generating Station
of $2.7 million, decreased electric distribution expenditures for overhead
and underground lines of $1.6 million and decreased expenditures for
general maintenance at the Perry K Generating Station of $.3 million.
Income taxes - net increased $.8 million primarily due to the increase
in pretax utility operating income.
As a result of the foregoing, utility operating income increased 3.9%
from last year, to $30.6 million.
Other Income and Deductions
- ---------------------------
Allowance for equity funds used during construction increased $.5
million due to an increased construction base.
Other - net, which includes the pretax operations other than IPL,
increased $1.4 million primarily due to increased revenues and decreased
operating costs of other subsidiaries.
Income taxes - net, which includes taxes on operations other than IPL,
increased $.9 million primarily due to the increase in nonutility operating
income.
Interest and Other Charges
- --------------------------
Interest expense increased $.7 million primarily due to the issuance
of $200 million long-term debt in 1994. The increase in interest expense
for the second quarter of 1995 was partially offset by decreased expense as
a result of refinancing certain first mortgage bonds during 1995 and 1994
with more favorable terms.
<PAGE>10
Allowance for borrowed funds used during construction increased $.3
million due to an increased construction base.
Comparison of Six Months Ended June 30, 1995 and June 30, 1994
--------------------------------------------------------------
Earnings per share during the first six months of 1995 were $1.16 or
$.07 below the $1.23 attained during the first six months of 1994. The
following discussion highlights the factors contributing to the
year-to-date results.
Operations
- ----------
The decrease in electric operating revenues of $5.7 million was the
result of milder weather during the first six months of the year compared
to the same period in 1994. Contributing to the decreased revenues was a
decrease in retail electric KWH sales of $3.6 million, a decrease in sales
for resale of $1.4 million, due to decreased energy sales to neighboring
utilities, and a decrease in fuel cost adjustment recoveries of $1.1
million. Miscellaneous revenues increased $.4 million. The following
table is a summary of KWH sales to each customer class:
Retail KWH Sales By Customer Class
In Millions of KWHs
Six Months Ended June 30,
1995 1994 % Change
------- ------- --------
Residential 1,992.8 2,127.9 (6.3)%
Commercial 1,065.2 1,130.6 (5.8)
Industrial 3,114.3 3,047.2 2.2
Other 35.9 38.6 (7.0)
------- -------
Total Retail 6,208.2 6,344.3 (2.1)
======= =======
Fuel costs decreased $2.5 million due to a decrease in prices of $4.1
million as well as a decrease in fuel consumption of $1.4 million,
partially offset by an increase in deferred fuel costs of $3.0 million.
Other operating expenses increased $2.6 million primarily due to increased
administrative and general expenses of $1.6 million, increased electric
distribution expenses of $.6 million, increased expenses at the Petersburg
Generating Station of $.3 million, increased customer accounts expense of
$.3 million and increased miscellaneous expense of $.2 million, partially
offset by decreased customer assistance expenses of $.4 million. Power
purchased decreased $.9 million due to decreased energy purchases.
Purchased steam decreased $.6 million due to a decrease in prices and
therms purchased from an independent resource recovery system located
within the City of Indianapolis.
Maintenance expenses decreased $4.9 million, reflecting decreased
expenditures for unit overhaul costs at the Petersburg Generating Station
of $4.1 million, decreased electric distribution expenditures for overhead
and underground lines of $1.7 million and decreased expenditures for
general maintenance at the Perry K Generating Station of $.5 million.
These expenses were partially offset by increased expenditures for unit
overhaul costs at the Pritchard Generating Station of $1.0 million during
<PAGE>11
1995 and increased expenditures for transmission station equipment of $.4
million.
Income taxes - net decreased $1.4 million primarily due to the
decrease in pretax utility operating income.
As a result of the foregoing, utility operating income decreased 2.9%
from last year, to $68.9 million.
Other Income and Deductions
- ---------------------------
Allowance for equity funds used during construction increased $.7
million due to an increased construction base.
Income taxes - net, which includes taxes on operations other than IPL,
increased $.9 million primarily due to the increase in nonutility operating
income.
Interest and Other Charges
- --------------------------
Interest expense increased $1.4 million primarily due to the issuance
of $200 million long-term debt in 1994. The increase in interest expense
for year-to-date 1995 was partially offset by decreased expense as a result
of refinancing certain first mortgage bonds during 1995 and 1994 with more
favorable terms.
Allowance for borrowed funds used during construction increased $.5
million due to an increased construction base.
<PAGE>12
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
- --------------------------
On August 18, 1993, the Indiana Utility Regulatory Commission ("IURC")
entered an order in Cause No. 39437, approving the Environmental Compliance
Plan of Indianapolis Power & Light Company ("IPL") to comply with the Clean
Air Act Amendments of 1990. The estimated cost of IPL's Environmental
Compliance Plan is approximately $250 million before including allowance for
funds used during construction. A primary part of IPL's Plan, scrubbing IPL's
Petersburg 1 and 2 coal-fired plants by 1996 to enable IPL to continue to burn
high sulfur coal, was opposed by the Office of Utility Consumer Counselor
("OUCC"), the Citizens Action Coalition ("CAC"), and the Industrial Intervenors
Group ("IIG"). OUCC, CAC and IIG appealed the IURC's order to the Indiana
Court of Appeals. On June 30, 1995, the Indiana Court of Appeals issued its
opinion that while the substantive findings of the Commission were appropriate,
the Indiana statutory provisions relating to the use of Indiana coal were
unconstitutional. The Court remanded the Cause back to the IURC for
reconsideration.
On April 8, 1994, IPL filed a petition with the IURC, Cause No. 39938, for
authority to increase its rates and charges for electric service, to continue
the capitalization of allowance for funds used during construction and to defer
depreciation expense on IPL's Stout Combustion Turbine Unit No. 5, to add to
the fair value of IPL's utility property environmental compliance capital
projects and qualified pollution control property under construction and for
revised depreciation rates. Settlement discussions were conducted which
resulted in a Settlement Agreement presented to the IURC on July 21, 1995.
Significant provisions of the Settlement Agreement include: a two step rate
increase; a moratorium on filing a new retail electric rate case until July 1,
1997; absent an emergency, a moratorium on filing for a Certificate of Public
Convenience and Necessity to build a retail base load generating unit until
January 1, 2000; and establishing an authorized return for fuel cost adjustment
filings of $150 million for step 1 and $163 million for step 2. As a result
of the settlement, IPL can increase its rates to produce additional annual
revenues of $35 million in step 1 and $25 million in step 2. The step 1
increase will be effective September 1, 1995 and step 2 becomes effective
June 30, 1996. The step 2 increase is conditioned on IPL certifying that the
flue gas desulfurization units (scrubbers) are in service. The inclusion of
the scrubbers effectively concludes the pending issues in IPL's Environmental
Compliance Plan proceeding discussed above. The remand of IPL's Environmental
Compliance Plan order to the IURC will be held in abeyance pending
implementation of step 2 of the rate case settlement. The rate case settlement
is subject to IURC approval.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The Annual Meeting of shareholders of IPALCO Enterprises, Inc. was held
on April 19, 1995. At the Annual Meeting, the following six directors in
Class III were elected to terms of three years each which expire in
April, 1998. Each director received the following numbers of votes as shown
opposite his or her name:
<PAGE>13
Director Votes For Votes Withheld
-------- ---------- --------------
Otto N. Frenzel III 31,802,309 451,184
Dr. Earl B. Herr, Jr. 31,798,540 454,953
Sam H. Jones 31,604,070 649,423
Andre B. Lacy 31,759,397 494,096
L. Ben Lytle 31,580,735 672,758
Thomas M. Miller 31,567,160 686,333
The shareholders also voted upon the approval of the IPALCO
Enterprises, Inc. Long-Term Performance and Restricted Stock Incentive Plan
(the "Plan"). The vote with regard to the Plan was as follows:
Votes For Votes Against Votes Abstaining
--------- ------------- ----------------
29,018,261 2,115,848 1,119,384
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
a) Exhibits. Copies of documents listed below which are identified
with an asterisk (*) are incorporated herein by reference and made
a part hereof.
3.1* Articles of Incorporation of IPALCO Enterprises, Inc., as amended.
(Form 10-K for year ended 12-31-90.)
3.2* Bylaws of IPALCO Enterprises, Inc. dated April 26, 1994. (Form 10-Q
for quarter ended 6-30-94.)
4.1* IPALCO Enterprises, Inc. Automatic Dividend Reinvestment and Stock
Purchase Plan. (Exhibit 4.1 to the Form 10-K for the year ended
12-31-94.)
4.2* IPALCO Enterprises, Inc. Shareholder Rights Plan - Rights Agreement.
(Exhibit 4.2 to the Form 10-K for the year ended 12-31-94.)
11.1 Computation of Per Share Earnings
27.1 Financial Data Schedule
b) Reports on Form 8-K.
None.
<PAGE>14
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
IPALCO ENTERPRISES, INC.
--------------------------------
(Registrant)
Date: August 11, 1995 /s/ John R. Brehm
--------------------- --------------------------------
John R. Brehm
Vice President and Treasurer
Date: August 11, 1995 /s/ Stephen J. Plunkett
--------------------- --------------------------------
Stephen J. Plunkett
Controller
<TABLE>
IPALCO ENTERPRISES, INC.
Exhibit 11.1 - Computation of Per Share Earnings
<CAPTION>
For the Quarter Ended June 30, 1995
QUARTER ENDED JUNE 30, 1995: Fully
Primary Diluted
---------- ----------
<S> <C> <C>
Weighted Average Number of Shares
Average Common Shares Outstanding at 6/30/95 37,818,838 37,818,838
Anti-Dilutive Effect for Stock Options at 6/30/95 (42,162) (42,162)
---------- ----------
Weighted Average Shares at 6/30/95 37,776,676 37,776,676
========== ==========
Net Income To Be Used To Compute Fully
Diluted Earnings Per Average Common Share (Dollars in thousands)
Net Income $17,884 $17,884
========== ==========
Earnings Per Average Common Share $0.47 (a) $0.47 (a)
========== ==========
For the Six Months Ended June 30, 1995
SIX MONTHS ENDED JUNE 30, 1995: Fully
Primary Diluted
---------- ----------
Weighted Average Number of Shares
Average Common Shares Outstanding at 6/30/95 37,816,504 37,816,504
Anti-Dilutive Effect for Stock Options at 6/30/95 (43,310) (43,310)
---------- ----------
Weighted Average Shares at 6/30/95 37,773,194 37,773,194
========== ==========
Net Income To Be Used To Compute Fully
Diluted Earnings Per Average Common Share (Dollars in thousands)
Net Income $43,787 $43,787
========== ==========
Earnings Per Average Common Share $1.16 (a) $1.16 (a)
========== ==========
Note:
(a) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000728391
<NAME> IPALCO ENTERPRISES, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,761,504
<OTHER-PROPERTY-AND-INVEST> 106,238
<TOTAL-CURRENT-ASSETS> 161,303
<TOTAL-DEFERRED-CHARGES> 141,216
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 2,170,261
<COMMON> 383,139
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 422,299
<TOTAL-COMMON-STOCKHOLDERS-EQ> 806,801
0
51,898
<LONG-TERM-DEBT-NET> 654,585
<SHORT-TERM-NOTES> 84,700
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 15,150
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 557,127
<TOT-CAPITALIZATION-AND-LIAB> 2,170,261
<GROSS-OPERATING-REVENUE> 335,170
<INCOME-TAX-EXPENSE> 25,971
<OTHER-OPERATING-EXPENSES> 240,323
<TOTAL-OPERATING-EXPENSES> 266,294
<OPERATING-INCOME-LOSS> 68,876
<OTHER-INCOME-NET> (463)
<INCOME-BEFORE-INTEREST-EXPEN> 68,413
<TOTAL-INTEREST-EXPENSE> 24,626
<NET-INCOME> 43,787
1,591
<EARNINGS-AVAILABLE-FOR-COMM> 43,787
<COMMON-STOCK-DIVIDENDS> 40,430
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 95,869
<EPS-PRIMARY> 1.16
<EPS-DILUTED> 1.16
</TABLE>
