<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER Section 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1996 Commission File Number 0-17736
ESELCO, INC.
--------------------
(Name of Registrant)
MICHIGAN 38-2785176
- - ------------------------ ----------------------
(State of Incorporation) (I. R. S. Employer
Identification Number)
725 East Portage Avenue
SAULT STE. MARIE, MICHIGAN 49783
----------------------------------
(Principal executive office)
(906) 632-2221
------------------
(Telephone Number)
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 twelve months (or for such shorter period that the registrant was
required to file such report) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
------ ------
1,496,955 shares of Common Stock, par value $.007 per share,
outstanding as of June 30, 1996
<PAGE>
E S E L C O, INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
June 30, December 31
1996 1995
------------ ------------
<S> <C> <C>
ASSETS:
ELECTRIC PLANT, at original cost $69,536,476 $68,027,994
Less - Accumulated depreciation 28,744,155 27,465,011
------------ ------------
$40,792,321 $40,562,983
Asset acquired under capital lease 2,885,750 2,917,609
------------ ------------
$43,678,071 $43,480,592
CURRENT ASSETS: ------------ ------------
Cash $82,314 $302,845
Accounts receivable, less reserve of $34,219
and $32,000 respectively 3,114,207 3,396,213
Unbilled revenue 1,380,035 1,789,655
Materials and supplies, at average cost 1,274,747 1,191,419
Prepayments 820,039 1,765,406
------------ ------------
$6,671,342 $8,445,538
OTHER ASSETS: ------------ ------------
Debt expense, being amortized $33,818 $38,018
Regulatory asset 2,850,000 2,850,000
Other 795,519 508,106
------------ ------------
$3,679,337 $3,396,124
------------ ------------
$54,028,750 $55,322,254
------------ ------------
------------ ------------
STOCKHOLDERS' INVESTMENT AND LIABILITIES:
CAPITALIZATION (See Statement):
Common equity $18,976,954 $18,363,998
Preferred stock 0 0
Long-term debt (less current portion) 13,750,935 13,935,889
------------ ------------
$32,727,889 $32,299,887
OTHER NONCURRENT LIABILITIES: ------------ ------------
Obligation under capital lease $2,815,065 $2,851,622
Other 2,850,000 2,850,000
------------ ------------
$5,665,065 $5,701,622
CURRENT LIABILITIES: ------------ ------------
Notes payable $2,323,000 $3,652,000
Current portion of long-term debt 2,184,613 1,435,206
Current portion of lease obligation 70,685 65,987
Accounts payable 1,606,627 2,121,036
Dividends declared 412,683 373,873
Accrued taxes 764,850 2,115,320
Current deferred income taxes 69,108 81,108
Accrued interest 165,835 257,973
Other 262,463 243,993
------------ ------------
$7,859,864 $10,346,496
DEFERRED CREDITS: ------------ ------------
Deferred income taxes $3,790,503 $3,199,515
Net regulatory liability 1,193,861 1,292,861
Unamortized investment tax credit 907,398 940,998
Other 1,884,170 1,540,875
------------ ------------
$7,775,932 $6,974,249
------------ ------------
$54,028,750 $55,322,254
------------ ------------
------------ ------------
</TABLE>
<PAGE>
E S E L C O, INC.
CONSOLIDATED STATEMENT OF CAPITALIZATION
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------------ ------------------
AMOUNT % AMOUNT %
----------- ---- ----------- ----
<S> <C> <C> <C> <C> <C> <C>
COMMON EQUITY:
Common stock, par value $.007 per share
1996 1995
---------- ----------
Authorized Shares 3,000,000 3,000,000
---------- ----------
---------- ----------
Outstanding Shares 1,496,955 1,437,975 $10,479 $10,066
---------- ----------
---------- ----------
Capital surplus 16,153,099 14,545,412
Retained earnings 3,452,879 4,250,891
Unearned compensation - ESOP (639,503) (442,371)
----------- -----------
$18,976,954 58% $18,363,998 57%
----------- -----------
PREFERRED STOCK, value $.01 per share,
authorized 160,000 shares $0 0% $0 0%
----------- -----------
LONG-TERM DEBT of Subsidiaries (less current
portion)
First Mortgage Bonds:
Series D, 7.00%, due 1998 $855,000 $867,000
Series F, 10.31%, due 2001 1,200,000 1,500,000
Series G, 10.25%, due 2009 4,440,000 4,810,000
Series H, 7.90%, due 2002 1,500,000 1,800,000
Energy Thrift Notes, 5.8%-10%, due 1998-2006 5,076,000 4,414,000
Equipment Loan, Floating Rate, due 1998 175,045 200,724
Floating Rate ESOP Loans of the Corporation
due 2000 504,890 344,165
----------- -----------
$13,750,935 42% $13,935,889 43%
----------- ---- ----------- ----
Total Capitalization $32,727,889 100% $32,299,887 100%
----------- ---- ----------- ----
----------- ---- ----------- ----
</TABLE>
<PAGE>
E S E L C O, INC.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
The Three Months The Six Months The Twelve Months
Ended June 30, Ended June 30, Ended June 30,
-------------------------- ------------------------ -------------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES $8,947,935 $8,834,027 $18,725,187 $18,066,354 $37,503,321 $35,027,474
-------------- -------------- -------------- -------------- ------------- ---------------
OPERATING EXPENSES:
Operation - Purchased power $4,346,701 $4,611,102 $9,667,957 $9,618,012 $19,581,393 $18,102,753
- Other 1,621,286 1,583,587 3,309,360 3,137,843 6,335,548 6,316,842
Maintenance 539,001 498,952 1,149,176 1,052,834 2,079,690 2,069,991
Depreciation and amortization 646,931 628,093 1,315,826 1,262,104 2,552,495 2,404,346
Property and other taxes 397,268 383,427 766,236 767,294 1,559,438 1,479,639
Income taxes 302,400 217,100 525,400 429,600 1,212,584 952,727
-------------- -------------- -------------- -------------- ------------- ---------------
Total operating expenses $7,853,587 $7,922,261 $16,733,955 $16,267,687 $33,321,148 $31,326,298
-------------- -------------- -------------- -------------- ------------- ---------------
Net operating income $1,094,348 $911,766 $1,991,232 $1,798,667 $4,182,173 $3,701,176
-------------- -------------- -------------- -------------- ------------- ---------------
OTHER INCOME (DEDUCTIONS), NET ($30,304) ($35,829) ($46,722) ($56,927) ($58,568) ($40,447)
-------------- -------------- -------------- -------------- ------------- ---------------
ALLOWANCE FOR FUNDS USED
DURING CONSTRUCTION $0 $0 $0 $0 $0 $0
-------------- -------------- -------------- -------------- ------------- ---------------
INTEREST CHARGES:
Interest on long-term debt $338,136 $299,253 $665,198 $596,560 $1,312,592 $1,231,191
Other interest 40,827 87,012 63,314 167,481 207,748 298,816
-------------- -------------- -------------- -------------- ------------- ---------------
Total interest charges $378,963 $386,265 $728,512 $764,041 $1,520,340 $1,530,007
-------------- -------------- -------------- -------------- ------------- ---------------
NET INCOME AVAILABLE FOR COMMON
STOCK $685,081 $489,672 $1,215,998 $977,699 $2,603,265 $2,130,722
------------- ------------- ------------- ------------- ------------ --------------
------------- ------------- ------------- ------------- ------------ --------------
EARNINGS PER AVERAGE SHARE OF
COMMON STOCK $0.46 $0.33 $0.82 $0.67 $1.76 $1.46
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
CASH DIVIDENDS DECLARED PER
SHARE OF COMMON STOCK $0.27 $0.25 $0.53 $0.50 $1.04 $0.97
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
AVERAGE COMMON SHARES
OUTSTANDING 1,493,703 1,466,233 1,489,638 1,463,198 1,482,470 1,458,066
------------- ------------- ------------- ------------- ------------ --------------
------------- ------------- ------------- ------------- ------------ --------------
</TABLE>
<PAGE>
E S E L C O, INC.
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
NET CASH FLOWS FROM (USED BY):
OPERATING ACTIVITIES:
Net income $1,215,998 $977,699
Noncash expenses, revenue, losses and gains
included in income
Depreciation and amortization 1,364,353 1,315,567
Deferred taxes and charge equivalent to
investment tax credit, net of amortization 446,388 (47,400)
Net decrease (increase) in receivables and
unbilled revenue 691,626 23,246
Net decrease (increase) in materials and
supplies and prepayments 862,039 221,127
Net increase (decrease) in accounts payable,
accrued taxes, and other current liabilities (1,846,409) (918,464)
Increase (decrease)in interest accrued
but not paid (92,138) (118,305)
Other 86,578 112,110
------------ ------------
Net cash from operating activities $2,728,435 $1,565,580
------------ ------------
INVESTING ACTIVITIES:
Acquisition of property, plant and equipment ($1,605,611) ($1,440,827)
Proceeds from disposals of property, plant
and equipment 16,120 46,361
------------ ------------
Net cash used by investing activities ($1,589,491) ($1,394,466)
------------ ------------
FINANCING ACTIVITIES:
Proceeds of short-term debt $5,923,500 $9,552,500
Payments to settle short-term debt (7,252,500) (8,621,000)
Issuance of long-term debt (net) 1,609,000 164,000
Payments on long-term debt (1,241,679) (1,035,641)
Proceeds from sale of common stock 405,664 273,689
Dividends paid (803,460) (729,338)
------------ ------------
Net cash used by financing activities ($1,359,475) ($395,790)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ($220,531) ($224,676)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 302,845 268,288
------------ ------------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $82,314 $43,612
------------ ------------
------------ ------------
INTEREST PAID $881,358 $884,409
------------ ------------
------------ ------------
INCOME TAXES PAID $645,000 $570,000
------------ ------------
------------ ------------
</TABLE>
<PAGE>
ESELCO, INC.
NOTES TO FINANCIAL STATEMENTS
(1) These consolidated financial statements include the accounts of
ESELCO, Inc. and its wholly owned subsidiaries, Edison Sault Electric
Company (Company) and Northern Tree Service, Inc. All significant
intercompany balances and transactions have been eliminated in
consolidation. The consolidated financial statements as of June 30, 1996
and 1995 included herein, which are unaudited, reflecting the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the results of operations for the
periods presented. Sales of electricity, of the ESELCO's major subsidiary,
are affected to some degree by variations in weather conditions, and
results of operations for interim periods are not necessarily indicative of
results to be expected for the entire year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to rules and
regulations of the Securities and Exchange Commission, although ESELCO
believes that the disclosures which are made are adequate to make the
information presented not misleading. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in ESELCO, Inc. 1995 Annual
Report on Form 10K, which incorporates by reference the financial
statements in the 1995 Annual Report to Shareholders.
(2) On August 22, 1995, the Company filed an application with the MPSC for
authority to implement price cap regulation. In the application the
Company proposed that its base rates be capped at present levels, that its
existing power supply cost recovery (PSCR) factor be rolled into base
rates, and that its existing PSCR Clause be suspended. The Company
published the required notice of opportunity to comment or request a
hearing. No comments were received and on September 21, 1995, the MPSC
approved the Company's application subject to the modification that the
Company give 30 days notice rather than 2 weeks notice for rate decreases
and that the Company file an application by October 1, 2000, to address its
experience under the price cap mechanism. With the latter modification the
price cap authorization represents an experimental regulatory mechanism.
The order also allows the Company to file an application seeking an
increase in rates only under extraordinary circumstances.
On October 23, 1995, the Attorney General for the State of Michigan
filed an intervention and petition for rehearing in the Company's price cap
order. The Attorney General's intervention was based on the grounds that
the MPSC did not have authority to approve price cap regulation. On
December 21, 1995, the MPSC rejected the Attorney General's petition for
rehearing. On January 19, 1996, the Attorney General filed an appeal with
the Michigan Court of Appeals.
Legal counsel for the Company believes that the Attorney General's
appeal is without merit and that the Company will prevail. A decision in
this case is not expected until early to mid 1997. The Company implemented
the price cap order on January 1,
<PAGE>
1996.
(3) The Company has received notification from the U.S. Environmental
Protection Agency (U.S. EPA) that it is being named a "Potentially
Responsible Party" at the Manistique River/ Harbor Area in Manistique,
Michigan. There are a number of other potentially responsible parties,
some of whom have been notified by the U.S. EPA.
The U.S. EPA, in conjunction with the Michigan Department of Natural
Resources, has identified the Manistique River and Harbor as an "Area of
Concern" or AOC, due to PCB's which have been found in that area. An
Environmental Engineering/Cost Analysis (EECA) was submitted to the U.S.
EPA which provided an analysis of various methods of remediation for the
harbor. The EECA presented six alternatives of remediation action and
ultimately recommended a remediation method of in-place capping.
Management believes this is the most prudent course of action. Although
the total ultimate cost of specific remedial action and the Company's
potential liability are not known at this time, management has estimated
the Company's minimum cost of this remedy to be $2.9 million. This figure
represents an increase of $1.9 million from the amount recorded during
1994. Certain other expenditures for investigation of any necessary
remedial action have been incurred and are reflected in the accompanying
financial statements. Remaining costs of investigation are not expected to
have a material impact on the Company's financial position or future
results of operations.
The Company believes that the costs discussed above of performing
specific remedial action would be a legitimate cost of doing business and
would be recoverable through utility rates. Further, in November 1993 the
MPSC issued an order authorizing the Company to defer and amortize, over a
period not to exceed ten-years, environmental assessment and remediation
costs associated with the Manistique River AOC. Therefore, the Company has
also recorded a regulatory asset in the amount of $2.9 million.
The Company expects to settle this matter with the EPA in 1996 at
which time the actual cost of this matter will be known. Subsequently, the
Company will be amortizing amounts charged to the regulatory asset over an
amortization period of three to ten years. Amortization will affect future
reported earnings and may commence during 1996.
The price cap order discussed previously allows the Company to seek
rate increases for costs incurred under extraordinary circumstances. The
Company believes that costs related to this EPA matter could be considered
extraordinary. As a result, management believes that future EPA actions
will not have a material adverse effect on its financial position or
results of operation.
<PAGE>
ESELCO, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Total operating revenues for the second quarter of 1996 were 1% above a
year ago while total kilowatt hour sales increased 2%.
During the second quarter of 1996, sales to residential and commercial
customers increased 1% and 3% respectively, while industrial sales decreased 2%.
The increase in the residential area is the result of an increase in the number
of customers partially offset by a decrease in use per customer. The number of
commercial customers and use per customer increased. Industrial sales decreased
due to a 10% decrease in sales to Lakehead Pipeline. Resale sales to Cloverland
Electric increased 8% during the period.
Purchased power costs for the second quarter of 1996 decreased 6% over the
1995 period. This decrease is the result of lower average costs.
Total other operating and maintenance expenses increased 4% during the
second quarter of 1996 due to an increase in payroll and associated employee
benefts costs charged to operating and maintenance expense and an increase in
water costs.
Depreciation and amortization is 3% higher than last year because of the
Company's construction programs. Interest expense is 2% lower due to decreased
short term borrowings.
Income taxes are 39% higher due to higher taxable income.
Based on the above changes net income available for common stock increased
40% for the second quarter of 1996. The operating results for the period do not
include any charges associated with the Manistique Harbor environmental matter
discussed in Note 3 of the Notes to Financial Statements.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Operating revenues for the first half of 1996 were 4% above a year ago
while total kilowatthour sales increased 5%.
Sales to residential customers increased 5% due to an increase in both use
per customer and the number of customers. Commercial sales increased 4% as a
result of an increase in both use per customer and number of customers.
Industrial sales increased 1%. Resale sales to Cloverland Electric increased
11%.
Purchased power expense increased 1% due to increased requirements. The
effect of the increase in requirements was almost entirely offset by lower
average costs from power
<PAGE>
suppliers.
Other operating and maintenance expenses increased 6% during this period
primarily because of an increase in payroll and associated employee benefiots
costs and higher major maintenance expense.
Depreciation and amortization charges increased 4% during the first half of
1996 due to the Company's construction programs which resulted in higher
depreciable assets. Interest expense decreased 5% due to decreased short-term
borrowings.
Income taxes increased 22% during the period because of higher taxable
income.
Based on the above changes, net income available for common stock has
increased 24% for the period. This increase is equal to 15CENTS per average
share of common stock outstanding. The operating results for the period do not
include any charges associated with the Manistique Harbor environmental matter
discussed in Note 3 of the Notes to Financial Statements.
TWELVE MONTHS ENDED JUNE 30, 1996 AND 1995
Operating revenues during the current twelve month period have increased 7%
while total sales have increased 6%.
Sales to residential and commercial customers increased 6%. Sales to
industrial customers increased 4%. Sales to Cloverland Electric increased 10%.
Purchased power expenses increased 8% during the period due to increased
requirements.
Other operating and maintenance expenses were about equal with the prior
twelve month period.
Depreciation increased 6% due to the Company's construction assets and
higher rates.
Income taxes increased 27% due to higher taxable income.
Based on the above changes, net income available for common stock has
increased 22% or 30CENTS per average share of common stock outstanding. The
operating results for the period do not include any charges associated with the
Manistique Harbor environmental matter discussed in Note 3 of the Notes to
Financial Statements.
LIQUIDITY AND CAPITAL COMMITMENTS
INVESTING ACTIVITIES ESELCO invested $1,606,000 in property, plant, and
equipment in the six-month period ending June 30, 1996. For the same period in
1995, ESELCO invested approximately $1,441,000 in property, plant, and
equipment.
Investment expenditures during the 1996 period include initial costs
associated with the planned construction of a new 138 KV interconnection with
Wisconsin Electric Power Company. It now appears that the interconnect project
will be delayed due to siting considerations. Therefore, expenditures during
1996 will be substantially less than what was
<PAGE>
anticipated. This project now has a planned completion date in late 1998 or
early in 1999. The Company's projected share of the cost of this project
increased from $7.3 million to $9.4 million with the planned addition of a
second circuit. Most of these expenditures are expected to be made in 1997 and
1998.
CASH PROVIDED BY OPERATING AND FINANCE ACTIVITIES Cash provided by operating
activities for the six-month period ending June 30, 1996, and June 30, 1995,
totalled $2,728,000 and $1,566,000, respectively. After payment of dividends,
internal sources of funds exceeded the capital requirements of ESELCO for the
quarter ending June 30, 1996. Dividend payments for the six months ending June
30, 1996, totalled $803,000 which represented a 66% payout ratio. For the same
period in 1995, dividends totalled $729,000 which represented a 75% dividend
payout ratio.
During 1995, Edison Sault had clauses in all of its retail sales tariffs
which recovered changes in the cost of purchased power and water for generation.
Michigan Public Act 304 allowed the Company to regularly file a Power Supply
Cost Recovery (PSCR) Plan which provided a mechanism for the recovery of
projected purchased power and fuel costs. In addition to reconciling actual
costs to projected costs, the law allowed for the refunding of overcollections
or charging for undercollections, both with interest. While the clause applied
specifically to residential and commercial customers, industrial customers were
covered under a like arrangement through a separate recovery clause mechanism.
During 1996, the Company began regulation under a price cap order as discussed
in Note 2.
Edison Sault has authority to issue up to $10 million in short-term
obligations. Included in this authority is a line of credit in the amount of $4
million at the prime rate. In addition, Edison Sault has authority to issue
short-term thrift notes to Michigan residents. The Company's short-term
financing requirements relate primarily to financing customer accounts
receivable, unbilled revenue resulting from cycle billing, and capital
expenditures until permanently financed.
At June 30, 1996, the Company had approximately $7.7 million of unused bank
line of credit and additional energy thrift notes. These two sources of short-
term financing have been sufficient to meet the Company's short-term capital
requirements.
ESELCO's shareholders reinvested approximately $406,000 through the
dividend reinvestment plan (DRP) in the first six months of 1996. For the six-
month period ending June 30, 1995, the DRP provided $274,000 of capital.
At June 30, 1996, the long-term portion of first mortgage bonds totalled
$7,995,000 which is a decrease of $982,000 from the December 31, 1995, amount.
First mortgage bonds are secured by the utility plant of Edison Sault.
Edison Sault also has authority to issue up to $10 million in long-term
energy thrift notes to Michigan residents. At June 30, 1996, the long-term
portion of energy thrift notes outstanding was $5,076,000 which is an increase
of $662,000 over the December 31, 1995, amount.
ESELCO had a $4 million bank term loan available for the purpose of
financing costs associated with the Manistique Harbor environmental problem. At
June 30, 1996, this source of financing had not yet been utilized.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) List of Exhibits.
Exhibit Filed
No. DESCRIPTION OF EXHIBIT HEREWITH BY REFERENCE
------- --------------------------------------------- -------- ------------
(2) Plan of acquisitions, reorganization,
arrangement liquidations or succession N/A N/A
(4) Instruments defining the rights of security
holders, including indentures:
(a) Mortgage and Deed of Trust as of
March 1, 1952 - (a) *
(b) Supplemental Indenture dated as of
February 1, 1957 - (a) *
(c) Second Supplemental Indenture dated
as of January 1, 1964 - (a) *
(d) Third Supplemental Indenture dated
as of February 1, 1968 - (a) *
(e) Fourth Supplemental Indenture dated
as of September 15, 1975 - (a) *
(f) Fifth Supplemental Indenture dated
as of October 1, 1986 - (b) *
(g) Sixth Supplemental Indenture dated
as of April 1, 1989 - (d) *
(h) Seventh Supplemental Indenture dated
as of February 15, 1992 - (e) *
(i) Debenture Indenture dated as of
August 1, 1973 - (a) *
(j) Articles of Incorporation of registrant
as filed on January 6, 1989 - (d) *
(k) Form of Long-Term Energy Thrift Note - (c) *
(11) Statement re computation of per share earnings N/A N/A
(15) Letters re unaudited interim financial
information N/A N/A
(18) Letter re change in accounting principles N/A N/A
(19) Previously unfiled documents None None
(20) Report furnished to security holders N/A N/A
(23) Published report regarding matters submitted
to vote of security holders N/A N/A
(24) Consents of experts and counsel N/A N/A
(25) Power of attorney N/A N/A
(28) Additional exhibits N/A N/A
<PAGE>
Key to Exhibits Incorporated by Reference:
(a) Filed with the Company's Registration Statement, Form S-16,
No. 2-67191, filed April 2, 1980.
(b) Filed with the Company's Form 10-K for 1986, dated March 30, 1987,
File No. 0-1158.
(c) Filed with the Company's Registration Statement, Amendment No. 2 to
Form S-3, No. 2-67191, filed February 16, 1988.
(d) Filed with the Company's Form 10-Q for June 30, 1989, dated August 11,
1989, File No. 0-17736.
(e) Filed with the Company's Form 10-Q for March 31, 1992, dated May 13,
1992, File No. 0-17736.
Item 6. (b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months
ended June 30, 1996.
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.
ESELCO, INC.
(Registrant)
/s/ William R. Gregory
Date August 9, 1996 ------------------------------
WILLIAM R. GREGORY
Its President
/s/ David R. Hubbard
Date August 9, 1996 -----------------------------
DAVID R. HUBBARD
Its Vice President - Finance
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 2ND QUARTER
10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 43,678,071
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 6,671,342
<TOTAL-DEFERRED-CHARGES> 3,679,337
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 54,028,750
<COMMON> 10,479
<CAPITAL-SURPLUS-PAID-IN> 16,153,099
<RETAINED-EARNINGS> 3,452,879
<TOTAL-COMMON-STOCKHOLDERS-EQ> 18,976,954
0
0
<LONG-TERM-DEBT-NET> 8,674,935
<SHORT-TERM-NOTES> 2,323,000
<LONG-TERM-NOTES-PAYABLE> 5,076,000
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 2,184,613
0
<CAPITAL-LEASE-OBLIGATIONS> 2,815,065
<LEASES-CURRENT> 70,685
<OTHER-ITEMS-CAPITAL-AND-LIAB> 13,907,498
<TOT-CAPITALIZATION-AND-LIAB> 54,028,750
<GROSS-OPERATING-REVENUE> 18,725,187
<INCOME-TAX-EXPENSE> 525,400
<OTHER-OPERATING-EXPENSES> 16,208,555
<TOTAL-OPERATING-EXPENSES> 16,733,955
<OPERATING-INCOME-LOSS> 1,991,232
<OTHER-INCOME-NET> (46,722)
<INCOME-BEFORE-INTEREST-EXPEN> 1,944,510
<TOTAL-INTEREST-EXPENSE> 728,512
<NET-INCOME> 1,215,988
0
<EARNINGS-AVAILABLE-FOR-COMM> 1,215,988
<COMMON-STOCK-DIVIDENDS> 803,460
<TOTAL-INTEREST-ON-BONDS> 850,565
<CASH-FLOW-OPERATIONS> 2,728,435
<EPS-PRIMARY> .82
<EPS-DILUTED> .00
</TABLE>
