<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to_________
Commission file number 1-10628
CIPSCO Incorporated
________________________________________________
(Exact name of registrant as specified in its charter)
Illinois 37-1260920
-------------- -------------------
(State of (IRS Employer
Incorporation) Identification No.)
607 EAST ADAMS STREET
SPRINGFIELD, ILLINOIS 62739
--------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (217) 523-3600
_________________________
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 such
filing requirements for the past 90 days. Yes X No
_____ _____
At April 30, 1994, the number of shares of the registrant's common stock
outstanding was 34,107,706.<PAGE>
CIPSCO INCORPORATED AND SUBSIDIARIES
CONTENTS
I. Financial Information Page
Item 1. Consolidated Financial Statements................... 4-9
Consolidated Statements of Income for
the three months ended, March 31,
1994 and 1993....................................... 4-5
Consolidated Balance Sheets as of
March 31, 1994 and December 31, 1993................ 6-7
Consolidated Statements of Cash Flows for
the three months ended March 31, 1994
and 1993............................................ 8-9
Condensed Notes to Financial Statements............. 10-13
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations.......................................... 14-16
II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 5. Other Information.................................. 18
Item 6. Exhibits and Reports on Form 8-K................... 18
Signature...................................................... 19
____________________________________________________________________________
The unaudited interim financial statements included herein are the consolidated
statements of CIPSCO Incorporated and Subsidiaries (Company) and its
subsidiaries, Central Illinois Public Service Company and CIPSCO Investment
Company. These unaudited statements have been prepared by the Company pursuant
to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes the disclosures are adequate to make the information
presented not misleading.
These financial statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1993.
In the opinion of the Company, the interim financial statements filed as part
of this Form 10-Q reflect all adjustments necessary to present fairly the
results for the respective periods.
2<PAGE>
Due to the effect of weather and other factors which are characteristic of
Central Illinois Public Service Copmpany's utility operations, financial
results for the periods ended March 31, 1994 and 1993 are not necessarily
indicative of trends for any twelve-month period.
This financial and other information is not given in connection with any sale
or offer to buy any security.
3<PAGE>
Part I.
Item 1. Consolidated Financial Statements.
FINANCIAL INFORMATION
CIPSCO Incorporated and Subsidiaries
Consolidated Statements of Income
For the Periods Ended March 31, 1994 and 1993
(in thousands)
(unaudited)
Three Months Ended
March 31,
_____________________
1994 1993
_________ _________
Operating Revenues:
Electric.......................... $159,332 $145,454
Gas............................... 64,094 64,086
Investment........................ 2,196 1,764
________ ________
Total operating revenues...... 225,622 211,304
________ ________
Operating Expenses:
Fuel for electric generation..... 53,679 45,054
Purchased power.................. 9,949 6,989
Gas purchased.................... 42,602 43,918
Other operation.................. 37,864 32,682
Maintenance...................... 14,595 11,924
Depreciation and amortization.... 20,412 19,516
Taxes other than income taxes.... 16,230 15,602
________ ________
Total operating expenses..... 195,331 175,685
________ ________
Operating Income................... 30,291 35,619
________ ________
4<PAGE>
Interest and Other Charges:
Interest on long-term debt of
subsidiary..................... 8,351 8,905
Other interest charges........... (20) 358
Allowance for funds used during
construction................... (23) (513)
Preferred stock dividends of
subsidiary..................... 828 954
Miscellaneous, net............... (1,119) (807)
________ ________
Total interest and other
charges.................... 8,017 8,897
________ ________
Income Before Income Taxes......... 22,274 26,722
________ ________
Income Taxes....................... 8,515 10,061
________ ________
Net Income......................... $ 13,759 $ 16,661
======== ========
Average Shares of Common Stock
Outstanding...................... 34,108 34,108
Earnings Per Average Share of
Common Stock..................... $ .40 $ .49
The accompanying condensed notes to financial statements are an integral
part of these statements.
5<PAGE>
CIPSCO Incorporated and Subsidiaries
Consolidated Balance Sheets
March 31, 1994 and December 31, 1993
(in thousands)
March 31, December 31,
1994 1993
___________ ____________
(unaudited)
ASSETS
Utility Plant, at original cost:
Electric............................. $2,188,477 $2,172,259
Gas.................................. 209,773 208,208
__________ __________
2,398,250 2,380,467
Less-Accumulated depreciation........ 1,036,570 1,020,097
__________ __________
1,361,680 1,360,370
Construction work in progress........ 52,301 61,104
__________ __________
1,413,981 1,421,474
__________ __________
Current Assets:
Cash................................. 678 4,630
Temporary investments, at cost which
approximates market.................. 36,999 5,527
Accounts receivable, net............. 71,713 61,445
Accrued unbilled revenues............ 27,053 38,774
Materials and supplies, at average
cost................................. 42,282 40,824
Fuel for electric generation, at
average cost......................... 21,488 26,046
Gas stored underground, at average
cost................................. 6,328 14,335
Prepayments.......................... 9,897 10,142
__________ __________
216,438 201,723
__________ __________
Investments and Other Assets:
Investment in marketable securities.. 43,667 42,703
Investment in leveraged leases....... 43,201 42,216
Other................................ 45,891 49,634
__________ __________
132,759 134,553
__________ __________
$1,763,178 $1,757,750
========== ==========
6<PAGE>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholders' equity.......... $ 631,224 $ 634,252
Unrealized investment gains, net..... 257 -
Preferred stock of subsidiary........ 80,000 80,000
Long-term debt of subsidiary......... 474,393 474,323
__________ __________
1,185,874 1,188,575
__________ __________
Current Liabilities:
Long-term debt of subsidiary due
within one year.................... 20,000 20,000
Accounts payable..................... 50,780 56,039
Accrued wages........................ 12,425 12,775
Accrued taxes........................ 19,201 12,973
Accrued interest..................... 8,810 9,204
Other................................ 40,504 34,902
__________ __________
151,720 145,893
__________ __________
Deferred Credits:
Accumulated deferred income taxes.... 298,256 294,732
Investment tax credits............... 58,120 58,962
Regulatory liabilities, net.......... 69,208 69,588
__________ __________
425,584 423,282
__________ __________
$1,763,178 $1,757,750
========== ==========
The accompanying condensed notes to financial statements are an
integral part of these statements.
7<PAGE>
CIPSCO Incorporated and Subsidiaries
Consolidated Statements of Cash Flows
For the Periods Ended March 31, 1994 and 1993
(in thousands)
(unaudited)
Three Months Ended
March 31,
______________________
1994 1993
__________ __________
Operating Activities:
Net income.............................. $ 13,759 $ 16,661
Adjustments to reconcile net income
to net cash provided:
Depreciation and amortization......... 20,412 19,516
Allowance for equity funds used during
construction (AFUDC).................. (16) (331)
Deferred income taxes, net............ 3,330 4,192
Investment tax credit amortization.... (842) (842)
Cash flows impacted by changes in assets
and liabilities:
Accounts receivable, net and accrued
unbilled revenues..................... 1,453 (10,766)
Fuel for electric generation.......... 4,558 10,084
Other inventories..................... 6,549 6,140
Prepayments........................... 245 3,597
Other assets.......................... 3,743 1,718
Accounts payable and other............ 343 (5,517)
Accrued wages, taxes and interest..... 5,484 9,286
Other................................... (434) 975
_________ _________
Net cash provided by operating
activities............................ 58,584 54,713
_________ _________
Investing Activities:
Utility construction expenditures,
excluding AFUDC....................... (12,677) (16,689)
Allowance for borrowed funds used during
construction.......................... (7) (181)
Change in temporary investments......... (31,472) (1,922)
Long-term investment in marketable
securities............................ (707) (655)
Long-term investment in leveraged
leases................................ (985) (978)
_________ _________
Net cash used in investing activities. (45,848) (20,425)
_________ _________
8<PAGE>
Financing Activities:
Common stock dividends paid............. (16,713) (16,372)
Proceeds from issuance of long-term debt
of subsidiary......................... - 35,000
Repayment of long-term debt of
subsidiary............................ - (35,000)
Repayment of short-term borrowings........ - (16,793)
Issuance expense, discount and premium.. 25 (1,458)
_________ _________
Net cash used in financing activities. (16,688) (34,623)
_________ _________
Net decrease in cash.................... (3,952) (335)
Cash at beginning of period............. 4,630 1,534
_________ _________
Cash at end of period................... $ 678 $ 1,199
========= =========
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest, net of amounts capitalized.. $ 8,195 $ 5,091
Income taxes.......................... 3,475 2,250
The accompanying condensed notes to financial statements are an
integral part of these statements.
9<PAGE>
CIPSCO Incorporated and Subsidiaries
CONDENSED NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1994
(unaudited)
COMMITMENTS AND CONTINGENCIES.
ENVIRONMENTAL REMEDIATION COSTS - CIPS (Central Illinois Public
Service Company) and certain of its predecessors and other
affiliates operated facilities in the past for manufacturing gas
from coal. In connection with manufacturing gas, various by-
products were produced, some of which remain on sites where the
facilities were located. CIPS has identified 13 of these former
manufactured gas plant sites (environmental remediation sites)
which contain potentially harmful materials. Under directives
from the Illinois Environmental Protection Agency (IEPA), CIPS
has incurred costs and associated legal expenses related to the
investigation and remediation of the sites.
One site was added to the United States Environmental Protection
Agency (USEPA) Superfund list on August 30, 1990. On September
30, 1992 the IEPA, in consultation with the USEPA, decided that
the long-term remedial plan for this site should consist of a
ground water pump-and-treat program. The IEPA and CIPS entered
into an agreement, which received approval by the court on March
14, 1994, for CIPS to carry out the remedial action with the IEPA
providing oversight. It is not known at this time what specific
remedial action will be required at the other 12 sites.
In 1987, CIPS filed a lawsuit against a number of insurance
carriers seeking full indemnification for all costs in connection
with certain environmental sites. CIPS has now settled the
lawsuit with most of the insurance carriers.
The estimated incurred costs related to studies and remediation
at these 13 sites and associated legal expenses are being accrued
and deferred rather than expensed currently, pending recovery
through rates, from insurance carriers or from other parties.
The total amount deferred represents costs incurred and estimates
for costs of completing studies at various sites and an estimate
of remediation costs at the Superfund site. At March 31, 1994
the amounts recovered have exceeded the aggregate amount
deferred.
In 1992, the Illinois Commerce Commission (the "Illinois
commission") issued an Order (the "Generic Order") in its
consolidated generic proceeding initiated on March 6, 1991,
regarding appropriate ratemaking treatment of cleanup costs
incurred by Illinois utilities with respect to environmental
remediation sites. The Generic Order indicates that allowed
cleanup costs may include prudently incurred costs of
investigation, assessment and cleanup of environmental
remediation sites, as well as litigation costs including those
involved in insurance recovery claims. The Generic Order
10<PAGE>
authorizes utilities, including CIPS, to propose a mechanism to
recover cleanup costs which is consistent with the provisions of
the order. Such a mechanism must, among other things, provide
for (1) recovery of cleanup costs over a five-year period,
excluding carrying costs associated with the unrecovered balance
of cleanup costs from the time that the recovery mechanism
becomes effective; (2) a return to ratepayers over a five-year
amortization period of any reimbursement of cleanup costs
received from insurance carriers or other parties; and (3) a
prudence review of each utility's expenditures. The Generic Order
was upheld on appeal by the Third District Illinois Appellate
Court. That decision held that a rate rider mechanism is an
appropriate means for utilities to recover cleanup costs. The
case has been appealed to the Illinois Supreme Court by an
intervenor that maintains that no recovery of cleanup costs
should be allowed and that, if allowed, a rate rider mechanism is
not the proper means of providing recovery. CIPS cannot predict
what action the Illinois Supreme Court will take in this matter.
On March 26, 1993 the Illinois commission approved CIPS' proposed
environmental cost-recovery rate riders, effective with April
1993 billings to customers. Known as the electric environmental
adjustment clause and the gas environmental adjustment clause,
the riders are designed to enable CIPS to recover from its
customers costs associated with cleanup of the environmental
remediation sites, along with associated legal expenses, over a
five year period on terms consistent with the Generic Order. The
environmental adjustment clause riders provide for an annual
review of amounts recovered through the riders. Amounts found to
have been incorrectly included would be subject to refund.
Through December 31, 1993, CIPS had collected $2.6 million from
its customers pursuant to the riders. Pursuant to monthly
filings made by CIPS under the riders, no additional amounts have
been collected from customers under the riders since January
1994. On April 6, 1994, the Illinois commission initiated a
reconciliation proceeding to review CIPS environmental
remediation activities and determine whether the level of
revenues collected by the riders is consistent with the amount of
remediation costs prudently incurred.
Total cost to be incurred for the cleanup of these sites or the
possible recovery from insurance carriers and other parties
cannot be estimated. Management believes that any costs incurred
in connection with the sites that are not recovered from
insurance carriers or other parties will be recovered through
utility rates. Accordingly, management believes that costs
incurred in connection with these sites will not have a material
adverse effect on the financial position or results of operations
of CIPS.
FERC ORDER 636 - During 1992, the Federal Energy Regulatory
Commission ("FERC") issued a series of orders that require
substantial restructuring of the service obligations of
interstate pipeline suppliers. These orders (together called
Order 636) required mandatory unbundling of existing pipeline gas
sales services. Mandatory unbundling requires pipelines to sell
separately the various components previously included with gas
sales services (i.e., storage, transport, capacity sales, etc.).
11<PAGE>
Order 636 provides a mechanism for pipelines to recover four
categories of transition costs associated with restructuring
their gas sales services.
Based on currently available information contained in the various
interstate pipeline Order 636 compliance filings, CIPS estimates
that the total amount of transition costs to be incurred by CIPS
is approximately $10 million of which $3 million has been paid.
At March 31, 1994, CIPS had recorded a liability and a related
deferred gas cost for that portion of the transition costs that
will be billed to CIPS regardless of future pipeline services.
The Illinois commission issued an order in March 1994 permitting
retail gas distribution companies, including CIPS, full recovery
through rates of Order 636 transition costs. On May 4, 1994, the
Illinois commission granted rehearing of the order. CIPS
believes that the rehearing will be limited to a determination of
the proper allocation of transition costs among customer classes.
CIPS cannot predict whether the Illinois commission's final order
in this matter will be appealed.
CLEAN AIR ACT - CIPS' compliance strategy to meet the sulfur
dioxide emission reduction requirements of the Clean Air Act
Amendments of 1990 (Amendments) includes complying with Phase I
of the Amendments by switching to a lower sulfur coal at some of
its units. Phase II compliance will be accomplished by
additional fuel switching at various units and by increased
scrubbing with its existing scrubber at Newton Unit 1. Phase I
and Phase II emission provisions of the Amendments become
effective in 1995 and 2000, respectively.
CIPS estimates that total capital costs, primarily for
modifications to boilers, precipitators, coal handling
facilities, and continuous monitoring equipment for
implementation of this compliance strategy, will be less than $50
million in total including amounts spent to date. Operating
costs are not expected to change materially. Compliance costs
could result in electric base rate increases of approximately one
to two percent by the year 2000.
In 1991, in accordance with the plan to switch some units to
lower sulfur coal, CIPS signed a long-term coal contract with an
existing supplier for lower sulfur Illinois coal. Due to the
magnitude of the supplier's capital investment, the contract
includes a graduated termination charge. In 1994, CIPS can
terminate the contract under certain conditions, and CIPS would
be required to pay up to $41 million (plus an inflation
adjustment) in termination charges. Each year subsequent to 1994
the termination charge is reduced according to a formula using
tons of coal purchased. The termination charge would not be
effective if CIPS terminated the contract due to the failure of
the coal to meet quality specifications provided for in the
contract.
LABOR DISPUTES - The International Union of Operating Engineers
Local 148 and the International Brotherhood of Electrical Workers
Local 702 each filed unfair labor practice charges in 1993 with
the National Labor Relations Board (NLRB) relating to the
12<PAGE>
legality of the lockout by CIPS of both unions during 1993. The
Peoria Regional Office of the NLRB has issued a complaint against
CIPS concerning its lockout of IBEW-702 represented employees.
However, the Peoria Regional Office did not find merit to a
similar charge filed by IUOE 148 and it was dismissed. The IUOE
148 has appealed the dismissal within the NLRB. Both unions
seek, among other things, back pay and other benefits for the
period of the lockout. CIPS estimates the amount of back pay and
other benefits for both unions to be less than $12 million.
Management believes the lockout was both lawful and reasonable
and that the final resolution of the disputes will not have a
material adverse effect on financial position or results of
operations.
OTHER ISSUES - The Company is involved in other legal and
administrative proceedings before various courts and agencies
with respect to rates, taxes, gas and electric fuel cost
reconciliations, service area disputes, environmental and other
matters. Although unable to predict the outcome of these
matters, management believes that appropriate liabilities have
been established and that final disposition of these actions will
have no material adverse effect on the results of operations or
the financial position of the Company.
CHANGE IN ACCOUNTING PRINCIPLE - On January 1, 1994, CIPSCO
adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities" (SFAS No. 115). Under the statement, the Company's
investments in debt and marketable securities are reported at
fair value with unrealized gains and losses reported as a net
amount in a separate component of shareholders' equity until
realized. The adoption of SFAS No. 115 did not have a material
effect on financial position or results of operation.
13<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
THE OUTLOOK
CIPS currently estimates that its total construction expenditures
for the 1994-1998 period will be about $431 million, including
about $4 million of allowance for funds used during construction.
In addition to funds for construction, projected capital
requirements for the 1994-1998 period include $93 million for
scheduled debt retirements. Capital requirements for the 1994-
1998 period are expected to be provided primarily through
internally generated funds. External financing to fund scheduled
debt retirements may be required.
FINANCIAL CONDITION
Financial condition and total capitalization for the three-month
periods ended March 31, 1994 and 1993 have changed as follows:
Three Months Ended
March 31,
________________________
(in thousands)
1994 1993
_________ _________
Common Shareholders' Equity
Net income $ 13,759 $ 16,661
Common stock dividends paid (16,713) (16,372)
Other 183 1
________ ________
(2,771) 290
________ ________
Long-Term Debt
Proceeds from issuance on January
1, 1993 of $35,000,000 of Pollution
Control Loan Obligations, Series
A, 6.375%, due 2028. - 35,000
Repayment effective April 1, 1993 of
two series of Pollution Control Loan
Obligations, $17,500,000 Series B, 6.80%,
due 2005; and $17,500,000 Series B,
6.875%, due 2009. - (35,000)
Change in unamortized debt discount
and premium 70 (241)
________ ________
Increase (Decrease) in total
capitalization $(2,701) $ 49
======== ========
14<PAGE>
RESULTS OF OPERATIONS (THREE-MONTH PERIODS ENDED MARCH 31, 1994 AND 1993)
Net Income Earnings
(in thousands) Per Share
______________ _________
Three Months Ended March 31:
1994 $ 13,759 $ .40
1993 16,661 .49
________ _____
Decrease $ 2,902 $ .09
======== =====
Percent Decrease 17 % 18 %
Electric Revenues: Electric revenues of CIPS were up 10% compared to the
first quarter of 1993. Kilowatthour sales increased 16% principally due to
increases in economy and emergency interchange sales to other utility systems.
A comparison follows:
Revenues (In 000's) KWH Sales (In 000's)
____________________________ ____________________________
First Quarter Inc. First Quarter Inc.
1994 1993 (Dec.) 1994 1993 (Dec.)
________ ________ ______ _________ _________ ______
Residential $ 50,888 $ 50,788 - % 761,471 761,504 - %
Commercial 36,352 36,578 (1) 617,428 627,993 (2)
Industrial 26,726 25,345 5 647,246 604,133 7
Public Auth.
and Other 3,477 3,651 (5) 40,828 46,505 (12)
_______ _______ _________ _________
Total Retail 117,443 116,362 1 2,066,973 2,040,135 1
_______ _______ _________ _________
Interchange
Sales (firm) 18,873 15,829 19 351,657 254,519 38
Interchange
Sales (economy
/emergency) 17,482 8,298 111 854,793 520,473 64
Cooperatives,
Muni's. & Other 5,534 4,965 11 129,649 124,189 4
_______ _______ _________ _________
Total Wholesale 41,889 29,092 44 1,336,099 899,181 49
_______ _______ _________ _________
Total $159,332 $145,454 10 % 3,403,072 2,939,316 16 %
======= ======= ========= =========
Fuel for Electric Generation: Fuel expense for electric generation increased
19% because KWH generation increased 19% in 1994 over 1993.
15 <PAGE>
Purchased Power: This expense increased 42% due to increased KWHs purchased
for resale to other utility systems on the interchange market.
Gas Revenues and Gas Purchased: In the first quarter of 1994, gas revenues
(excluding transportation revenues) increased 2% as a result of increased
sales to industrial customers. The increased revenues and sales were
partially offset by a decrease in therms transported.
Revenues (In 000's) Therm Sales (In 000's)
____________________________ ____________________________
First Quarter Inc. First Quarter Inc.
1994 1993 (Dec.) 1994 1993 (Dec.)
________ ________ ______ _________ _________ ______
Residential $ 41,985 $ 43,670 (4)% 76,556 78,418 (2)%
Commercial 14,692 14,952 (2) 27,077 26,731 1
Industrial 4,769 2,023 136 13,069 6,958 88
Miscellaneous 231 19 1,060 - - -
_______ _______ _______ _______
Subtotal 61,677 60,664 2 116,702 112,107 4
Transported 2,417 3,422 (29) 39,738 40,664 (2)
_______ _______ _______ _______
Total $ 64,094 $ 64,086 - % 156,440 152,771 2 %
======= ======= ======= =======
The utility transported approximately 40 million therms of customer-owned gas
in the first quarter of 1994 and 41 million therms in the first quarter of
1993. Transportation revenues were higher in 1993 because of the greater
volume transported at a higher average rate.
Other Operation: Other operation expense increased 16% primarily due to
nonrecurring expenses related to the settlement of labor disputes.
Maintenance: Maintenance expense increased 22% due to the timing of power
station maintenance, for which similar projects did not occur in the first
quarter of 1993.
Depreciation and amortization: Depreciation and amortization increased due to
normal plant additions.
Taxes Other than Income Taxes: Utility revenue taxes increased because of
increased revenue.
Interest Charges and Preferred Dividends: Interest charges and preferred
dividends decreased 7% in 1994 due to refinancings made in 1993 which lowered
interest and dividend rates.
16<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of CIPSCO Incorporated was held on
April 27, 1994.
(b) All nominees who were proposed as directors by the Board of Directors
were elected and there were no other nominees proposed.
(c) Three shareholder proposals, which had been included in the CIPSCO
Incorporated Proxy Statement, were submitted for a vote at the
shareholder meeting. The Shareholder Proposals recommended that
the Board of Directors take certain actions as described below:
(1) Shareholder Proposal No. 1 - "Institute a salary and compensation
ceiling such that as to future employment contracts, no senior
executive or director of the Company receive combined salary and
other compensation which is more than two times the salary
provided to the President of the United States."
(2) Shareholder Proposal No. 2 - "Take the necessary steps to insure
that any increase in salary and/or compensation in future
employment contracts for senior executives and directors be no
greater percentage-wise than the increase in dividends paid to
the Stockholders."
(3) Shareholder Proposal No. 3 - "In the future refrain from entering
into agreements providing executive compensation contingent on a
change in control of the Company unless such agreements or
arrangements are specifically submitted to the shareholders for
approval."
The results of the voting on each matter submitted are as follows:
Election of Directors
Directors With Authority Without Authority
William J. Alley 28,269,972 579,376
Clifford L. Greenwalt 28,117,617 579,376
John L. Heath 28,657,656 579,376
Robert W. Jackson 28,186,464 579,376
Gordon R. Lohman 28,263,534 579,376
Hanne M. Merriman 28,275,291 579,376
Donald G. Raymer 28,249,810 579,376
Thomas L. Shade 28,311,149 579,376
James W. Wogsland 28,109,302 579,376
17<PAGE>
Appointment of Auditors
For Against Abstain
28,031,811 475,979 342,958
Shareholder Proposal No. 1
For Against Abstain Broker Non-Vote
3,220,907 21,591,180 734,603 3,304,058
Shareholder Proposal No. 2
For Against Abstain Broker Non-Vote
3,152,328 21,655,035 739,746 3,303,639
Shareholder Proposal No. 3
For Against Abstain Broker Non-Vote
6,086,665 18,238,004 1,221,941 3,304,138
Item 5. Other Information
On March 23, 1994, final court approval was granted to the settlement
agreement between CIPS and International Brotherhood of Electrical Workers
Local 702 ("IBEW 702") dismissing a lawsuit previously filed by IBEW 702
concerning the labor dispute.
Currently, dry fly ash material produced by the coal-fired generating units at
the Coffeen Power Station is hauled by truck to an off-site disposal area
under terms of an agreement between CIPS and the owner of the disposal site.
The Illinois Environmental Protection Agency (the "Agency") has notified the
owner that some remediation of the site may be required. An engineering study
of the area is in progress. The final resolution of this matter is not
expected to be material to the results of operations or the financial position
of the Company.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
None.
(B) Reports on Form 8-K:
None.
18<PAGE>
SIGNATURE
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.
CIPSCO Incorporated
Date: May 13, 1994 /s/ J. C. Fiaush
J. C. Fiaush
Controller
(Chief Accounting Officer)
19
