UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
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 1-3576
ST. JOSEPH LIGHT & POWER COMPANY
(Exact name of registrant as specified in its charter)
State of Missouri 44-04l9850
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
520 Francis Street, P. O. Box 998, St. Joseph, Missouri 64502-
0998
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code (816) 233-
8888
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (l) has filed all reports
required to be filedby Section l3 or l5(d) of the Securities Exchange
Act of l934 during the preceding l2 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, without par value 3,907,891 shares
(Class) (Outstanding at October 31, 1994)
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
FINANCIAL STATEMENTS
The unaudited financial statements included herein 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 that the disclosures are
adequate to make the information presented not misleading. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's l993
Annual Report to Shareholders incorporated by reference in the Company's
Form l0-K Annual Report for l993.
STATEMENTS OF INCOME
(UNAUDITED INTERIM REPORT)
Three Months Ended
September 30
1994 1993
OPERATING REVENUES:
Electric
Retail sales & other $ 22,091,769 $ 21,298,080
Sales for resale 75,979 680,847
Other 1,859,051 2,141,021
$ 24,026,799 $ 24,119,948
OPERATING EXPENSES:
Production fuel $ 5,051,619 $ 4,493,907
Purchased power-System energy 1,817,989 2,348,039
Resale 61,008 557,478
Gas purchased for resale 200,078 214,774
Other operations 4,448,380 4,686,859
Maintenance 2,187,238 1,882,356
Depreciation 2,499,598 2,393,472
Taxes - General 1,653,996 1,645,222
Income 1,619,241 1,522,874
$ 19,539,147 $ 19,744,981
OPERATING INCOME $ 4,487,652 $ 4,374,967
OTHER INCOME & DEDUCTIONS:
Allowance for equity funds used $ 16,792 $ 51,951
during construction
Other - including income taxes (4,790) 319
on nonutility operations
$ 12,002 $ 52,270
INCOME BEFORE INTEREST CHARGES $ 4,499,654 $ 4,427,237
INTEREST CHARGES (Net):
Long-term debt $ 1,065,750 $ 1,112,591
Interest on bank notes 67,517 24,110
Other 26,697 15,760
Allowance for borrowed funds (24,719) (34,060)
used during construction
$ 1,135,245 $ 1,118,401
NET INCOME AVAILABLE FOR $ 3,364,409 $ 3,308,836
COMMON STOCK
WEIGHTED AVERAGE COMMON 3,917,108 4,009,081
SHARES OUTSTANDING
EARNINGS PER AVERAGE COMMON SHARE $0.86 $0.83
DIVIDENDS PAID PER COMMON SHARE $0.45 $0.44
Nine Months Ended
September 30
1994 1993
OPERATING REVENUES:
Electric
Retail sales & other $ 57,770,439 $ 57,081,458
Sales for resale 3,246,969 1,278,974
Other 8,524,338 8,817,316
$ 69,541,746 $ 67,177,748
OPERATING EXPENSES:
Production fuel $ 13,832,437 $ 12,642,657
Purchased power-System energy 5,511,160 5,905,943
Resale 2,957,197 955,448
Gas purchased for resale 2,533,480 1,735,514
Other operations 8,788,313 18,540,207
Maintenance 5,466,236 5,432,430
Depreciation 7,388,765 7,095,399
Taxes - General 4,841,852 4,884,586
Income 5,182,323 (965,816)
$ 56,501,763 $ 56,226,368
OPERATING INCOME $ 13,039,983 $ 10,951,380
OTHER INCOME & DEDUCTIONS:
Allowance for equity funds used $ 114,627 $ 124,249
during construction
Other - including income taxes (62,321) (57,075)
on nonutility operations
$ 52,306 $ 67,174
INCOME BEFORE INTEREST CHARGES $ 13,092,289 $ 11,018,554
INTEREST CHARGES (Net):
Long-term debt $ 3,195,054 $ 3,398,601
Interest on bank notes 105,147 41,086
Other 80,008 50,320
Allowance for borrowed funds (81,165) (66,780)
used during construction
$ 3,299,044 $ 3,423,227
NET INCOME AVAILABLE FOR $ 9,793,245 $ 7,595,327
COMMON STOCK
WEIGHTED AVERAGE COMMON 3,953,565 4,007,924
SHARES OUTSTANDING
EARNINGS PER AVERAGE COMMON SHARE $2.48 $1.90
DIVIDENDS PAID PER COMMON SHARE $1.35 $1.32
Twelve Months Ended
September 30
1994 1993
OPERATING REVENUES:
Electric
Retail sales & other $ 74,949,935 $ 74,742,075
Sales for resale 3,397,453 1,311,603
Other 12,555,664 12,407,530
$ 90,903,052 $ 88,461,208
OPERATING EXPENSES:
Production fuel $ 17,577,547 $ 16,990,380
Purchased power-System energy 9,174,341 7,557,437
Resale 3,063,966 977,454
Gas purchased for resale 3,814,931 2,703,916
Other operations 14,080,526 22,598,531
Maintenance 8,219,539 7,611,024
Depreciation 9,807,563 9,414,311
Taxes - General 6,241,372 6,372,035
Income 4,586,310 6,669
$ 76,566,095 $ 74,231,757
OPERATING INCOME $ 14,336,957 $ 14,229,451
OTHER INCOME & DEDUCTIONS:
Allowance for equity funds used $ 126,691 $ 141,680
during construction
Other - including income taxes (10,379) 8,638
on nonutility operations
$ 116,312 $ 150,318
INCOME BEFORE INTEREST CHARGES $ 14,453,269 $ 14,379,769
INTEREST CHARGES (Net):
Long-term debt $ 4,154,888 $ 4,551,004
Interest on bank notes 166,141 41,086
Other 99,057 77,220
Allowance for borrowed funds (86,935) (75,671)
used during construction
$ 4,333,151 $ 4,593,639
NET INCOME AVAILABLE FOR $ 10,120,118 $ 9,786,130
COMMON STOCK
WEIGHTED AVERAGE COMMON 3,967,422 4,008,285
SHARES OUTSTANDING
EARNINGS PER AVERAGE COMMON SHARE $2.55 $2.44
DIVIDENDS PAID PER COMMON SHARE $1.79 $1.75
The accompanying Notes to Financial Statements are an integral part of these
statements.<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
BALANCE SHEETS
September 30,
1994 December 31,
(Unaudited) 1993
ASSETS
UTILITY PLANT:
Electric $269,525,460 $262,816,268
Other 9,684,000 9,461,245
$279,209,460 $272,277,513
Less - Reserves for 135,887,997 131,107,136
depreciation $143,321,463 $141,170,377
Construction work in progress 2,927,329 4,166,823
$146,248,792 $145,337,200
OTHER INVESTMENTS $ 2,341,794 $ 669,238
CURRENT ASSETS:
Cash and cash equivalents $ 513,453 $ 269,720
Temporary investments 989,729 2,206,263
Receivables, less reserves 7,104,378 7,986,400
Unbilled revenue 3,063,054 3,452,270
Fuel, at average cost 2,674,774 2,829,947
Materials and supplies, 5,179,240 5,011,198
at average cost
Prepayments and other 1,609,646 1,173,467
$ 21,134,274 $ 22,929,265
DEFERRED CHARGES
Debt expense $ 1,415,497 $ 1,475,350
Lease payments receivable 3,689,199 3,781,793
Prepaid pension expense 7,057,523 6,108,963
Regulatory assets, net 3,091,189 -
Other 735,093 683,162
$ 15,988,501 $ 12,049,268
$185,713,361 $180,984,971
CAPITALIZATION & LIABILITIES
CAPITALIZATION (See Statements):
Common stock and retained $ 76,319,242 $ 76,462,078
earnings
Long-term debt 53,100,000 53,100,000
$129,419,242 $129,562,078
CURRENT LIABILITIES:
Outstanding checks in excess $ 712,844 $ 3,061,474
cash balances
Accounts payable 2,935,460 6,201,388
Notes payable 4,100,000 -
Accrued income and general 4,463,663 886,471
taxes
Accrued interest 1,309,116 1,211,147
Accrued vacation 1,276,432 1,033,659
Dividends declared 1,758,551 -
Other 353,757 320,501
$ 16,909,823 $ 12,714,640
DEFERRED CREDITS AND
NON-CURRENT LIABILITIES:
Capital lease obligations $ 2,531,254 $ 2,542,096
Deferred income taxes 25,246,466 23,935,040
Investment tax credit 5,417,911 5,744,971
Accrued claims and benefits 2,315,442 1,511,723
Deferred revenues 2,639,206 2,728,664
Regulatory liabilities, net - 1,370,996
Other 1,234,017 874,763
$ 39,384,296 $ 38,708,253
$185,713,361 $180,984,971
The accompanying Notes to Financial Statements are
are an integral part of these statements.
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
STATEMENTS OF CAPITALIZATION
September 30,
1994 December 31,
(Unaudited) 1993
COMMON STOCK AND RETAINED EARNINGS:
Common stock--authorized 25,000,000 shares,
without par value, issued 4,626,374 $ 33,816,099 $ 33,816,099
shares
Retained earnings 59,435,740 56,745,217
Other paid-in capital 380,148 362,273
Less-treasury stock, at cost, 718,483 and 617,818
shares, respectively (17,312,745) (14,461,511)
$ 76,319,242 $ 76,462,078
LONG-TERM DEBT:
First Mortgage Bonds -
9.44% Series due February 1, 2021 $ 22,500,000 $ 22,500,000
7-3/8% Pollution Control Revenue Bonds
Series due February 1, 2013 5,600,000 5,600,000
$ 28,100,000 $ 28,100,000
Medium-term Notes-
5.77% due December 8, 1998 $ 5,000,000 $ 5,000,000
7.13% due November 29, 2013 1,000,000 1,000,000
7.16% due November 29, 2013 9,000,000 9,000,000
7.17% due December 1, 2023 7,000,000 7,000,000
7.33% due November 30, 2023 3,000,000 3,000,000
$ 25,000,000 $ 25,000,000
Total Long-Term Debt $ 53,100,000 $ 53,100,000
Total Capitalization $129,419,242 $129,562,078
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED INTERIM REPORT)
Nine Months Ended
September 30
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 9,793,245 $ 7,595,327
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation 7,388,765 7,095,399
Pension expense (6,238,898) 3,979,959
Other post retirement benefits 753,471 624,758
Deferred taxes and investment tax credits 1,699,292 (2,904,822)
Allowance for equity funds used during
construction (114,627) (124,249)
Net changes in working capital items not
considered elsewhere:
Accounts receivable and unbilled revenue 1,271,238 (364,453)
Fuel 155,173 2,409,020
Accounts payable and outstanding checks (5,614,558) (3,589,561)
Accrued income and general taxes 3,577,192 1,702,109
Other, net (669,177) (870,413)
Net change in regulatory assets and
liabilities 1,370,806 (1,581,924)
Net changes in other assets and liabilities (826,955) (705,283)
Net cash provided by operating activities $12,544,967 $13,265,867
CASH FLOWS FROM INVESTING ACTIVITIES:
Gross additions to plant $(7,864,434) $(8,440,131)
Allowance for borrowed funds used
during construction 81,165 66,780
Investments (456,022) 142,838
Other 33,462 57,468
Net cash used in investing activities $(8,205,829) $(8,173,045)
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term debt reacquired $ - $ 1,900,000
Increase (decrease) in notes payable 4,100,000 (1,794,000)
Common stock (purchased)/issued from
treasury stock (2,851,234) 82,124
Dividends paid (5,344,171) (5,290,154)
Net cash used in financing activities $(4,095,405) $(5,102,030)
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 243,733 $ (9,208)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 269,720 279,613
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 513,453 $
270,405
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during period:
Interest $ 3,215,734 $ 4,128,497
Income taxes $ 2,389,156 $ 3,607,980
For purposes of the Statements of Cash Flows, the Company
considers all highly liquid debt instruments purchased
with an original maturity of three months or less
to be cash equivalents.
The accompanying Notes to Financial Statements
are an integral part of these statements.
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
STATEMENTS OF RETAINED EARNINGS
(Unaudited Interim Report)
Three Months Ended
September 30
1994 1993
Balance at beginning of period$59,593,787 $56,637,494
Net income 3,364,409 3,308,836
$62,958,196 $59,946,330
Dividends on common stock 3,522,456 3,527,989
Balance at end of period $59,435,740 $56,418,341
Nine Months Ended
September 30
1994 1993
Balance at beginning of period$56,745,217 $55,877,164
Net income 9,793,245 7,595,327
$66,538,462 $63,472,491
Dividends on common stock 7,102,722 7,054,150
Balance at end of period $59,435,740 $56,418,341
Twelve Months Ended
September 30
1994 1993
Balance at beginning of period$56,418,341 $53,682,406
Net income 10,120,118 9,786,130
$66,538,459 $63,468,536
Dividends on common stock 7,102,719 7,050,195
Balance at end of period $59,435,740 $56,418,341
The accompanying Notes to Financial Statements
are an integral part of these statements.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Company's interim financial statements have been prepared in accordance
with the accounting policies described in the financial statements and
related notes included in the Company's 1993 Annual Report to Shareholders
incorporated by reference in the Company's Form 10-K Annual Report for
1993. There are no significant differences in the Company's interim and
annual accounting policies. However, due to estimates inherent in the
accounting process for other than annual periods, the accuracy of the
amounts in the interim financial statements is in some respects dependent
upon facts that will exist and reviews that will be performed by the
Company later in the fiscal year.
2. REGULATORY MATTERS
In November 1993 the Company filed a request with the Missouri Public Service
Commission (MPSC) to increase annual electric revenues by $5.5 million.
In June 1994 the MPSC ruled on the request increasing annual electric
revenues by approximately $2.15 million effective June 15, 1994.
The 1994 MPSC rate order required the Company to change its regulatory
accounting policies for pension expense. The order provides for pension
expense to be recognized on an accrual basis for ratemaking purposes
rather than on a funding basis as previously required. In response to
the MPSC order the Company recorded a one time adjustment reducing
pension expense by approximately $5.9 million, thus eliminating a
regulatory liability established as a result of a 1993 MPSC rate order.
The effect on the 1994 periods was to decrease pension expense by
$5.9 million and increase associated income tax expense by $2.6 million.
The adjustment resulting from the MPSC rate order was recorded
in the second quarter.
<PAGE>
The 1994 MPSC rate order also required that other post employment
benefits (OPEB) be accounted for on an accrual basis for ratemaking
purposes. The ruling will not change the Company's financial policy of
accounting for OPEB expense on an accrual basis as required
under Statement of Financial Accounting Standards No. 106. However,
the ruling will permit the accrual level of expenses to be recoverable
in revenues provided the Company funds its OPEB obligation.
In December 1993, the Company filed a request with the MPSC to increase
industrial steam revenues by $800,000. The MPSC granted the full amount
of the Company's request in October 1994. The higher rates became
effective November 2, 1994.
MANAGEMENT STATEMENT
The information contained in these financial statements reflects all
adjustments which are,in the opinion of management, necessary to state
fairly the results of the interim periods.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL - The Company is a public utility engaged primarily in the
business of generating and distributing electric energy in a
ten-county area in northwestern Missouri. It also sells natural gas
and industrial steam in limited areas.
RESULTS OF OPERATIONS - Electric retail sales and other revenues
increased 3.7% for the three months ended, 1.2% for the nine months
ended and .3% for the twelve months ended. Increased commercial sales
for the periods offset the loss of two major industrial customers
in 1993 resulting in relative stable sales for the periods. All periods
reflect the June 1994 rate increase which added approximately $712,000
to revenues in the three month ended period and $748,000 in the nine
and twelve month ended periods.
Sales for resale and related purchased power expenses decreased for
the quarter and increased for the nine and twelve months ended
respectively. The quarterly decrease is primarily the result of
limited availability of regional power supplies and reduced
transactions with a regional utility. The nine and twelve month
periods reflect a large nonrecurring transaction.
Other revenues decreased for the three and nine month ended periods and
increased for the twelve month period. Industrial steam revenues were
down for all periods primarily due to the loss of a major steam
customer in late 1993. Natural gas revenues increased for the
nine and twelve month periods reflecting a $275,000 annual price
adjustment approved by the MPSC in April 1993, mitigating the effect
of the loss of the steam customer. Also there were higher prices for
purchased gas which is passed on to the customers in the Purchased
Gas Adjustment.
System energy cost increased .1%, 4.2% and 8.9% for the three, nine and
twelve months ended respectively. All periods were affected by higher
purchased power prices and the amortization of previously incurred
costs for ash disposal at the Lake Road facility. Partially offsetting
the increases for the quarter was the increased use of the more efficient
Iatan unit. The limited availability of the Iatan unit in late 1993
increased costs for the twelve month ended period. Iatan is the
Company's most efficient unit.
<PAGE>
Other operations decreased for all periods reflecting the effects
of the 1993 and 1994 rate case orders. The 1993 order required the
Company to change the method of accounting for pension expense
resulting in a one-time charge of $4.6 million. The 1994 order
eliminated the regulatory liability established as a result of
the 1993 rate order and reduced pension expense by a one-time
adjustment of $5.9 million. (Refer to Note 2 in the
Notes to Financial Statements.)
Maintenance expenses increased 16.2%, .6% and 8.0% for the three,
nine and twelve months ended periods respectively. The increase for
the quarter was primarily due to the maintenance of a boiler at
the Lake Road plant. The extended outage at the Iatan plant
in late 1993 significantly impacted the twelve month ended period.
Income tax expense increased in the nine and twelve month ended
periods primarily due to the tax effects of the pension expense
adjustments required by the 1993 and 1994 rate orders. The 1993
order also required the Company to change its recognition of the tax
effects of certain temporary differences from a normalized to a
flow-through basis. Partially offsetting these increases for the
periods were reductions in pretax earnings.
Interest charges for the periods were impacted by the replacement
of five issues of first mortgage bonds with lower interest medium term
notes in late 1993. Offsetting the reduction for the quarter was an
increase in interest on short term borrowing.
In addition to the above noted items, earnings per share for all
periods were impacted by the repurchase of treasury stock in 1994.
LIQUIDITY AND CAPITAL RESOURCES - The Company has $12.3 million in unused
lines of credit to meet short-term cash needs. Financial coverages are
at levels in excess of those required for issuance of debt and
preferred stock.
The Company's short-term construction program (net of Allowance for
Funds Used During Construction) is currently projected at $12.1 million
for 1994 and about $160 million during the next five years.
Construction requirements will be met with internally generated funds
supplemented by external financing as necessary.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
b. No form 8-K Current Report was filed during the quarter ended
September 30, 1994.<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 thereunto duly authorized.
ST. JOSEPH LIGHT & POWER COMPANY
(Registrant)
Dated: November 14, 1994
L. J. STOLL
Vice President-Finance, Treasurer
and Assistant Secretary
(Duly Authorized Officer)
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