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 June 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 filed by 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
3,917,791 shares (Class)
(Outstanding at July 31, 1994)<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
FINANCIAL STATEMENTS
The financial statements included herein have been prepared by
the Company, without audit, 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.
<TABLE>
STATEMENTS OF INCOME
(Unaudited Interim Report)
<CAPTION>
Three Months Ended
June 30
1994
1993
<S>
OPERATING REVENUES:
<C>
<C>
Electric
Retail sales & other
$
17,623,285
$
17,333,304
Sales for resale
2,876,819
371,762
Other
2,200,451
2,594,536
$
22,700,555
$
20,299,602
OPERATING EXPENSES:
Production fuel
$
4,399,769
$
3,502,837
Purchased power-System energy
1,791,867
1,870,856
Resale
2,663,541
318,633
Gas purchased for resale
445,532
338,384
Other operations
(570,800)
9,325,774
Maintenance
1,538,014
1,909,053
Depreciation
2,476,350
2,356,912
Taxes - General
1,546,357
1,554,349
Income
2,879,577
(3,776,096)
$
17,170,207
$
17,400,702
OPERATING INCOME
$
5,530,348
$
2,898,900
OTHER INCOME &
DEDUCTIONS:
Allowance for equity funds used
during construction
$
42,272
$
46,964
Other - including income taxes on
nonutility operations
(47,955)
1,688
$
(5,683)
$
48,652
INCOME BEFORE INTEREST
CHARGES
$
5,524,665
$
2,947,552
INTEREST CHARGES (Net):
Long-term debt
$
1,065,750
$
1,133,695
Interest on bank notes
35,395
11,550
Other
26,698
18,798
Allowance for borrowed funds used
during construction
(29,584)
(21,139)
$
1,098,259
$
1,142,904
NET INCOME AVAILABLE
FOR COMMON STOCK
$
4,426,406
$
1,804,648
WTD. AVERAGE COMMON
SHARES OUTSTANDING
3,955,358
4,009,081
EARNINGS PER AVERAGE
COMMON SHARE
$1.12
$0.45
DIVIDENDS PAID PER
COMMON SHARE
$0.45
$0.44
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF INCOME
(Unaudited Interim Report)
<CAPTION>
Six Months Ended
June 30
1994
1993
<S>
<C>
<C>
OPERATING REVENUES:
Electric
Retail sales & other
$
35,678,670
$
35,783,378
Sales for resale
3,170,990
598,127
Other
6,665,287
6,676,295
$
45,514,947
$
43,057,800
OPERATING EXPENSES:
Production fuel
$
8,780,818
$
8,148,750
Purchased power-System energy
3,693,171
3,557,904
Resale
2,896,189
397,970
Gas purchased for resale
2,333,402
1,520,740
Other operations
4,339,933
13,853,348
Maintenance
3,278,998
3,550,074
Depreciation
4,889,167
4,701,927
Taxes - General
3,187,856
3,239,364
Income
3,563,082
(2,488,690)
$
36,962,616
$
36,481,387
OPERATING INCOME
$
8,552,331
$
6,576,413
OTHER INCOME &
DEDUCTIONS:
Allowance for equity funds used
during construction
$
97,834
$
72,298
Other - including income taxes
on nonutility operations
(57,530)
(57,394)
$
40,304
$
14,904
INCOME BEFORE INTEREST
CHARGES
$
8,592,635
$
6,591,317
INTEREST CHARGES (Net):
Long-term debt
$
2,129,304
$
2,286,010
Interest on bank notes
37,630
16,976
Other
53,311
34,560
Allowance for borrowed funds
use during construction
(56,446)
(32,720)
$
2,163,799
$
2,304,826
NET INCOME AVAILABLE
FOR COMMON STOCK
$
6,428,836
$
4,286,491
WTD. AVERAGE COMMON
SHARES OUTSTANDING
3,971,793
4,007,346
EARNINGS PER AVERAGE
COMMON SHARE
$1.62
$1.07
DIVIDENDS PAID PER
COMMON SHARE
$0.90
$0.88
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF
INCOMEME
<CAPTION>
Twelve Months Ended
June 30
1994
1993
<C>
<C>
<S>
OPERATING REVENUES:
Electric
Retail sales & other
$
74,156,246
$
72,855,184
Sales for resale
4,002,321
681,686
Other
12,837,634
12,366,373
$
90,996,201
$
85,903,243
OPERATING EXPENSES:
Production fuel
$
17,019,835
$
16,173,997
Purchased power-System energy
9,704,391
7,044,339
Resale
3,560,436
452,894
Gas purchased for resale
3,829,627
2,574,599
Other operations
14,319,005
22,059,130
Maintenance
7,914,657
7,510,560
Depreciation
9,701,437
9,309,939
Taxes - General
6,232,598
6,215,152
Income
4,489,943
255,293
$
76,771,929
$
71,595,903
OPERATING INCOME
$
14,224,272
$
14,307,340
OTHER INCOME &
DEDUCTIONS:
Allowance for equity funds used
during construction
$
161,849
$
130,955
Other - including income taxes
on nonutility operations
(5,266)
36,217
$
156,583
$
167,172
INCOME BEFORE INTEREST
CHARGES
$
14,380,855
$
14,474,512
INTEREST CHARGES (Net):
Long-term debt
$
4,201,729
$
4,590,815
Interest on bank notes
122,734
18,043
Other
88,120
81,540
Allowance for borrowed
funds used
during construction
(96,276)
(62,642)
$
4,316,307
$
4,627,756
NET INCOME AVAILABLE
FOR COMMON STOCK
$
10,064,548
$
9,846,756
WTD. AVERAGE COMMON
SHARES OUTSTANDING
3,990,415
4,011,919
EARNINGS PER AVERAGE
COMMON SHARE
$2.52
$2.45
DIVIDENDS PAID PER
COMMON SHARE
$1.78
$1.74
<FN> The accompanying
Notes to Financial Statements
are an integral part of these
statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
ST JOSEPH LIGHT & POWER COMPANY
BALANCE SHEETS
<CAPTION>
June 30, December 31,
1994 1993
(Unaudited)
<C> <C>
<S>
ASSETS
UTILITY PLANT:
Electric $264,407,225 $262,816,268
Other 9,505,555 9,461,245
$273,912,780 $272,277,513
Less-Reserves for 133,769,660 131,107,136
depreciation $140,143,120 $141,170,377
Construction work in progress 5,852,992 4,166,823
$145,996,112 $145,337,200
OTHER INVESTMENTS, at cost $ 2,343,232 $ 669,238
CURRENT ASSETS:
Cash and cash equivalents $ 487,316 $ 269,720
Temporary investments 987,813 2,206,263
Receivables, less reserves 6,780,320 7,986,400
Unbilled revenue 3,322,746 3,452,270
Fuel, at average cost 2,885,587 2,829,947
Materials and supplies, at 5,038,743 5,011,198
average cost
Prepayments and other 1,383,121 1,173,467
$ 20,885,646 $ 22,929,265
DEFERRED CHARGES:
Debt expense $ 1,437,695 $ 1,475,350
Lease payments receivable 3,720,064 3,781,793
Prepaid pension expense 6,642,136 6,108,963
Regulatory assets, net 3,602,065 -
Other 834,321 683,162
$ 16,236,281 $ 12,049,268
$185,461,271 $180,984,971
CAPITALIZATION & LIABILITIES
CAPITALIZATION (See statements):
Common stock and retained
earnings $77,415,479 $76,462,078
Long-term debt 53,100,00053,100,000
$130,515,479 $129,562,078
CURRENT LIABILITIES:
Outstanding checks in
excess of cash balances $ 544,401 $ 3,061,474
Accounts payable 3,915,852 6,201,388
Notes payable 5,500,000 -
Accrued income & general taxes 2,322,819 886,471
Accrued interest 1,502,371 1,211,147
Accrued vacation 1,337,530 1,033,659
Other 328,857 320,501
$ 15,451,830 $ 12,714,640
DEFERRED CREDITS AND
NON-CURRENT LIABILITIES:
Capital lease obligations $ 2,534,939 $ 2,542,096
Deferred income taxes 25,312,033 23,935,040
Investment tax credit 5,526,931 5,744,971
Accrued claims and benefits 2,284,698 1,511,723
Deferred revenues 2,668,998 2,728,664
Regulatory liabilities, net - 1,370,996
Other 1,166,363 874,763
$ 39,493,962 $ 38,708,253
$185,461,271 $180,984,971
<FN> The accompanying Notes to Financial Statements are an
integral part of these statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
ST JOSEPH LIGHT & POWER COMPANY
STATEMENTS OF CAPITALIZATION
<CAPTION> June 30, December 31,
1994 1993
(Unaudited)
<C> <C>
<S>
COMMON STOCK AND RETAINED EARNINGS:
Common stock--authorized 25,000,000
shares, without par value, issued
4,626,374 shares $33,816,099 $ 33,816,099
Retained earnings 59,593,78756,745,217
Other paid-in capital 380,148 362,273
Less-treasury stock, at cost,
682,983 and 617,818 shares
respectively (16,374,555) (14,461,511)
$77,415,479 $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 first mortgage bonds $ 53,100,000 $ 53,100,000
and medium-term notes
Total Capitalization $130,515,479 $129,562,078
<FN> The accompanying Notes to Financial Statements
are an integral part of these statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
ST JOSEPH LIGHT & POWER COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited Interim Report)
<CAPTION> Six Months Ended June 30
1994 1993
<C> <C>
<S>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $6,428,836 $ 4,286,491
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 4,889,167 4,701,927
Pension expense (5,823,511)3,979,959
Other post retirement
benefits 525,250 381,383
Deferred taxes and investment
tax credits 1,873,879(4,581,137)
Allowance for equity funds used
during construction (97,834) (72,298)
Net change in working capital items
not considered elsewhere:
Accounts receivable and unbilled
revenue 1,335,604 1,016,396
Fuel (55,640)1,069,484
Accounts payable and outstanding
checks (4,802,609) (3,669,267)
Accrued income and general taxes 1,436,348 1,014,018
Other, net (72,702) (480,990)
Net changes in regulatory
liabilities 859,930 600,996
Net changes in other assets
and liabilities (925,379) (486,919)
Net cash provided by
operating activities $ 5,571,339 $ 7,760,043
CASHFLOWS FROM INVESTING ACTIVITIES:
Gross additions to plant $(5,002,723) $(5,413,709)
Allowance for borrowed funds used
during construction 56,446 32,720
Investments (455,544) 147,545
Other 41,388 39,576
Net cash used in investing
activities $(5,360,433) $(5,193,868)
CASHFLOWS FROM FINANCING ACTIVITIES:
Long-term debt reacquired $ - $ (1,194,000)
Increase in notes payable 5,500,000 2,100,000
Common stock (purchased)/
issued from treasury stock (1,913,044) 82,124
Dividends paid (3,580,266) (3,526,161)
Net cash used in financing
activities $6,690 $(2,538,037)
NET INCREASE IN CASH AND
CASH EQUIVALENTS $ 217,596 $ 28,138
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 269,720 279,613
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 487,316 $ 307,751
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during period:
Interest $ 1,884,711 $ 2,328,253
Income taxes $2,004,156 $ 2,481,980
<FN>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.
<FN> The accompanying Notes to Financial
Statements are an integral part of these statements.
</TABLE>
PAGE
<PAGE>
<TABLE>
ST. JOSEPH LIGHT & POWER COMPANY
STATEMENTS OF RETAINED EARNINGS
(Unaudited Interim Report)
<CAPTION> Three Months Ended
June 30
1994 1993
<C> <C> <S>
<S>
Balance at beginning
of period $55,165,896 $54,832,846
Net Income 4,426,406 1,804,648
$59,592,302 $56,637,494
Dividends on common stock (1,485) -
Balance at end of period $59,593,787 $56,637,494
<CAPTION> Six Months Ended
June 30
1994 1993
<C> <C>
<S>
Balance at beginning
of period $56,745,217 $55,877,164
Net Income 6,428,836 4,286,491
$63,174,053 $60,163,655
Dividends on common stock 3,580,266 3,526,161
Balance at end of period $59,593,787 $56,637,494
<CAPTION> Twelve Months Ended
June 30
1994 1993
<C> <C>
<S>
Balance at beginning
of period $56,637,494 $53,773,256
Net Income 10,064,548 9,846,756
$66,702,042 $63,620,012
Dividends on common stock 7,108,255 6,982,518
Balance at end of period $59,593,787 $56,637,494
<FN> The accompanying Notes to Financial Statements are an
integral part of these statements.
</TABLE>
<PAGE>
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.
<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.
In December 1993, the Company filed a request with
the MPSC to increase industrial steam revenues by $800,000.
Hearings on the request were held in August and a ruling is
expected later this year.
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 1.7% for the three months ended, decreased
.3% for the six months ended and increased 1.8% for the twelve
months ended June 1994. While all three periods were adversely
affected by the June 1993 rate reduction and the loss of two
major industrial customers in 1993, the increase in sales to the
residential and commercial segments more than offset the losses
in the three and twelve months ended periods.
Sales for resale and related purchased power expense
increased in the three periods due to expanded transactions with
a regional utility.
Other revenues decreased for the three and six months
ended periods and increased for the twelve month period.
Industrial steam revenues were down for all periods due to the
loss of a major steam customer in late 1993. Increased natural
gas revenues for the three periods reflect a $275,000 annual price
adjustment approved by the MPSC in April 1993 and higher
prices for purchased gas which is passed on to the customers in
the Purchased Gas Adjustment.
As a result of higher purchased power prices and the
amortization of previously incurred costs for ash disposal at the
Lake Road facility, energy costs increased 15.2%, 6.6%, and
15.1% for the three, six and twelve month periods respectively.
The twelve months ended period was also impacted by the
limited availability of the Iatan plant during late 1993. Iatan is
the Company's most efficient unit.
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.)
<PAGE>
Maintenance expenses decreased 19.4% and 7.6% for
the three and six months ended periods respectively primarily
due to reduced Lake Road maintenance expense. The extended
outage at the Iatan plant in late 1993 significantly impacted the
twelve month ended period resulting in a 5.4% increase over the
prior year.
The increase in depreciation expense during the
periods reflects additional plant investments.
Income tax expense increased in the three periods
primarily due to the effects of the 1993 and 1994 rate orders on
deferred taxes. The 1993 order required the Company to change
its recognition of the tax effects of certain temporary differences
from a normalized to a flow-through basis. The policy change, in
addition to the tax effect associated with other rate adjustments,
resulted in a decrease in income tax expense of approximately
$4.6 million. Deferred taxes recorded in association with the
1994 pension adjustment increased income tax expense by $2.6
million. Partially offsetting the increases for the periods were
reductions in pre-tax earnings.
The decline in interest rates for the periods was
primarily the result of replacing five issues of first mortgage
bonds with lower interest medium term notes in late 1993.
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 - At June 30, 1994,
the Company had $1.5 million in cash and temporary
investments and $2.3 million in other investments. The Company
has $6.4 million in conventional lines of credit and $10 million
in another short-term arrangement 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 $14.8 million for 1994 and about $99 million during
the next five years. Construction requirements will be met
primarily with internally generated funds supplemented by
external financing as necessary.
<PAGE>
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
a. The annual meeting of common stockholders was held May
18, 1994.
b. The following persons were re-elected Directors of the
Company to serve until the 1997 annual meeting of common
stockholders.
Daniel A. Burkhardt (3,188,961 votes for; 251,788 withheld)
James A. Carolus (3,190,387 votes for; 250,362 withheld)
Terry F. Steinbecker (3,193,073 votes for; 247,676 withheld)
c. A Long-Term Incentive Plan for key employees was
approved (2,836,993 votes for; 519,647 against; and 84,108
withheld)
d. The appointment of Arthur Andersen & Co. as independent
auditors for 1994 was approved. (3,380,680 votes for; 30,994
against; and 29,074 withheld)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
b. Form 8-K regarding the June 1994 rate order was filed on
June 3, 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: August 12, 1994
L. J. STOLL
Vice President-Finance, Treasurer
and Assistant Secretary
(Duly Authorized Officer)
