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 March 31, 1997
[ ] 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 St., 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 7,968,450 shares
(Class) (Outstanding at April 30, 1997)
<PAGE>
ST. JOSEPH LIGHT & POWER COMPANY
INDEX
Page Number
Part I. Financial Information
Item 1. Consolidated Financial Statements:
Statements of Income . . . . . . . . . . . . . . . . 3
Balance Sheets . . . . . . . . . . . . . . . . . . . 4
Statements of Capitalization . . . . . . . . . . . . 5
Statements of Retained Earnings. . . . . . . . . . . 5
Statements of Cash Flow. . . . . . . . . . . . . . . 6
Note to Financial Statements . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 8
Part II. Other Information
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 10
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 10
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . 10
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 10
Item 5. Other Information. . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Forms 8-K. . . . . . . . . . 10
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31
1997 1996
OPERATING REVENUES:
Electric
Retail sales & other $18,692,144 $18,864,646
Sales for resale 266,830 582,335
Other 4,551,512 4,172,081
23,510,486 23,619,062
OPERATING EXPENSES:
Production fuel 4,625,527 4,349,874
Purchased power-System
energy 1,631,809 2,141,999
Resale 99,028 429,719
Gas purchased for
resale 1,844,589 1,446,706
Other operations 4,965,170 4,636,423
Maintenance 1,541,455 1,864,397
Depreciation 2,696,599 2,537,284
Taxes - General 1,741,675 1,672,481
Income 930,717 999,981
20,076,569 20,078,864
OPERATING INCOME 3,433,917 3,540,198
OTHER INCOME & DEDUCTIONS:
Allowance for equity
funds used during
construction 23,196 77,310
Other - including
income taxes on
nonutility operations 19,902 (42,492)
43,098 34,818
INCOME BEFORE INTEREST
CHARGES 3,477,015 3,575,016
INTEREST CHARGES (Net):
Long-term debt 1,462,400 1,462,400
Other 37,576 34,547
Allowance for borrowed
funds used during
construction (13,547) (63,789)
1,486,429 1,433,158
NET INCOME $ 1,990,586 $ 2,141,858
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,940,138 7,822,158
EARNINGS PER AVERAGE
COMMON SHARE $0.25 $0.27
DIVIDENDS PAID PER
COMMON SHARE $0.24 $0.235
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Twelve Months Ended
March 31
1997 1996
OPERATING REVENUES:
Electric
Retail sales & other $81,879,482 $81,121,965
Sales for resale 1,131,395 1,546,758
Other 12,749,840 11,670,841
95,760,717 94,339,564
OPERATING EXPENSES:
Production fuel 18,096,697 15,419,756
Purchased power-System
energy 8,229,009 9,523,993
Resale 841,865 1,175,067
Gas purchased for
resale 3,773,509 2,941,112
Other operations 18,730,661 19,622,341
Maintenance 8,122,679 8,967,708
Depreciation 10,633,749 10,106,198
Taxes - General 6,580,114 6,315,324
Income 5,165,321 4,600,355
$80,173,604 $78,671,854
OPERATING INCOME $15,587,113 $15,667,710
OTHER INCOME & DEDUCTIONS:
Allowance for equity
funds used during
construction 261,710 204,424
Other - including
income taxes on
nonutility operations 216,730 234,304
478,440 438,728
INCOME BEFORE INTEREST
CHARGES 16,065,553 16,106,438
INTEREST CHARGES (Net):
Long-term debt 5,849,600 5,885,282
Other 174,939 136,641
Allowance for borrowed
funds used during
construction (164,712) (293,520)
5,859,827 5,728,403
NET INCOME $10,205,726 $10,378,035
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,897,386 7,815,080
EARNINGS PER AVERAGE
COMMON SHARE $1.29 $1.33
DIVIDENDS PAID PER
COMMON SHARE $0.945 $0.925
See Consolidated Note to Financial Statements.
ST JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
(Unaudited)
ASSETS
PROPERTY,PLANT AND EQUIPMENT,
at original cost:
Electric utility plant $300,203,104 $298,995,660
Other 10,073,372 10,005,809
310,276,476 309,001,469
Less-Reserves for
depreciation (149,976,347) (147,539,255)
160,300,129 161,462,214
Construction work in progress 4,751,161 4,588,513
165,051,290 166,050,727
OTHER INVESTMENTS 2,322,455 2,298,785
CURRENT ASSETS:
Cash and cash equivalents 479,197 688,466
Temporary investments 4,554,583 5,822,979
Receivables, less reserves 7,380,230 7,718,866
Accrued utility revenue 2,560,900 3,651,310
Fuel, at average cost 3,085,206 2,961,316
Materials and supplies, at
average cost 5,663,583 5,545,927
Prepayments and other 698,658 1,309,328
24,422,357 27,698,192
DEFERRED CHARGES
Debt expense 1,523,767 1,552,704
Lease payments receivable 3,381,664 3,412,528
Prepaid pension expense 11,729,158 11,150,659
Regulatory assets 14,647,651 14,769,131
Other 534,682 317,094
31,816,922 31,202,116
$223,613,024 $227,249,820
CAPITALIZATION & LIABILITIES
CAPITALIZATION (See statements):
Common equity $ 84,983,637 $ 86,170,013
Long-term debt 73,100,000 73,100,000
158,083,637 159,270,013
CURRENT LIABILITIES:
Outstanding checks in
excess of cash balances 604,562 3,034,793
Accounts payable 5,818,520 8,839,419
Accrued income & general taxes 2,064,428 511,474
Accrued interest 1,349,341 1,961,526
Accrued vacation 1,275,589 1,119,376
Dividends declared 1,912,122 0
Other 422,978 422,907
13,447,540 15,889,495
DEFERRED CREDITS AND
NON-CURRENT LIABILITIES:
Capital lease obligations 3,227,508 3,270,593
Deferred income taxes 28,938,950 28,734,335
Investment tax credit 4,400,975 4,502,729
Accrued claims and benefits 1,868,185 1,749,015
Deferred revenues 2,342,880 2,372,348
Regulatory liabilities 9,416,766 9,416,766
Other 1,886,583 2,044,526
52,081,847 52,090,312
$223,613,024 $227,249,820
See Consolidated Note to Financial Statements.
ST JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
March 31, December 31,
1997 1996
(Unaudited)
COMMON EQUITY:
Common stock--authorized
25,000,000 shares, without par
value,issued 9,252,748 shares $ 33,816,099 $ 33,816,099
Retained earnings 65,708,402 67,532,568
Other paid-in capital 964,202 816,995
Less-treasury stock, at cost,
1,285,479 and 1,326,272 shares (15,505,066) (15,995,649)
84,983,637 86,170,013
LONG-TERM DEBT:
First mortgage bonds -
9.44% series due
February 1, 2021 22,500,000 22,500,000
Unsecured pollution control
revenue bonds-5.85% series
due February 1, 2013 5,600,000 5,600,000
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
8.36% due March 15, 2005 20,000,000 20,000,000
45,000,000 45,000,000
73,100,000 73,100,000
Total Capitalization $158,083,637 $159,270,013
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(Unaudited)
Three Months Ended
March 31
1997 1996
Balance at beginning of period $67,532,568 $64,560,183
Net income 1,990,586 2,141,858
69,523,154 66,702,041
Less-dividends on common stock (3,814,752) (3,677,006)
Balance at end of period $65,708,402 $63,025,035
ST JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(Unaudited)
Twelve Months Ended
March 31
1997 1996
Balance at beginning of period $63,025,035 $59,917,165
Net income 10,205,726 10,378,035
73,230,761 70,295,200
Less-dividends on common stock (7,522,359) (7,270,165)
Balance at end of period $65,708,402 $63,025,035
See Consolidated Note to Financial Statements.
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,990,586 $ 2,141,858
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation 2,696,599 2,537,284
Pension expense (468,584) (237,661)
Other post retirement
benefits 86,087 223,263
Deferred taxes and investment credit 102,861 126,249
Allowance for equity funds used
during construction (23,196) (77,310)
Net changes in working capital items
not considered elsewhere:
Accounts receivable and accrued
utility revenues 1,429,046 694,720
Fuel (123,890) 1,290,799
Accounts payable and outstanding
checks (5,451,130) (5,700,631)
Accrued income and general taxes 1,552,954 1,594,282
Other, net 37,114 225,749
Net changes in regulatory
assets and liabilities 121,480 (10,347)
Net changes in other assets
and liabilities (424,344) (135,513)
Net cash provided by
operating activities 1,525,583 2,672,742
CASHFLOWS FROM INVESTING ACTIVITIES:
Gross additions to plant (1,694,849) (2,651,641)
Allowance for borrowed funds used
during construction 13,547 63,789
Investments 1,244,726 1,378,597
Other 9,649 13,521
Net cash used in investing
activities (426,927) (1,195,734)
CASHFLOWS FROM FINANCING ACTIVITIES:
Principal payment under capital
lease obligation (43,085) (4,148)
Common stock purchased (3,431) (1,297)
Common stock issued 641,221 371,428
Dividends paid (1,902,630) (1,836,096)
Net cash used in financing
activities (1,307,925) (1,470,113)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (209,269) 6,895
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 688,466 287,319
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 479,197 $ 294,214
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid during the period for:
Interest $ 2,079,500 $ 2,079,780
Income taxes $ 45,000 $ 50,000
For purposes of the Consolidated Statements of Cash Flow, the Company
considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents.
See Consolidated Note to Financial Statement.
ST. JOSEPH LIGHT & POWER COMPANY
NOTE TO FINANCIAL STATEMENTS
SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation: The consolidated financial statements
include St. Joseph Light & Power Company and its wholly owned subsidiary,
SJLP Inc., which was formed in September 1996. Collectively, these
entities are referred to herein as the "Company." All significant
intercompany transactions have been eliminated.
General: The unaudited consolidated 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. See Notes to Financial Statements
included in the Company's 1996 Annual Report to Shareholders incorporated
by reference in the Company's 1996 Annual Report on Form 10-K.
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. The information contained in these
consolidated financial statements reflects all adjustments which are,
in the opinion of management, necessary to state fairly the results of
the interim periods.
The results for the three months ended March 31, 1997 are not
necessarily indicative of the results for the entire year 1997.
Restatement: All common share information for prior periods
presented in these statements has been restated to give retroactive
effect to a two-for-one stock split which was effective July 15,
1996.
Statement of Financial Accounting Standards (SFAS) No. 128: At
December 31, 1997, the Company will retroactively adopt the provisions
of Statement of Financial Accounting Standards (SFAS) No. 128, Earnings
per Share. This Statement establishes new standards for computing and
presenting earnings per share (EPS) for publicly held common
stock or potential common stock. It replaces the presentation of
primary EPS as required by Accounting Principles Board Opinion No.
15, Earnings per Share, with a presentation of basic EPS. It also
requires dual presentation of basic and diluted EPS on the face of
the income statement and a reconciliation of basic EPS to diluted
EPS. With the adoption of SFAS No. 128, basic EPS is not expected to
differ from primary EPS.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company is engaged primarily in the business of generating
and distributing electric energy in a ten-county area of northwestern
Missouri. It also sells natural gas and industrial steam in limited
areas. SJLP Inc. was formed to pursue investments in non-utility
areas. Its operations were not material to the Company's financial
position or results of operations.
In the electric utility industry, results of operations generally
show a seasonal pattern of higher revenues and earnings in the third
quarter due to weather. The Company expects that its historical pattern
of higher revenues and earnings in the third quarter will be more
pronounced as a result of rate-design changes implemented in June 1995
which increase electric rates from June through September and decrease
rates from October through May.
RESULTS OF OPERATIONS
Comparison of the quarters ended March 31, 1997 and 1996
Electric retail sales and other revenues decreased 1% for the
quarter primarily due to warmer than normal winter weather. Sales to
residential customers decreased 3% reflecting the warmer temperatures.
Partially offsetting the decrease was a 1% increase in sales to
commercial and industrial customers, with both classes boosted by
continuing economic improvement in the Company's service territory.
Sales for resale and related purchased power expense decreased
for the quarter primarily due to reduced demand from regional utilities
and energy marketers.
Other operating revenues increased 9% with both the natural gas
and industrial steam segments posting gains. Natural gas revenues
increased 12% despite an 11% decrease in sales resulting from the
warmer winter temperatures. The increase in revenues was attributable
to higher market prices for natural gas which the Company is allowed
to recover through the Purchased Gas Adjustment (PGA). Industrial
steam revenues increased 5% primarily due to increased sales and a
rate increase for a major customer.
System energy costs decreased 4% primarily due to the reduced
system requirements and the mixing of lower cost, low-sulfur coal at
the Lake Road plant. Modifications to the Lake Road plant to burn a
blend of coal has resulted in increased generation at the plant to
replace more expensive purchased power.
The increase in gas purchased for resale reflects the higher
market price for natural gas.
Maintenance expense for the period decreased primarily due to
lower maintenance requirements at the Lake Road plant.
Comparison of the twelve months ended March 31, 1997 and 1996
Electric retail sales and other revenues increased 1% for the
period which was consistent with sales. While an expanding area
economy increased sales 2% to the commercial and industrial segments,
more moderate weather reduced sales to the residential class to
partially offset the gain.
The decrease in sales for resale and related purchased power
expense resulted from lower demand from regional utilities and energy
marketers.
Other operating revenue increased 9% primarily due to a 36% increase
in natural gas revenues. The increase in natural gas revenues and
related gas purchased for resale reflects the significantly higher
market prices for natural gas which are passed on to customers
through the PGA. Natural gas sales for the period remained relatively
stable. Industrial steam revenues increased 4% for the period with
sales increasing 12%, reflecting a rate decrease to a major customer
in the prior period.
System energy requirements increased 6% primarily due to higher
unit prices for natural gas and oil used for generation and to higher
purchased power costs. Increased generation to replace more expensive
purchased power partially offset the rise in prices.
The reduction in other operations is primarily attributable to
reduced pension expense.
Maintenance expense decreased 9% primarily due to a scheduled
overhaul of a boiler at the Lake Road plant in the prior period.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had $5 million in cash and temporary
investments. In addition, the Company has bank credit arrangements
of $5.5 million in conventional lines of credit. No borrowings
were outstanding under these agreements at March 31, 1997. Financial
coverages are at levels in excess of those required for issuance of
debt and preferred stock.
Capital expenditures, net of allowance for funds used during
construction and including non-utility investments, are currently
projected to be $14.6 million for the remainder of 1997 and about
$90.5 million for the five-year period ending 2001. The Company
expects to finance these expenditures through internally generated
funds and the issuance of short-term debt and common equity.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in the Rights of the Company's Security Holders
None.
Item 3. Default Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
The Company's wholly owned subsidiary, SJLP Inc., entered
into an agreement on May 13, 1997, to acquire a 51% controlling
interest in Percy Kent Bag Company. Percy Kent is a 112 year old,
$31 million dollar manufacturer of multiwall shipping sacks
and small bags based in Kansas City, Missouri. The acquisition
is subject to regulatory approval.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibit 27 - Financial Data Schedule
b. No Current Report on Form 8-K was filed during the
quarter ended March 31, 1997.
<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.
ST. JOSEPH LIGHT & POWER COMPANY
(Registrant)
Dated: May 14, 1997
/s/ L. J. STOLL
Vice President-Finance, Treasurer
and Assistant Secretary
(Duly Authorized Officer)
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