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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, 1998
/ /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 44-0419850
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
520 Francis Street, P. O. Box 998 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 8,081,311 shares
(Class) (Outstanding at April 30, 1998)
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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 Flows...................................6
Notes to Consolidated 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 the Rights of the Company's
Security Holders..........................................10
Item 3.Default 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 2
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31
1998 1997
<S> <C> <C>
OPERATING REVENUES:
Electric utility $19,159,974 $18,958,974
Other utility 3,974,752 4,551,512
Manufacturing 6,582,284 --
29,717,010 23,510,486
OPERATING EXPENSES:
Production fuel 4,832,785 4,625,527
Purchased power 1,527,810 1,730,837
Gas purchased for resale 1,371,944 1,844,589
Manufacturing cost of goods sold 5,375,230 --
Other operations 5,614,484 4,965,170
Maintenance 1,412,619 1,541,455
Depreciation 2,833,513 2,696,599
Taxes other than income taxes 1,749,907 1,741,675
24,718,292 19,145,852
OPERATING INCOME 4,998,718 4,364,634
INTEREST CHARGES (Net) 1,702,309 1,486,429
OTHER INCOME (Net) 392,888 76,745
INCOME BEFORE INCOME TAXES AND MINORITY
INTEREST 3,689,297 2,954,950
INCOME TAXES 1,180,980 964,364
INCOME BEFORE MINORITY INTEREST 2,508,317 1,990,586
MINORITY INTEREST IN INCOME OF
SUBSIDIARY 107,016 --
NET INCOME $ 2,401,301 $ 1,990,586
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 8,056,020 7,940,138
BASIC AND DILUTED EARNINGS PER AVERAGE
COMMON SHARE $0.30 $0.25
DIVIDENDS PAID PER COMMON SHARE $0.245 $0.24
</TABLE>
See Notes to Consolidated Financial Statements
Page 3
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<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED BALANCE SHEETS
March 31,
1998 December 31,
(Unaudited) 1997
A S S E T S
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant $ 310,424,530 $ 309,027,825
Other 19,187,317 18,865,038
329,611,847 327,892,863
Less - Reserves for depreciation (159,039,093) (157,127,144)
170,572,754 170,765,719
Construction work in progress 6,123,846 6,086,063
176,696,600 176,851,782
OTHER INVESTMENTS 3,760,412 3,477,351
CURRENT ASSETS:
Cash and cash equivalents 333,804 350,385
Temporary investments 600,977 1,649,413
Receivables, net of reserves 8,972,888 9,819,655
Accrued utility revenue 3,125,737 3,286,867
Manufacturing inventories 3,113,543 3,570,559
Fuel 2,395,650 3,007,565
Materials and supplies 5,733,989 5,778,192
Prepayments and other 718,141 1,626,739
24,994,729 29,089,375
DEFERRED CHARGES:
Debt expense 1,532,236 1,570,970
Lease payments receivable 3,258,206 3,289,070
Prepaid pension expense 14,284,092 13,571,592
Regulatory assets 13,813,611 13,939,598
Other 2,238,688 1,979,390
35,126,833 34,350,620
$ 240,578,574 $ 243,769,128
C A P I T A L I Z A T I O N AND L I A B I L I T I E S
CAPITALIZATION (See Statements):
Common equity $ 90,261,776 $ 91,167,951
Long-term debt 70,028,748 68,744,804
160,290,524 159,912,755
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY 1,405,092 1,298,076
CURRENT LIABILITIES:
Outstanding checks in excess of
cash balances 407,468 3,288,237
Current maturities of long-term
obligations 7,231,019 8,628,004
Accounts payable 8,760,607 11,399,497
Notes payable 2,598,487 2,620,719
Accrued income and general taxes 1,885,478 735,210
Accrued interest 1,350,075 1,960,463
Accrued vacation 1,359,139 1,153,889
Dividends declared 1,981,997 --
Other 506,046 564,865
26,080,316 30,350,884
NON-CURRENT LIABILITIES AND DEFERRED CREDITS:
Capital lease obligations 3,046,962 3,093,360
Deferred income taxes 30,117,568 29,635,113
Investment tax credit 3,994,470 4,095,882
Accrued claims and benefits 1,927,038 1,744,112
Deferred revenues 2,225,394 2,254,705
Regulatory liabilities 8,970,205 8,970,205
Other 2,521,005 2,414,036
52,802,642 52,207,413
$240,578,574 $243,769,128
</TABLE>
See Notes to Consolidated Financial Statements
Page 4
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<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
March 31,
1998 December 31,
(Unaudited) 1997
<S> <C> <C>
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 69,162,303 70,714,339
Other paid-in capital 1,437,001 1,251,180
Less--treasury stock, at cost, 1,172,965
and 1,211,110 shares (14,153,627) (14,613,667)
90,261,776 91,167,951
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
Other long-term debt 4,159,767 4,272,808
Less current maturities (7,231,019) (8,628,004)
70,028,748 68,744,804
Total capitalization $ 160,290,524 $ 159,912,755
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(Unaudited)
Three Months Ended
March 31
1998 1997
Balance at beginning of period $ 70,714,339 $ 67,532,568
Net income 2,401,301 1,990,586
73,115,640 69,523,154
Less-dividends on common stock (3,953,337) (3,814,752)
Balance at end of period $ 69,162,303 $ 65,708,402
</TABLE>
See Notes to Consolidated Financial Statements
Page 5
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<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,401,301 $ 1,990,586
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 3,012,787 2,696,599
Pension expense (563,516) (468,584)
Deferred taxes and investment credit 381,043 102,861
Allowance for equity funds used during
construction (34,969) (23,196)
Net changes in working capital items
not considered elsewhere:
Accounts receivable and accrued utility
revenues 1,007,897 1,429,046
Inventories 1,113,134 (241,546)
Accounts payable and outstanding
checks (5,519,659) (5,451,130)
Accrued income and general taxes 1,150,268 1,552,954
Other, net 444,641 37,114
Net change in regulatory assets and
liabilities 125,987 121,480
Net changes in other assets and
liabilities (94,402) (220,601)
Net cash provided by operating
activities 3,424,512 1,525,583
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant (2,734,287) (1,694,849)
Allowance for borrowed funds used during
construction 20,273 13,547
Investments 765,375 1,244,726
Other 14,696 9,649
Net cash used in investing activities (1,933,943) (426,927)
CASH FLOWS FROM FINANCING ACTIVITIES:
Notes payable decrease (22,232) --
Principal payments under capital lease
obligations (46,398) (43,085)
Long-term debt retired (113,041) --
Common stock purchased -- (3,431)
Common stock issued 645,860 641,221
Dividends paid (1,971,339) (1,902,630)
Net cash used in financing activities (1,507,150) (1,307,925)
NET INCREASE IN CASH AND CASH EQUIVALENTS (16,581) (209,269)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 350,385 688,466
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 333,804 $ 479,197
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 2,302,444 $ 2,079,500
Income taxes (net of refunds) $ 404,945 $ 45,000
</TABLE>
For purposes of the Consolidated 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.
See Notes to Consolidated Financial Statements
Page 6
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ST. JOSEPH LIGHT & POWER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include St. Joseph Light & Power Company and its
wholly owned subsidiary, SJLP Inc., and its subsidiary, Percy
Kent Bag Co., Inc. 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 Consolidated
Financial Statements included in the Company's 1997 Annual Report
to Shareholders incorporated by reference in the Company's 1997
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, 1998 are not
necessarily indicative of the results for the entire year 1998.
Reclassifications: Certain reclassifications have been made in
the financial statements to enhance comparability.
(2) BASIC AND DILUTED EARNINGS PER COMMON SHARE CALCULATION
Basic earnings per share is calculated based upon the weighted
average number of common shares outstanding during the period.
There were no significant amounts of dilutive securities
outstanding for the March 31, 1997 and 1998 periods.
Page 7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations should be read in conjunction
with Management's Discussion and Analysis of Financial Condition
and Results of Operations in the Company's 1997 Annual Report on
Form 10-K.
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. 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.
SJLP Inc. was formed to pursue unregulated investments.
Effective May 31, 1997, SJLP Inc. acquired controlling interest
in Percy Kent Bag Co., Inc. (Percy Kent), a manufacturer of
multiwall and small paper bags. For the quarter, SJLP Inc.
contributed one cent of earnings per share.
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1998 AND 1997
Electric operating revenues increased 1% for the quarter with
sales remaining basically stable. Sales to the residential class
decreased 1% primarily due to warmer than normal winter
temperatures. Offsetting the decrease was a 1% increase in sales
to commercial and industrial customers reflecting the continued
economic growth in the Company's service territory. Mild winter
temperatures also reduced the demand for sales for resale to
regional utilities.
Other utility revenues decreased 13% primarily due to the natural
gas segment. Natural gas revenues and related gas purchased for
resale were down reflecting reduced heating requirements and
lower market prices for natural gas which are passed on to
customers through the Purchased Gas Adjustment.
Manufacturing revenues and related manufacturing cost of goods
sold reflect the operations of Percy Kent, acquired May 31,
1997.
Total energy costs (production fuel and purchased power) remained
stable. Lower coal costs at the Lake Road plant resulted in
increased generation at the plant replacing more expense
purchased power. Offsetting gains from the Lake Road plant were
higher market prices for purchased power.
The increase in other operations reflects the operations of Percy
Kent.
Maintenance expense decreased primarily due to a favorable
litigation settlement with a vendor.
Increased depreciation expense is the result of higher
depreciable plant balances, as well as the inclusion of
depreciation related to Percy Kent.
The increase in interest expense is due to Percy Kent borrowings.
Other income increased significantly as a result of higher
investment earnings.
Page 8
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LIQUIDITY AND CAPITAL RESOURCES
The Company believes its liquidity and capital resources are
sufficient and provide adequate financial flexibility.
Historically, operations have generated strong positive cash
flow. Financial coverages are at levels in excess of those
required for the issuance of debt and preferred stock. At March
31, 1998, the Company had $.9 million in cash and temporary
investments.
The Company's short-term financing requirements are satisfied
through borrowings under unsecured lines of credit maintained
with banks. At March 31, 1998, the Company had available lines
of credit of $5.5 million. In addition, the Company's
consolidated subsidiaries' secured credit agreements had
available balances of $.1 million.
Capital expenditures, excluding allowance for funds used during
construction and including non-utility investments, are currently
projected to be $13.9 million for the remainder of 1998 and about
$70.5 million for the remainder of the five-year period ending
2002. The Company expects to finance these expenditures
primarily through internally generated funds supplemented by
external financing as necessary.
FORWARD LOOKING INFORMATION
This quarterly report contains forward looking information that
is intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of
1995. Although the Company believes that its expectations are
based on reasonable assumptions, actual results could differ
materially from those currently anticipated. Factors that could
cause actual results to differ from those anticipated include,
but are not limited to, the effects of regulatory actions,
competition, future economic conditions, and weather.
Page 9
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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
None.
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, 1998.
Page 10
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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, 1998 /s/ L. J. STOLL
Vice President-Finance, Treasurer
and Assistant Secretary
(Duly Authorized Officer)
Page 11
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000086251
<NAME> ST. JOSEPH LIGHT & POWER COMPANY
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 168827379
<OTHER-PROPERTY-AND-INVEST> 11629633
<TOTAL-CURRENT-ASSETS> 24994729
<TOTAL-DEFERRED-CHARGES> 35126833
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<TOTAL-ASSETS> 240578574
<COMMON> 19662472
<CAPITAL-SURPLUS-PAID-IN> 1437001
<RETAINED-EARNINGS> 69162303
<TOTAL-COMMON-STOCKHOLDERS-EQ> 90261776
0
0
<LONG-TERM-DEBT-NET> 70028748
<SHORT-TERM-NOTES> 2598487
<LONG-TERM-NOTES-PAYABLE> 0
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<LONG-TERM-DEBT-CURRENT-PORT> 7231019
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<CAPITAL-LEASE-OBLIGATIONS> 3046962
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<OTHER-ITEMS-CAPITAL-AND-LIAB> 67411582
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<OPERATING-INCOME-LOSS> 3948744
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<INCOME-BEFORE-INTEREST-EXPEN> 4103610
<TOTAL-INTEREST-EXPENSE> 1702309
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