<PAGE>
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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 September 30, 1999
/ / 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,
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 8,251,875 shares
(Class) (Outstanding at October 31, 1999)
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<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 Flows.........................6
Notes to Consolidated Financial Statements.......7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................10
Part II. Other Information
Item 1. Legal Proceedings..................................13
Item 2. Changes in the Rights of the Company's Security
Holders............................................13
Item 3. Default Upon Senior Securities.....................13
Item 4. Submission of Matters to a Vote of Security
Holders............................................13
Item 5. Other Information..................................13
Item 6. Exhibits and Reports on Forms 8-K..................13
Signature.....................................................14
Page 2 of 14
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric utility $ 30,403,624 $ 29,767,259 $ 71,459,065 $ 71,231,781
Other utility 1,972,148 1,871,518 7,859,610 7,853,500
Manufacturing 3,971,973 5,727,491 14,020,777 18,053,543
36,347,745 37,366,268 93,339,452 97,138,824
OPERATING EXPENSES:
Production fuel 6,499,206 6,074,453 16,069,675 15,448,165
Purchased power 4,086,977 4,012,551 9,694,786 8,216,616
Gas purchased for
resale 164,426 159,289 1,547,636 1,808,279
Manufacturing cost
of goods sold 3,550,951 4,840,510 11,796,717 15,038,149
Other operations 5,249,315 5,353,539 16,162,878 16,886,409
Merger-related
expenses -- -- 2,933,438 --
Maintenance 1,793,551 1,903,205 6,216,610 5,624,919
Depreciation 3,022,764 2,886,331 9,009,306 8,587,169
Taxes other than
income taxes 1,982,146 2,014,621 5,526,038 5,566,506
26,349,336 27,244,499 78,957,084 77,176,212
OPERATING INCOME 9,998,409 10,121,769 14,382,368 19,962,612
INTEREST CHARGES (Net) 1,784,513 1,669,447 5,353,551 5,146,259
OTHER INCOME (Net) 172,269 141,156 515,658 655,565
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 8,386,165 8,593,478 9,544,475 15,471,918
INCOME TAXES 3,128,855 3,391,346 4,003,581 5,851,437
INCOME BEFORE MINORITY
INTEREST 5,257,310 5,202,132 5,540,894 9,620,481
MINORITY INTEREST IN
INCOME (LOSS) OF
SUBSIDIARY (147,119) (11,838) (94,937) 15,014
NET INCOME $ 5,404,429 $ 5,213,970 $ 5,635,831 $ 9,605,467
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 8,241,328 8,114,921 8,196,056 8,087,920
BASIC EARNINGS PER
AVERAGE COMMON SHARE $0.66 $0.64 $0.69 $1.19
DILUTED EARNINGS PER
AVERAGE COMMON SHARE $0.65 $0.64 $0.68 $1.18
DIVIDENDS PAID PER
COMMON SHARE $0.25 $0.24 $0.75 $0.735
</TABLE>
See Notes to Consolidated Financial Statements.
Page 3 of 14
<PAGE>
<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED BALANCE SHEETS
September 30,
1999 December 31,
(Unaudited) 1998
A S S E T S
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant $ 329,229,663 $ 324,621,028
Other 20,709,661 20,376,779
349,939,324 344,997,807
Less - Reserves for depreciation (175,274,619) (167,112,141)
174,664,705 177,885,666
Construction work in progress 6,642,309 3,668,931
181,307,014 181,554,597
OTHER INVESTMENTS 6,615,042 4,922,043
CURRENT ASSETS:
Cash and cash equivalents 558,315 371,768
Receivables, net of reserves 13,623,492 10,160,025
Accrued utility revenue 3,182,796 3,673,848
Manufacturing inventories 2,779,727 2,910,801
Fuel 4,458,299 3,366,077
Materials and supplies 5,667,060 5,674,296
Prepayments and other 2,326,669 1,901,723
32,596,358 28,058,538
DEFERRED CHARGES:
Debt expense 1,277,859 1,348,939
Lease payments receivable 3,073,019 3,165,613
Prepaid pension expense 18,836,988 16,388,954
Regulatory assets 16,491,596 13,843,633
Other 1,977,456 1,972,879
41,656,918 36,720,018
$ 262,175,332 $ 251,255,196
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 $ 95,339,815 $ 95,805,327
Long-term debt 72,633,346 73,515,018
167,973,161 169,320,345
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY 1,273,607 1,368,544
CURRENT LIABILITIES:
Outstanding checks in excess of
cash balances 307,457 3,512,473
Current maturities of long-term
obligations 1,211,439 1,212,815
Accounts payable 9,797,394 9,987,970
Notes payable 16,158,000 7,290,000
Accrued income and general taxes 5,624,291 823,006
Accrued interest 1,292,656 1,922,853
Accrued vacation 1,226,583 1,232,774
Dividends declared 2,055,750 --
Other 626,245 678,774
38,299,815 26,660,665
NON-CURRENT LIABILITIES AND DEFERRED
CREDITS:
Capital lease obligations 2,749,774 2,902,496
Deferred income taxes 32,292,999 31,822,287
Investment tax credit 3,384,106 3,689,152
Accrued claims and benefits 2,531,089 1,832,991
Deferred revenues 2,050,457 2,137,719
Regulatory liabilities 8,440,159 8,440,159
Other 3,180,165 3,080,838
54,628,749 53,905,642
$ 262,175,332 $ 251,255,196
</TABLE>
See Notes to Consolidated Financial Statements.
Page 4 of 14
<PAGE>
<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
September 30,
1999 December 31,
(Unaudited) 1998
<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 70,892,185 73,450,443
Other paid-in capital 2,714,926 1,876,625
Less-treasury stock, at cost,
1,001,804 and 1,105,821 shares (12,083,395) (13,337,840)
95,339,815 95,805,327
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-
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
40,000,000 40,000,000
Other long-term debt 5,744,785 6,627,833
Less current maturities (1,211,439) (1,212,815)
72,633,346 73,515,018
Total capitalization $ 167,973,161 $ 169,320,345
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Balance at beginning of
period $ 69,601,925 $71,154,576 $ 73,450,443 $ 70,714,339
Net income 5,404,429 5,213,970 5,635,831 9,605,467
75,006,354 76,368,546 79,086,274 80,319,806
Less-dividends on
common stock (4,114,169) (3,977,269) (8,194,089) (7,928,529)
Balance at end of period $ 70,892,185 $72,391,277 $ 70,892,185 $ 72,391,277
</TABLE>
See Notes to Consolidated Financial Statements.
Page 5 of 14
<PAGE>
<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,635,831 $ 9,605,467
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 9,375,506 9,166,522
Pension expense (2,049,004) (1,676,581)
Deferred taxes and investment
tax credit 165,666 175,902
Allowance for equity funds used
during construction (78,763) (182,417)
Net changes in working capital items
not considered elsewhere:
Accounts receivable and accrued
utility revenues (2,972,415) (2,934,015)
Inventories (953,912) 689,228
Accounts payable and outstanding
checks (3,395,592) (3,561,959)
Accrued income and general taxes 4,801,285 5,253,639
Other, net (1,115,756) (1,474,791)
Net change in regulatory assets
and liabilities (2,647,963) 398,964
Net changes in other assets and
liabilities (2,712,525) 816,526
Net cash provided by operating
activities 4,052,358 16,276,485
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant (6,040,105) (11,984,097)
Allowance for borrowed funds used
during construction 63,993 110,072
Investments (1,691,106) 206,512
Other 14,770 72,345
Net cash used in investing
activities (7,652,448) (11,595,168)
CASH FLOWS FROM FINANCING ACTIVITIES:
Lines of credit increase (decrease) 8,868,000 (396,578)
Principal payments under capital
lease obligations (152,722) (141,814)
Long-term debt retired (2,113,729) (2,558,702)
Long-term debt issued 1,230,681 3,020,061
Common stock issued 2,092,746 1,502,556
Dividends paid (6,138,339) (5,937,335)
Net cash provided by (used in)
financing activities 3,786,637 (4,511,812)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 186,547 169,505
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 371,768 350,385
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 558,315 $ 519,890
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 5,959,161 $ 6,444,191
Income taxes, net of refunds $ 1,745,500 $ 2,794,945
</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 of 14
<PAGE>
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 1998 Annual Report
to Shareholders incorporated by reference in the Company's 1998
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 and nine months ended September 30,
1999 are not necessarily indicative of the results for the entire
year 1999.
NEW ACCOUNTING PRONOUNCEMENT: In June 1998, the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) 133, " Accounting for Derivative
Instruments and Hedging Activities." The Statement, to be
effective for fiscal years beginning after June 15, 2000,
establishes accounting and reporting standards requiring that
every derivative instrument be recorded in the balance sheet as
either an asset or liability measured at fair value. The Company
has not quantified the impacts of adopting SFAS 133 on its
financial statements and has not determined the timing of or
method of its adoption of SFAS 133.
RECLASSIFICATIONS: Certain reclassifications have been made in
the financial statements to enhance comparability.
Page 7 of 14
<PAGE>
(2) EARNINGS PER SHARE
Basic and diluted earnings per average common share were
calculated by dividing net income by the following:
For the three months For the nine months
ended September 30 ended September 30
1999 1998 1999 1998
Denominator for
basic EPS:
Weighted average
number of shares
outstanding
during the year 8,241,328 8,114,921 8,196,056 8,087,920
Effect of dilutive
securities:
Contingently
issuable shares
pursuant to long-
term incentive
plan 19,236 15,123 21,060 15,123
Directors' stock
options 18,641 11,616 16,061 14,880
Denominator for
diluted EPS: 8,279,205 8,141,660 8,233,177 8,117,923
(3) SEGMENTS OF BUSINESS
The following table sets forth certain information regarding
the Company's segments of business:
Electric Manufactur All Totals
Utility -ing Other
THREE MONTHS
ENDED SEPTEMBER 30,
1999:
Revenues from
external customers $ 30,403,624 $ 3,971,973 $ 1,972,148 $ 36,347,745
Segment profit
(loss) $ 7,303,367 $ (177,503) $ (107,225) $ 7,018,639
Non-manufacturing
interest expense
(net) (1,630,806)
Other income 27,744
Income taxes on
other income (11,148)
Consolidated net
income $ 5,404,429
Electric Manufactur All Totals
Utility -ing Other
THREE MONTHS
ENDED SEPTEMBER 30,
1998:
Revenues from
external customers $ 29,767,259 $ 5,727,491 $ 1,871,518 $ 37,366,268
Segment profit
(loss) $ 6,779,939 $ (36,700) $ (140,622) $ 6,602,617
Non-manufacturing
interest expense
(net) (1,477,326)
Other income 144,802
Income taxes on
other income (56,123)
Consolidated net
income $ 5,213,970
Page 8 of 14
<PAGE>
Electric Manufactur All Totals
Utility -ing Other
NINE MONTHS
ENDED SEPTEMBER 30,
1999:
Revenues from
external customers $ 71,459,065 $ 14,020,777 $ 7,859,610 $ 93,339,452
Segment profit
(loss) $ 10,554,241 $ (171,948)$ 24,263 $ 10,406,556
Non-manufacturing
interest expense
(net) (4,867,332)
Other income 161,496
Income taxes on
other income (64,889)
Consolidated net
income $ 5,635,831
Electric Manufactur All Totals
Utility -ing Other
NINE MONTHS ENDED
SEPTEMBER 30,
1998:
Revenues from
external customers $ 71,231,781 $ 18,053,543 $ 7,853,500 $ 97,138,824
Segment profit
(loss) $ 13,396,526 $ (57,509) $ 275,994 $ 13,615,011
Non-manufacturing
interest expense
(net) (4,442,745)
Other income 691,206
Income taxes on
other income (258,005)
Consolidated net
income $ 9,605,467
(4) PROPOSED MERGER
On March 4, 1999, the Company and UtiliCorp United Inc.
entered into an Agreement and Plan of Merger to form a strategic
business combination. Under terms of the agreement, each share
of common stock of the Company, valued at $23 per share, will be
exchanged for shares of UtiliCorp United Inc. common stock. The
Agreement has been approved by a vote of the Company's
shareholders at a special meeting, which was held June 16, 1999,
and by the Public Utility Commissions of Colorado and West
Virginia. The transaction is subject to several additional
closing conditions, including approvals by the Federal Energy
Regulatory Commission (FERC), the Department of Justice, the
Federal Communications Commission, and the state commissions of
Missouri, Iowa, and Minnesota. A joint application for approval
of the merger was filed by the Company and UtiliCorp United Inc.
with the Missouri Public Service Commission (PSC)on October 19,
1999. Management expects the merger to be completed in mid-2000.
Additional merger-related expenses are expected to be incurred
primarily in 2000, resulting in an after tax impact to earnings
of approximately $4.4 million.
The Merger Agreement limits the Company's ability to do
certain things prior to closing, including issue or redeem
securities, merge with any entity or make acquisitions, incur
material liens, and declare or pay dividends.
(5) RATE MATTERS
On December 1, 1998, the Company filed separate rate cases
before the PSC asking for price increases of approximately
$6,100,000, $50,000, and $275,000 for electric, natural gas, and
industrial steam, respectively. An earlier electric earnings
complaint filed by the PSC staff, requesting a reduciton of $6.4
million, was consolidated with the Company's electric case.
Page 9 of 14
<PAGE>
Stipulated agreements were reached between the Company and other
parties to the cases and were approved by the PSC. Under the
agreements, the Company will reduce annual electric revenues by
$2.5 million and annual industrial steam revenues by $25,000.
There will be no change in natural gas prices. The new prices
reflecting the reductions will be effective for service rendered
on and after October 31, 1999. The Company expects the revenue
reductions and accounting method changes required by the
agreements to result in a negligible effect on 1999 earnings,
with annual reductions of approximately $500,000 thereafter.
(6)CONTINGENCIES
In April 1999, the FERC issued an order directing the Mid-
Continent Area Power Pool (MAPP), of which the Company is a
member, to refund payments for transmission charges assessed from
March 1997 through March 1999. The FERC disagrees with the
method MAPP was using to assess transmission charges for
transactions with non-member entities.
Fifteen MAPP transmission providers, including St. Joseph
Light & Power Company, filed a petition for rehearing on the
FERC's order, which was denied by the FERC. The Company,
therefore, made the required payment of $596,520 in October 1999.
St. Joseph Light & Power Company is participating in a joint
appeal of the FERC's order.
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
1998 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.
The Company owns SJLP INC., a non-regulated subsidiary. SJLP
Inc. holds a controlling interest in Percy Kent Bag Co., Inc.
(Percy Kent), a manufacturer of multiwall and small paper bags.
Neither SJLP Inc.'s nor Percy Kent's operations were material to
the Company's financial position or results of operations.
RESULTS OF OPERATIONS
COMPARISON OF THE QUARTERS ENDED SEPTEMBER 30, 1999 AND 1998
Electric operating revenues increased $.6 million, or 2%, as
a result of several offsetting factors. Sales for resale revenue
increased 137% for the period due to a significant growth in the
volume of sales coupled with higher market prices in July.
Strong retail sales to the industrial and commercial classes of
customers also contributed to the growth of electric revenues
reflecting the continued economic growth in the service
territory. Partially offsetting these increases was a 4%
decrease in retail sales to the residential class due to milder
weather than in the prior year.
Page 10 of 14
<PAGE>
Other utility revenues increased 5% primarily due to slight
growth in both natural gas and industrial steam segment sales,
which benefited from cooler temperatures and favorable economic
conditions during the period.
Total energy costs (production fuel and purchased power)
increased 5% for the period primarily due to increased system
requirements, higher demand charges, higher per unit costs for
purchased energy, and increased purchases of power for resale.
The Company expects these higher prices for purchased energy to
continue.
Manufacturing revenues and related manufacturing cost of
goods sold at Percy Kent were lower primarily due to reduced
demand and the loss of two major customers. The net results for
Percy Kent were insignificant for the period.
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Electric operating revenues were up $227,000 for the period
mostly due to increased sales for resale in the third quarter.
Reductions in retail residential and other electric revenues were
offset by strong growth in the commercial and industrial retail
sectors.
Total energy costs (production fuel and purchased power)
increased 9% for the period reflecting increased system
requirements, higher demand charges, and increased per unit costs
for purchased energy.
Manufacturing revenues and related manufacturing cost of
goods sold at Percy Kent were lower primarily due to reduced
demand and the loss of two major customers. The net results for
Percy Kent were insignificant for the period.
The merger-related expenses are the result of the propsed
merger with UtiliCorp United Inc. See Note 4, Proposed Merger,
in the Notes to Consolidated Financial Statements. Most of these
merger-related expenses are not deductible for income tax
purposes.
Maintenance expense was higher during the first nine months of
1999, primarily due to increased maintenance requirements at the
Lake Road plant. In addition, a favorable litagation settlement
with a vendor reduced expenses in the prior period.
REGULATORY ASSETS
Certain expenses and credits, normally reflected in income as
incurred, are accounted for as assets when included in rates and
recovered from or refunded to customers in accordance with
Statement of Financial Accounting Standards No. 71. In the
second quarter of 1999, the Company established additional
regulatory assets of $3.4 million for fuel contract settlement
costs resulting from the Iatan coal contract that was
renegotiated on April 1, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes its liquidity and capital resources are
sufficient and provide adequate financial flexibility.
Historically, operations have generated strong cash flow. Lower
cash flow from operating activities for the period was primarily
due to merger-related expenses and increased power costs. At
September 30, 1999, the Company had $558,000 in cash and
temporary investments.
Page 11 of 14
<PAGE>
The Company's short-term financing requirements are satisfied
through borrowings under unsecured lines of credit maintained
with banks. At September 30, 1999, the Company had available
lines of credit of $11.3 million. In addition, Percy Kent's
secured credit agreement had an available balance of $2.4
million.
Capital expenditures, excluding allowance for funds used
during construction and including non-utility investments, are
currently projected to be $3.2 million for the remainder of 1999.
The Company expects to finance these expenditures through a
combination of internally generated funds and external
financing.
IMPACT OF THE YEAR 2000 ISSUE
The Company has completed remediation and testing for the Year
2000 issue. Contingency plans for critical functions have been
developed and are being reviewed and revised as necessary. Total
costs of Year 2000 preparations are expected to be less than $1
million, excluding the costs of the redeployment of existing
resources.
In April and September 1999, the Company participated in Year
2000 drills conducted by the North American Electric Reliability
Council (NERC), which is coordinating Year 2000 preparations of
the electric power industry. The purpose of the drills was to
test for Year 2000 readiness of primary and secondary
communications systems used to operate the electric power grids
of the United States. The exercises were considered successful
as communications were maintained internally and with
interconnecting utilities.
The Company presently believes that with the modifications and
conversions it has made to software, hardware and embedded
systems, the Year 2000 issue can be mitigated with no significant
adverse effect on customers or disruption to business operations.
If such modifications are ineffective, the Year 2000 issue could
have a material adverse effect on the Company.
Refer to Management's Discussion and Analysis in the Company's
1998 Annual Report for a comprehensive discussion of the Year
2000 issue.
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 12 of 14
<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
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 September 30, 1999.
Page 13 of 14
<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)
/s/ L. J. Stoll
---------------------------------
Dated: November 9, 1999 L. J. STOLL
Vice President-Finance, Treasurer
and Assistant Secretary
(Duly Authorized Officer)
Page 14 of 14
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