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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 June 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 8,233,673 shares
(Class) (Outstanding at July 31, 1999)
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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................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
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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 Six Months Ended
June 30 June30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric utility $ 21,410,095 $ 22,304,549 $41,055,442 $ 41,464,524
Other utility 2,214,406 2,007,228 5,887,461 5,981,980
Manufacturing 4,681,633 5,743,768 10,048,804 12,326,052
28,306,134 30,055,545 56,991,707 59,772,556
OPERATING EXPENSES:
Production fuel 4,761,777 4,540,926 9,570,470 9,373,711
Purchased power 3,064,462 2,676,257 5,607,808 4,204,066
Gas purchased for resale 283,753 277,046 1,383,210 1,648,990
Manufacturing cost of goods sold 3,752,967 4,822,409 8,245,766 10,197,639
Other operations 5,326,992 5,918,422 10,913,563 11,532,905
Merger-related expenses 1,816,189 -- 2,933,438 --
Maintenance 2,730,817 2,309,096 4,423,059 3,721,715
Depreciation 3,000,053 2,867,325 5,986,542 5,700,838
Taxes other than income taxes 1,773,107 1,801,939 3,543,892 3,551,848
26,510,117 25,213,420 52,607,748 49,931,712
OPERATING INCOME 1,796,017 4,842,125 4,383,959 9,840,844
INTEREST CHARGES (Net) 1,851,845 1,774,503 3,569,038 3,476,812
OTHER INCOME 170,857 121,521 343,388 514,409
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 115,029 3,189,143 1,158,309 6,878,441
INCOME TAXES 248,582 1,279,111 874,726 2,460,091
INCOME BEFORE MINORITY INTEREST (133,553) 1,910,032 283,583 4,418,350
MINORITY INTEREST IN INCOME (LOSS) OF
SUBSIDIARY 48,883 (80,164) 52,182 26,852
NET INCOME $ (182,436)$ 1,990,196 $ 231,401 $ 4,391,498
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 8,187,817 8,092,173 8,173,045 8,074,196
BASIC AND DILUTED EARNINGS PER AVERAGE
COMMON SHARE ($0.02) $0.25 $0.03 $0.54
DIVIDENDS PAID PER COMMON SHARE $0.25 $0.245 $0.50 $0.49
</TABLE>
See Notes to Consolidated Financial Statements.
Page 3 of 14
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<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED BALANCE SHEETS
June 30,
1999 December 31,
(Unaudited) 1998
A S S E T S
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant $ 327,616,890 $ 324,621,028
Other 20,594,989 20,376,779
348,211,879 344,997,807
Less - Reserves for depreciation (172,386,734) (167,112,141)
175,825,145 177,885,666
Construction work in progress 5,028,911 3,668,931
180,854,056 181,554,597
OTHER INVESTMENTS 6,594,697 4,922,043
CURRENT ASSETS:
Cash and cash equivalents 771,081 371,768
Receivables, net of reserves 11,195,530 10,160,025
Accrued utility revenue 3,797,532 3,673,848
Manufacturing inventories 2,494,225 2,910,801
Fuel 4,719,039 3,366,077
Materials and supplies 5,460,570 5,674,296
Prepayments and other 1,966,474 1,901,723
30,404,451 28,058,538
DEFERRED CHARGES:
Debt expense 1,306,951 1,348,939
Lease payments receivable 3,106,552 3,165,613
Prepaid pension expense 17,962,937 16,388,954
Regulatory assets 16,805,909 13,843,633
Other 2,192,878 1,972,879
41,375,227 36,720,018
$ 259,228,431 $ 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 $ 93,661,898 $ 95,805,327
Long-term debt 72,780,460 73,515,018
166,442,358 169,320,345
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY 1,420,726 1,368,544
CURRENT LIABILITIES:
Outstanding checks in excess of
cash balances 159,857 3,512,473
Current maturities of long-term
obligations 1,237,252 1,212,815
Accounts payable 10,645,981 9,987,970
Notes payable 18,861,000 7,290,000
Accrued income and general taxes 2,935,093 823,006
Accrued interest 1,989,040 1,922,853
Accrued vacation 1,301,868 1,232,774
Other 549,418 678,774
37,679,509 26,660,665
NON-CURRENT LIABILITIES AND DEFERRED
CREDITS:
Capital lease obligations 2,801,628 2,902,496
Deferred income taxes 31,715,301 31,822,287
Investment tax credit 3,485,788 3,689,152
Accrued claims and benefits 2,058,701 1,832,991
Deferred revenues 2,079,496 2,137,719
Regulatory liabilities 8,440,159 8,440,159
Other 3,104,765 3,080,838
53,685,838 53,905,642
$ 259,228,431 $ 251,255,196
</TABLE>
See Notes to Consolidated Financial Statements.
Page 4 of 14
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<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
June 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 69,601,925 73,450,443
Other paid-in capital 2,550,033 1,876,625
Less--treasury stock, at
cost, 1,020,280
and 1,105,821 shares (12,306,159) (13,337,840)
93,661,898 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 5,917,712 6,627,833
Less current maturities (1,237,252) (1,212,815)
72,780,460 73,515,018
Total capitalization $ 166,442,358 $ 169,320,345
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Balance at beginning of $ $ $ $
period 69,784,361 69,162,303 73,450,443 70,714,339
Net income (182,436) 1,990,196 231,401 4,391,498
69,601,925 71,152,499 73,681,844 75,105,837
Less-dividends on common
stock -- 2,077 (4,079,919) (3,951,261)
Balance at end of period $ 69,601,925 $ 71,154,576 $ 69,601,925 $ 71,154,576
</TABLE>
See Notes to Consolidated Financial Statements.
Page 5 of 14
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<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months
Ended
June 30
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 231,401 $ 4,391,498
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 6,233,123 6,061,541
Pension expense (1,317,424) (1,124,910)
Deferred taxes and investment tax credit (310,350) 258,307
Allowance for equity funds used during
construction (66,104) (97,320)
Net changes in working capital items
not considered elsewhere:
Accounts receivable and accrued utility
revenue (1,159,189) (2,085,372)
Inventories (722,661) 1,107,879
Accounts payable and outstanding checks (2,694,605) (3,927,373)
Accrued income and general taxes 2,112,087 1,557,930
Other, net (60,718) (92,769)
Net change in regulatory assets and
liabilities (2,962,276) 248,734
Net changes in other assets and liabilities (1,496,280) (1,940,712)
Net cash (used in) provided by
operating activities (2,212,996) 4,357,433
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant (4,168,215) (5,954,498)
Allowance for borrowed funds used during
construction 29,083 56,351
Investments (1,670,761) 1,190,042
Other 37,021 40,969
Net cash used in investing activities (5,772,872) (4,667,136)
CASH FLOWS FROM FINANCING ACTIVITIES:
Lines of credit increase 11,571,000 3,112,848
Principal payments under capital lease
obligations (100,868) (93,664)
Long-term debt retired (1,703,552) (2,285,640)
Long-term debt issued 993,431 2,976,137
Common stock issued 1,705,089 1,116,868
Dividends paid (4,079,919) (3,951,261)
Net cash provided by financing activities 8,385,181 875,288
NET INCREASE IN CASH AND CASH EQUIVALENTS 399,313 565,585
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 371,768 350,385
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 771,081 $ 915,970
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 3,472,447 $ 3,325,808
Income taxes, net of refunds $ 745,500 $ 2,159,945
</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
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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 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 six months ended June 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
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(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 six months
ended June 30 ended June 30
1999 1998 1999 1998
Denominator for
basic EPS:
Weighted average
number of shares
outstanding
during the year 8,187,817 8,092,173 8,173,045 8,074,196
Effect of dilutive
securities:
Contingently
issuable shares
pursuant to
long-term
incentive plan 21,724 -- 21,972 --
Directors'
stock options 17,685 11,553 14,651 16,499
Denominator for
diluted EPS: 8,227,226 8,103,726 8,209,668 8,090,695
(3) SEGMENTS OF BUSINESS
The following table sets forth certain information regarding
the Company's segments of business:
Electric Manufact- All Totals
Utility uring Other
THREE MONTHS
ENDED JUNE 30,
1999:
Revenues from
external customers $ 21,410,095 $4,681,633 $2,214,406 $28,306,134
Segment profit
(loss) $ 1,574,083 $ 26,500 $ (111,739)$ 1,488,844
Non-manufacturing
interest expense
(net) (1,686,944)
Other income 26,241
Income taxes on
other income (10,577)
Consolidated net loss $ (182,436)
Electric Manufact- All Totals
Utility uring Other
THREE MONTHS
ENDED JUNE 30,
1998:
Revenues from
external customers $22,304,549 $ 5,743,768 $ 2,007,228 $ 30,055,545
Segment profit
(loss) $ 3,502,646 $ (107,815) $ (28,939) $ 3,365,892
Non-manufacturing
interest expense
(net) (1,480,330)
Other income 147,990
Income taxes on
other income (43,356)
Consolidated net
income $ 1,990,196
Page 8 of 14
<PAGE>
Electric Manufact- All Totals
Utility uring Other
SIX MONTHS ENDED
JUNE 30, 1999:
Revenues from
external customers $ 41,055,442 $ 10,048,804 $ 5,887,461 $ 56,991,707
Segment profit
(loss) $ 3,250,875 $ 5,555 $ 131,489 $ 3,387,919
Non-manufacturing
interest expense
(net) (3,236,526)
Other income 133,750
Income taxes on
other income (53,742)
Consolidated net
income $ 231,401
Electric Manufact- All Totals
Utility uring Other
SIX MONTHS ENDED
JUNE 30, 1998:
Revenues from
external customers $ 41,464,524 $ 12,326,052 $ 5,981,980 $59,772,556
Segment profit
(loss) $ 6,616,588 $ (20,810) $ 416,618 $ 7,012,396
Non-manufacturing
interest expense
(net) (2,965,420)
Other income 546,405
Income taxes on
other income (201,883)
Consolidated net
income $ 4,391,498
(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 was approved by a vote of the Company's shareholders at
a special meeting, which was held June 16, 1999, and by the
Public Utility Commission of Colorado in early July. 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, West
Virginia, and Minnesota. A joint application for approval of the
merger is expected to be filed by the Company and UtiliCorp
United Inc. with the Missouri Public Service Commission during
the third quarter of 1999. Management expects the merger to be
completed in the first half of 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, $500,000, 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
Page 9 of 14
<PAGE>
consolidated with the Company's electric case. Stipulated
agreements have been reached between the Company and other
parties to the cases. The Public Service Commission is in the
process of reviewing the agreements and must issue an order of
approval before they become effective.
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
$400,000 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, have filed a petition for rehearing on the
FERC's order. The FERC has not yet responded to the rehearing
request. In the event the FERC order stands as issued, the
Company will be required to refund approximately $516,000, plus
interest.
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 JUNE 30, 1999 AND 1998
Electric operating revenues decreased $.9 million or 4%
primarily due to a change in the retail sales mix and reduced
sales for resale. While total retail sales remained stable,
cooler than normal temperatures reduced sales to the residential
and commercial classes. Offsetting the decrease was an 8% increase
in the industrial class reflecting the continued economic growth
in the service territory. Sales for resale revenue also
decreased primarily due to the reduced availablility of
economically priced energy for resale and a higher proportion of
off-peak sales.
Page 10 of 14
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Other utility revenues increased 10% primarily due to strong
growth in the industrial steam segment. Industrial steam sales
increased 1% benefiting from favorable economic conditions during
the period.
Total energy costs (production fuel and purchased power)
increased 8% for the period primarily due to expensive
replacement energy required by unscheduled outages at the Iatan
generating station and increased per unit costs for purchased
power. 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 elimination of lower profit contracts. The new
results for Percy Kent were insignificant.
Other operation expenses were lower for the period primarily
due to reduced pension expense, resulting from strong investment
performance.
The merger-related expenses are the result of the proposed
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 primarily due to additional
maintenance requirements at the Lake Road plant.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
Electric operating revenues were down 1% for the period
despite electric retail sales posting a 2% increase. Sales to the
industrial class increased 7%, while milder temperatures reduced
sales to the residential and commercial classes. Sales for
resale revenues were down due to a higher proportion of off-peak
sales, which generate less per unit revenues.
Total energy costs (production fuel and purchased power)
increased 12% for the period reflecting increased system
requirements, expensive replacement energy required by
unscheduled outages at the Iatan generating station and increased
per unit costs for purchased power.
Manufacturing revenues and related manufacturing cost of
goods sold at Percy Kent were lower primarily due to reduced
demand and the elimination of lower profit contracts. 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. Most of these merger-related
expenses are not deductible for income tax purposes.
Maintenance expense was higher during the first half of 1999,
primarily due to increased maintenance requirements at the Lake
Road facility. In addition, a favorable litigation settlement
with a vendor reduced expenses in the prior period.
Other income was lower due primarily to lower investment
earnings.
Page 11 of 14
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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. Negative cash flow from operating activities for the
period was primarily due to merger-related expenses and increased
energy costs. At June 30, 1999, the Company had $771,000 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 June 30, 1999, the Company had available lines of
credit of $8.6 million. In addition, Percy Kent's secured credit
agreements had available balances of $2.5 million.
Capital expenditures, excluding allowance for funds used
during construction and including non-utility investments, are
currently projected to be $7.3 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 is in the latter stages of remediation and testing
for the Year 2000 issue with approximately 98% of the
remediation and testing procedures completed. Contingency plans
for critical functions are being reviewed and revised as
necessary.
In April 1999, the Company participated in a Year 2000 drill
conducted by the North American Electric Reliability Council
(NERC), who is coordinating Year 2000 preparations of the
electric power industry. The purpose of the drill 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 day-long drill simulated the loss of voice and data
communications systems used by the Company to communicate both
within and between electrical delivery systems. The exercise was
considered successful as communications were maintained
internally and with interconnecting utilities. NERC is scheduling
more system testing later in the year.
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 Mangement'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
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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
a. The annual meeting of common stockholders was held
May 19, 1999.
b. The following persons were elected Directors of the
Company to serve until the 2002 annual meeting of common
stockholders:
Deborah A. Beck (6,514,829 votes for; 74,507
withheld)
Robert L. Simpson (6,509,941 votes for; 79,395
withheld)
Gerald R. Sprong (6,516,683 votes for; 72,653
withheld)
c. The appointment of Arthur Andersen LLP as independent
auditors for 1999 was approved. (6,505,210 votes for;
39,318 against; and 44,808 witheld)
d. A special meeting of the common stockholders was held
June 16, 1999 to vote on the Agreement and Plan of Merger
between UtiliCorp United Inc. and St. Joseph Light & Power
Company. The merger was approved. (5,604,701 votes for;
175,142 against; and 42,248 withheld.)
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 June 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: August 9, 1999 L. J. STOLL
Vice President-Finance, Treasurer
and Assistant Secretary
(Duly Authorized Officer)
Page 14 of 14
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