<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 March 31, 2000
/ / 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 8,267,548 shares
(Class) (Outstanding at April 28, 2000)
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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.................9
Part II. Other Information
Item 1. Legal Proceedings..................................11
Item 2. Changes in the Rights of the Company's Security
Holders............................................11
Item 3. Default Upon Senior Securities.....................11
Item 4. Submission of Matters to a Vote of Security
Holders............................................11
Item 5. Other Information..................................11
Item 6. Exhibits and Reports on Forms 8-K..................11
Signature.....................................................12
Page 2 of 12
<PAGE>
<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
2000 1999
<S> <C> <C>
OPERATING REVENUES:
Electric utility $ 19,645,109 $ 19,645,347
Other utility 3,656,741 3,673,055
Manufacturing 5,290,981 5,367,171
28,592,831 28,685,573
OPERATING EXPENSES:
Production fuel 4,770,302 4,808,693
Purchased power 3,060,338 2,543,347
Gas purchased for resale 1,050,137 1,099,457
Manufacturing cost of goods sold 4,357,860 4,492,799
Other operations 4,641,646 5,586,570
Merger-related expenses 124,058 1,117,250
Maintenance 2,214,714 1,692,242
Depreciation 2,995,849 2,986,489
Taxes other than income taxes 1,764,659 1,770,784
24,979,563 26,097,631
OPERATING INCOME 3,613,268 2,587,942
INTEREST CHARGES (Net) 1,903,861 1,717,193
OTHER INCOME (Net) 320,927 172,531
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 2,030,334 1,043,280
INCOME TAXES 456,883 626,144
INCOME BEFORE MINORITY INTEREST 1,573,451 417,136
MINORITY INTEREST IN INCOME OF 227,185 3,299
SUBSIDIARY
NET INCOME $ 1,346,266 $ 413,837
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 8,267,548 8,158,109
BASIC AND DILUTED EARNINGS PER AVERAGE
COMMON SHARE $0.16 $0.05
DIVIDENDS PAID PER COMMON SHARE $0.25 $0.25
</TABLE>
See Notes to Consolidated Financial Statements.
Page 3 of 12
<PAGE>
<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED BALANCE SHEETS
March 31,
2000 December 31,
(Unaudited) 1999
A S S E T S
<S> <C> <C>
PROPERTY, PLANT AND EQUIPMENT:
Electric utility plant $ 335,692,595 $ 333,512,749
Other 21,172,115 20,912,132
356,864,710 354,424,881
Less - Reserves for depreciation (181,097,133) (178,056,693)
175,767,577 176,368,188
Construction work in progress 5,970,461 5,660,576
181,738,038 182,028,764
OTHER INVESTMENTS 4,545,561 6,741,478
CURRENT ASSETS:
Cash and cash equivalents 1,149,533 353,774
Receivables, net of reserves 8,598,503 10,013,747
Accrued utility revenue 2,971,195 3,305,683
Manufacturing inventories 2,949,391 3,187,268
Fuel 3,675,155 4,641,063
Materials and supplies 5,664,920 5,625,927
Prepayments and other 2,230,371 3,100,615
27,239,068 30,228,077
DEFERRED CHARGES:
Debt expense 1,219,674 1,248,767
Lease payments receivable 3,011,290 3,042,155
Prepaid pension expense 21,599,258 20,001,265
Regulatory assets 16,133,098 16,445,760
Other 1,674,437 1,589,778
43,637,757 42,327,725
$ 257,160,424 $ 261,326,044
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 $ 93,400,310 $ 96,187,818
Long-term debt 68,503,008 68,597,536
161,903,318 164,785,354
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARY 1,539,700 1,312,515
CURRENT LIABILITIES:
Outstanding checks in excess of
cash balances 300,937 3,610,873
Current maturities of long-term
obligations 5,255,845 5,685,297
Accounts payable 8,508,529 9,395,499
Notes payable 18,616,000 17,762,000
Accrued income and general taxes 1,145,195 397,920
Accrued interest 599,881 1,982,960
Accrued vacation 1,403,696 1,246,619
Dividends declared 2,066,887 --
Other 655,765 686,457
38,552,735 40,767,625
NON-CURRENT LIABILITIES AND DEFERRED
CREDITS:
Capital lease obligations 2,643,141 2,696,951
Deferred income taxes 33,163,510 32,610,148
Investment tax credit 3,175,300 3,279,211
Accrued claims and benefits 1,851,282 1,586,124
Deferred revenues 1,992,530 2,021,468
Regulatory liabilities 8,811,770 8,811,770
Other 3,527,138 3,454,878
55,164,671 54,460,550
$ 257,160,424 $ 261,326,044
</TABLE>
See Notes to Consolidated Financial Statements.
Page 4 of 12
<PAGE>
<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
March 31,
2000 December 31,
(Unaudited) 1999
<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 68,588,248 71,375,756
Other paid-in capital 2,879,114 2,879,114
Less--treasury stock, at cost,
985,200 shares (11,883,151) (11,883,151)
93,400,310 96,187,818
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
Unsecured 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 5,658,853 6,182,833
Less current maturities (5,255,845) (5,685,297)
68,503,008 68,597,536
Total capitalization $ 161,903,318 $ 164,785,354
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(Unaudited)
Three Months Ended
March 31
2000 1999
<S> <C> <C>
Balance at beginning of $ $
period 71,375,756 73,450,443
Net income 1,346,266 413,837
72,722,022 73,864,280
Less-dividends on common
stock (4,133,774) (4,079,919)
Balance at end of period $ 68,588,248 $ 69,784,361
</TABLE>
See Notes to Consolidated Financial Statements.
Page 5 of 12
<PAGE>
<TABLE>
<CAPTION>
ST. JOSEPH LIGHT & POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,346,266 $ 413,837
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 3,209,302 3,123,474
Pension expense (1,238,893) (585,899)
Deferred taxes and investment tax
credit 449,451 (155,175)
Allowance for equity funds used during
construction -- (44,386)
Net changes in working capital items
not considered elsewhere:
Accounts receivable and accrued
utility revenue 1,749,732 (125,493)
Inventories 1,164,792 (543,613)
Accounts payable and outstanding
checks (4,196,906) (3,527,558)
Accrued income and general taxes 747,275 1,322,377
Other, net (386,448) 426,957
Net change in regulatory assets and
liabilities 312,662 117,714
Net changes in other assets & liabilities 71,336 (1,283,670)
Net cash provided by (used in)
operating activities 3,228,569 (861,435)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to plant (2,838,050) (2,007,620)
Allowance for borrowed funds used
during construction 35,931 32,666
Investments 2,195,917 (169,803)
Other (35,931) 11,719
Net cash used in investing activities (642,133) (2,133,038)
CASH FLOWS FROM FINANCING ACTIVITIES:
Lines of credit increase 854,000 5,195,000
Principal payments under capital lease
obligations (53,810) (49,967)
Long-term debt retired (523,980) (779,800)
Long-term debt issued -- 369,739
Common stock issued -- 432,457
Dividends paid (2,066,887) (2,037,094)
Net cash (used in) provided by
financing activities (1,790,677) 3,130,335
NET INCREASE IN CASH AND
CASH EQUIVALENTS 795,759 135,862
CASH AND CASH EQUIVALENTS BEGINNING
OF PERIOD 353,774 371,768
CASH AND CASH EQUIVALENTS END OF
PERIOD $ 1,149,533 $ 507,630
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 3,293,779 $ 2,386,400
Income taxes, net of refunds $ -- $ 300,000
</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 of 12
<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 1999 Annual Report
to Shareholders incorporated by reference in the Company's 1999
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, 2000 are not
necessarily indicative of the results for the entire year 2000.
NEW ACCOUNTING PRONOUNCEMENT: Statement of Financial Accounting
Standards (SFAS) 133, " Accounting for Derivative Instruments and
Hedging Activities," as amended, is effective for fiscal years
beginning after June 15, 2000.
The Company is continuing to study the impacts of adopting
SFAS 133 on its financial statements and has not determined the
timing of its adoption. For further discussion refer to Note 1
in Notes to Consolidated Financial Statements included in the
Company's 1999 Annual Report to Shareholders incorporated by
reference in the Company's 1999 Annual Report on Form 10-K.
Page 7 of 12
<PAGE>
(2) EARNINGS PER SHARE
Basic and diluted earnings per average common share were
calculated by dividing net income by the following:
Three Months
Ended March 31
2000 1999
Denominator for basic EPS:
Weighted average number of shares
outstanding during the year 8,267,548 8,158,109
Effect of dilutive securities:
Contingently issuable shares pursuant
to long-term incentive plan 18,316 22,221
Directors' stock options 17,155 11,137
Denominator for diluted EPS 8,303,019 8,191,467
3) SEGMENTS OF BUSINESS
The following table sets forth certain information regarding
the Company's segments of business:
Electric
Utility Manufacturing All Other Totals
Quarter ended March 31,2000:
Revenues from external
customers $19,645,109 $5,290,981 $3,656,741 $28,592,831
Segment profit (loss) $ 2,421,722 $ 212,079 $ 437,533 $ 3,071,334
Non-manufacturing interest
expense (net) (1,719,559)
Other income (10,272)
Income taxes on other
income 4,763
Consolidated net income $1,346,266
Quarter ended March 31,1999:
Revenues from external
customers $19,645,347 $5,367,171 $3,673,055 $28,685,573
Segment profit (loss) $1,676,791 $ (20,945) $ 243,227 $ 1,899,073
Non-manufacturing interest
expense (net) (1,549,582)
Other income 107,510
Income taxes on other
income (43,164)
Consolidated net income $ 413,837
Page 8 of 12
<PAGE>
(4) PROPOSED MERGER
On March 4, 1999, the Company and UtiliCorp United Inc.
entered into an Agreement and Plan of Merger to form a stategic
business combination. Under terms of the agreement, each share of
common stock of the Company will be valued at $23.00 per share of
UtiliCorp United Inc. common stock. The Agreement was approved by
a vote of the Company's shareholders at a special meeting in
1999, and by the Public Utility Commissions of Colorado, West
Virginia, Iowa and Minnesota. The transaction is subject to
several additional closing conditions, including approval by the
Federal Energy Regulatory Commission, the Department of Justice,
the Federal Communications Commission and the Missouri Public
Service Commission (PSC). The PSC has scheduled hearings in July
2000. Management expects the merger to be completed in the fall
of 2000. Additional merger-related expenses are expected to be
incurred in the remainder of 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 other than regular
quarterly cash dividends.
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
1999 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 MARCH 31, 2000 AND 1999
Electric operating revenues remained stable for the period
with increased sales for resale offsetting slightly lower retail
revenue. Retail revenues were down 1% despite a 1.5% increase in
sales. Increased commercial and industrial sales more than
offset reduced residential sales which were lower due to milder
than normal winter temperatures. Although retail sales
increased, the change in sales mix and the effect of a $2.5
million annual rate reduction, that was effective October 31,
1999, resulted in a slight decline in electric revenue.
Increased availability of power in the area resulted in
additional sales for resale during the period.
Total energy costs (production fuel and purchased power)
increased 6.5% for the period reflecting increased system
requirements, replacement energy required by a scheduled outage
at the Iatan generating station, and increased per unit costs for
purchased power.
Other operations decreased primarily due to lower pension
expenses resulting from an accounting change ordered by the
Missouri Public Service Commission in the October 1999 rate order
and to better than expected investment returns.
The merger-related expenses are related to the proposed
merger with UtiliCorp Unied Inc. See Note 4, Propsed Merger, in
the Notes to Consolidated Financial Statements. The majority of
merger-related expenses is not deductible for income tax
purposes.
The increase in maintenance expenses reflect the scheduled
overhaul at the Iatan station. The outage which began March 10,
is expected to be completed in early May.
Other income was higher primarily due to a favorable
settlement of Percy Kent's medical claims.
Page 9 of 12
<PAGE>
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.
Negative cash flow from operating activities in the prior year
was primarily due to merger-related expenses and increased energy
costs. At March 31, 2000, the Company had $1.1 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, 2000, the Company had available lines
of credit of $3 million. In addition, Percy Kent's secured credit
agreement had an available balance of $1.9 million.
Capital expenditures, excluding allowance for funds used
during construction and including non-utility investments, are
currently projected to be $8.8 million for the remainder of 2000.
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 11 of 12
<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
Page 11 of 12
<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: May 12, 2000 L. J. STOLL
Vice President-Finance, Treasurer
and Assistant Secretary
(Duly Authorized Officer)
Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 174647643
<OTHER-PROPERTY-AND-INVEST> 11635956
<TOTAL-CURRENT-ASSETS> 27239068
<TOTAL-DEFERRED-CHARGES> 43637757
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 257160424
<COMMON> 21932948
<CAPITAL-SURPLUS-PAID-IN> 2879114
<RETAINED-EARNINGS> 68588248
<TOTAL-COMMON-STOCKHOLDERS-EQ> 93400310
0
0
<LONG-TERM-DEBT-NET> 68503008
<SHORT-TERM-NOTES> 18616000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 5255845
0
<CAPITAL-LEASE-OBLIGATIONS> 2643141
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 68742120
<TOT-CAPITALIZATION-AND-LIAB> 257160424
<GROSS-OPERATING-REVENUE> 28592831
<INCOME-TAX-EXPENSE> 473308
<OTHER-OPERATING-EXPENSES> 24979563
<TOTAL-OPERATING-EXPENSES> 25452871
<OPERATING-INCOME-LOSS> 3139960
<OTHER-INCOME-NET> 110167
<INCOME-BEFORE-INTEREST-EXPEN> 3250127
<TOTAL-INTEREST-EXPENSE> 1903861
<NET-INCOME> 1346266
0
<EARNINGS-AVAILABLE-FOR-COMM> 1346266
<COMMON-STOCK-DIVIDENDS> 4133774
<TOTAL-INTEREST-ON-BONDS> 5646420
<CASH-FLOW-OPERATIONS> 3228569
<EPS-BASIC> .16
<EPS-DILUTED> .16
</TABLE>
