______________________________________________________________________________
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification No.
- ----------- ----------------------------------- ------------------
1-11337 WPS RESOURCES CORPORATION 39-1775292
(A Wisconsin Corporation)
700 North Adams Street
P. O. Box 19001
Green Bay, WI 54307-9001
920-433-1466
1-3016 WISCONSIN PUBLIC SERVICE CORPORATION 39-0715160
(A Wisconsin Corporation)
700 North Adams Street
P. O. Box 19001
Green Bay, WI 54307-9001
920-433-1466
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 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.
WPS Resources Corporation Yes [x] No [ ]
Wisconsin Public Service Corporation Yes [x] No [ ]
Indicate the number of shares outstanding of each of the issuers' classes of
common stock, as of the latest practicable date:
WPS RESOURCES CORPORATION Common stock, $1 par value,
23,896,962 shares outstanding at
November 7, 1997
WISCONSIN PUBLIC SERVICE CORPORATION Common stock, $4 par value,
23,896,962 shares outstanding at
November 7, 1997
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
WPS RESOURCES CORPORATION
AND
WISCONSIN PUBLIC SERVICE CORPORATION
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997
CONTENTS
Page
INTRODUCTION 4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
WPS RESOURCES CORPORATION
Consolidated Statements of Income and
Retained Earnings 5
Consolidated Balance Sheets 6
Consolidated Statements of Capitalization 7
Consolidated Statements of Cash Flows 8
WISCONSIN PUBLIC SERVICE CORPORATION
Consolidated Statements of Income 9
Consolidated Balance Sheets 10
Consolidated Statements of Capitalization 11
Consolidated Statements of Cash Flows 12
Consolidated Statements of Retained Earnings 13
CONDENSED NOTES TO FINANCIAL STATEMENTS OF
WPS Resources Corporation and
Wisconsin Public Service Corporation 14 - 15
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations for
WPS Resources Corporation and
Wisconsin Public Service Corporation 16 - 25
PART II. OTHER INFORMATION
Item 5. Other Information 26 - 27
Item 6. Exhibits and Reports on Form 8-K 27
Signatures 28 - 29
-2-
<PAGE>
EXHIBIT INDEX 30
Exhibit 11 Statement Regarding Computation of Per Share
Earnings
WPS Resources Corporation
Exhibit 27 Financial Data Schedule
WPS Resources Corporation
Wisconsin Public Service Corporation
-3-
<PAGE>
<PAGE>
INTRODUCTION
The unaudited interim financial statements presented herein include
the consolidated statements of WPS Resources Corporation and
Subsidiaries ("Company") as well as separate consolidated financial
statements for Wisconsin Public Service Corporation ("WPSC"). The
unaudited statements have been prepared by the Company and WPSC,
respectively, 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. The Company and WPSC
believe, however, that the disclosures are adequate to make the
information presented not misleading. The Company's and WPSC's
consolidated financial statements should be read in conjunction with
the financial statements and notes thereto incorporated by reference
in the respective Annual Reports on Form 10-K of the Company and WPSC
for the year ended December 31, 1996.
In the opinion of the Company and WPSC, their respective interim
financial statements filed as part of this Form 10-Q reflect all
adjustments necessary to present fairly the results for the respective
periods. Due to the influence of weather and other factors which are
characteristic of WPSC's utility operations, financial results for the
periods ended September 30, 1997 and 1996 are not necessarily
indicative of trends for any 12-month period.
-4-
<PAGE>
<TABLE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
WPS RESOURCES CORPORATION
<CAPTION>
============================================================================================================================
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS Three Months Ended Nine Months Ended
(Thousands, except per share amounts) September 30 September 30
1997 1996 1997 1996
============================================================================================================================
<S> <C> <C> <C> <C>
Operating revenues
Electric utility $124,408 $129,322 $365,635 $368,814
Gas utility 25,518 25,758 149,424 144,402
Non-regulated energy and other 35,299 23,900 124,539 98,982
- ----------------------------------------------------------------------------------------------------------------------------
Total operating revenues 185,225 178,980 639,598 612,198
============================================================================================================================
Operating expenses
Electric production fuels 28,952 27,498 80,603 78,316
Purchased power 9,588 9,873 38,645 26,205
Gas purchased for resale 17,123 18,186 104,616 100,146
Non-regulated energy cost of sales 33,167 24,720 119,778 99,236
Other operating expenses 33,820 41,784 110,113 121,810
Maintenance 9,703 11,425 32,580 33,198
Depreciation and decommissioning 20,070 16,176 57,713 48,716
Taxes other than income 6,412 6,802 20,271 20,198
- ----------------------------------------------------------------------------------------------------------------------------
Total operating expenses 158,835 156,464 564,319 527,825
============================================================================================================================
Operating income 26,390 22,516 75,279 84,373
- ----------------------------------------------------------------------------------------------------------------------------
Other income
Allowance for equity funds used during construction 34 35 102 105
Other, net 1,531 (177) 8,243 2,701
- ----------------------------------------------------------------------------------------------------------------------------
Total other income 1,565 (142) 8,345 2,806
============================================================================================================================
Income before interest expense 27,955 22,374 83,624 87,179
- ----------------------------------------------------------------------------------------------------------------------------
Interest on long-term debt 5,656 5,346 16,835 16,187
Other interest 844 743 2,434 2,017
Allowance for borrowed funds used during construction (25) (28) (89) (92)
- ----------------------------------------------------------------------------------------------------------------------------
Total interest expense 6,475 6,061 19,180 18,112
============================================================================================================================
Income before income taxes 21,480 16,313 64,444 69,067
Income taxes 7,942 5,150 22,011 22,709
Minority interest (143) - (609) -
Preferred stock dividends of subsidiary 778 778 2,333 2,333
- ----------------------------------------------------------------------------------------------------------------------------
Net income 12,903 10,385 40,709 44,025
============================================================================================================================
Retained earnings at beginning of period 316,898 320,381 311,794 308,965
Cash dividends on common stock 11,590 11,351 34,292 33,575
- ----------------------------------------------------------------------------------------------------------------------------
Retained earnings at end of period $318,211 $319,415 $318,211 $319,415
============================================================================================================================
Average shares of common stock 23,870 23,893 23,875 23,893
Earnings per average share of common stock $0.54 $0.43 $1.71 $1.84
Dividend per share of common stock $0.485 $0.475 $1.435 $1.405
============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-5-
<PAGE>
<TABLE>
WPS RESOURCES CORPORATION
<CAPTION>
======================================================================================================
CONSOLIDATED BALANCE SHEETS September 30 December 31
(Thousands) 1997 1996
======================================================================================================
<S> <C> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------
Utility plant
Electric $1,501,349 $1,474,104
Gas 250,834 240,791
- ------------------------------------------------------------------------------------------------------
Total 1,752,183 1,714,895
Less - Accumulated depreciation and decommissioning 1,014,633 952,296
- ------------------------------------------------------------------------------------------------------
Total 737,550 762,599
Nuclear decommissioning trusts 126,116 100,570
Construction in progress 8,317 10,301
Nuclear fuel, less accumulated amortization 19,274 19,381
- ------------------------------------------------------------------------------------------------------
Net utility plant 891,257 892,851
======================================================================================================
Current assets
Cash and equivalents 3,810 5,978
Customer and other receivables, net of reserves 68,045 106,967
Accrued utility revenues 19,004 35,386
Fossil fuel, at average cost 9,887 8,224
Gas in storage, at average cost 22,512 19,987
Materials and supplies, at average cost 19,309 19,944
Prepayments and other 15,261 22,658
- ------------------------------------------------------------------------------------------------------
Total current assets 157,828 219,144
======================================================================================================
Regulatory assets 81,882 96,920
Net non-utility and non-regulated plant 19,027 19,738
Investments and other assets 115,034 102,011
======================================================================================================
Total $1,265,028 $1,330,664
======================================================================================================
CAPITALIZATION AND LIABILITIES
- ------------------------------------------------------------------------------------------------------
Capitalization
Common stock equity $ 474,964 $ 467,524
Preferred stock of subsidiary
with no mandatory redemption 51,200 51,200
Long-term debt 305,442 305,788
- ------------------------------------------------------------------------------------------------------
Total capitalization 831,606 824,512
======================================================================================================
Current liabilities
Notes payable 10,000 26,600
Commercial paper 19,230 31,350
Accounts payable 61,323 96,531
Accrued taxes 4,180 1,350
Accrued interest 5,238 8,134
Other 7,163 12,771
- ------------------------------------------------------------------------------------------------------
Total current liabilities 107,134 176,736
======================================================================================================
Long-term liabilities and deferred credits
Accumulated deferred income taxes 125,873 130,208
Accumulated deferred investment credits 27,343 28,669
Regulatory liabilities 47,664 48,870
Environmental remediation liabilities 40,286 41,697
Other long-term liabilities 85,865 80,173
- ------------------------------------------------------------------------------------------------------
Total long-term liabilities and deferred credits 327,031 329,617
======================================================================================================
Minority interest (743) (201)
======================================================================================================
Total $1,265,028 $1,330,664
======================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-6-
<PAGE>
<TABLE>
WPS RESOURCES CORPORATION
<CAPTION>
=======================================================================================================
CONSOLIDATED STATEMENTS OF CAPITALIZATION September 30 December 31
(Thousands, except share amounts) 1997 1996
=======================================================================================================
<S> <C> <C>
Common stock equity
Common stock, $1 par value, 100,000,000 shares authorized;
and 23,896,962 shares outstanding $ 23,897 $ 23,897
Premium on capital stock 145,021 145,021
Retained earnings 318,211 311,794
Shares in deferred compensation trust, 29,756 and 14,223 shares
at average cost of $29.19 and $31.16 per share at
September 30, 1997 and December 31, 1996, respectively. (869) (443)
ESOP loan guarantees (11,296) (12,745)
- -------------------------------------------------------------------------------------------------------
Total common stock equity 474,964 467,524
=======================================================================================================
Preferred stock - Wisconsin Public Service Corporation
Cumulative, $100 par value, 1,000,000 shares authorized;
with no mandatory redemption
Series Shares Outstanding
------ ------------------
5.00% 132,000 13,200 13,200
5.04% 30,000 3,000 3,000
5.08% 50,000 5,000 5,000
6.76% 150,000 15,000 15,000
6.88% 150,000 15,000 15,000
- -------------------------------------------------------------------------------------------------------
Total preferred stock 51,200 51,200
=======================================================================================================
Long-term debt
First mortgage bonds - Wisconsin Public Service Corporation
Series Year Due
------ --------
5-1/4% 1998 50,000 50,000
7.30% 2002 50,000 50,000
6.80% 2003 50,000 50,000
6-1/8% 2005 9,075 9,075
6.90% 2013 22,000 22,000
8.80% 2021 53,100 53,100
7-1/8% 2023 50,000 50,000
- -------------------------------------------------------------------------------------------------------
Total 284,175 284,175
Unamortized discount and premium on bonds, net (912) (978)
- -------------------------------------------------------------------------------------------------------
Total first mortgage bonds 283,263 283,197
- -------------------------------------------------------------------------------------------------------
ESOP loan guarantees 11,296 12,745
Notes payable to bank, secured by non-regulated plant 10,644 9,581
Other long-term debt 239 265
- -------------------------------------------------------------------------------------------------------
Total long-term debt 305,442 305,788
=======================================================================================================
Total capitalization $831,606 $824,512
=======================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-7-
<PAGE>
<TABLE>
WPS RESOURCES CORPORATION
<CAPTION>
============================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended
(Thousands) September 30
1997 1996
============================================================================================
<S> <C> <C>
Cash flows from operating activities
Net income $ 40,709 $ 44,025
Adjustments to reconcile net income to net cash from
operating activities
Depreciation and decommissioning 57,713 48,716
Amortization of nuclear fuel and other 9,017 22,905
Deferred income taxes (6,787) (6,144)
Investment tax credit restored (1,326) (1,333)
Allowance for equity funds used during construction (102) (105)
Pension income (8,790) (9,321)
Post-retirement funding 3,723 5,363
Deferred demand-side management expenditures (5) (5,197)
Other, net 9,679 7,571
Changes in
Customer and other receivables 38,922 11,928
Accrued utility revenues 16,382 18,419
Fossil fuel inventory (1,663) (2,366)
Gas in storage (2,525) (17,602)
Accounts payable (35,208) (12,217)
Miscellaneous current and accrued liabilities (5,416) (6,425)
Accrued taxes 2,830 238
Gas refunds (240) (5,677)
- --------------------------------------------------------------------------------------------
Net cash from operating activities 116,913 92,778
============================================================================================
Cash flows from (used for) investing activities
Construction of utility plant and nuclear fuel expenditures (45,844) (62,833)
Purchase of other property and equipment (2,061) (2,024)
Decommissioning funding (11,749) (6,734)
Purchase of investments and acquisitions 560 (625)
Other 2,444 914
- --------------------------------------------------------------------------------------------
Net cash from (used for) investing activities (56,650) (71,302)
============================================================================================
Cash flows from (used for) financing activities
Redemption of first mortgage bonds - (6,900)
Issuance of notes payable 118,787 150,627
Redemption of notes payable (134,324) (143,411)
Issuance of other long-term debt 486 -
Redemption of other long-term debt (542) -
Issuance of commercial paper 496,568 81,500
Redemption of commercial paper (508,688) (72,000)
Cash dividends on common stock (34,292) (33,575)
Purchase of deferred compensation stock (426) (322)
- --------------------------------------------------------------------------------------------
Net cash from (used for) financing activities (62,431) (24,081)
============================================================================================
Net increase (decrease) in cash and equivalents (2,168) (2,605)
Cash and equivalents at beginning of period 5,978 6,533
============================================================================================
Cash and equivalents at end of period $ 3,810 $ 3,928
============================================================================================
Cash paid during period for
Interest, less amount capitalized $ 19,862 $ 18,816
Income taxes 26,770 27,424
Preferred stock dividends of subsidiary 2,333 2,333
============================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-8-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
============================================================================================================================
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Nine Months Ended
(Thousands) September 30 September 30
1997 1996 1997 1996
============================================================================================================================
<S> <C> <C> <C> <C>
Operating revenues
Electric $124,408 $129,322 $365,635 $368,814
Gas 25,518 25,758 149,424 144,402
- ----------------------------------------------------------------------------------------------------------------------------
Total operating revenues 149,926 155,080 515,059 513,216
============================================================================================================================
Operating expenses
Electric production fuels 28,952 27,498 80,603 78,316
Purchased power 9,588 9,873 38,645 26,205
Gas purchased for resale 16,732 18,186 104,141 100,146
Other operating expenses 30,466 38,699 98,770 115,841
Maintenance 9,703 11,425 32,580 33,198
Depreciation and decommissioning 19,695 15,786 56,510 47,798
Federal income taxes 6,675 6,424 18,879 21,326
Investment tax credit restored (442) (444) (1,326) (1,333)
State income taxes 2,149 2,003 6,062 6,679
Gross receipts tax and other 6,394 6,802 20,219 20,198
- ----------------------------------------------------------------------------------------------------------------------------
Total operating expenses 129,912 136,252 455,083 448,374
============================================================================================================================
Operating income 20,014 18,828 59,976 64,842
- ----------------------------------------------------------------------------------------------------------------------------
Other income and (deductions)
Allowance for equity funds used during construction 34 35 102 105
Other, net 1,690 1,199 8,474 4,225
Income taxes 141 (190) (1,374) (474)
- ----------------------------------------------------------------------------------------------------------------------------
Total other income and (deductions) 1,865 1,044 7,202 3,856
============================================================================================================================
Income before interest expense 21,879 19,872 67,178 68,698
- ----------------------------------------------------------------------------------------------------------------------------
Interest expense
Interest on long-term debt 5,631 5,637 16,038 16,876
Other interest 791 624 2,999 1,840
Allowance for borrowed funds used during construction (25) (28) (89) (92)
- ----------------------------------------------------------------------------------------------------------------------------
Total interest expense 6,397 6,233 18,948 18,624
============================================================================================================================
Net income 15,482 13,639 48,230 50,074
Preferred stock dividend requirements 778 778 2,333 2,333
- ----------------------------------------------------------------------------------------------------------------------------
Earnings on common stock $ 14,704 $ 12,861 $ 45,897 $ 47,741
============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-9-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
==================================================================================================
CONSOLIDATED BALANCE SHEETS September 30 December 31
(Thousands) 1997 1996
==================================================================================================
<S> <C> <C>
ASSETS
- --------------------------------------------------------------------------------------------------
Utility plant
Electric $1,501,349 $1,474,104
Gas 250,834 240,791
- --------------------------------------------------------------------------------------------------
Total 1,752,183 1,714,895
Less - Accumulated depreciation and decommissioning 1,014,633 952,296
- --------------------------------------------------------------------------------------------------
Total 737,550 762,599
Nuclear decommissioning trusts 126,116 100,570
Construction in progress 8,317 10,301
Nuclear fuel, less accumulated amortization 19,274 19,381
- --------------------------------------------------------------------------------------------------
Net utility plant 891,257 892,851
==================================================================================================
Current assets
Cash and equivalents 2,316 4,165
Customer and other receivables, net of reserves 46,448 66,234
Accrued utility revenues 19,004 35,326
Fossil fuel, at average cost 9,484 8,224
Gas in storage, at average cost 21,525 16,440
Materials and supplies, at average cost 19,309 19,796
Prepayments and other 15,090 22,189
- --------------------------------------------------------------------------------------------------
Total current assets 133,176 172,374
==================================================================================================
Regulatory assets 81,882 96,920
Net non-utility plant 3,079 4,191
Investments and other assets 106,125 92,612
==================================================================================================
Total $1,215,519 $1,258,948
==================================================================================================
CAPITALIZATION AND LIABILITIES
- --------------------------------------------------------------------------------------------------
Capitalization
Common stock equity $ 451,478 $ 448,425
Preferred stock with no mandatory redemption 51,200 51,200
Long-term debt to parent 14,384 14,612
Long-term debt 294,798 296,207
- --------------------------------------------------------------------------------------------------
Total capitalization 811,860 810,444
==================================================================================================
Current liabilities
Note payable 10,000 10,000
Commercial paper 13,000 29,000
Accounts payable 42,416 62,500
Accrued taxes 4,180 1,350
Accrued interest 5,238 8,134
Other 6,218 12,324
- --------------------------------------------------------------------------------------------------
Total current liabilities 81,052 123,308
==================================================================================================
Long-term liabilities and deferred credits
Accumulated deferred income taxes 127,649 131,549
Accumulated deferred investment tax credits 27,343 28,669
Regulatory liabilities 47,664 48,870
Environmental remediation liabilities 40,286 41,697
Other long-term liabilities 79,665 74,411
- --------------------------------------------------------------------------------------------------
Total long-term liabilities and deferred credits 322,607 325,196
==================================================================================================
Total $1,215,519 $1,258,948
==================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-10-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
========================================================================================================
CONSOLIDATED STATEMENTS OF CAPITALIZATION September 30 December 31
(Thousands, except share amounts) 1997 1996
========================================================================================================
<S> <C> <C>
Common stock equity
Common stock $ 95,588 $ 95,588
Premium on capital stock 73,842 73,842
Retained earnings 293,344 291,740
ESOP loan guarantees (11,296) (12,745)
- --------------------------------------------------------------------------------------------------------
Total common stock equity 451,478 448,425
========================================================================================================
Preferred stock
Cumulative, $100 par value, 1,000,000 shares authorized;
with no mandatory redemption
Series Shares Outstanding
------ ------------------
5.00% 132,000 13,200 13,200
5.04% 30,000 3,000 3,000
5.08% 50,000 5,000 5,000
6.76% 150,000 15,000 15,000
6.88% 150,000 15,000 15,000
- --------------------------------------------------------------------------------------------------------
Total preferred stock 51,200 51,200
========================================================================================================
Long-term debt to parent
Series Year Due
------ --------
8.76% 2015 5,940 6,012
7.35% 2016 8,444 8,600
- --------------------------------------------------------------------------------------------------------
Total long-term debt to parent 14,384 14,612
========================================================================================================
Long-term debt
First mortgage bonds
Series Year Due
------ --------
5-1/4% 1998 50,000 50,000
7.30% 2002 50,000 50,000
6.80% 2003 50,000 50,000
6-1/8% 2005 9,075 9,075
6.90% 2013 22,000 22,000
8.80% 2021 53,100 53,100
7-1/8% 2023 50,000 50,000
- --------------------------------------------------------------------------------------------------------
Total 284,175 284,175
Unamortized discount and premium on bonds, net (912) (978)
- --------------------------------------------------------------------------------------------------------
Total first mortgage bonds 283,263 283,197
- --------------------------------------------------------------------------------------------------------
ESOP loan guarantees 11,296 12,745
Other long-term debt 239 265
- --------------------------------------------------------------------------------------------------------
Total long-term debt 294,798 296,207
========================================================================================================
Total capitalization $811,860 $810,444
========================================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-11-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
============================================================================================
CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended
(Thousands) September 30
1997 1996
============================================================================================
<S> <C> <C>
Cash flows from operating activities
Net income $ 48,230 $ 50,074
Adjustments to reconcile net income to net cash from
operating activities
Depreciation and decommissioning 56,510 47,798
Amortization of nuclear fuel and other 8,944 22,254
Deferred income taxes (6,352) (6,120)
Investment tax credit restored (1,326) (1,333)
Allowance for equity funds used during construction (102) (105)
Pension income (8,790) (9,321)
Post-retirement funding 3,723 5,363
Deferred demand-side management expenditures (5) (5,197)
Other, net 8,974 10,038
Changes in
Customer and other receivables 19,786 9,512
Accrued utility revenues 16,322 18,419
Fossil fuel inventory (1,260) (2,366)
Gas in storage (5,085) (12,057)
Accounts payable (20,084) (11,452)
Miscellaneous current and accrued liabilities (5,836) (5,485)
Accrued taxes 2,830 238
Gas refunds (240) (5,677)
- --------------------------------------------------------------------------------------------
Net cash from operating activities 116,239 104,583
============================================================================================
Cash flows from (used for) investing activities
Construction of utility plant and nuclear fuel expenditures (45,843) (62,925)
Decommissioning funding (11,749) (2,024)
Purchase of other property and equipment (95) (6,734)
Other 2,225 681
- --------------------------------------------------------------------------------------------
Net cash from (used for) investing activities (55,462) (71,002)
============================================================================================
Cash flows from (used for) financing activities
Redemption of first mortgage bonds - (6,900)
Proceeds of long-term debt from parent - 8,618
Proceeds from issuance of commercial paper 166,600 81,500
Redemption of commercial paper (182,600) (72,000)
Preferred stock dividends (2,333) (2,333)
Common stock dividends (34,293) (33,575)
Dividend to parent (10,000) (11,000)
- --------------------------------------------------------------------------------------------
Net cash from (used for) financing activities (62,626) (35,690)
============================================================================================
Net increase (decrease) in cash and equivalents (1,849) (2,109)
Cash and equivalents at beginning of period 4,165 4,471
============================================================================================
Cash and equivalents at end of period $ 2,316 $ 2,362
============================================================================================
Cash paid during period for
Interest, less amount capitalized $ 19,536 $ 18,816
Income taxes 32,805 28,745
============================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-12-
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION
<CAPTION>
============================================================================================
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS Nine Months Ended
(Thousands) September 30
1997 1996
============================================================================================
<S> <C> <C>
Balance at beginning of period $291,740 $290,387
Add Net income 48,230 50,074
- --------------------------------------------------------------------------------------------
339,970 340,461
- --------------------------------------------------------------------------------------------
Deduct
Cash dividends declared on preferred stock 2,333 2,333
Dividends declared on common stock 34,293 33,575
Dividend to parent 10,000 11,000
- --------------------------------------------------------------------------------------------
46,626 46,908
- --------------------------------------------------------------------------------------------
Balance at end of period $293,344 $293,553
============================================================================================
</TABLE>
The accompanying notes are an integral part of these statements.
-13-
PAGE
<PAGE>
WPS RESOURCES CORPORATION AND SUBSIDIARIES
WISCONSIN PUBLIC SERVICE CORPORATION
CONDENSED NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
NOTE 1. FINANCIAL INFORMATION
______________________________
The foregoing consolidated financial statements have been prepared by
WPS Resources Corporation ("Company") and Wisconsin Public Service
Corporation ("WPSC"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC") and, in
the opinion of Management, include all adjustments (consisting only of
normal recurring adjustments) necessary for a fair statement of
results for each period shown. 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 SEC rules and regulations. The
Company believes that the disclosures made are adequate to make the
information presented not misleading. It is recommended that these
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's and WPSC's
latest annual reports on Form 10-K.
Because of the seasonal nature of the Company's operations, interim
results are not necessarily indicative of annual results.
NOTE 2. EARNINGS PER SHARE
___________________________
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128,
Earnings Per Share. This statement establishes standards for
computing and presenting earnings per share. The Company will be
adopting this standard at December 31, 1997 and does not expect that
adoption will have an impact on its presentation of earnings per
share.
NOTE 3. COMPREHENSIVE INCOME
_____________________________
In June 1997, the FASB issued SFAS No. 130, Reporting of Comprehensive
Income, which establishes standards for reporting and display of
-14-
<PAGE>
comprehensive income and its components of revenues, expenses, gains,
and losses. The statement is effective for fiscal years beginning
after December 15, 1997 and the Company will be adopting the
requirements for reporting comprehensive income in the first quarter
of 1998.
NOTE 4. SEGMENT DISCLOSURES
____________________________
In June 1997, the FASB issued SFAS No. 131, Disclosures about Segments
of an Enterprise and Related Information. This statement establishes
standards for reporting information about operating segments and is
effective for periods beginning after December 15, 1997. The Company
will be adopting the requirements of this statement at year-end and
has not yet determined the segments which will be disclosed.
NOTE 5. AGREEMENT TO MERGE WITH UPPER PENINSULA ENERGY CORPORATION
___________________________________________________________________
On July 10, 1997, the Company announced a merger agreement with
Upper Peninsula Energy Corporation ("UPEN"). The merger is subject to
(i) approval by the shareholders of UPEN; (ii) approval by the
Federal Energy Regulatory Commission; (iii) the Form S-4 Registration
Statement of the Company being declared effective by the Securities
and Exchange Commission; (iv) the expiration or termination of the
waiting period applicable to the merger under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; (v) receipt by the parties of an
opinion of counsel that the exchange of stock qualifies as a tax-free
transaction; (vi) receipt by the parties of appropriate assurances
that the transaction will be accounted for as a pooling of interests;
and (vii) the satisfaction of various other conditions. The merger is
expected to be completed in 1998. UPEN will merge with and into the
Company and the Upper Peninsula Power Company, UPEN's utility
subsidiary, will become a wholly-owned subsidiary of the Company.
-15-
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
WPS Resources Corporation ("Company") is a holding company.
Approximately 96% and 81% of the Company's assets and revenues,
respectively, are derived from Wisconsin Public Service Corporation
("WPSC"), an electric and gas utility.
Overview of Third Quarter of 1997 Compared to Third Quarter of 1996
Earnings per share at the Company were $.54 in 1997 compared to $.43
in 1996. Net income at the Company was $12.9 million for the third
quarter 1997 compared to $10.4 million for the same period in 1996.
Net income at WPSC was $14.7 million in 1997 compared to $12.9 million
in 1996. Non-regulated losses were $1.8 million and $2.5 million for
the third quarter 1997 and 1996, respectively. The primary reasons
for the increase in earnings at the Company were decreased operating
and maintenance expenses at WPSC, increased non-regulated energy
margins, increased other income, and an increased gas utility margin.
Partially offsetting these increases to earnings were a decrease in
the electric utility margin and an increase in depreciation and
decommissioning expense.
Electric Utility Operations
Electric utility margins were lower than 1996 by $6.1 million, or
6.6%, as a result of an 8.1% electric rate reduction authorized by the
Public Service Commission of Wisconsin ("PSCW") on February 21, 1997.
Third Quarter
---------------------------
Electric Margins (000's) 1997 1996
- ------------------------ ---- ----
Revenues $124,408 $129,322
Fuel and purchased power 38,540 37,371
------- -------
Margins $ 85,868 91,951
======= =======
Sales in kilowatt-hours (000) 2,969,193 2,895,337
-16-
<PAGE>
Although overall electric kilowatt-hour ("Kwh") sales increased by
2.6%, electric revenues decreased $4.9 million, or 3.8%, during the
third quarter of 1997 due primarily to the 8.1% rate decrease.
Commercial and industrial Kwh sales increased 4.7%, while cooling
degree days decreased 19.8%.
Electric fuels and purchased power increased $1.2 million, or 3.1%, in
the third quarter of 1997. This increase was comprised of a
$1.5 million increase in fuel expense and a $0.3 million decrease in
purchased power expense. Overall, generation increased 5.4% in 1997
primarily as a result of increased nuclear generation. The Kewaunee
Nuclear Power Plant ("Kewaunee") was down for maintenance in the third
quarter of 1996. WPSC is the operator and 41.2% owner of Kewaunee.
Gas Utility Operations
Gas margins increased $0.8 million, or 10.9%, due primarily to a gas
rate increase in 1997.
Third Quarter
--------------------------
Gas Margins (000's) 1997 1996
- ------------------- ---- ----
Revenues $25,518 $25,758
Purchase costs 17,123 18,186
------ ------
Margin $ 8,395 $ 7,572
====== ======
Sales volume in therms (000) 90,713 87,745
The PSCW allows WPSC to pass changes in the cost of gas on to
customers through a purchased gas adjustment clause ("PGAC").
Gas operating revenues remained relatively stable during the third
quarter of 1997 as compared to the third quarter of 1996. Gas sales
volumes increased 3.4% while gas costs decreased 8.0%. Gas revenues
also reflect implementation of a PSCW rate order authorizing a
$5.7 million, or 2.7%, increase in gas rates.
-17-
<PAGE>
Gas purchased for resale decreased $1.1 million, or 5.8%, in the third
quarter of 1997 as compared to the same period in 1996. This decrease
was due primarily to a $2.8 million refund from the ANR Pipeline
Company in the third quarter of 1997.
Non-Regulated Operations
Non-regulated energy and other operating revenues increased
$11.4 million, or 47.7%. Non-regulated energy revenues primarily
represent the gas and electric sales of WPS Energy Services, Inc.
("ESI"), the Company's energy marketing subsidiary. The increase in
non-regulated energy revenues consisted largely of increased gas sales
at ESI of $10.6 million, or 45.0%, as a result of customer growth. In
addition, ESI had increased revenues of $0.5 million related to
electric sales.
Other operating revenues increased $0.3 million due to increased
project revenues at WPS Power Development, Inc. ("PDI"), a company
organized to participate in the development of electric generation
projects and to provide services to the non-regulated electric power
generation industry.
Non-regulated energy cost of sales increased $8.4 million, or 34.2%,
due primarily to increased gas purchases at ESI.
Non-regulated operations experienced a loss of $1.8 million for the
third quarter of 1997, an impact of approximately $.08 per share. The
emphasis for non-regulated operations in the near term continues to be
solidifying market share and developing the infrastructure necessary
for the long term. ESI experienced an overall loss for the third
quarter of 1997 in line with management's expectations. Management's
plan at ESI calls for continued gas and electric customer growth with
emphasis on products and market segments that will enhance
opportunities for an increased margin, while controlling operating
expenses. While PDI's majority-owned 53 megawatt Stoneman Plant began
commercial operation as a merchant plant in August of 1996, management
does not expect the plant to achieve consistent profitability until
the plant is upgraded to 300 megawatts or larger, as planned, and
certain transmission and regulatory issues are resolved. There are
some legal and regulatory uncertainties in this area. PDI's project
revenues partially offset the impact of costs related to investigation
of possible energy-related investments and a loss for Stoneman
operations, resulting in a small overall operating loss for the third
quarter of 1997 as was anticipated by management.
-18-
<PAGE>
Other Expenses
Other operating expenses at the Company decreased $8.0 million, or
19.1%.
Other operating expenses at WPSC decreased $8.2 million, or 21.3%.
This decrease was due to lower customer service and accounts expenses
of $3.0 million, lower administrative expenses of $2.2 million, and
lower electric operating expenses of $2.1 million. These decreases
were the result of several cost control efforts, lower benefit
expenses, and completion in 1996 of the amortization related to a
deferred coal and rail contract settlement.
Other operating expenses at ESI decreased $0.5 million due to lower
administrative expenses. Other operating expenses at PDI increased
$0.3 million as a result of expansion of the business. Other
operating expenses also increased at the Company.
Maintenance expense decreased $1.7 million, or 15.1%, as a result of
decreased electric transmission and distribution maintenance expenses
and decreased maintenance expense at Kewaunee. Kewaunee was off-line
in the third quarter of 1996.
Depreciation and decommissioning expenses increased $3.9 million, or
24.1%, largely due to the accelerated recovery of investment in
Kewaunee and accelerated funding of Kewaunee decommissioning costs.
Other income increased $1.7 million in the third quarter of 1997
compared to the third quarter of 1996 due to a loss recorded at PDI in
the third quarter of 1996 related to an industrial processing facility
investment.
Overview of Nine Months of 1997 Compared to Nine Months of 1996
Earnings per share at the Company were $1.71 in 1997 compared to $1.84
in 1996. Net income at the Company was $40.7 million for the nine
months ended September 30, 1997, and $44.0 million for the same period
in 1996. Net income at WPSC was $45.9 million in 1997 compared to
$47.7 million in 1996. Non-regulated losses were $5.2 million and
$3.7 million in 1997 and 1996, respectively. The primary reason for
the variance in earnings at the Company was a decrease in the electric
margin at WPSC. The electric margin decrease was primarily a result
of the implementation of a PSCW rate order on February 21, 1997, which
authorized an 8.1% electric rate reduction. In addition, electric
margins decreased due to increased replacement power costs as a result
-19-
<PAGE>
of an extended outage at Kewaunee. A $2.0 million per month surcharge
authorized by the PSCW beginning on February 21, 1997, partially
offset the increases to replacement power costs. Kewaunee returned to
service in mid-June, 1997. Also contributing to the decreased
earnings was an increase in depreciation and decommissioning expense.
Partially offsetting these decreases to earnings were lower operating
expenses at WPSC, increased non-regulated gas margins, and increased
other income.
Electric Utility Operations
Electric margins decreased $17.9 million, or 6.8%, due to increased
replacement power costs as a result of an extended outage at Kewaunee
and implementation of a PSCW rate order which reduced electric rates.
A surcharge authorized by the PSCW partially offset increases to
replacement power costs in the latter part of the first quarter and in
the second quarter of 1997.
Nine Months
--------------------------
Electric Margins (000's) 1997 1996
- ------------------------ ---- ----
Revenues $365,635 $368,814
Fuel and purchased power 119,248 104,521
------- -------
Margins $246,387 $264,293
======= =======
Sales in kilowatt-hours (000) 8,447,435 8,306,985
Electric revenues decreased $3.2 million, or .9%, during the first
nine months of 1997 compared to the first nine months of 1996.
Cooling degree days were 29.5% lower in the first nine months of 1997
than the same period in 1996. Commercial and industrial sales rose
5.4% while wholesale Kwh sales decreased 7.3% because WPSC did not
have the generation available to make short-term opportunity sales to
wholesale customers during the first six months of 1997.
Electric fuel and purchased power increased $14.7 million, or 14.1%,
in the first nine months of 1997 compared to the first nine months of
1996. This increase was primarily the result of increased purchased
power costs of $12.4 million, or 47.5%, reflecting a 30.5% increase in
Kwh purchases. Purchased power requirements increased due to
-20-
<PAGE>
decreased production at Kewaunee as a result of an extended outage.
Purchased power represented 21.8% of total Kwh sales for the
nine-month period ended September 30, 1997 compared to 17.0% for the
same period in 1996.
Gas Utility Operations
Gas margins remained fairly stable between the first nine months of
1997 and the first nine months of 1996 reflecting the implementation
of a PSCW rate order on February 21, 1997, which authorized a 2.7%
increase in gas revenues, offset by a 2.6% decrease in heating degree
days.
Nine Months
--------------------------
Gas Margins (000's) 1997 1996
- ------------------- ---- ----
Revenues $149,424 $144,402
Purchase costs 104,616 100,146
------- -------
Margin $ 44,808 $ 44,256
======= =======
Sales volume in therms (000) 476,079 469,165
The PSCW allows WPSC to pass changes in the cost of gas on to
customers through a purchased gas adjustment clause.
Gas operating revenues increased $5.0 million, or 3.5%, during the
first nine months of 1997 compared to the same period in 1996. This
increase was due primarily to higher gas costs in the first quarter of
1997. Gas revenues also reflect the PSCW authorized rate increase of
2.7% and a one-time reduction of $.9 million in the first quarter
based on a PSCW directive related to a change in the accounting
treatment for previous customer line extensions.
Gas purchased for resale showed a net increase of $4.5 million, or
4.5%, in the first nine months of 1997 as compared to the same period
in 1996 due primarily to increased gas costs in the first quarter of
1997.
-21-
<PAGE>
Non-Regulated Operations
Non-regulated energy and other operating revenues increased
$25.6 million, or 25.8%. The increase in non-regulated energy
revenues consisted largely of increased gas sales at ESI of
$19.3 million, or 19.7%, as a result of customer growth and higher
market prices for gas. ESI also had increased sales of $4.6 million
related to electric sales. In addition, other operating revenues
increased $1.6 million due to increased consulting activities and
electric sales at PDI.
Non-regulated energy cost of sales increased $20.5 million, or 20.7%,
due primarily to increased gas purchases and purchased power of
$16.8 million and $3.6 million, respectively, at ESI. Gas and
electric margins at ESI increased $2.5 million and $0.9 million,
respectively, in the first nine months of 1997 compared to the same
period in 1996.
Non-regulated operations experienced a loss of $5.2 million for the
nine months ended September 30, 1997, an impact of approximately
$.22 per share. ESI experienced an overall loss for the nine months
ended September 30, 1997, that was slightly larger than the overall
loss for the comparable period in 1996. Although higher margins more
than offset increased other operating expenses, increased interest
costs due to financing of increased customer receivables and gas
storage, coupled with gas trading results which were below
expectations, resulted in a larger loss in 1997. Project revenues at
PDI partially offset the impact of costs related to investigation of
possible energy-related investments and a loss for Stoneman
operations, resulting in a small overall operating loss for the nine
months ended September 30, 1997, as was anticipated by management.
Other Expenses
Other operating expenses at the Company decreased $11.7 million, or
9.6%.
Other operating expenses at WPSC decreased $17.1 million, or 14.7%.
This decrease was due to lower customer service and sales expenses of
$6.8 million, lower administrative expenses of $3.8 million, and lower
generation operating expenses of $4.9 million resulting from
completion in 1996 of the retail amortization related to a deferred
coal and rail contract settlement. The lower customer service and
sales expenses and the lower administrative expenses were the result
of several cost savings initiatives, as well as reduced
-22-
<PAGE>
post-retirement medical, dental, and other benefit expenses. Also
included in the decrease in operating expenses at WPSC were lower gas
operating expenses of $1.2 million which represents gas servicing
activities which were directed to be transferred to non-utility by the
PSCW. These expenses are now included as other income and deductions.
In addition, reflected in the decreased operating expenses for 1997 is
$0.3 million of gain on the sale of emission allowances. This gain
represents sales of emission allowances which had previously been
deferred. The PSCW had approved a two-year amortization period for
this gain beginning on February 21, 1997.
Other operating expenses at ESI increased $1.7 million, or 41.3%, due
to expansion of the business. Other operating expenses at PDI
increased $2.3 million as a result of expansion of the business and
operation of the Stoneman Power Plant. Other operating expenses also
increased $1.4 million at the Company.
Depreciation and decommissioning expenses increased $9.0 million, or
18.5%, largely due to the accelerated recovery of investment in
Kewaunee and accelerated funding of Kewaunee decommissioning costs.
Other income increased $5.5 million, or 205.2%, due primarily to gains
on the sale of non-utility property at WPSC which represented
approximately $.07 per share after income tax effects. Also reflected
in this increase were losses recorded by PDI in the second and third
quarters of 1996 related to an industrial processing facility
investment representing approximately $.05 per share after income tax
effects.
FINANCIAL CONDITION
Internally generated funds exceeded the Company's cash requirements
resulting in the reduction of short-term borrowings during the first
nine months of 1997. Pretax interest coverage was 4.20 times for the
12 months ended September 30, 1997 for WPSC.
WPSC's bond ratings are AA+ (Standard & Poor's and Duff & Phelps) and
Aa2 (Moody's).
Capital requirements for WPSC are principally for construction
expenditures and payments to the nuclear decommissioning trust. These
cash requirements are expected to be met primarily through internal
sources and short-term borrowing. There are no firm agreements in
place that would result in significant capital expenditures for
non-regulated projects.
-23-
<PAGE>
The company may periodically issue additional long-term debt, common
stock, and preferred stock to reduce short-term debt and maintain
desired capitalization ratios. The specific forms, amounts, and
timing have not been determined and will depend on the availability of
projects, market conditions, and other factors.
Effective March 20, 1997, WPSC received authorization from the PSCW to
defer all costs associated with the repair of the Kewaunee steam
generators. The joint owners of Kewaunee will be requesting rate
recovery of these deferred costs in a future rate proceeding. Repairs
are complete and approximately $3.8 million (WPSC's portion) has been
deferred through September 30, 1997.
During this past summer, Governor Tommy Thompson requested reports
from the PSCW, electric utilities, and industrial customers assessing
the electric capacity problems experienced during this past spring and
summer in eastern Wisconsin. The reports provide analyses and
recommendations on how to assure future reliability and make
recommendations to improve the effectiveness of the state's utility
regulatory processes. WPSC participated in the development of the
electric utility report. The Governor is expected to make a
recommendation based on the reports.
On July 1, 1997, the PSCW authorized WPSC to defer all advertising
costs associated with developing a communication plan to educate
customers on the potential energy shortage. WPSC was also authorized
to defer all costs related to returning its fossil fueled plant,
Pulliam Unit 3, to service and all subsequent operating costs for
Pulliam Unit 3 until the next rate filing. The recovery of these
deferred costs will then be considered in a future rate proceeding.
To date, approximately $0.3 million has been deferred.
WPSC filed an electric fuel application proposing a $.00082 per Kwh
increase in electric retail rates with the PSCW on July 3, 1997. WPSC
has since withdrawn this application.
In the third quarter of 1997, WPSC received an additional portion of
the $13.3 million manufactured gas plant remediation insurance
settlement that it anticipates receiving during 1997. Insurance
recoveries are being deferred and will offset future remediation costs
as the PSCW prescribes in future rate proceedings.
A PSCW order granting a Certificate of Public Convenience and
Necessity related to the De Pere Energy Center was issued on
-24-
<PAGE>
October 9, 1997. WPSC has a 25-year commitment to purchase the output
of the facility which is scheduled for operation in 1999 and will
account for the transaction as a capital lease. Any necessary capital
adjustments will be made and appropriate rate relief is expected.
In response to the electric capacity problems recently experienced,
the PSCW is accelerating its review of steam generator replacement at
Kewaunee. A decision is expected from the PSCW in March or April of
1998.
The chair of the PSCW has developed a recommendation to reconfigure
the current 32-step process designed to achieve a restructured
electric utility industry into a 7-step process. The 7-step process
is intended to achieve the same time line for restructuring as the
original process. The PSCW is expected to rule on the proposed
process during the fourth quarter of 1997.
The Company's contract with the International Union of Operating
Engineers Local 310 expired on October 28, 1997. Contract
negotiations continue to address a few unresolved issues.
The Company has completed an assessment of the impact of the year 2000
compliance on its computer systems. A plan has been developed which
will enable systems to be compliant by the year 2000 at an estimated
internal labor and third party cost of approximately $11.6 million.
-25-
<PAGE>
<PAGE>
Part II. OTHER INFORMATION
Item 5. Other Information
De Pere Energy Center
During the third quarter, the Public Service Commission of Wisconsin
("PSCW") announced its decision to issue a Certificate of Public
Convenience and Necessity ("CPCN") authorizing the construction of the
De Pere Energy Center by De Pere Energy LLC (organized by Polsky
Energy Corporation). The PSCW order granting the CPCN was issued
early in October.
Under the terms of Wisconsin Public Service Corporation's ("WPSC")
agreement with De Pere Energy LLC, WPSC has a 25-year commitment to
purchase the output of the facility. The agreement provides that the
179-megawatt facility will initially be operated as a combustion
turbine. The facility will be converted to a 232-megawatt combined
cycle operation at WPSC's direction or after the fifth year of
operation. The contract will be accounted for as a capital lease by
WPSC.
Electric Reliability in Wisconsin
During this past summer, Wisconsin Governor Tommy Thompson requested
reports from the PSCW, electric utilities, and industrial customers
assessing the electric capacity problems experienced during this past
spring and summer in eastern Wisconsin. The reports provided analyses
and recommendations on how to assure future reliability, and make
recommendations to improve the effectiveness of the state's utility
regulatory processes. These reports were delivered to the Governor at
the end of September. WPSC participated in the development of the
electric utility report.
Although the events which came together to create problems this past
spring and summer are not expected to reoccur the same way in the
future, they have highlighted the need to promptly address the
short-term and longer-term actions necessary to assure reliable
electric supply in Wisconsin. WPSC supports changes which would
permit the development of merchant power plants, the development of
cost effective transmission projects to increase the power import
capability from the south and west, and the development of a regional
independent system operator to coordinate the operation of the
-26-
<PAGE>
transmission system in the region. WPSC anticipates that it will
continue to provide reliable electric energy supply.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following documents are filed herewith:
Exhibit 11 Statement Regarding Computation of Per
Share Earnings
WPS Resources Corporation
Exhibit 27 Financial Data Schedule
WPS Resources Corporation
Wisconsin Public Service Corporation
(b) Report on Form 8-K
A current report on Form 8-K dated October 20, 1997
regarding financial results of WPS Resources
Corporation for the quarterly period ended
September 30, 1997
WPS Resources Corporation
-27-
PAGE
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant, WPS Resources Corporation, has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
WPS Resources Corporation
Date: November 7, 1997 /s/ Diane Ford
________________________________
Diane L. Ford
Controller and Chief
Accounting Officer
(Duly Authorized Officer and
Chief Accounting Officer)
-28-
<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant, Wisconsin Public Service Corporation, has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Wisconsin Public Service Corporation
Date: November 7, 1997 /s/ Diane Ford
________________________________
Diane L. Ford
Controller
(Duly Authorized Officer and
Chief Accounting Officer)
-29-
<PAGE>
<PAGE>
WPS RESOURCES CORPORATION AND
WISCONSIN PUBLIC SERVICE CORPORATION
EXHIBIT INDEX TO FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
Exhibit No. Description
___________ ___________
11 Statement Regarding Computation of Per Share Earnings
WPS Resources Corporation
27 Financial Data Schedule
WPS Resources Corporation
Wisconsin Public Service Corporation
-30-
<PAGE>
<TABLE>
EXHIBIT 11
WPS RESOURCES CORPORATION
<CAPTION>
============================================================================================================
INFORMATION WITH RESPECT TO THE COMPUTATION
OF EARNINGS PER SHARE OF COMMON STOCK Three Months Ended Nine Months Ended
(Thousands) September 30 September 30
1997 1996 1997 1996
============================================================================================================
<S> <C> <C> <C> <C>
Shares of common stock at beginning of period 23,872 23,891 23,883 23,897
Shares of common stock purchased for deferred
compensation trust -
Date of deferred Number
compensation trust purchase of Shares
- --------------------------- ---------
January 20, 1997 2,190 2
February 20, 1997 1,384 1
March 20, 1997 1,930 2
April 21, 1997 1,611 2
May 20, 1997 1,569 2
June 20, 1997 1,946 2
July 21, 1997 2,316 2 2
August 20, 1997 1,141 1 1
September 23, 1997 1,448 2 2
January 22, 1996 469 1
February 20, 1996 1,027 1
March 21, 1996 1,133 1
April 22, 1996 1,075 1
May 20, 1996 1,119 1
June 20, 1996 1,257 1
July 22, 1996 1,095 1 1
August 22, 1996 1,627 2 2
September 24, 1996 1,272 1 1
- ------------------------------------------------------------------------------------------------------------
Shares of common stock at end of period 23,867 23,887 23,867 23,887
============================================================================================================
Computation of daily weighted average
shares:
Shares of common stock at
beginning of period -
Number Number
of of
Days Shares
------ ------
September 30, 1996 21 23,890,884 501,709
September 30, 1996 21 23,896,962 501,836
September 30, 1997 20 23,872,111 477,442
September 30, 1997 19 23,882,741 453,772
Shares of common stock after
purchase for deferred compensation trust -
Number Number
of of
Days Shares
------ ------
September 30, 1996 29 23,896,493 692,998
September 30, 1996 10 23,895,466 238,955
September 30, 1996 20 23,895,467 477,909
September 30, 1996 32 23,894,334 764,619
September 30, 1996 28 23,893,259 669,011
September 30, 1996 18 23,892,140 430,059
September 30, 1996 13 23,892,141 310,598
September 30, 1996 32 23,890,884 764,508
September 30, 1996 31 23,889,788 740,583 740,583
September 30, 1996 33 23,888,162 788,309 788,309
September 30, 1996 7 23,886,890 167,208 167,208
September 30, 1997 31 23,880,551 740,297
September 30, 1997 28 23,879,167 668,617
September 30, 1997 32 23,877,237 764,072
September 30, 1997 29 23,875,626 692,393
September 30, 1997 31 23,874,057 740,096
September 30, 1997 31 23,872,111 740,035
September 30, 1997 30 23,869,795 716,094 716,094
September 30, 1997 34 23,868,654 811,534 811,534
September 30, 1997 8 23,867,206 190,938 190,938
- ------------------------------------------------------------------------------------------------------------
Total days - weighted 2,196,008 2,197,809 6,517,848 6,546,593
============================================================================================================
Average number of shares of common
stock based on daily
weighted average computations 23,870 23,889 23,875 23,893
============================================================================================================
Earnings on common stock, as set forth
in statements of income $12,903 $10,385 $40,709 $44,025
============================================================================================================
Earnings per share of common stock based on
weighted average shares $0.54 $0.43 $1.71 $1.84
============================================================================================================
</TABLE>
The accompanying notes to financial statements are an integral part of
these statements.
<TABLE> <S> <C>
<ARTICLE> UT EXHIBIT 27
<CIK> 0000916863
<NAME> WPS RESOURCES CORPORATION
<SUBSIDIARY>
<NUMBER> 1
<NAME> WISCONSIN PUBLIC SERVICE CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 891,257
<OTHER-PROPERTY-AND-INVEST> 134,061
<TOTAL-CURRENT-ASSETS> 157,828
<TOTAL-DEFERRED-CHARGES> 81,882
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,265,028
<COMMON> 23,897
<CAPITAL-SURPLUS-PAID-IN> 145,021
<RETAINED-EARNINGS> 306,046
<TOTAL-COMMON-STOCKHOLDERS-EQ> 474,964
0
51,200
<LONG-TERM-DEBT-NET> 305,442
<SHORT-TERM-NOTES> 10,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 19,230
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 0
<TOT-CAPITALIZATION-AND-LIAB> 860,836
<GROSS-OPERATING-REVENUE> 639,598
<INCOME-TAX-EXPENSE> 22,011
<OTHER-OPERATING-EXPENSES> 564,319
<TOTAL-OPERATING-EXPENSES> 564,319<F1>
<OPERATING-INCOME-LOSS> 75,279<F2>
<OTHER-INCOME-NET> 8,345
<INCOME-BEFORE-INTEREST-EXPEN> 83,624<F3>
<TOTAL-INTEREST-EXPENSE> 19,180
<NET-INCOME> 43,042<F4>
2,333
<EARNINGS-AVAILABLE-FOR-COMM> 40,709
<COMMON-STOCK-DIVIDENDS> 34,292
<TOTAL-INTEREST-ON-BONDS> 19,862
<CASH-FLOW-OPERATIONS> 116,913
<EPS-PRIMARY> 1.71
<EPS-DILUTED> 1.71
<FN>
<F1>Operating expenses exclude income taxes of $22,011.
<F2>Operating income is before income taxes of $22,011.
<F3>Income before interest expense is before income taxes of
$22,011.
<F4>Net income includes minority interest of $(609).
</FN>
</TABLE>
