SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: October 20, 1997
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(Date of earliest event reported)
WPS Resources Corporation
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(Exact name of registrant as specified in its charter)
Wisconsin
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(State or other jurisdiction of incorporation)
1-11337 39-1775292
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(Commission File Number) (IRS Employer Identification No.)
700 North Adams Street, P.O. Box 19001, Green Bay, WI 54307-9001
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920)433-1466
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Not Applicable
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(Former name or former address, if changed since last report)
Page 1 of 4 Pages
Index to Exhibits is on Page 4
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ITEM 5. Other Events.
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On October 20, 1997, the Registrant issued a Press
Release announcing its financial results for the quarterly period
ended September 30, 1997.
ITEM 7. Financial Statements and Exhibits.
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(c) Exhibits.
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99-1 Press release dated October 20, 1997,
regarding financial results of WPS Resources
Corporation for the quarterly period ended
September 30, 1997.
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SIGNATURES
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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 hereunto duly authorized.
WPS RESOURCES CORPORATION
By: /s/ P. D. Schrickel
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P. D. Schrickel
Executive Vice President
Date: October 21, 1997
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WPS RESOURCES CORPORATION
FORM 8-K
EXHIBIT INDEX
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Exhibit Page
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99-1 Press release dated October 20, 1997,
regarding financial results of WPS Resources
Corporation for the quarterly period ended
September 30, 1997.
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EXHIBIT 99-1
(WPS RESOURCES CORPORATION LETTERHEAD)
For Release: For more information, see attached table or contact:
October 20, 1997 Ralph G. Baeten, Treasurer
WPS Resources Corporation
(920) 433-1449
WPS RESOURCES CORPORATION
ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
Green Bay, WI -- Third quarter earnings per average share of common
stock of WPS Resources Corporation (the "Company") for the three
months ended September 30, 1997, were $0.54 compared to $0.43 for the
corresponding period in 1996. Net income for the three months ended
September 30, 1997, was $12.9 million compared to $10.4 million for
the third quarter of 1996. Net income for the three months ended
September 30, 1997, at Wisconsin Public Service Corporation ("WPSC"),
the Company's principal subsidiary, was $14.7 million compared to
$12.9 million for the same period in 1996.
<TABLE>
Explanation of Earnings Per Share Changes
Between Quarters Ended September 30, 1997 and September 30, 1996
<CAPTION>
DOLLAR EARNINGS PER
IMPACT SHARE IMPACT
(Before Tax) (After Tax)
<S> <C> <C>
Decrease in Electric Utility Margin ($6.1 million) ($0.15)
Increase in Gas Utility Margin $0.8 million $0.02
Net Increase in Non-Regulated Gross Margin $3.0 million $0.08
Decrease in Other Operating Expenses $8.0 million $0.20
Increase in Depreciation and Decommissioning Expenses ($3.9 million) ($0.10)
Increase in Other Income $1.7 million $0.04
Decrease in Other Items $0.8 million $0.02
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Total Earnings Per Share Impact $0.11
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</TABLE> /MORE/
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WPSR Financial Results
October 20, 1997
Page 2
Operating revenues were $185.2 million for the third quarter of
1997 compared to $179.0 million for the third quarter of 1996.
Electric utility revenues at WPSC decreased $4.9 million while gas
utility revenues remained relatively stable. Utility revenues reflect
the implementation of a Public Service Commission of Wisconsin
("PSCW") rate order on February 21, 1997, which authorized an 8.1%
decrease in electric rates and a 2.7% increase in gas rates. Overall,
electric sales at WPSC increased by 2.6% in spite of a 19.8% decrease
in cooling degree days. Sales to commercial and industrial customers
increased 4.5%. Non-regulated revenues increased $11.4 million.
Lower electric utility margins of 6.6% were due to the rate
decrease and to higher fuel costs. Generation increased 5.4%
primarily as a result of WPSC's Kewaunee Nuclear Power Plant
("Kewaunee") returning to service in mid-June 1997 having been
off-line since September 1996. WPSC is the operator and 41.2% owner
of Kewaunee.
Higher gas utility margins of 10.9% were due primarily to the
rate increase.
Increased non-regulated gross margin was due largely to higher
gas sales of $10.6 million and higher electric sales of $0.5 million
at WPS Energy Services, Inc. ("ESI"), the Company's energy marketing
subsidiary. Non-regulated energy cost of sales increased $8.4 million
due primarily to increased gas purchases at ESI.
The decrease in other operating expenses represents lower
customer service expenses of $3.0 million, lower administrative
expenses of $2.2 million, and lower electric operating expenses of
$2.1 million at WPSC. Lower customer service and administrative
expenses were the result of several cost control efforts and lower
benefit expenses. Lower electric operating expenses included a
decrease of $1.9 milliom due to the completion in 1996 of the
amortization related to a deferred coal and rail contract settlement.
The decrease in other items at the Company was comprised largely
of lower maintenance expenses at WPSC of $1.7 million, including lower
electric transmission and distribution maintenance and decreased
maintenance expense at Kewaunee which had been off-line in the third
quarter of 1996.
/MORE/
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WPSR Financial Results
October 20, 1997
Page 3
Depreciation and decommissioning expenses increased due to the
accelerated recovery of WPSC's investment in Kewaunee and accelerated
funding of Kewaunee decommissioning costs effective with the February
1997 rate order.
The increase in other income was due primarily to a $1.5 million
loss recorded at the non-regulated subsidiaries in the third quarter
of 1996 related to an industrial processing facility investment.
Year-to-date 1997 earnings per average share of common stock of
the Company were $1.71 compared to $1.84 for the corresponding period
in 1996. Operating revenues for the nine-month period ending
September 30, 1997, were $639.6 million and net income for the period
was $40.7 million. Whereas, operating revenues for the nine-month
period ending September 30, 1996 were $612.2 million and net income
for the period was $44.0 million. Year-to-date net income at WPSC
was $45.9 million for 1997 compared to $47.7 million for 1996.
The primary reasons for the decrease in year-to-date earnings at
the Company were increased depreciation and decommissioning expenses
and a 6.8% decrease in electric utility margins at WPSC resulting from
higher replacement power costs during the first and second quarters of
1997 while Kewaunee was out of service and implementation of an
electric rate decrease. Partially offsetting these decreases to
earnings were decreased operating expenses including $5.8 million
related to the 1996 completion of amortization on a coal and rail
contract settlement, increased other income including a 1997 gain on
the sale of non-utility property at WPSC equal to approximately $.07
per share and a 1996 loss on investment of approximately $.05 per
share, increased non-regulated gross margin, and increased gas utility
margin.
/MORE/
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WPSR Financial Results
October 20, 1997
Page 4
<TABLE>
Explanation of Earnings Per Share Changes
Between Year-to-Date September 30, 1997 and September 30, 1996
<CAPTION>
DOLLAR EARNINGS PER
IMPACT SHARE IMPACT
(Before Tax) (After Tax)
<S> <C> <C>
Decrease in Electric Utility Margin ($17.9 million) ($0.45)
Increase in Gas Utility Margin $ .6 million $0.02
Net Increase in Non-Regulated Gross Margin $ 5.0 million $0.13
Decrease in Other Operating Expenses $11.7 million $0.29
Increase in Depreciation and Decommissioning Expenses ($ 9.0 million) ($0.23)
Increase in Other Income $ 5.5 million $0.14
Increase in Other Items ($1.2 million) ($0.03)
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Total Earnings Per Share Impact ($0.13)
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</TABLE>
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<TABLE>
WPS RESOURCES CORPORATION
EARNINGS ANALYSIS
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
QUARTER ENDED % YEAR-TO-DATE % 12-MONTHS-ENDED %
SEPTEMBER 30 CHANGE SEPTEMBER 30 CHANGE SEPTEMBER 30 CHANGE
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES $185,225 $178,980 3.5% $639,598 $612,198 4.5% $885,654 $815,434 8.6%
OPERATING EXPENSES 158,835 156,464 1.5% 564,319 527,825 6.9% 796,406 703,777 13.2%
-------- -------- -------- -------- -------- --------
OPERATING INCOME 26,390 22,516 17.2% 75,279 84,373 -10.8% 89,248 111,657 -20.1%
OTHER INCOME/(DEDUCTIONS) 1,708 (142) - 8,954 2,806 219.1% 8,030 3,948 103.4%
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INCOME BEFORE INTEREST
AND TAXES 28,098 22,374 25.6% 84,233 87,179 -3.4% 97,278 115,605 -15.9%
INTEREST EXPENSE 6,475 6,061 6.8% 19,180 18,112 5.9% 26,068 24,439 6.7%
INCOME TAXES 7,942 5,150 54.2% 22,011 22,709 -3.1% 23,660 30,523 -22.5%
PREFERRED STOCK DIVIDENDS
OF SUBSIDIARY 778 778 0.0% 2,333 2,333 0.0% 3,111 3,111 0.0%
-------- -------- -------- -------- -------- --------
NET INCOME $ 12,903 $ 10,385 24.2% $ 40,709 $ 44,025 -7.5% $ 44,439 $ 57,532 -22.8%
======== ======== ======== ======== ======== ========
AVERAGE SHARES OF
COMMON STOCK 23,870 23,893 -0.1% 23,875 23,893 0.0% 23,877 23,894 0.0%
EARNINGS PER SHARE $0.54 $0.43 25.6% $1.71 $1.84 -7.1% $1.86 $2.41 -22.8%
HEATING DEGREE DAYS 303 251 20.7% 5,433 5,577 -2.6% 8,422 8,589 -1.9%
COOLING DEGREE DAYS 178 222 -19.8% 248 352 -29.5% 248 353 -29.7%
</TABLE>
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