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: February 25, 1998
(Date of earliest event reported)
WPS Resources Corporation
(Exact name of registrant as specified in its charter)
Wisconsin
(State or other jurisdiction of incorporation)
1-11337 39-1775292
(Commission File Number) (IRS Employer Identification No.)
700 North Adams Street, P.O. Box 19001, Green Bay, WI 54307-9001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920) 433-1466
Not Applicable
(Former name or former address, if changed since last report)
Page 1 of 4 Pages
Index to Exhibits is on Page 4
<PAGE>
ITEM 5. Other Events.
On February 25, 1998, the Registrant filed with the Securities
and Exchange Commission an Application on Form U-1 under the Public
Utility Holding Company Act of 1935, as amended, for an order authorizing
the Registrant's acquisition of all of the issued and outstanding common
stock of Upper Peninsula Power Company pursuant to the Plan and Agreement
of Merger between the Registrant and Upper Peninsula Energy Corporation
("UPEN"). The Registrant filed as exhibits to the Form U-1 unaudited pro
forma combined balance sheets and statements of income of the Registrant
and UPEN as of December 31, 1997, copies of which are filed herewith.
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits.
99-1 Unaudited Pro Forma Combined Balance Sheet and
Statements of Income as of December 31, 1997 and Notes
<PAGE>
SIGNATURES
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/ Patrick D. Schrickel
Patrick D. Schrickel
Executive Vice President
Date: February 25, 1998
<PAGE>
WPS RESOURCES CORPORATION
FORM 8-K
EXHIBIT INDEX
Exhibit Page
99-1 Unaudited Pro Forma Combined Balance Sheet and
Statements of Income as of December 31, 1997 and Notes
Exhibit 99-1
<TABLE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
YEAR ENDED DECEMBER 31, 1997
(in thousands)
<CAPTION>
WPS UPEN Pro Forma Pro Forma
As Reported As Reported Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS
Utility Plant
Electric $1,506,470 $178,943 $1,685,413
Gas 251,603 0 251,603
--------- ------- -------- ---------
Total 1,758,073 178,943 1,937,016
Less - Accumulated depreciation and
decommissioning 1,032,149 80,993 1,113,142
--------- ------- -------- ---------
Total 725,924 97,950 0 823,874
Nuclear decommissioning trusts 134,108 0 134,108
Construction in progress 7,266 4,510 11,776
Nuclear fuel, less accumulated amortization 19,062 0 19,062
--------- ------- -------- ---------
Net utility plant 886,360 102,460 0 988,820
========= ======= ======== =========
Current assets
Cash and equivalents 6,424 2,071 8,495
Customer and other receivables, net of
reserves 87,709 8,391 96,100
Accrued utility revenues 30,750 0 30,750
Fossil fuel, at average cost 10,336 286 10,622
Gas in storage, at average cost 22,080 0 22,080
Materials and supplies, at average cost 18,793 1,968 20,761
Prepayments and other (Note 4) 20,499 4,788 (642) 24,645
-------- ------- -------- ---------
Total current assets 196,591 17,504 (642) 213,453
======== ======= ======== =========
Regulatory assets 78,544 1,305 79,849
Net nonutility and nonregulated plant 19,194 11,387 30,581
Investments and other assets 118,913 4,188 123,101
-------- ------- -------- ---------
Total $1,299,602 $136,844 ($642) $1,435,804
========== ======= ======== =========
See accompanying notes to Unaudited Pro Forma Combined Financial
Statements.
</TABLE>
<PAGE>
<TABLE>
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
YEAR ENDED DECEMBER 31, 1997
(in thousands)
<CAPTION>
WPS UPEN Pro Forma Pro Forma
As Reported As Reported Adjustments Combined
<S> <C> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization
Common stock equity (Note 2) $477,823 $40,941 (1,100) $517,664
Preferred stock of subsidiary 51,200 445 51,645
Long-term debt 304,008 43,007 347,015
------- ------- ------ -------
Total capitalization 833,031 84,393 (1,100) 916,324
======= ======= ====== =======
Current liabilities
Notes payable 10,000 9,760 19,760
Commercial paper 20,706 0 20,706
Accounts payable 85,651 4,096 1,100 90,847
Accrued taxes 3,514 6,600 10,114
Accrued interest 7,801 910 8,711
Other 9,536 2,879 12,415
------- ------ ------ -------
Total current liabilities 137,208 24,245 1,100 162,553
======= ====== ====== =======
Long-term liabilities and deferred credits
Accumulated deferred income taxes
(Note 4) 125,804 6,035 (642) 131,197
Accumulated deferred investment tax credits 26,901 2,560 29,461
Regulatory liabilities 50,279 6,208 56,487
Environmental remediation liabilities 40,215 656 40,871
Other long-term liabilities 86,164 12,747 98,911
------- ------- ------ -------
Total long-term liabilities and deferred credits 329,363 28,206 (642) 356,927
======= ======= ======= =======
Total $1,299,602 $136,844 ($642) $1,435,804
========== ======== ======= ==========
See accompanying notes to Unaudited Pro Forma Combined Financial
Statements.
</TABLE>
<PAGE>
WPS RESOURCES CORPORATION
NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS
1. The pro forma combined financial statements reflect the conversion of
each share of UPEN Common Stock (no par value) outstanding into 0.90
shares of WPS Common Stock ($1.00 par value), as provided in the
Merger Agreement. The pro forma combined statements of income are
presented as if the companies had combined at January 1, 1997. The
pro forma combined balance sheet is presented as if the companies had
combined at December 31, 1997.
2. Estimated cost savings and the cost to achieve such savings have not
been reflected in the pro forma combined financial statements.
Transaction costs are currently estimated to be approximately
$3,700,000 (including fees for financial advisors, attorneys,
accountants, consultants, filings, and printing). Estimated
transaction costs to be incurred after December 31, 1997, have been
reflected in the pro forma balance sheet at December 31, 1997
reducing common stock equity by $1,100,000.
3. Intercompany transactions (including purchased and exchange power
transactions) between WPS and UPEN during the periods presented were
included in the determination of regulated rates and were not
material. Accordingly, no pro forma adjustments were made to
eliminate such transactions.
4. Accounting principles have been consistently applied in the financial
statement presentations for WPS and UPEN with one exception. UPEN
does not include unbilled electric revenues in its calculation of
total revenues. WPS accrues unbilled revenues. The impact of this
difference in accounting principles does not have a material impact
on the unaudited pro forma combined financial statements as
presented, and accordingly, no adjustments have been made to conform
accounting principles. A pro forma adjustment has been made to
conform the presentation of current deferred income taxes in the pro
forma combined balance sheet into one net amount. A pro forma
adjustment has been made to conform the presentation of income taxes
in the pro forma combined statements of income. Other minor
reclassifications have been made to the balance sheet and statements
of income of UPEN to align with the financial statement presentation
of WPS.
<PAGE>
<TABLE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 1997
(in thousands, except per share amounts)
<CAPTION>
WPS UPEN Pro Forma Pro Forma
As Reported As Reported Adjustments Combined
<S> <C> <C> <C> <C>
Operating revenues
Electric utility revenues $479,388 $55,952 $535,340
Gas utility revenues 211,090 0 211,090
Non-regulated energy and other 187,862 4,152 192,014
-------- ------- ------- -------
Total operating revenues 878,340 60,104 0 938,444
======== ======= ======= =======
Operating expenses
Electric production fuels 107,538 0 107,538
Purchased power 45,876 21,128 67,004
Gas purchased for resale 147,755 0 147,755
Non-regulated energy cost of sales 182,863 0 182,863
Other operating expenses 148,569 17,413 165,982
Maintenance 41,661 2,664 44,325
Depreciation and decommissioning 77,541 5,900 83,441
Federal income tax (Note 4) 0 1,620 (1,620) 0
Taxes other than income 26,448 4,927 31,375
------- ------- ------- -------
Total operating expenses 778,251 53,652 (1,620) 830,283
======= ======= ======= =======
Operating income 100,089 6,452 1,620 108,161
------- ------- ------- -------
Other income
Allowance for equity funds used during
construction 129 25 154
Other, net 11,511 225 11,736
------- ------- ------- -------
Total other income 11,640 250 0 11,890
======= ======= ======= =======
Income before interest expense 111,729 6,702 1,620 120,051
------- ------- ------- -------
Interest on long-term debt 22,331 3,942 26,273
Other interest 4,172 738 4,910
Allowance for borrowed funds used during (100) (67) (167)
construction ------- ------- ------- -------
Total interest expense 26,403 4,613 0 31,016
=======
Income before income taxes 85,326 2,089 1,620 89,035
Income taxes (Note 4) 29,270 0 1,620 30,890
Minority interest (797) 0 (797)
Preferred stock dividends of subsidiary 3,111 22 3,133
------- ------ ------ -------
Net income 53,742 2,067 0 55,809
======= ====== ====== =======
Average shares of common stock (Note 1) 23,873 2,960 (296) 26,537
Basic and diluted earnings per average
share of common stock $ 2.25 $ 0.70 $ 2.10
See accompanying notes to Unaudited Pro Forma Combined Financial
Statements.
</TABLE>
<PAGE>
WPS RESOURCES CORPORATION
NOTES TO UNAUDITED PRO FORMA
COMBINED FINANCIAL STATEMENTS
1. The pro forma combined financial statements reflect the conversion of
each share of UPEN Common Stock (no par value) outstanding into 0.90
shares of WPS Common Stock ($1.00 par value), as provided in the
Merger Agreement. The pro forma combined statements of income are
presented as if the companies had combined at January 1, 1997. The
pro forma combined balance sheet is presented as if the companies had
combined at December 31, 1997.
2. Estimated cost savings and the cost to achieve such savings have not
been reflected in the pro forma combined financial statements.
Transaction costs are currently estimated to be approximately
$3,700,000 (including fees for financial advisors, attorneys,
accountants, consultants, filings, and printing). Estimated
transaction costs to be incurred after December 31, 1997, have been
reflected in the pro forma balance sheet at December 31, 1997
reducing common stock equity by $1,100,000.
3. Intercompany transactions (including purchased and exchange power
transactions) between WPS and UPEN during the periods presented were
included in the determination of regulated rates and were not
material. Accordingly, no pro forma adjustments were made to
eliminate such transactions.
4. Accounting principles have been consistently applied in the financial
statement presentations for WPS and UPEN with one exception. UPEN
does not include unbilled electric revenues in its calculation of
total revenues. WPS accrues unbilled revenues. The impact of this
difference in accounting principles does not have a material impact
on the unaudited pro forma combined financial statements as
presented, and accordingly, no adjustments have been made to conform
accounting principles. A pro forma adjustment has been made to
conform the presentation of current deferred income taxes in the pro
forma combined balance sheet into one net amount. A pro forma
adjustment has been made to conform the presentation of income taxes
in the pro forma combined statements of income. Other minor
reclassifications have been made to the balance sheet and statements
of income of UPEN to align with the financial statement presentation
of WPS.
