-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OVrRjAXiJy3TibFDsDlSmNqyP5Ck5HXAatvohEYmewSn79umT8FYcUmU3Y0adSLy XlgLUAF4lUY9ggM2Uz1tVw== 0000950124-95-003683.txt : 19951119 0000950124-95-003683.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950124-95-003683 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION ELECTRIC CO CENTRAL INDEX KEY: 0000100826 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 430559760 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02967 FILM NUMBER: 95589659 BUSINESS ADDRESS: STREET 1: P O BOX 149 CITY: ST LOUIS STATE: MO ZIP: 63166 BUSINESS PHONE: 3146213222 MAIL ADDRESS: STREET 1: P O BOX 149 CITY: ST LOUIS STATE: MO ZIP: 63166 10-Q 1 10-Q 1 UNITED STATES 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 QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 [ ] 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 1-2967. UNION ELECTRIC COMPANY (Exact name of registrant as specified in its charter) Missouri 43-0559760 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1901 Chouteau Avenue, St. Louis, Missouri 63103 (Address of principal executive offices and Zip Code) Registrant's telephone number, including area code: (314) 621-3222 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. Yes X . No_______. Shares outstanding of each of registrant's classes of common stock as of October 31, 1995: Common Stock, $5 par value - 102,123,834 (excl. 42,990 treasury shares) 2 UNION ELECTRIC COMPANY INDEX
Page No. Part I Financial Information (Unaudited) Balance Sheet -- September 30, 1995 and December 31, 1994 2 Statement of Income -- Three Months, Nine Months and Twelve Months Ended September 30, 1995 and 1994 3 Statement of Cash Flows -- Nine Months Ended September 30, 1995 and 1994 4 Notes to Financial Statements 5 thru 7 Management's Discussion and Analysis 8 thru 12 Part II Other Information 13
3 UNION ELECTRIC COMPANY Page 2 BALANCE SHEET UNAUDITED
ASSETS (Thousands of Dollars) September 30, December 31, - ------ 1995 1994 ------------ ------------ Property and plant, at original cost Electric $8,441,276 $8,200,094 Gas 169,820 160,729 Other 35,007 35,033 ---------- ---------- 8,646,103 8,395,856 Less accumulated depreciation and amortization 3,454,662 3,305,582 ---------- ---------- 5,191,441 5,090,274 Construction work in progress: Nuclear fuel in process 109,353 134,815 Other 100,187 119,473 ---------- ---------- Total property and plant, net 5,400,981 5,344,562 Regulatory asset - deferred income taxes 726,788 732,478 Deferred charges: Unamortized debt expense 45,733 49,432 Nuclear decommissioning trust fund 69,124 53,906 Other 22,635 22,508 ---------- ---------- Total deferred charges 137,492 125,846 Current assets: Cash 2,190 1,510 Temporary cash investments 72,835 - Accounts receivable - trade (less allowance for doubtful accounts of $7,182 and $6,277 at respective dates) 270,534 164,803 Unbilled revenue 58,983 71,321 Other accounts and notes receivable 19,816 17,691 Materials and supplies, at average cost - Fossil fuel 55,434 61,533 Construction and maintenance 95,038 89,683 Other 14,215 15,274 ---------- ---------- Total current assets 589,045 421,815 ---------- ---------- Total Assets $6,854,306 $6,624,701 ========== ========== CAPITAL AND LIABILITIES: - ------------------------ Capitalization: Common stock, $5 par value, authorized 150,000,000 shares- outstanding 102,123,834 shares (excluding 42,990 shares at par value in treasury) $ 510,619 $ 510,619 Other paid-in capital 717,669 717,669 Retained earnings 1,130,808 1,040,766 ---------- ---------- Total common stockholders' equity 2,359,096 2,269,054 Preferred stock not subject to mandatory redemption 218,497 218,497 Preferred stock subject to mandatory redemption 650 676 Capital lease obligation 63,476 88,038 Long-term debt 1,710,585 1,745,585 Unamortized discount and premium on debt (9,718) (10,134) ---------- ---------- 1,700,867 1,735,451 Long-term debt, net ---------- ---------- 4,342,586 4,311,716 Total capitalization 1,348,881 1,349,239 Accumulated deferred income taxes 168,068 172,705 Accumulated deferred investment tax credits 219,525 229,333 Regulatory liability 70,797 55,579 Accumulated provision for nuclear decommissioning 160,417 131,543 Other deferred credits and liabilities Current and accrued liabilities: 34,295 30,318 Current maturity of capital lease obligation 35,000 38,000 Current maturity of long-term debt 107,436 61,575 Accounts payable 33,982 35,045 Wages payable 27,409 28,574 Accumulated deferred income taxes 95,291 36,481 Income taxes accrued 86,432 16,954 Other taxes accrued 57,372 55,909 Interest accrued 3,301 3,301 Dividends accrued 63,514 68,429 Other ---------- ---------- 544,032 374,586 Total current and accrued liabilities ---------- ---------- $6,854,306 $6,624,701 Total Capital and Liabilities ========== ==========
4 Page 3 UNION ELECTRIC COMPANY STATEMENT OF INCOME (UNAUDITED) (Thousands of Dollars Except Shares and Per Share Amounts)
Three Months Ended Nine Months Ended Twelve Months Ended September 30, September 30, September 30, --------------------- ----------------- --------------------- 1995 1994 1995 1994 1995 1994 ---- ---- ---- ---- ---- ---- Operating revenues: Electric $704,741 $667,274 $1,613,570 $1,586,088 $1,997,016 $1,971,594 Gas 8,866 9,899 60,480 62,653 83,936 88,498 Steam 71 67 318 343 448 491 -------- -------- ---------- ---------- --------- --------- Total operating revenues 713,678 677,240 1,674,368 1,649,084 2,081,400 2,060,583 Operating expenses: Operations Fuel and purchased power 110,611 96,027 280,690 256,906 353,345 352,847 Other 100,386 100,272 312,542 326,144 422,064 443,193 -------- -------- ---------- ---------- --------- --------- 210,997 196,299 593,232 583,050 775,409 796,040 Maintenance 52,254 49,598 163,342 140,105 220,997 202,275 Depreciation and decommissioning 58,591 56,762 174,369 168,135 232,279 223,938 Income taxes 114,422 106,067 188,492 194,065 200,848 197,094 Other taxes 63,891 63,041 166,944 165,299 212,122 210,369 -------- -------- ---------- ---------- --------- --------- Total operating expenses 500,155 471,767 1,286,379 1,250,654 1,641,655 1,629,716 Operating income 213,523 205,473 387,989 398,430 439,745 430,867 Other income and deductions: Allowance for equity funds used during construction 1,850 1,204 4,758 4,340 6,186 5,968 Miscellaneous, net (10,304) 160 (8,772) 3,259 (11,629) 4,573 -------- --------- ----------- --------- ---------- ---------- Total other income/deductions, net (8,454) 1,364 (4,014) 7,599 (5,443) 10,541 Income before interest charges 205,069 206,837 383,975 406,029 434,302 441,408 Interest charges: Interest 33,783 41,673 101,770 107,774 135,108 139,360 Allowance for borrowed funds used during construction (1,321) (1,311) (4,661) (3,838) (6,336) (4,867) -------- -------- -------- --------- --------- --------- Net interest charges 32,462 40,362 97,109 103,936 128,772 134,493 Net income 172,607 166,475 286,866 302,093 305,530 306,915 Preferred stock dividends 3,312 3,312 9,938 9,939 13,250 13,252 -------- -------- -------- -------- -------- --------- Earnings on common stock $169,295 $163,163 $276,928 $292,154 $292,280 $293,663 ======== ======== ======== ======== ======== ======== Earnings per share of common stock (based on average shares outstanding) $1.66 $1.60 $2.71 $2.86 $2.86 $2.88 ===== ===== ===== ===== ===== ===== Dividends per share of common stock $0.61 $0.595 $1.83 $1.785 $2.44 $2.38 ===== ====== ===== ====== ===== ===== Average number of common shares outstanding (in thousands) 102,124 102,124 102,124 102,124 102,124 102,124 ======= ======= ======= ======= ======= =======
5 UNION ELECTRIC COMPANY Page 4 STATEMENT OF CASH FLOWS UNAUDITED (Thousands of Dollars)
Nine Months Ended September 30, --------------------- 1995 1994 ---- ---- Cash Flows From Operating: Net income $286,866 $302,093 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 167,247 161,149 Amortization of nuclear fuel 25,597 32,932 Allowance for funds used during construction (9,419) (8,178) Postretirement benefit accrual 19,569 19,633 Deferred income taxes, net (5,641) (9,038) Deferred investment tax credits, net (4,637) (4,640) Changes in assets and liabilities: Receivables, net (95,518) (35,285) Materials and supplies 744 (15,158) Accounts and wages payable 44,798 (86,593) Taxes accrued 128,288 133,275 Interest and dividends accrued or declared 1,463 22,658 Other, net 10,388 15,969 -------- -------- Net cash provided by operating activities 569,745 528,817 Cash Flows From Investing: Construction expenditures (224,252) (232,095) Allowance for funds used during construction 9,419 8,178 Nuclear fuel expenditures (30,405) (12,525) -------- -------- Net cash used in investing activities (245,238) (236,442) Cash Flow From Financing: Dividends on preferred stock (9,938) (9,939) Dividends on common stock (186,886) (182,291) Environmental bond funds 4,443 11,129 Redemptions - Nuclear fuel lease (61,552) (22,728) Short-term debt - (59,600) Long-term debt (38,000) (25,000) Preferred stock (26) (26) Issuances - Nuclear fuel lease 40,967 37,943 Long-term debt - 100,000 -------- -------- Net cash used in financing activities (250,992) (150,512) -------- -------- Net change in cash and cash equivalents 73,515 141,863 Cash and cash equivalents at beginning of period 1,510 1,297 -------- -------- Cash and cash equivalents at end of period $ 75,025 $143,160 ======== ======== Supplemental disclosure of cash flow information: Cash and cash equivalents include cash on hand and temporary investments purchased with a maturity of three months or less Cash paid during the period: Interest (net of amount capitalized) $ 90,684 $ 71,646 Income taxes 138,515 141,390
6 Page 5 UNION ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Note 1 - Financial statement note disclosures, normally included in financial statements prepared in conformity with generally accepted accounting principles, have been omitted in this Form 10-Q pursuant to the Rules and Regulations of the Securities and Exchange Commission. However, in the opinion of the registrant, the disclosures contained in this Form 10-Q are adequate to make the information presented not misleading. See Notes to Financial Statements included in the 1994 Annual Report on Form 10-K for information relevant to the financial statements contained in this Form 10-Q, including information as to the significant accounting policies of the registrant. Note 2 - In the opinion of the registrant the interim financial statements filed as part of this Form 10-Q reflect all adjustments, consisting only of normal recurring adjustments, necessary to a fair statement of the results for the periods presented. Registrant's financial statements were prepared to permit the information required in the Financial Data Schedule (FDS), Exhibit 27, to be directly extracted from the filed statements. The FDS amounts correspond to or are calculable from the amounts reported in the financial statements or notes thereto. Note 3 - Due to the effect of weather on sales and other factors which are characteristic of public utility operations, financial results for the periods ended September 30, 1995 and 1994 are not necessarily indicative of trends for any twelve-month period. Note 4 - On July 21, 1995, the Missouri Public Service Commission approved an agreement involving the registrant's Missouri electric rates. The agreement provided for a rate decrease for all classes of Missouri retail electric customers, effective August 1, 1995, reducing annual revenues by $30 million. In addition, a one-time $30 million credit to current Missouri electric customers reduced third quarter 1995 earnings approximately 18 cents per share. Also included is a three-year plan which provides that earnings in excess of a 12.61 percent return on equity will be shared equally between customers and stockholders and earnings above a 14 percent return on equity will be credited to customers. Also, the agreement provides that no party shall file for a general increase or decrease in registrant's Missouri retail electric rates prior to July 1, 1998, except that the registrant may file for an increase if certain adverse events occur. Note 5 - On August 11, 1995, the registrant entered into an Agreement and Plan of Merger (the "Merger Agreement") with CIPSCO Incorporated, an Illinois corporation ("CIPSCO"), Arch Holding Corp., a newly formed Missouri corporation (which was recently renamed as Ameren Corporation) 50% owned by the registrant and 50% owned by CIPSCO ("Ameren"), and Arch Merger Inc., a newly formed Missouri corporation and wholly owned subsidiary of Ameren ("Merger Sub"), pursuant to which, among other things, Merger Sub will be merged with and into the registrant and CIPSCO will be merged with and into Ameren (the "Mergers"), with the result that the registrant and Central Illinois Public Service Company, an Illinois corporation and the wholly owned operating subsidiary of CIPSCO, as well as other direct subsidiaries of CIPSCO, will continue as wholly owned operating subsidiaries of Ameren. As a result of the Mergers, each outstanding share of the registrant's common stock, par value $5.00 per share ("Common Stock"), (other than shares with respect to which dissenters' rights are perfected under applicable state laws) will be converted into the right to receive one share of common stock of Ameren, par value $0.01 per share ("Ameren Common Stock"), each outstanding share of the registrant's preferred stock, without par value, (other than shares with respect to which dissenters' rights are perfected under applicable state laws), will remain outstanding and unchanged and each outstanding share of CIPSCO's common stock, without par value ("CIPSCO Common Stock") (including shares with respect to which dissenters' rights are perfected under applicable state laws) will be converted into the right to receive 1.03 shares of Ameren Common Stock (or cash in lieu of fractional shares otherwise deliverable in respect thereof). The business combination is intended to be tax-free for income tax purposes and to be accounted for as a "pooling of interests." 7 Page 6 UNION ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Simultaneous with their execution and delivery of the Merger Agreement, the registrant and CIPSCO entered into stock option agreements (the "Stock Option Agreements"), pursuant to one of which the registrant granted CIPSCO the right, upon the terms and subject to the conditions set forth therein, to purchase up to 6,983,233 shares of Common Stock at a price of $35.94 per share, and pursuant to the other of which CIPSCO granted the registrant the right, upon the terms and subject to the conditions set forth therein, to purchase up to 6,779,838 shares of CIPSCO Common Stock at a price of $37.02 per share. After the Mergers, Ameren will become a registered public utility holding company under the Public Utility Holding Company Act of 1935, as amended. The Mergers are conditioned upon, among other things, approval by holders of two-thirds of the Common Stock and of the preferred stock, without par value, of the registrant voting together as a single class, by holders of two-thirds of the CIPSCO Common Stock, and upon receipt of certain regulatory and governmental approvals. The Merger Agreement and certain related matters will be submitted to shareholders of the registrant and CIPSCO for approval at meetings expected to be held later this year. Also, in November 1995, the registrant filed an application for approval of the merger with the Missouri Public Service Commission and CIPSCO and the registrant filed a joint application for approval of the merger with the Illinois Commerce Commission. Shortly thereafter, the registrant and CIPSCO will file a joint application for approval of the merger with the Federal Energy Regulatory Commission. In those applications, the registrant and CIPSCO seek recovery of merger transaction costs and a sharing of net merger savings between ratepayers and shareholders. The merger is expected to be consummated by the end of 1996. Note 6 - The registrant is regulated by the Missouri Public Service Commission (MoPSC), Illinois Commerce Commission and the Federal Energy Regulatory Commission. In accordance with Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" (FAS 71), the registrant's financial statements reflect assets and liabilities based on ratemaking prescribed by those regulatory commissions. At September 30, 1995, the registrant had recorded the following regulatory assets and regulatory liabilities:
(In Thousands) Regulatory Assets ----------------- Income Taxes $726,788 Unamortized Debt Expense 11,484 Unamortized Loss on Reacquired Debt 34,249 -------- Total Regulatory Assets $772,521 ======== Regulatory Liability -------------------- Regulatory Liability - Income Taxes $219,525 ========
The registrant continually assesses the recoverability of its regulatory assets. Under current accounting standards, regulatory assets are reduced through a charge to earnings if and when it is probable that such amounts will not be recovered through future revenues. 8 Page 7 UNION ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Note 7 - Electric rates charged to customers provide for recovery of Callaway Plant decommissioning costs over the life of the plant, based on an assumed 40-year life, ending with the expiration of the plant's operating license in 2024. The Callaway site is assumed to be decommissioned using the DECON (immediate dismantlement) method. Based on the registrant's most recent study (August 1995), decommissioning costs, including decontamination, dismantling and site restoration, are estimated to be $433 million in current year dollars and are expected to escalate about 4% per year through the end of decommissioning activity in 2033. The registrant's previous study, which was completed in 1993, estimated decommissioning costs to be $383 million in 1993 dollars. Every three years, the MoPSC requires the registrant to file updated decommissioning cost studies, at which time electric rates may be adjusted to reflect changes in estimates. The registrant believes that any future increases in the estimated costs of decommissioning Callaway are probable of recovery in rates. Costs collected from customers are deposited in an external trust fund established to provide for Callaway's decommissioning. Fund earnings are expected to average 9% to 10% through the date of decommissioning. If the assumed return on trust assets is not earned, the registrant believes it is probable that such earnings deficiency will be recovered in rates. Trust fund earnings, net of expenses, appear on the balance sheet as increases in Nuclear decommissioning trust fund and in the Accumulated provision for nuclear decommissioning. The staff of the Securities and Exchange Commission has questioned certain of the current accounting practices of the electric utility industry, including the registrant, regarding the recognition, measurement and classification of decommissioning costs for nuclear generating stations in the financial statements of electric utilities. In response to these questions, the Financial Accounting Standards Board has agreed to review the accounting for removal costs, including decommissioning. If current electric utility industry accounting practices for such decommissioning are changed (1) the annual provisions for decommissioning could increase, and (2) trust fund income from the external decommissioning trusts could be reported as investment income rather than as a reduction to decommissioning expense. The registrant does not expect that changes in the accounting for nuclear decommissioning costs will have a material effect on the registrant's results of operations. Note 8 - As discussed in Note 10 to the Notes to Financial Statements in the registrant's 1994 Annual Report to Stockholders, which is incorporated by reference in the registrant's 1994 Form 10-K, the registrant is involved in various environmental, legal and administrative proceedings, some of which involve substantial amounts. The registrant believes that the outcome of these proceedings will not have a material adverse effect on the registrant's financial position, results of operations or liquidity. 9 Page 8 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS The registrant and CIPSCO Incorporated entered into a Merger Agreement dated August 11, 1995. Information concerning such agreement is included in Note 5 to the Financial Statements of this report, and in Item 5, Other Information, included in Part II of this report. RESULTS OF OPERATIONS Third quarter 1995 common stock earnings were $169.3 million or $1.66 per share, an increase of $6.1 million from 1994's third quarter. Earnings per share in the third quarter of 1995 were 6 cents higher than in the comparable 1994 period despite a one-time credit to Missouri electric customers which reduced electric revenues by $30 million and earnings by 18 cents per share. Additionally, the registrant implemented a 1.8 percent rate decrease for Missouri electric customers during the third quarter which reduced electric revenues by $7 million and earnings by about 4 cents per share. (See Note 4 to the Financial Statements of this report). Common stock earnings for the nine months ended September 30, 1995 were $276.9 million, a decrease of $15.2 million from the same period in 1994. Earnings of $2.71 per share during the nine months ended September 30, 1995 were 15 cents lower than in the comparable 1994 period. Common stock earnings for the twelve months ended September 30, 1995 were $292.3 million, a $1.4 million decrease from the preceding twelve-month period. Earnings of $2.86 per share for the twelve months ended September 30, 1995 decreased 2 cents per share from the twelve months ended September 30, 1994. The increased earnings for the three months ended September 30, 1995 over the comparable 1994 period reflect increased electric operating revenues, net of the Missouri revenue adjustments noted above and reduced interest charges. The higher third quarter revenues were primarily from increased electricity sales this year due to unusually hot weather. These changes were partially offset by increased operating expenses resulting from increased sales, and merger-related expenses of $9 million. The decreased earnings for the nine months and twelve months ended September 30, 1995 versus the prior nine-month and twelve-month periods also reflects higher electric operating revenues, net of the Missouri revenue adjustments noted above, and lower interest charges offset by increased operating expenses and merger-related expenses. Operating expenses were up primarily due to greater fuel and purchased power costs and increased maintenance and depreciation expenses. The increased operating expenses for the nine months ended September 30, 1995 were largely due to the Spring 1995 Callaway refueling outage. The significant items affecting revenues, costs and earnings during the three-month, nine-month and twelve-month periods ended September 30, 1995 and 1994 are detailed below:
Electric Operating Revenues (Millions of Dollars) Variations for periods ended September 30, 1995 from comparable prior periods ------------------------------------------------------ Three Months Nine Months Twelve Months ------------ ----------- ------------- Rate variations $ (39.9) $ (39.9) $ (39.9) Effect of abnormal weather 55.1 34.8 24.3 Growth and other 22.3 32.6 41.0 ------ ------ ------ $ 37.5 $ 27.5 $ 25.4 ====== ====== ======
As discussed previously, rate variations for the three months, nine months and twelve months ended September 30, 1995 are attributable to the one-time $30 million credit to Missouri customers and the 1.8% rate decrease for Missouri electric customers. 10 Page 9 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) Third quarter 1995 kilowatt-hour sales were up 10 percent from the same quarter of 1994, primarily due to hot summer weather. Weather-sensitive residential and commercial sales increased 19 percent and 7 percent, respectively, from the year-ago quarter while industrial sales rose 4 percent. Kilowatt-hour sales for the nine months ended September 30, 1995 were 4 percent higher from the comparable 1994 period. Residential sales increased 4 percent, commercial sales increased 3 percent and industrial sales grew 4 percent. Kilowatt-hour sales for the twelve months ended September 30, 1995 increased 3 percent over the prior twelve-month period. Residential and commercial customers increased 3 percent respectively, while sales to industrial customers rose 4 percent.
Operating Expenses (Millions of Dollars) Variations for periods ended September 30, 1995 from comparable prior periods ------------------------------------------------ Three Months Nine Months Twelve Months ------------ ----------- ------------- Fuel: Variation in generation $ 4.0 $ 3.1 $ 32.0 Price (0.1) 1.2 (24.2) Generation efficiencies 0.7 0.5 5.1 Department of Energy assessment (0.3) 0.1 0.3 Net Interchange sales and purchased power variation 10.3 18.9 (12.7) ----- ----- ------ $14.6 $23.8 $ 0.5 ===== ===== ======
The increased fuel and purchased power costs for the three months ended September 30, 1995, versus the three months ended September 30, 1994, is primarily due to greater net purchased power costs and increased generation associated with the unusually hot 1995 summer. The increased fuel and purchased power costs for the nine months ended September 30, 1995, versus the nine months ended September 30, 1994, is primarily due to greater net purchased power costs and increased generation, resulting from the Callaway plant refueling outage this Spring and greater electricity sales during the hot 1995 summer. The fuel costs for the twelve months ended September 30, 1995, versus the twelve months ended September 30, 1994, were almost unchanged reflecting lower fuel prices and reduced net purchased power costs offset by increased generation and reduced generation efficiencies. Other operating expense variations reflect recurring conditions such as growth, inflation and wage increases. During the three months ended September 30, 1995, versus the comparable 1994 period, operations expenses other than fuel and purchased power were unchanged. Maintenance expenses during the current three-month period were $3 million higher primarily due to greater power plant maintenance. During the nine months ended September 30, 1995, versus the comparable 1994 period, operations expenses other than fuel and purchased power, were $14 million lower, primarily due to an $11 million decrease in purchased gas costs due primarily to lower gas prices, and lower employee welfare, injuries and damages, insurance premiums, and research and development expenses. Maintenance expenses for the current nine-month period were $23 million higher primarily due to increases of $25 million for power plant maintenance offset by a $2 million reduction in transmission/distribution system maintenance. Callaway maintenance was $17 million higher, most of which was associated with the Spring 1995 nuclear refueling and maintenance outage. Maintenance at other power plants increased $8 million. 11 Page 10 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) Operating Expenses (Continued) For the twelve months ended September 30, 1995, versus the prior twelve-month period, operations expenses other than fuel and purchased power, were $21 million lower, primarily due to a $18 million reduction in purchased gas costs due primarily to lower gas prices, a $2 million decrease in labor costs and a $1 million reduction in other expenses. Maintenance expenses for the current twelve-month period increased $19 million primarily due to increases of $16 million for power plant maintenance expenses. Depreciation expense for the three-month, nine-month and twelve-month periods ended September 30, 1995, versus the comparable 1994 periods, increased $2 million, $6 million and $8 million, respectively, primarily due to increases in depreciable property. Other taxes charged to operating expenses increased during the three, nine and twelve months ended September 30, 1995, versus the comparable 1994 periods resulting primarily from increases in gross receipts taxes due to greater electric sales. Income taxes charged to operating expenses increased $8 million and $4 million, respectively, during the three and twelve months ended September 30, 1995, versus the comparable 1994 periods, primarily due to higher pretax income. Income taxes charged to operating expenses decreased $6 million during the nine months ended September 30, 1995, versus the comparable 1994 period, primarily due to lower pretax income. Other Income and Deductions Miscellaneous other net income and deductions decreased $10 million, $12 million and $16 million for the three, nine and twelve months ended September 30, 1995, versus the comparable 1994 periods, primarily reflecting $9 million of merger-related expenses (See Note 5 of Notes to Financial Statements in this Report) and increased charitable contributions. Interest During the three, nine and twelve months ended September 30, 1995 versus the comparable prior year periods, interest decreased $8 million, $6 million and $4 million, respectively, primarily due to reduced other interest expense, partially offset by higher interest rates on variable rate long-term debt. Allowance for Funds Used During Construction (AFC) Variations in AFC track construction work in progress and changes were not significant for the reporting periods. During the twelve-month periods ended September 30, 1995 and 1994, AFC rates averaged 9.3 percent and 9.2 percent, respectively. Balance Sheet The $93.4 million increase (40%) in accounts receivable and unbilled revenues is due primarily to an increase in revenues of 60% for the months of August and September 1995, compared to the months of November and December 1994. Changes in the accounts payable, income taxes accrued and other taxes accrued balances are due primarily to the timing of various payments to taxing authorities and suppliers. 12 Page 11 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) Rate Matters See Notes 4 and 5 under Notes to Financial Statements of this report. LIQUIDITY AND CAPITAL RESOURCES Cash provided by the registrant's operations was $570 million for the nine months ended September 30, 1995 compared to $529 million during the same period in 1994. Cash flows used in investing activities totaled $245 million and $236 million for the nine months ended September 30, 1995 and 1994, respectively. Construction expenditures for the nine months ended September 30, 1995 were for constructing new or improving existing facilities, purchasing of rail cars and expenditures for complying with the Clean Air Act. In addition, the registrant expended $30 million for the acquisition of nuclear fuel. Capital requirements for the remainder of 1995 are expected to be principally for construction expenditures and the acquisition of nuclear fuel. Cash flows used in financing activities were $251 million for the nine months ended September 30, 1995 compared to $151 million during the same period in 1994. The registrant's principal financing activities for the nine months ended September 30, 1995 were the redemption of $38 million of First Mortgage Bonds and the payment of dividends. On October 13, 1995, the Board of Directors of the registrant increased the quarterly common stock dividend to 62.5 cents per share from 61 cents, increasing the indicated annualized common stock dividend to $2.50 per share. Common stock dividends paid for the twelve months ended September 30, 1995, resulted in a pay out rate of 85% of registrant's earnings to common stockholders. Common stock dividends paid to registrant's common stockholders in relation to net cash provided by operating activities for the same period were 43%. The registrant plans to continue utilizing short-term debt as support for normal operations and other temporary requirements. The registrant is authorized by the Federal Energy Regulatory Commission (FERC) to have outstanding at any one time up to $600 million of short-term unsecured debt instruments. Short-term borrowings of the registrant consist of bank loans (maturities generally on an overnight basis) and commercial paper (maturities generally within 10-45 days). At September 30, 1995, the registrant had committed banks lines of credit aggregating $184 million (none of which was used at such date) which make available interim financing at various rates of interest based on LIBOR, the bank certificate of deposit rate, or other options, and in support of which the registrant has agreements with its lending banks to pay annual fees up to 0.125%. These lines of credit are renewable annually at various dates throughout the year. The registrant also has bank credit agreements due 1998 and 1999 which permit the registrant to borrow up to $300 million and $200 million, respectively, on a long-term basis. At September 30, 1995, no such borrowings were outstanding. Additionally, the registrant has a lease agreement which provides for the financing of nuclear fuel. At September 30, 1995, the maximum amount which may be financed under the agreement is $120 million. Cash provided from financing for the nine months ended September 30, 1995 included issuances for nuclear fuel of $41 million offset by $62 million of redemptions resulting in a $21 million net reduction of cash from financing. At September 30, 1995, $98 million was financed under the lease. For a discussion of Callaway Plant decommissioning costs, see Note 7 to the Notes to Financial Statements of this report. See Note 8 to the Notes to Financial Statements of this report for a discussion of issues existing at September 30, 1995 that could affect the registrant. 13 Page 12 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of (FAS 121). This statement establishes standards for the impairment of long-lived assets and certain identifiable intangible assets. In addition, FAS 121 requires that regulatory assets which are no longer probable of recovery through future revenues be charged to earnings. FAS 121 will be effective as of January 1, 1996. FAS 121 is not expected to have a material effect on the registrant's financial position or results of operations upon adoption. 14 Page 13 PART II. OTHER INFORMATION ITEM 5. OTHER MATTERS MERGER AGREEMENT WITH CIPSCO INCORPORATED As reported in its Quarterly Report on Form 10-Q for the quarter ended June 30, 1995, the registrant, on August 11, 1995, entered into an Agreement and Plan of Merger (the "Merger Agreement") with CIPSCO Incorporated. Further information concerning the Merger Agreement and proposed merger transaction is included in Note 5 to the Notes to Financial Statements in Part I of this report. Details of the proposed transaction will be included in the Joint Proxy Statement/Prospectus which will be sent to the shareholders of both parties in connection with shareholder voting on the merger. UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma financial information combines the historical balance sheets and statements of income of the registrant and CIPSCO, including their respective subsidiaries, after giving effect to the Mergers. The unaudited pro forma combined condensed balance sheet at September 30, 1995 gives effect to the Mergers as if they had occurred at September 30, 1995. The unaudited pro forma combined condensed statements of income for the nine-month periods ended September 30, 1995 and 1994, and the 12-month period ended September 30, 1995 give effect to the Mergers as if they had occurred at the beginning of the periods presented. These statements are prepared on the basis of accounting for the Mergers as a pooling of interests and are based on the assumptions set forth in the notes thereto. In addition, the pro forma financial information does not give effect to the expected synergies of the transaction. The following pro forma financial information has been prepared from, and should be read in conjunction with, the historical financial statements and related notes thereto of the registrant and CIPSCO. The following information is not necessarily indicative of the financial position or operating results that would have occurred had the Mergers been consummated on the date, or at the beginning of the periods, for which the Mergers are being given effect nor is it necessarily indicative of future operating results or financial position. In addition, due to the effect of weather on sales and other factors which are characteristic of public utility operations, financial results for the nine-month periods ended September 30, 1995 and 1994 are not necessarily indicative of trends for any twelve-month period. 15 Page 14 AMEREN CORP. UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT SEPTEMBER 30, 1995 (THOUSANDS OF DOLLARS)
ASSETS As Reported (Note 1) Pro Forma - ------ -------------------- Adjustments Pro Forma Property and plant UE CIPSCO (Notes 2,9) Combined ----- ------ ----------- --------- Electric $8,441,276 $2,287,538 $ 374,294 $11,103,108 Gas 169,820 223,660 - 393,480 Other 35,007 - - 35,007 ---------- ---------- ---------- ----------- 8,646,103 2,511,198 374,294 11,531,595 Less accumulated depreciation and amortization 3,454,662 1,115,529 246,430 4,816,621 ---------- ---------- ---------- ----------- 5,191,441 1,395,669 127,864 6,714,974 Construction work in progress: Nuclear fuel in process 109,353 - - 109,353 Other 100,187 51,940 1,389 153,516 ---------- ---------- ---------- ---------- Total property and plant, net 5,400,981 1,447,609 129,253 6,977,843 Regulatory asset - deferred income taxes (Note 6) 726,788 45,589 - 772,377 Other assets: Unamortized debt expense 45,733 16,813 673 63,219 Nuclear decommissioning trust fund 69,124 - - 69,124 Investments in nonregulated activities - 98,539 - 98,539 Other 22,635 41,332 (2,014) 61,953 ---------- ---------- ---------- ---------- Total other assets 137,492 156,684 (1,341) 292,835 Current assets: Cash and temporary investments 75,025 9,185 327 84,537 Accounts receivable, net 270,534 78,261 21,665 370,460 Unbilled revenue 58,983 16,993 - 75,976 Materials and supplies, at average cost - Fossil fuel 55,434 39,595 6,890 101,919 Other 95,038 51,606 5,600 152,244 Other 34,031 13,430 3,527 50,988 ---------- ---------- ---------- ---------- Total current assets 589,045 209,070 38,009 836,124 ---------- ----------- ---------- ---------- Total Assets $6,854,306 $1,858,952 $ 165,921 $8,879,179 ========== ========== ========== ========== CAPITAL AND LIABILITIES: - ------------------------ Capitalization: Common stock (Note 2) $ 510,619 $ 356,812 $ (866,059) $ 1,372 Other stockholders' equity (Note 2) 1,848,477 308,098 866,059 3,022,634 ---------- ---------- ---------- ---------- Total common stockholders' equity 2,359,096 664,910 - 3,024,006 Preferred stock of subsidiary 219,147 80,000 - 299,147 Long-term debt 1,764,343 478,850 130,000 2,373,193 ---------- ---------- ---------- ---------- Total capitalization 4,342,586 1,223,760 130,000 5,696,346 Minority interest in consolidated subsidiary - - 3,534 3,534 Accumulated deferred income taxes 1,348,881 324,041 (5,842) 1,667,080 Accumulated deferred investment tax credits 168,068 53,074 - 221,142 Regulatory liability 219,525 114,569 - 334,094 Accumulated provision for nuclear decommissioning 70,797 - - 70,797 Other deferred credits and liabilities 160,417 - 5,613 166,030 Current liabilities: Current maturity of long-term debt 69,295 - - 69,295 Short-term debt - - 6,800 6,800 Accounts payable 107,436 48,955 20,101 176,492 Wages payable 33,982 11,260 - 45,242 Taxes accrued 209,132 23,473 86 232,691 Interest accrued 57,372 8,610 2,885 68,867 Other 66,815 51,210 2,744 120,769 ---------- ---------- ---------- ---------- Total current liabilities 544,032 143,508 32,616 720,156 ---------- ---------- ---------- ---------- Total Capital and Liabilities $6,854,306 $1,858,952 $ 165,921 $8,879,179 ========== ========== ========== ==========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. 16 Page 15 AMEREN CORP. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1995 (THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
UE CIPSCO -- ------ Pro Forma (As Reported) (As Reported) Adjustments Pro Forma (Notes 1,4,10) (Notes 1,3) (Notes 2,9) Combined -------------- ----------- ----------- -------- OPERATING REVENUES: Electric $1,613,570 $ 544,886 $ 138,378 $2,296,834 Gas 60,480 87,523 - 148,003 Other 318 5,860 244 6,422 ---------- ---------- ---------- ---------- Total operating revenues 1,674,368 638,269 138,622 2,451,259 OPERATING EXPENSES: Operations Fuel and purchased power 280,690 189,447 74,097 544,234 Gas Costs 35,051 48,322 - 83,373 Other 277,491 113,897 14,452 405,840 ---------- ---------- ---------- ---------- 593,232 351,666 88,549 1,033,447 Maintenance 163,342 46,690 14,038 224,070 Depreciation and amortization 174,369 62,280 11,866 248,515 Income taxes (Note 7) 188,492 41,826 6,208 236,526 Other taxes 166,944 43,133 1,496 211,573 ---------- ---------- ---------- ---------- Total operating expenses 1,286,379 545,595 122,157 1,954,131 OPERATING INCOME 387,989 92,674 16,465 497,128 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction 4,758 600 - 5,358 Minority interest in consolidated subsidiary - - (3,396) (3,396) Miscellaneous, net (8,772) 1,915 (5,153) (12,010) ---------- ---------- ---------- ---------- Total other income and deductions, net (4,014) 2,515 (8,549) (10,048) INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 383,975 95,189 7,916 487,080 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 101,770 25,157 7,916 134,843 Allowance for borrowed funds used during construction (4,661) (49) - (4,710) Preferred dividends of subsidiaries (Note 8) 9,938 2,896 - 12,834 ---------- ---------- ---------- ---------- Net interest charges and preferred dividends 107,047 28,004 7,916 142,967 NET INCOME $ 276,928 $ 67,185 $ - $ 344,113 ========== ========== ========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $2.71 $1.97 $2.51 ===== ===== ===== AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,069,542 1,022,086 137,215,462 =========== ========== ========= ===========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. 17 Page 16 AMEREN CORP. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME NINE MONTHS ENDED SEPTEMBER 30, 1994 (THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
UE CIPSCO -- ------ Pro Forma (As Reported) (As Reported) Adjustments Pro Forma (Note 1) (Note 1) (Notes 2,9) Combined -------- -------- ----------- -------- OPERATING REVENUES: Electric $1,586,088 $ 537,013 $ 181,129 $2,304,230 Gas 62,653 100,724 - 163,377 Other 343 6,660 108 7,111 ---------- ---------- ---------- ---------- Total operating revenues 1,649,084 644,397 181,237 2,474,718 OPERATING EXPENSES: Operations Fuel and purchased power 256,906 190,014 117,952 564,872 Gas Costs 45,928 61,835 - 107,763 Other 280,216 109,795 14,380 404,391 ---------- ---------- ---------- ---------- 583,050 361,644 132,332 1,077,026 Maintenance 140,105 45,378 13,465 198,948 Depreciation and amortization 168,135 60,610 9,035 237,780 Income taxes (Note 7) 194,065 42,247 7,787 244,099 Other taxes 165,299 42,972 1,480 209,751 ---------- ---------- ---------- ---------- Total operating expenses 1,250,654 552,851 164,099 1,967,604 OPERATING INCOME 398,430 91,546 17,138 507,114 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction 4,340 504 - 4,844 Minority interest in consolidated subsidiary - - (4,110) (4,110) Miscellaneous, net 3,259 2,673 (6,193) (261) ---------- ---------- ---------- ---------- Total other income and deductions, net 7,599 3,177 (10,303) 473 INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 406,029 94,723 6,835 507,587 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 107,774 24,826 6,835 139,435 Allowance for borrowed funds used during construction (3,838) (231) - (4,069) Preferred dividends of subsidiaries (Note 8) 9,939 2,568 - 12,507 ---------- ---------- ---------- ---------- Net interest charges and preferred dividends 113,875 27,163 6,835 147,873 NET INCOME $ 292,154 $ 67,560 $ - $ 359,714 ========== ========== ========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $2.86 $1.98 $2.62 ===== ===== ===== AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,107,706 1,023,231 137,254,771 =========== ========== ========= ===========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. 18 Page 17 AMEREN CORP. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME TWELVE MONTHS ENDED SEPTEMBER 30, 1995 (THOUSANDS OF DOLLARS EXCEPT SHARES AND PER SHARE AMOUNTS)
UE CIPSCO -- ------ Pro Forma (As Reported) (As Reported) Adjustments Pro Forma (Notes 1,4,10) (Notes 1,3) (Notes 2,9) Combined -------------- ----------- ----------- -------- OPERATING REVENUES: Electric $1,997,016 $ 705,300 $ 202,438 $2,904,754 Gas 83,936 125,218 - 209,154 Other 448 7,969 317 8,734 ---------- ---------- ---------- ---------- Total operating revenues 2,081,400 838,487 202,755 3,122,642 OPERATING EXPENSES: Operations Fuel and purchased power 353,345 251,300 113,763 718,408 Gas costs 49,218 71,530 - 120,748 Other 372,846 144,170 20,024 537,040 ---------- ---------- ---------- ---------- 775,409 467,000 133,787 1,376,196 Maintenance 220,997 66,488 19,649 307,134 Depreciation and amortization 232,279 82,769 16,607 331,655 Income taxes (Note 7) 200,848 48,661 8,160 257,669 Other taxes 212,122 56,178 1,945 270,245 ---------- ---------- ---------- ---------- Total operating expenses 1,641,655 721,096 180,148 2,542,899 OPERATING INCOME 439,745 117,391 22,607 579,743 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction 6,186 726 - 6,912 Minority interest in consolidated subsidiary - - (4,840) (4,840) Miscellaneous, net (11,629) 2,744 (7,257) (16,142) ---------- ---------- ---------- ----------- Total other income and deductions, net (5,443) 3,470 (12,097) (14,070) INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 434,302 120,861 10,510 565,673 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 135,108 33,551 10,510 179,169 Allowance for borrowed funds used during construction (6,336) (107) - (6,443) Preferred dividends of subsidiaries (Note 8) 13,250 3,838 - 17,088 ---------- ---------- ---------- ---------- Net interest charges and preferred dividends 142,022 37,282 10,510 189,814 NET INCOME $ 292,280 $ 83,579 $ - $ 375,859 ========== ========== ========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $2.86 $2.45 $2.74 ===== ===== ===== AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,078,037 1,022,341 137,224,212 =========== ========== ========= ===========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. 19 Page 18 AMEREN CORP. NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS 1. Reclassifications have been made to certain "as reported" account balances reflected in the registrant's and CIPSCO's financial statements to conform to this reporting presentation (See Notes 6, 7 and 8). All other financial statement presentation and accounting policy differences are immaterial and have not been adjusted in the pro forma combined condensed financial statements. 2. The pro forma combined condensed financial statements reflect the conversion of each share of the registrant's Common Stock ($5 par value) outstanding into one share of Ameren Common Stock ($.01 par value) and the conversion of each share of CIPSCO Common Stock (no par value) outstanding into 1.03 shares of Ameren Common Stock, as provided in the Merger Agreement. The pro forma combined condensed financial statements are presented as if the companies were combined during all periods included therein. 3. Net income for the nine months and twelve months ended September 30, 1995 includes a pre-tax charge of $6.3 million for CIPSCO's voluntary separation program. 4. The allocation between the registrant and CIPSCO and their customers of the estimated cost savings resulting from the Mergers, net of the costs incurred to achieve such savings, will be subject to regulatory review and approval. Transaction costs are currently estimated to be approximately $22 million (including fees for financial advisors, attorneys, accountants, consultants, filings and printing). None of these estimated cost savings or the costs to achieve such savings have been reflected in the pro forma combined condensed financial statements. However, net income for the nine months and twelve months ended September 30, 1995 includes a charge of $9 million, net of income taxes, for merger transaction costs. 5. Intercompany transactions (including purchased and exchanged power transactions) between the registrant and CIPSCO during the periods presented were not material and, accordingly, no pro forma adjustments were made to eliminate such transactions. 6. CIPSCO's regulatory asset related to deferred income taxes was reclassified from the regulatory liability account balance to conform to this reporting presentation. 7. CIPSCO's income taxes are reflected as operating expenses to conform to this reporting presentation. 8. Currently, the registrant's Preferred Stock is not issued by a subsidiary; subsequent to the Merger, the registrant's Preferred Stock will be issued by a subsidiary of Ameren. As a result, the registrant's preferred dividend requirements have been reclassified to conform to this reporting presentation. 9. Pro forma adjustments have been made to consolidate the financial results of Electric Energy, Inc. (EEI), which will, in substance, be a 60% owned subsidiary of Ameren subsequent to the Merger. Prior to the Merger, the registrant and CIPSCO held 40% and 20% ownership interests, respectively, in EEI and accounted for these investments under the equity method of accounting. All intercompany transactions between the registrant, CIPSCO and EEI have been eliminated. 10. Net income for the nine and twelve months ended September 30, 1995 includes a one-time credit to Missouri electric customers which reduced revenues and pre-tax income of the registrant by $30 million. 20 Page 19 PART II. OTHER INFORMATION (Continued) ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. Exhibit 12(a) - Computation of Ratio of Earnings to Fixed Charges, 12 Months Ended September 30, 1995. Exhibit 12(b) - Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements, 12 Months Ended September 30, 1995. Exhibit 27 - Financial Data Schedule. (b) Reports on Form 8-K. None 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 thereunto duly authorized. UNION ELECTRIC COMPANY (Registrant) November 8, 1995 By /s/ Donald E. Brandt ------------------------- Donald E. Brandt Senior Vice President Finance and Corporate Services EX-12.(A) 2 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12(a) UNION ELECTRIC COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
12 Months Year Ended December 31, Ended ------------------------------------------------------------- September 30, 1990 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- ---- (Thousands of Dollars Except Ratios) Net income for the Period $294,219 $321,512 $302,748 $297,160 $320,757 $305,530 -------- -------- -------- -------- -------- -------- Add: Taxes Based on income 191,532 218,954 197,009 182,716 203,827 196,875 -------- -------- -------- -------- -------- -------- Fixed Charges: Interest on Debt 183,215 163,061 125,798 124,430 135,608 129,605(*) Amortization of Premium and Discount, Less Expense on Debt; and Bond Defeasance Cost 4,369 4,148 9,521 5,170 5,504 5,503 Rentals (See note) 1,114 1,171 908 1,314 1,299 2,846 -------- -------- -------- -------- -------- -------- Total Fixed Charges 188,698 168,380 136,227 130,914 142,411 137,954 -------- -------- -------- -------- -------- -------- Earnings Available for Fixed Charges $674,449 $708,846 $635,984 $610,790 $666,995 $640,359 ======== ======== ======== ======== ======== ======== Ratio of Earnings to Fixed Charges 3.57 4.21 4.66 4.66 4.68 4.64 ==== ==== ==== ==== ==== ====
(*) Total annual interest charges on all bonds for the twelve months ended September 30, 1995 was $115,334,000. Note: Represents the interest factor applicable to rentals. EX-12.(B) 3 COMP OF RATIO OF EARNINGS TO FIXED CHARGES & PREF. 1 EXHIBIT 12(b) UNION ELECTRIC COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
12 Months Year Ended December 31, Ended ------------------------------------------------------------- September 30, 1990 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- ---- (Thousands of Dollars Except Ratios) Net income for the period $294,219 $321,512 $302,748 $297,160 $320,757 $305,530 Add: Taxes based on income 191,532 218,954 197,009 182,716 203,827 196,875 Fixed charges (see below) 188,698 168,380 136,227 130,914 142,411 137,954 ------- -------- -------- -------- -------- -------- Earnings available for fixed charges and preferred stock dividend requirements of Registrant $674,449 $708,846 $635,984 $610,790 $666,995 $640,359 ======== ======== ======== ======== ======== ======== Fixed charges: Interest on debt $183,215 $163,061 $125,798 $124,430 $135,608 $129,605 Amortization of premium and discount, less expense, on debt; and bond defeasance cost 4,369 4,148 9,521 5,170 5,504 5,503 Rentals (see note) 1,114 1,171 908 1,314 1,299 2,846 -------- -------- -------- -------- -------- -------- Total fixed charges $188,698 $168,380 $136,227 $130,914 $142,411 $137,954 Preferred stock dividend requirements of Registrant *(Adjusted for income tax effect) 22,901 22,213 21,852 21,537 20,514 20,613 -------- -------- -------- -------- -------- -------- Total fixed charges and preferred stock dividend requirements $211,599 $190,593 $158,079 $152,451 $162,925 $158,567 ======== ======== ======== ======== ======== ======== Ratio of earnings to fixed charges and preferred dividends 3.19 3.72 4.02 4.01 4.09 4.04 ==== ==== ==== ==== ==== ====
Note: Represents the interest factor applicable to rentals. * See following page for supporting computation. 2 EXHIBIT 12(b) (continued) UNION ELECTRIC COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
12 Months Year Ended December 31, Ended ------------------------------------------------------------- September 30, 1990 1991 1992 1993 1994 1995 ---- ---- ---- ---- ---- ---- (Thousands of Dollars Except Ratios) Computation of preferred stock dividend requirements of Registrant, adjusted for income tax effect* Preferred stock dividend requirements of Registrant, as shown on statement of earnings $14,693 $14,059 $14,058 $14,087 $13,252 $13,250 Less deductible preferred stock dividends** 2,085 2,085 2,085 1,973 1,816 1,816 ------- ------- ------- ------- ------- ------- Non-deductible preferred stock dividends $12,608 $11,974 $11,973 $12,114 $11,436 $11,434 ======= ======= ======= ======= ======= ======= Excess of net income before income taxes over net income (percentage) See note below 65.1% 68.1% 65.1% 61.5% 63.5% 64.4% ----- ----- ----- ----- ----- ----- Income tax effect on non-deductible preferred stock dividends* $8,208 $8,154 $7,794 $7,450 $7,262 $7,363 Add: Deductible preferred stock dividends (above) 2,085 2,085 2,085 1,973 1,816 1,816 Non-deductible preferred stock dividends (above) 12,608 11,974 11,973 12,114 11,436 11,434 ------ ------ ------ ------ ------ ------ Preferred stock dividend requirements of Registrant. (Adjusted for income tax effect) $22,901 $22,213 $21,852 $21,537 $20,514 $20,613 ======= ======= ======= ======= ======= ======= Note: Calculated as follows - Net income before income taxes $485,751 $540,466 $499,757 $479,876 $524,584 $502,405 Less net income 294,219 321,512 302,748 297,160 320,757 305,530 -------- -------- -------- -------- -------- -------- Excess - Taxed based on income $191,532 $218,954 $197,009 $182,716 $203,827 $196,875 ======== ======== ======== ======== ======== ======== - Percentage of net income 65.1% 68.1% 65.1% 61.5% 63.5% 64.4% ===== ===== ===== ===== ===== =====
* Income tax adjustment to reflect pretax earnings required to meet preferred stock dividend. ** Dividends deductible on federal income tax return. EX-27 4 FINANCIAL DATA SCHEDULE
UT 9-MOS DEC-31-1995 SEP-30-1995 PER-BOOK 5,400,981 69,124 589,045 68,368 726,788 6,854,306 510,619 717,669 1,130,808 2,359,096 624 218,497 1,700,867 0 0 0 35,000 26 63,476 34,295 2,442,425 6,854,306 1,674,368 188,492 1,097,887 1,286,379 387,989 (4,014) 383,975 97,109 286,866 9,938 276,928 186,886 115,334 569,745 2.71 2.71
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