-----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, Fn/DHpuRXakWYJK5AWJ/ydPJXb96uE85I8qypYpxNi2ezj0xki/+zoq/AR/BY3TY N6y8HDGFMNDbTn9oJV6Gtg== 0000950124-96-003649.txt : 19960816 0000950124-96-003649.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950124-96-003649 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 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: 96614464 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 FORM 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 JUNE 30, 1996 [ ] 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 July 31, 1996: 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 -- June 30, 1996 and December 31, 1995 2 Statement of Income -- Three Months, Six Months and Twelve Months Ended June 30, 1996 and 1995 3 Statement of Cash Flows -- Six Months Ended June 30, 1996 and 1995 4 Notes to Financial Statements 5 Management's Discussion and Analysis 6 thru 10 Part II Other Information 3 UNION ELECTRIC COMPANY Page 2 BALANCE SHEET UNAUDITED
ASSETS: (Thousands of Dollars) June 30, December 31, - ------- Property and plant, at original cost 1996 1995 ------------ -------------- Electric $8,622,939 $8,473,501 Gas 178,845 174,231 Other 34,763 35,033 --------- --------- 8,836,547 8,682,765 Less accumulated depreciation and amortization 3,613,616 3,494,722 --------- ---------- 5,222,931 5,188,043 Construction work in progress: Nuclear fuel in process 148,706 121,460 Other 127,445 125,934 --------- --------- Total property and plant, net 5,499,082 5,435,437 Regulatory asset - deferred income taxes 701,612 732,580 Deferred charges: Unamortized debt expense 42,335 44,496 Nuclear decommissioning trust fund 81,778 73,838 Other 24,325 20,101 --------- --------- Total deferred charges 148,438 138,435 Current assets: Cash 15,970 1,025 Accounts receivable - trade (less allowance for doubtful accounts of $5,320 and $6,925 at respective dates) 196,568 191,520 Unbilled revenue 122,837 82,098 Other accounts and notes receivable 22,413 21,602 Materials and supplies, at average cost - Fossil fuel 54,830 46,381 Construction and maintenance 96,311 92,921 Other 7,102 12,470 --------- --------- Total current assets 516,031 448,017 --------- --------- Total Assets $6,865,163 $6,754,469 ========= ========= 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 1,060,716 1,090,909 --------- --------- Total common stockholders' equity 2,289,004 2,319,197 Preferred stock not subject to mandatory redemption 218,497 218,497 Preferred stock subject to mandatory redemption 624 650 Capital lease obligation 78,920 62,607 Long-term debt 1,755,585 1,710,585 Unamortized discount and premium on debt (9,297) (9,579) --------- --------- Long-term debt, net 1,746,288 1,701,006 --------- --------- Total capitalization 4,333,333 4,301,957 Accumulated deferred income taxes 1,325,046 1,357,689 Accumulated deferred investment tax credits 163,430 166,524 Regulatory liability 210,160 216,502 Accumulated provision for nuclear decommissioning 83,451 75,511 Other deferred credits and liabilities 152,541 150,600 Current and accrued liabilities: Current maturity of capital lease obligation 31,599 34,462 Current maturity of long-term debt 45,000 35,000 Accounts payable 108,665 169,012 Wages payable 33,599 36,605 Bank loans 70,000 19,600 Accumulated deferred income taxes 40,749 27,429 Income taxes accrued 37,211 29,986 Other taxes accrued 63,202 17,727 Interest accrued 45,033 46,244 Dividends accrued 3,312 3,312 Other 118,832 66,309 --------- --------- Total current and accrued liabilities 597,202 485,686 --------- --------- Total Capital and Liabilities $6,865,163 $6,754,469 ========= =========
4 Page 3 UNION ELECTRIC COMPANY STATEMENT OF INCOME (UNAUDITED) (Thousands of Dollars Except Shares and Per Share Amounts)
Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, June 30, ------------------ ------------------ -------------------- 1996 1995 1996 1995 1996 1995 ---- ---- ---- ---- ---- ---- Operating revenues: Electric $495,548 $500,081 $910,234 $908,829 $2,015,858 $ 1,959,548 Gas 13,930 13,402 58,478 51,614 94,678 84,969 Steam 102 92 259 247 452 445 -------- -------- -------- -------- ---------- ---------- Total operating revenue 509,580 513,575 968,971 960,690 2,110,988 2,044,962 Operating expenses: Operations Fuel and purchased power 88,893 81,180 176,978 170,079 372,057 338,762 Other 106,645 102,771 220,774 212,156 427,740 421,950 -------- -------- -------- -------- ---------- ---------- 195,538 183,951 397,752 382,235 799,797 760,712 Maintenance 61,828 60,920 110,462 111,088 220,982 218,341 Depreciation and decommissioning 59,700 58,178 119,285 115,778 236,745 230,450 Income taxes 44,644 50,210 72,865 74,070 208,336 192,493 Other taxes 52,224 53,156 103,207 103,053 212,299 211,271 -------- -------- -------- -------- ---------- ---------- Total operating expenses 413,934 406,415 803,571 786,224 1,678,159 1,613,267 Operating income 95,646 107,160 165,400 174,466 432,829 431,695 Other income and deductions: Allowance for equity funds used during construction 2,121 1,016 3,823 2,908 7,742 5,539 Miscellaneous, net (2,481) 887 (1,586) 1,533 (9,099) (1,163) -------- -------- ------- -------- ---------- ---------- Total other income/deductions, net (360) 1,903 2,237 4,441 (1,357) 4,376 Income before interest charges 95,286 109,063 167,637 178,907 431,472 436,071 Interest charges: Interest 33,670 34,553 67,528 67,988 134,282 142,999 Allowance for borrowed funds used during construction (2,331) (1,525) (3,978) (3,340) (6,744) (6,326) -------- -------- -------- -------- -------- ---------- Net interest charges 31,339 33,028 63,550 64,648 127,538 136,673 Net income 63,947 76,035 104,087 114,259 303,934 299,398 Preferred stock dividends 3,313 3,313 6,625 6,626 13,249 13,251 -------- -------- -------- -------- -------- -------- Earnings on common stock $ 60,634 $ 72,722 $ 97,462 $107,633 $ 290,685 $ 286,147 ======== ======== ======== ======== ======== ======== Earnings per share of common stock (based on average shares outstanding) $ 0.59 $ 0.71 $ 0.95 $ 1.05 $ 2.85 $ 2.80 ======== ======== ======== ======== ======== ======== Dividends per share of common stock $0.625 $ 0.61 $ 1.25 $ 1.22 $ 2.485 $ 2.425 ======== ======== ======= ======== ======== ======== 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)
Six Months Ended June 30, ------------------ 1996 1995 ---- ---- Cash Flows From Operating: Net income $104,087 $114,259 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 114,464 111,066 Amortization of nuclear fuel 21,219 14,963 Allowance for funds used during construction (7,801) (6,248) Postretirement benefit accrual - 15,647 Deferred income taxes, net 5,303 (4,857) Deferred investment tax credits, net (3,094) (3,093) Changes in assets and liabilities: Receivables, net (46,598) (45,355) Materials and supplies (11,839) 6,039 Accounts and wages payable (63,353) 9,417 Taxes accrued 52,700 48,164 Interest and dividends accrued or declared (1,211) (7,665) Other, net 58,440 (2,350) -------- -------- Net cash provided by operating activities 222,317 249,987 Cash Flows From Investing: Construction expenditures (175,383) (154,041) Allowance for funds used during construction 7,801 6,248 Nuclear fuel expenditures (24,334) (23,893) -------- --------- Net cash used in investing activities (191,916) (171,686) Cash Flows From Financing: Dividends on preferred stock (6,625) (6,626) Dividends on common stock (127,655) (124,591) Environmental bond funds - 3,796 Redemptions - Nuclear fuel lease (16,901) (56,891) Long-term debt (35,000) (38,000) Preferred stock (26) (26) Issuances - Nuclear fuel lease 30,351 29,967 Short-term debt 50,400 25,400 Long-term debt 90,000 90,000 -------- -------- Net cash used in financing activities (15,456) (76,971) ----------- ---------- Net change in cash and cash equivalents 14,945 1,330 Cash and cash equivalents at beginning of period 1,025 1,510 -------- -------- Cash and cash equivalents at end of period $ 15,970 $ 2,840 ======== ======== 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) $ 61,883 $ 69,005 Income taxes 63,289 80,570
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 1995 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 June 30, 1996 and 1995 are not necessarily indicative of trends for any three-month, six-month or 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 1.8 percent rate decrease for all classes of Missouri retail electric customers, effective August 1, 1995, reducing annual revenues by $30 million. In addition, a $30 million credit was provided to Missouri electric customers in 1995 under the agreement. Also included is a three-year plan which provides that earnings in excess of a 12.61% regulatory return on equity (ROE) will be shared equally between customers and shareholders and earnings above a 14% ROE will be credited to customers. The formula for computing the credit uses twelve-month results ending June 30, rather than calendar year earnings. During the six months ended June 30, 1996, the registrant recorded an estimated $45 million credit for the first year of the plan. This credit, which the registrant expects to pay to Missouri customers later this year, was reflected as a reduction in electric revenues. Note 5 - On July 12, 1996, a joint agreement was filed with the Missouri Public Service Commission that recommends approval of the merger between the registrant and CIPSCO Incorporated. The registrant, the Missouri Public Service Commission staff, the office of the Public Counsel, several customer groups and others signed the agreement. Agreement provisions include a new three-year alternative regulation plan that would run from July 1, 1998 to June 30, 2001. Like the current plan (see Note 4 above), the new plan provides that earnings over a 12.61 percent ROE up to a 14 percent ROE would be shared equally between customers and shareholders. The new three-year plan would also return to customers 90 percent of all earnings above an ROE of 14 percent up to 16 percent. Earnings above a 16 percent ROE would be credited entirely to customers. Other agreement provisions include: recovery over a 10-year period of the Missouri portion of an estimated $71.5 million of merger-related transaction and transition costs; a Missouri electric rate decrease, effective September 1, 1998, based on the weather-adjusted average annual credits to customers under the current alternative regulation plan (see Note 4 above); and an experimental retail wheeling pilot program for 100 megawatts of electric power to be filed by the registrant no later than March 1, 1997. Also, as part of the agreement, the registrant will not seek to recover in Missouri the merger premium. The exclusion of the merger premium from rates would not result in a charge to earnings. 7 Page 6 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, which was approved by the shareholders of both companies in December 1995. The merged entity is expected to realize approximately $644 million in net savings over 10 years from combining certain operations of the two companies and is expected to adopt Union Electric's dividend payment level. However, the merger is conditioned upon, among other things, receipt of certain regulatory and governmental approvals. The merger is expected to be consummated in early 1997. RESULTS OF OPERATIONS Second-quarter 1996 common stock earnings decreased $12.1 million, or 12 cents per share, from 1995's second quarter to $60.6 million, or 59 cents per share. Common stock earnings for the six months ended June 30, 1996 totaled $97.5 million, or 95 cents per share, a decrease of $10.1 million, or 10 cents per share, from the same 1995 period. Common stock earnings for the twelve months ended June 30, 1996 were $290.7 million, or $2.85 per share, a $4.6 million, or 5 cent-per-share, increase from the preceding twelve-month period. Earnings and earnings per share fluctuated due to many conditions, the primary ones being: weather variations, electric rate reductions, credits to electric customers, sales growth, fluctuating operating costs and merger-related costs. The significant items affecting revenues, costs and earnings during the three-month, six month and twelve-month periods ended June 30, 1996 and 1995 are detailed below: Electric Operating Revenues
(Millions of Dollars) Variations for periods ended June 30, 1996 from comparable prior-year periods ---------------------------------------------------- Three Months Six Months Twelve Months ------------ ---------- ------------- Rate variations $(8.5) $(15.4) $(29.1) Credits to customers (32.4) (45.9) (75.9) Effect of abnormal weather 8.0 15.9 89.0 Growth and other 28.4 46.8 72.3 ------ ------ ------ $ (4.5) $ 1.4 $ 56.3 ====== ====== ======
The $4.5 million decrease in second-quarter electric revenues compared to the year-ago quarter is primarily due to an estimated $32.4 million credit to Missouri electric customers recorded during the period, as well as a 1.8 percent Missouri electric rate decrease, implemented in August, 1995, which reduced electric revenues $8.5 million. The customer credit and the rate decrease relate to the agreement approved by the Missouri Public Service Commission in July 1995. (See Note 4 to the Financial Statements of this report.) A $36.4 million increase in quarterly electric revenue due to growth and weather partially offset the effects of the credit and the rate decrease. 1996 second-quarter kilowatthour sales were up 8 percent from the same quarter of 1995, due to solid economic growth in the registrant's service area and warmer-than-normal weather. Weather-sensitive residential and commercial sales rose 16 percent and 5 percent, respectively, and industrial sales grew 3 percent compared to the year-ago quarter. Electric revenues for the first six months of 1996 increased $1.4 million as higher sales more than offset the effects of the customer credit and the rate decrease discussed previously. (See Note 4 to the Financial Statements of this report.) Year-to-date kilowatthour sales were up 7 percent from the comparable 1995 period. Residential sales increased 13 percent, commercial sales rose 6 percent and industrial sales were up 3 percent. These increases reflect the positive effects of weather, leap year, and growth in the service area during the current period. 8 Page 7 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) Electric revenues for the 12 months ended June 30, 1996 increased $56.3 million over the prior twelve-month period. The increase is primarily due to an 8 percent increase in kilowatthour sales over the comparable year-ago period. This increase reflects hotter-than-normal weather during the 1995 third quarter, colder-than-normal temperatures in the 1996 first quarter and a strong local economy. Residential sales increased 14 percent, commercial sales rose 6 percent and industrial sales grew 3 percent. These increases were partially offset by customer credits and the Missouri electric rate decrease. (See Note 4 to the Financial Statements of this report.) OPERATING EXPENSES
Fuel and Purchased Power - ------------------------ Variations for periods ended June 30, 1996 (Millions of Dollars) from comparable prior-year periods ------------------------------------------------ Three Months Six Months Twelve Months ------------ ---------- ------------- Fuel: Variation in generation $ 3.9 $ 10.5 $ 12.6 Price (10.6) (17.0) (19.1) Generation efficiencies 1.4 3.7 5.8 Department of Energy assessment (0.3) (0.6) (1.1) Net Interchange sales and purchased power variation 13.3 10.3 35.1 ----- ------ ------ $ 7.7 $ 6.9 $ 33.3 ===== ====== ======
The increases in fuel and purchased power costs for the three months, six months and twelve months ended June 30, 1996 versus the comparable prior-year periods were driven mainly by higher kilowatthour sales. Increases due to greater net purchased power costs and increased generation were partially offset by lower fuel prices. Other Operating Expenses Other operating expense variations reflect recurring conditions such as growth, inflation and wage increases. Second-quarter 1996 operations expenses other than fuel and purchased power were up $4 million over last year's second quarter primarily due to storm-related expenses, higher gas purchased for resale costs, and increased regulatory expenses. Second-quarter maintenance expenses rose $1 million as increased fossil-plant expenses related to scheduled maintenance projects more than offset decreased nuclear expenses caused by the absence of a Callaway nuclear plant refueling in the 1996 second quarter compared to last year's second quarter. Year-to-date operations expenses other than fuel and purchased power increased $9 million over the first six months of 1995 mostly due to higher gas purchased for resale costs and storm-related costs. Maintenance expenses for the six-month period declined $1 million as decreased Callaway expenses more than offset increased fossil-plant expenses. For the twelve months ended June 30, 1996, operations expenses other than fuel and purchased power were up $6 million versus the comparable year-ago period. The rise is primarily due to higher gas purchased for resale costs and increased labor expenses, partially offset by a decrease in employee benefits expense, and a reduction in injuries, damages and insurance premiums expenses. Maintenance expenses for the current twelve-month period increased $3 million as increased fossil-plant maintenance expenses were partially offset by reduced Callaway and tree-trimming expenses. 9 Page 8 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) Depreciation expense for the three-month, six-month and twelve-month periods ended June 30, 1996 increased $2 million, $4 million and $6 million, respectively, versus the comparable 1995 periods, primarily due to increases in depreciable property. Income taxes charged to operating expenses for the three months and six months ended June 30, 1996 decreased $6 million and $1 million, respectively, versus the comparable 1995 periods, primarily due to lower pretax income. Income taxes charged to operating expenses for the twelve months ended June 30, 1996 increased $16 million, versus the comparable 1995 period, principally due to greater pretax income and a higher effective tax rate. Other Income and Deductions Miscellaneous other net income and deductions decreased $3 million for the three-month and six-month periods ended June 30, 1996 versus the comparable 1995 periods resulting primarily from merger-related expenses. Merger-related expenses totaled $3 million for the second quarter and $4 million year-to-date. Miscellaneous other net income and deductions decreased $8 million for the twelve months ended June 30, 1996, versus the comparable 1995 period, primarily reflecting $13 million of merger-related expenses partially offset by reduced charitable contributions. Interest Interest charged for the twelve months ended June 30, 1996 decreased $9 million versus the prior-year period, primarily due to reductions in other interest expense, partially offset by higher 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 June 30, 1996 and 1995 AFC, rates averaged 9.2 percent for each of the periods. Balance Sheet The $46 million increase in accounts receivable and unbilled revenues is due primarily to higher kilowatthour sales in May and June 1996 compared to November and December 1995. The higher sales caused increases in revenue, as well as increased budget billing accounts receivable balances. Changes in the accounts payable, income taxes accrued and other tax accruals result from the timing of various payments to taxing authorities and suppliers. The $53 million increase in other current and accrued liabilities at June 30, 1996 compared to December 31, 1995 is primarily due to the $45 million Missouri customer credit discussed previously. (See Note 4 to the Financial Statements of this report.) Rate Matters See Notes 4 and 5 under Notes to Financial Statements of this report. 10 Page 9 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) On April 24, 1996 the Federal Energy Regulatory Commission (FERC) issued Orders 888 and 889 which are intended to promote competition in the wholesale electric energy market. FERC requires transmission-owning public utilities, such as the registrant, to provide transmission access and service to others in a manner similar and comparable to that which the utility has by virtue of ownership. In Order 888, FERC requires that a single tariff be used by the utility in providing transmission service. Order 888 also provides for the recovery of stranded costs. On July 9, 1996 the registrant filed an open access tariff under FERC Order 888. Order 889 established the Standards of Conduct and information requirements that transmission owners must adhere to in doing business under the open access rule. Under Order 889, utilities must obtain transmission service for their own use in the same manner its customers will obtain service, thus mitigating market power through control of transmission facilities. The registrant is currently evaluating Orders 888 and 889. Based on its preliminary analysis, the registrant believes that these Orders, which relate to its wholesale business, will not have a material adverse effect on its financial condition, results of operations or liquidity. LIQUIDITY AND CAPITAL RESOURCES Cash provided by the registrant's operations totaled $222 million for the six months ended June 30, 1996 compared to $250 million during the same 1995 period. Cash flows used in investing activities totaled $192 million and $172 million for the six months ended June 30, 1996 and 1995, respectively. Construction expenditures for the six months ended June 30, 1996 were for constructing new or improving existing facilities, purchasing railroad coal cars and complying with the Clean Air Act. In addition, the registrant expended $24 million for the acquisition of nuclear fuel. Capital requirements for the remainder of 1996 are expected to be principally for construction expenditures and the acquisition of nuclear fuel. Cash flows used in financing activities were $15 million for the six months ended June 30, 1996 compared to $77 million during the same 1995 period. The registrant's principal financing activities for the six months ended June 30, 1996 were the redemption of $35 million of First Mortgage Bonds, the issuance of $50 million of short-term debt bank loans and $90 million of long-term debt under a revolving credit agreement and the payment of dividends. On April 23, 1996, the registrant's Board of Directors declared a quarterly dividend of 62.5 cents per common share which was paid to shareholders June 28, 1996. Common stock dividends paid for the twelve months ended June 30, 1996 resulted in a pay out rate of 87% of the registrant's earnings to common shareholders. Dividends paid to registrant's common shareholders relative to net cash provided by operating activities for the same period were 41%. The registrant plans to utilize short-term debt as support for normal operations and other temporary requirements. The registrant is authorized by 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 June 30, 1996, the registrant had committed banks lines of credit aggregating $184 million (of which $114 million was unused 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 pays to its lending banks annual fees up to 0.10%. 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 June 30, 1996, $90 million of such borrowings were outstanding. 11 Page 10 UNION ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued) Additionally, the registrant has a lease agreement which provides for the financing of nuclear fuel. At June 30, 1996, the maximum amount which may be financed under the agreement is $120 million. Cash provided from financing for the six months ended June 30, 1996 included issuances for nuclear fuel of $30 million offset by $17 million of redemptions. At June 30, 1996, $111 million was financed under the lease. On May 1, 1996, the registrant redeemed $30,000,000 of 5-1/2% Series First Mortgage Bonds, due on that date, at a price of 100% of the principal amount. 12 Page 11 PART II. OTHER INFORMATION ITEM 5.OTHER INFORMATION UNAUDITED PRO FORMA FINANCIAL INFORMATION AMEREN CORPORATION On August 11, 1995, the registrant and CIPSCO Incorporated ("CIPSCO") entered into an Agreement and Plan of Merger, which was subsequently approved by the shareholders of both parties. The merger ("Merger") is further conditioned on, among other things, receipt of regulatory and governmental approvals; is expected to be consummated in early 1997; and will result in a newly formed holding company, Ameren Corporation. 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 Merger. The unaudited pro forma combined condensed balance sheet at June 30, 1996 gives effect to the Merger as if it had occurred at June 30, 1996. The unaudited pro forma combined condensed statements of income for the six-month periods ended June 30, 1996, 1995 and the twelve-month period ended June 30, 1996, give effect to the Merger as if it had occurred at the beginning of the periods presented. These statements are prepared on the basis of accounting for the Merger 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 Merger been consummated on the date, or at the beginning of the periods, for which the Merger is 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 six-month periods ended June 30, 1996 and 1995, are not necessarily indicative of trends for any twelve-month period. Also see Part I, Note 5, Notes to Financial Statements. 13 Page 12 AMEREN CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET AT JUNE 30, 1996 (Thousands of Dollars)
ASSETS: As Reported (Note 1) Pro Forma - ------- ------------------------- Adjustments Pro Forma Property and plant UE CIPSCO (Notes 2,9) Combined ----- ------ ----------- --------- Electric $8,622,939 $2,342,630 $ 374,741 $11,340,310 Gas 178,845 233,403 - 412,248 Other 34,763 - - 34,763 ---------- ---------- ---------- ----------- 8,836,547 2,576,033 374,741 11,787,321 Less accumulated depreciation and amortization 3,613,616 1,165,985 260,354 5,039,955 ---------- ---------- ---------- ----------- 5,222,931 1,410,048 114,387 6,747,366 Construction work in progress: Nuclear fuel in process 148,706 - - 148,706 Other 127,445 51,974 2,886 182,305 ---------- ---------- ---------- ---------- Total property and plant, net 5,499,082 1,462,022 117,273 7,078,377 Regulatory asset - deferred income taxes (Note 6) 701,612 43,339 - 744,951 Other assets: Unamortized debt expense 42,335 15,781 624 58,740 Nuclear decommissioning trust fund 81,778 - - 81,778 Investments in nonregulated activities - 109,121 - 109,121 Other 24,325 32,521 (3,284) 53,562 ---------- --------- ---------- ---------- Total other assets 148,438 157,423 (2,660) 303,201 Current assets: Cash and temporary investments 15,970 11,484 2,889 30,343 Accounts receivable, net 196,568 78,623 20,164 295,355 Unbilled revenue 122,837 23,752 - 146,589 Materials and supplies, at average cost - Fossil fuel 54,830 41,103 6,817 102,750 Other 96,311 40,281 4,707 141,299 Other 29,515 17,653 3,467 50,635 ---------- ---------- ---------- ---------- Total current assets 516,031 212,896 38,044 766,971 ---------- ---------- ---------- ---------- Total Assets $6,865,163 $1,875,680 $ 152,657 $8,893,500 ========== ========== ========== ========== CAPITAL AND LIABILITIES: - ------------------------ Capitalization: Common stock (Note 2) $ 510,619 $ 356,812 $ (866,059) $ 1,372 Other stockholders' equity (Note 2) 1,778,385 293,135 866,059 2,937,579 ---------- ---------- ---------- ---------- Total common stockholders' equity 2,289,004 649,947 - 2,938,951 Preferred stock of subsidiary 219,121 80,000 - 299,121 Long-term debt 1,825,208 464,077 130,000 2,419,285 ---------- ---------- ---------- ---------- Total capitalization 4,333,333 1,194,024 130,000 5,657,357 Minority interest in consolidated subsidiary - - 3,534 3,534 Accumulated deferred income taxes 1,325,046 326,341 (6,937) 1,644,450 Accumulated deferred investment tax credits 163,430 50,560 - 213,990 Regulatory liability 210,160 111,945 - 322,105 Accumulated provision for nuclear decommissioning 83,451 - - 83,451 Other deferred credits and liabilities 152,541 - 4,753 157,294 Current liabilities: Current maturity of long-term debt 76,599 15,000 - 91,599 Short-term debt 70,000 38,482 - 108,482 Accounts payable 108,665 52,109 17,925 178,699 Wages payable 33,599 10,358 - 43,957 Taxes accrued 141,162 14,677 69 155,908 Interest accrued 45,033 9,459 420 54,912 Other 122,144 52,725 2,893 177,762 ---------- ---------- ---------- ---------- Total current liabilities 597,202 192,810 21,307 811,319 ---------- ---------- ---------- ---------- Total Capital and Liabilities $6,865,163 $1,875,680 $ 152,657 $8,893,500 ========== ========== ========== ==========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. 14
UE CIPSCO ---------- ------ (As Reported) (As Reported) (Notes 1,4,10) (Notes 1,4,7) -------------- ------------- OPERATING REVENUES: Electric $910,234 $ 341,210 Gas 58,478 85,359 Other 259 5,082 ---------- ---------- Total operating revenues 968,971 431,651 OPERATING EXPENSES: Operations Fuel and purchased power 176,978 131,646 Gas costs 34,571 52,681 Other 186,203 69,207 ---------- ---------- 397,752 253,534 Maintenance 110,462 30,971 Depreciation and amortization 119,285 43,130 Income taxes (Note 7) 72,865 21,294 Other taxes 103,207 29,384 ---------- ---------- Total operating expenses 803,571 378,313 OPERATING INCOME 165,400 53,338 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction 3,823 77 Minority interest in consolidated subsidiary - - Miscellaneous, net (1,586) (1,062) ---------- ---------- Total other income and deductions, net 2,237 (985) INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 167,637 52,353 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 67,528 17,487 Allowance for borrowed funds used during construction (3,978) (98) Preferred dividends of subsidiaries (Note 8) 6,625 1,864 ----------- ---------- Net interest charges and preferred dividends 70,175 19,253 NET INCOME $ 97,462 $ 33,100 ========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $0.95 $0.97 ===== ===== AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,069,542 =========== ========== Pro Forma Adjustments Pro Forma (Notes2,9) Combined ---------- --------- OPERATING REVENUES: Electric $ 96,703 $1,348,147 Gas - 143,837 Other 789 6,130 ---------- ---------- Total operating revenues 97,492 1,498,114 OPERATING EXPENSES: Operations Fuel and purchased power 54,864 363,488 Gas costs - 87,252 Other 9,396 264,806 ---------- ---------- 64,260 715,546 Maintenance 9,232 150,665 Depreciation and amortization 7,601 170,016 Income taxes (Note 7) 4,048 98,207 Other taxes 1,028 133,619 ---------- --------- Total operating expenses 86,169 1,268,053 OPERATING INCOME 11,323 230,061 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction - 3,900 Minority interest in consolidated subsidiary (2,482) (2,482) Miscellaneous, net (3,719) (6,367) ----------- --------- Total other income and deductions, net (6,201) (4,949) INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 5,122 225,112 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 5,122 90,137 Allowance for borrowed funds used during construction - (4,076) Preferred dividends of subsidiaries (Note 8) - 8,489 ----------- ---------- Net interest charges and preferred dividends 5,122 94,550 NET INCOME $ - $ 130,562 =========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $0.95 ===== AVERAGE COMMON SHARES OUTSTANDING (Note 2) 1,022,086 137,215,462 ========= ===========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. 15 Page 14 AMEREN CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME SIX MONTHS ENDED JUNE 30, 1995 (Thousands of Dollars Except Shares and Per Share Amounts)
UE CIPSCO -- ------ (As Reported) (As Reported) (Note 1) (Notes 1,3,7) -------- ------------- OPERATING REVENUES: Electric $908,829 $ 316,688 Gas 51,614 74,290 Other 247 3,428 ---------- --------- Total operating revenues 960,690 394,406 OPERATING EXPENSES: Operations Fuel and purchased power 170,079 117,094 Gas costs 28,216 43,069 Other 183,940 76,536 ---------- ---------- 382,235 236,699 Maintenance 111,088 30,672 Depreciation and amortization 115,778 41,275 Income taxes (Note 7) 74,070 15,105 Other taxes 103,053 28,349 ---------- ---------- Total operating expenses 786,224 352,100 OPERATING INCOME 174,466 42,306 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction 2,908 377 Minority interest in consolidated subsidiary - - Miscellaneous, net 1,533 1,337 ---------- ---------- Total other income and deductions, net 4,441 1,714 INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 178,907 44,020 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 67,988 16,658 Allowance for borrowed funds used during construction (3,340) (31) Preferred dividends of subsidiaries (Note 8) 6,626 1,939 ----------- ---------- Net interest charges and preferred dividends 71,274 18,566 NET INCOME $ 107,633 $ 25,454 ========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $1.05 $0.75 ===== ===== AVERAGE COMMON SHARES OUTSTANDING (Note 2) 102,123,834 34,069,542 =========== ========== Pro Forma Adjustments Pro Forma (Notes2,9) Combined ------------ ---------- OPERATING REVENUES: Electric $ 91,488 $1,317,005 Gas - 125,904 Other 143 3,818 ---------- ---------- Total operating revenues 91,631 1,446,727 OPERATING EXPENSES: Operations Fuel and purchased power 48,169 335,342 Gas costs - 71,285 Other 10,011 270,487 ---------- ---------- 58,180 677,114 Maintenance 9,471 151,231 Depreciation and amortization 8,050 165,103 Income taxes (Note 7) 4,209 93,384 Other taxes 1,030 132,432 ---------- --------- Total operating expenses 80,940 1,219,264 OPERATING INCOME 10,691 227,463 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction - 3,285 Minority interest in consolidated subsidiary (2,164) (2,164) Miscellaneous, net (3,314) (444) ----------- ------- Total other income and deductions, net (5,478) 677 INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 5,213 228,140 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 5,213 89,859 Allowance for borrowed funds used during construction - (3,371) Preferred dividends of subsidiaries (Note 8) - 8,565 ----------- ---------- Net interest charges and preferred dividends 5,213 95,053 NET INCOME $ - $ 133,087 =========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $0.97 =========== ===== AVERAGE COMMON SHARES OUTSTANDING (Note 2) 1,022,086 137,215,462 ========= ===========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. 16 Page 15 AMEREN CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME TWELVE MONTHS ENDED JUNE 30, 1996 (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 1,3,4,7) (Notes 2,9) Combined -------------- --------------- ---------- --------- OPERATING REVENUES: Electric $ 2,015,858 $ 728,006 $ 187,754 $ 2,931,618 Gas 94,678 140,676 - 235,354 Other 452 10,825 1,000 12,277 ----------- ---------- ---------- ---------- Total operating revenues 2,110,988 879,507 188,754 3,179,249 OPERATING EXPENSES: Operations Fuel and purchased power 372,057 262,778 104,201 739,036 Gas costs 57,607 83,667 - 141,274 Other 370,133 148,039 18,533 536,705 ----------- ---------- ---------- ---------- 799,797 494,484 122,734 1,417,015 Maintenance 220,982 68,295 17,702 306,979 Depreciation and amortization 236,745 85,118 15,299 337,162 Income taxes (Note 7) 208,336 51,961 7,696 267,993 Other taxes 212,299 57,647 1,909 271,855 ----------- ---------- ---------- --------- Total operating expenses 1,678,159 757,505 165,340 2,601,004 OPERATING INCOME 432,829 122,002 23,414 578,245 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction 7,742 589 - 8,331 Minority interest in consolidated subsidiary - - (4,876) (4,876) Miscellaneous, net (9,099) (4,697) (8,313) (22,109) ----------- ---------- ----------- ---------- Total other income and deductions, net (1,357) (4,108) (13,189) (18,654) INCOME BEFORE INTEREST CHARGES AND PREFERRED DIVIDENDS 431,472 117,894 10,225 559,591 INTEREST CHARGES AND PREFERRED DIVIDENDS: Interest 134,282 34,598 10,225 179,105 Allowance for borrowed funds used during construction (6,744) (140) - (6,884) Preferred dividends of subsidiaries (Note 8) 13,249 3,775 - 17,024 ----------- ---------- ----------- ---------- Net interest charges and preferred dividends 140,787 38,233 10,225 189,245 NET INCOME $ 290,685 $ 79,661 $ - $ 370,346 =========== ========== =========== ========== EARNINGS PER SHARE OF COMMON STOCK (BASED ON AVERAGE SHARES OUTSTANDING) $ 2.85 $ 2.34 $2.70 ===== ===== ===== 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 CORPORATION 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 six months ended June 30, 1995 includes CIPSCO's pre-tax charges of $5.8 million for a voluntary separation program. Net income for the twelve months ended June 30, 1996 includes $5.7 million of system development expenses. 4. The allocation between the registrant and CIPSCO and their customers of the estimated cost savings resulting from the merger, 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 have been reflected in the pro forma combined condensed financial statements. However, net income for the six months and twelve months ended June 30, 1996 include merger transaction costs and costs to achieve such savings of $4.4 million and $13.2 million, net of income taxes, for the registrant and $2.1 million and $6.8 million, net of income taxes, for CIPSCO, respectively. 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. The registrant and CIPSCO hold 40% and 20% ownership interests, respectively, in EEI and account 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 six and twelve months ended June 30, 1996 includes credits for Missouri electric customers which reduced revenues and pre-tax income of the registrant by $45 million and $76 million, respectively. 18 Page 17 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 June 30, 1996. Exhibit 12(b) - Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements, 12 Months Ended June 30, 1996. 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) August 13, 1996 By /s/Donald E. Brandt ---------------------- Donald E. Brandt Senior Vice President Finance and Corporate Services EX-12.(A) 2 COMPUTATION OF RATIO EARNINGS TO FIXED CHARGES 1 EXHIBIT 12(a) UNION ELECTRIC COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Year Ended December 31, 12 Months ------------------------------------------------------------- Ended June 30, 1991 1992 1993 1994 1995 1996 ---- ---- ---- ---- ---- ---- (Thousands of Dollars Except Ratios) Net income for the Period $321,512 $302,748 $297,160 $320,757 $314,107 $303,934 -------- -------- -------- -------- -------- -------- Add: Taxes Based on income 218,954 197,009 182,716 203,827 207,734 206,198 -------- -------- -------- -------- -------- -------- Fixed Charges: Interest on Debt 163,061 125,798 124,430 135,608 129,239 129,087(*) Amortization of Premium and Discount, Less Expense on Debt; and Bond Defeasance Cost 4,148 9,521 5,170 5,504 5,502 5,195 Rentals (See note) 1,171 908 1,314 1,299 3,330 3,302 -------- -------- -------- -------- -------- -------- Total Fixed Charges 168,380 136,227 130,914 142,411 138,071 137,584 -------- -------- -------- -------- -------- -------- Earnings Available for Fixed Charges $708,846 $635,984 $610,790 $666,995 $659,912 $647,716 ======== ======== ======== ======== ======== ======== Ratio of Earnings to Fixed Charges 4.21 4.66 4.66 4.68 4.78 4.7 ==== ==== ==== ==== ==== ===
(*) Total annual interest charges on all bonds for the twelve months ended June 30, 1996 was $113,813,000. Note: Represents the interest factor applicable to rentals. EX-12.(B) 3 COMP RATIO EARNINGS TO FIXED CHRGES/PREF.STATE DIV 1 EXHIBIT 12(b) UNION ELECTRIC COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
Year Ended December 31, 12 Months ------------------------------------------------------------- Ended June 30, 1991 1992 1993 1994 1995 1996 ---- ---- ---- ---- ---- ---- (Thousands of Dollars Except Ratios) Net income for the period $321,512 $302,748 $297,160 $320,757 $314,107 $303,934 Add: Taxes based on income 218,954 197,009 182,716 203,827 207,734 206,198 Fixed charges (see below) 168,380 136,227 130,914 142,411 138,071 137,584 ------- -------- -------- -------- -------- -------- Earnings available for fixed charges and preferred stock dividend requirements of Registrant $708,846 $635,984 $610,790 $666,995 $659,912 $647,716 ======== ======== ======== ======== ======== ======== Fixed charges: Interest on debt $163,061 $125,798 $124,430 $135,608 $129,239 $129,087 Amortization of premium and discount, less expense, on debt; and bond defeasance cost 4,148 9,521 5,170 5,504 5,502 5,195 Rentals (see note) 1,171 908 1,314 1,299 3,330 3,302 -------- -------- -------- -------- -------- -------- Total fixed charges $168,380 $136,227 $130,914 $142,411 $138,071 $137,584 Preferred stock dividend requirements of Registrant* (Adjusted for income tax effect) 22,213 21,852 21,537 20,514 20,808 21,001 -------- -------- -------- -------- -------- -------- Total fixed charges and preferred stock dividend requirements $190,593 $158,079 $152,451 $162,925 $158,879 $158,585 ======== ======== ======== ======== ======== ======== Ratio of earnings to fixed charges and preferred dividends 3.72 4.02 4.01 4.09 4.15 4.08 ==== ==== ==== ==== ==== ====
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
Year Ended December 31, 12 Months ------------------------------------------------------------- Ended June 30, 1991 1992 1993 1994 1995 1996 ---- ---- ---- ---- ---- ---- (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 $ 14,059 $ 14,058 $ 14,087 $ 13,252 $ 13,250 $ 13,249 Less deductible preferred stock dividends** 2,085 2,085 1,973 1,816 1,816 1,816 ------- ------- ------- ------- ------- ------- Non-deductible preferred stock dividends $ 11,974 $ 11,973 $ 12,114 $ 11,436 $ 11,434 $ 11,433 ======= ======= ======= ======= ======= ======= Excess of net income before income taxes over net income (percentage) See note below 68.1% 65.1% 61.5% 63.5% 66.1% 67.8% ----- ----- ----- ----- ----- ----- Income tax effect on non-deductible preferred stock dividends* $ 8,154 $ 7,794 $ 7,450 $ 7,262 $ 7,558 $ 7,752 Add: Deductible preferred stock dividends (above) 2,085 2,085 1,973 1,816 1,816 1,816 Non-deductible preferred stock dividends (above) 11,974 11,973 12,114 11,436 11,434 11,433 ------ ------ ------ ------ ------ ------ Preferred stock dividend requirements of Registrant. (Adjusted for income tax effect) $ 22,213 $ 21,852 $ 21,537 $ 20,514 $ 20,808 $ 21,001 ======= ======= ======= ======= ======= ======= Note: Calculated as follows - Net income before income taxes $540,466 $499,757 $479,876 $524,584 $521,841 $510,132 Less net income 321,512 302,748 297,160 320,757 314,107 303,934 -------- -------- -------- -------- -------- -------- Excess - Taxed based on income $218,954 $197,009 $182,716 $203,827 $207,734 $206,198 ======== ======== ======== ======== ======== ======== - Percentage of net income 68.1% 65.1% 61.5% 63.5% 66.1% 67.8% ===== ===== ===== ===== ===== =====
* 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 6-MOS DEC-31-1996 JUN-30-1996 PER-BOOK 5,499,082 81,778 516,031 66,660 701,612 6,865,163 510,619 717,669 1,060,716 2,289,004 598 218,497 1,746,288 70,000 0 0 45,000 26 78,920 31,599 2,385,231 6,865,163 2,110,988 208,336 1,469,823 1,678,159 432,829 (1,357) 431,472 127,538 303,394 13,249 290,685 127,655 113,813 611,842 2.85 2.85
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