-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Ssi+ipcKkHa5m08ELs2PMfCCHkwEPTxsmH0yeVoH1Jo35E7tWPZDJ+WhoigTkFk3 xwKGcCzD77XCGIGptJX2bg== 0000051720-95-000018.txt : 19950511 0000051720-95-000018.hdr.sgml : 19950511 ACCESSION NUMBER: 0000051720-95-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950510 SROS: MSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERSTATE POWER CO CENTRAL INDEX KEY: 0000051720 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 420329500 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03632 FILM NUMBER: 95536230 BUSINESS ADDRESS: STREET 1: 1000 MAIN ST STREET 2: PO BOX 769 CITY: DUBUQUE STATE: IA ZIP: 52004-0769 BUSINESS PHONE: 3195825421 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR ( ) 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 1-3632 INTERSTATE POWER COMPANY (Exact name of registrant as specified in its charter) DELAWARE 42-0329500 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1000 Main Street, P.O. Box 769, Dubuque, Iowa 52004-0769 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 319-582-5421 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 Indicate the number of shares outstanding of each of the issuer's classes of common stock. Shares Outstanding May 1, 1995 Common Stock Par Value $3.50 Per Share 9,564,287 Shares INTERSTATE POWER COMPANY Form 10-Q Table of Contents Part I - Financial Information Item 1. Statements of Income - Three Months Ended 1 Balance Sheets - Assets 2 Balance Sheets - Capitalization and Liabilities 3 Statements of Cash Flows 4 Summarized Financial Information 5 Notes to Financial Statements 5 Item 2. Management's Discussion and Analysis 6 Part II - Other Information Item 1. Legal Proceedings 10 Item 2. Changes in Securities 10 Item 3. Defaults Upon Senior Securities 10 Item 4. Submission of Matters to a Vote of Security Holders 10 Item 5. Other Information 11 Item 6. Exhibits and Reports on Form 8-K 11 INTERSTATE POWER COMPANY STATEMENTS OF INCOME Three Months Ended March 31 1995 1994 (In Thousands) OPERATING REVENUES: Electric $ 63,803 $ 62,375 Gas 18,962 23,200 82,765 85,575 OPERATING EXPENSES: Operation: Fuel for electric generation 16,840 15,594 Power purchased 12,102 11,553 Cost of gas sold 9,957 13,011 Other operating expenses 12,031 12,206 Maintenance 3,440 3,528 Depreciation 7,226 6,861 Income taxes: Federal currently payable 2,988 3,506 State currently payable 893 1,040 Deferred taxes-net 1,225 1,171 Investment tax credit amortization (257) (257) Property and other taxes 4,505 4,311 Total operating expenses 70,950 72,524 OPERATING INCOME 11,815 13,051 OTHER INCOME AND DEDUCTIONS: Allowance for equity funds used during construction 0 7 Interest income 56 46 Miscellaneous 214 177 Income taxes (111) (92) Total other income and deductions 159 138 INCOME BEFORE INTEREST CHARGES 11,974 13,189 INTEREST CHARGES: Long-term debt 3,811 3,843 Other interest charges 488 122 Allowance for borrowed funds used during construction (82) (27) Total interest charges 4,217 3,938 NET INCOME 7,757 9,251 PREFERRED STOCK DIVIDENDS 614 613 NET INCOME AVAILABLE FOR COMMON STOCK $ 7,143 $ 8,638 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 9,564 9,401 EARNINGS PER COMMON SHARE OUTSTANDING $ .74 $ .91 DIVIDENDS PAID PER COMMON SHARE $ .52 $ .52 The accompanying Notes to Financial Statements are an integral part of these statements. INTERSTATE POWER COMPANY BALANCE SHEETS ASSETS Mar. 31 Dec. 31 1995 1994 (In Thousands) UTILITY PLANT (at original cost) $883,429 $879,897 Less accumulated provision for depreciation 385,194 379,216 Utility plant - net 498,235 500,681 OTHER PROPERTY AND INVESTMENTS 477 522 CURRENT ASSETS: Cash and cash equivalents 1,664 1,537 Accounts receivable less reserve 24,993 22,350 Inventories - at average cost: Fuel 15,523 24,220 Materials and supplies 5,424 5,208 Prepaid income tax 7,070 6,197 Other prepayments and current assets 6,664 5,954 Total current assets 61,338 65,466 DEFERRED DEBITS: Regulatory assets for deferred income taxes 27,686 27,469 Deferred energy efficiency costs 18,203 16,961 Other 17,475 17,746 Total deferred debits 63,364 62,176 TOTAL $623,414 $628,845 The accompanying Notes to Financial Statements are an integral part of these statements. INTERSTATE POWER COMPANY BALANCE SHEETS CAPITALIZATION AND LIABILITIES Mar. 31 Dec. 31 1995 1994 CAPITALIZATION: Common stock, par value $3.50 per share; Authorized - 30,000,000 shares; issued and outstanding - 9,564,287 in 1995 and 9,564,287 in 1994 $ 33,475 $ 33,475 Additional paid-in capital 103,127 103,137 Retained earnings 58,063 55,893 Total common equity 194,665 192,505 Preferred stock, par value $50 per share 34,777 34,752 Total stockholders' equity 229,442 227,257 Long-term debt 189,050 189,032 Total capitalization 418,492 416,289 CURRENT LIABILITIES: Commercial paper payable 22,100 35,600 Long-term debt maturing within one year 14,000 14,000 Accounts payable 11,179 14,133 Payroll, interest and taxes accrued 25,103 19,342 Other 13,676 12,147 Total current liabilities 86,058 95,222 DEFERRED CREDITS AND OTHER NON-CURRENT LIABILITIES: Accumulated deferred income taxes 89,723 88,176 Accumulated deferred investment tax credits 18,812 19,069 Other 10,329 10,089 Total deferred credits and other non-current liabilities 118,864 117,334 TOTAL $623,414 $628,845 The accompanying Notes to Financial Statements are an integral part of these statements. INTERSTATE POWER COMPANY STATEMENTS OF CASH FLOWS Three Months Ended March 31 1995 1994 (In Thousands) RECONCILIATION OF NET INCOME TO CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 7,757 $ 9,251 Adjustment for non-cash items: Depreciation 7,226 6,861 Deferred income taxes 1,331 1,109 Investment tax credit amortization (257) (257) Allowance for equity funds used during construction (0) (7) Deferred pension cost 0 23 Changes in assets and liabilities: Accounts receivable - net (2,643) (1,567) Fuel 8,700 13,404 Materials and supplies (217) (507) Accounts payable and other current liabilities (1,501) (2,289) Accrued and prepaid taxes 2,868 2,496 Interest accrued 1,669 1,707 Other prepayments and current assets (710) (3,005) Deferred energy conservation costs (1,242) (777) Regulatory Assets 578 (458) Other operating activities 627 461 Cash flows from operating activities 24,186 26,445 CASH FLOWS FROM INVESTING ACTIVITIES: Additions to utility plant (4,792) (5,778) Allowance for borrowed funds used during construction (82) (27) Other (110) (60) Cash flows from investing activities (4,984) (5,865) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 0 1,299 Retirement of long-term debt (3) (3) Dividends on common and preferred stock (5,572) (5,487) Sale of commercial paper - net (13,500) (17,600) Cash flows from financing activities (19,075) (21,791) NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS: $ 127 $(1,211) CASH AND CASH EQUIVALENTS: Beginning of period $ 1,537 $ 3,083 End of period $ 1,664 $ 1,872 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest (net of amount capitalized) $ 2,445 $ 2,118 Income taxes $ 0 $ 90 The accompanying Notes to Financial Statements are an integral part of these statements. INTERSTATE POWER COMPANY Summarized Financial Information The March 31, 1995 financial statements included herein have been prepared by the company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The accounting policies followed by the company are set forth in Note 1 to the company's financial statements in the 1994 Form 10-K. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the company's Form 10-K for the year ended December 31, 1994. In the opinion of the company, the financial statements reflect all adjustments, consisting only of normal recurring accruals, necessary to fairly state the results of operations. Notes to Financial Statements In March 1995 the company filed an application with the Iowa Utilities Board for an increase in electric rates in an annual amount of approximately $13.1 million. The application includes a request for increased interim rates in an annual amount of $9.6 million. The Board has until June 29, 1995 to rule on the level and effective date of the requested interim rate increase. Any interim rate increase will be collected subject to refund upon final determination by the Board. On May 1, 1995 the company filed an application with the Minnesota Public Utilities Commission for an increase in gas rates in an annual amount of $2.4 million. A decision on the final rate increase is expected in March 1996. INTERSTATE POWER COMPANY PART I - FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis The company's results of operations and financial condition are affected by numerous factors, including weather, sales, and the amount of changes in customer rates. The dividend of $2.08 per share annually and $0.52 per quarter has been maintained, however, the Board of Directors will be monitoring future dividends and the current level cannot be assured. EARNINGS PER SHARE for the first quarter of 1995 were $0.74 compared to $0.91 for the corresponding period in 1994. Gas sales and electric sales to residential and commercial customers were down in the first quarter of 1995, primarily because of mild weather. The ELECTRIC MARGIN (revenue less cost of fuel and purchased power) for the first quarter of 1995 was $34.9 million compared to $35.2 million for the first quarter of 1994. The decrease is primarily a result of lower sales to residential and commercial customers. The reduction in interchange sales did not significantly affect the electric margin nor net income, as the margin on such sales allocable to the Iowa jurisdiction is flowed back to customers through the fuel clause adjustment. Three Months Ended March 31 ELECTRIC SALES (Mwh) 1995 1994 % Change Residential 268,769 279,483 (3.8) Commercial 187,415 194,323 (3.6) Large Power & Light 768,701 713,782 7.7 Interchange 4,973 18,690 (73.4) Sales for Resale 64,049 63,282 1.2 Other 15,384 16,200 (5.0) Total Electric Sales 1,309,291 1,285,760 1.8 The decrease in residential and commercial electric sales is primarily a result of milder weather this year. Large power & light sales increased 7.7% due to favorable economic conditions. The decrease in interchange sales to other utilities was primarily due to unusually high sales during extremely cold weather in January 1994. Three Months Ended March 31 ELECTRIC REVENUES (000'S) 1995 1994 % Change Residential 19,185 19,556 (1.9) Commercial 11,760 11,992 (1.9) Large Power & Light 28,235 25,724 9.8 Interchange 106 578 (81.7) Sales for Resale 2,188 2,158 1.4 Other 2,329 2,367 (1.6) Total Electric Revenues 63,803 62,375 2.3 The increase in revenues for the first quarter of 1995 is primarily due to the increased large power & light sales. In addition, the company received IUB approval to collect $6.7 million of demand side management (DSM) costs over a 4-year period effective October 1994. These factors were partially offset by the reduced interchange sales and a $0.9 million first quarter of 1994 overcollection of interim Iowa electric rates. The GAS MARGIN (revenue less purchased gas) for the first quarter of 1995 was $9.0 million compared to $10.2 million for the same period in 1994. The decrease was primarily attributable to lower residential and commercial sales. The COST OF GAS SOLD decreased $3.1 million, or 23.5%, during the first quarter of 1995 compared to the same period in 1994 primarily due to a 12.8% decrease in volumes sold and a 13.7% reduction in the unit cost of gas. The reduction in cost is attributable to favorable gas prices as a result of mild heating season temperatures. Three Months Ended March 31 GAS DELIVERIES (MMcf) 1995 1994 % Change Residential 2,231 2,552 (12.6) Commercial 1,275 1,435 (11.1) Industrial 467 577 (19.1) Other 11 4 Total Gas Sales 3,984 4,568 (12.8) Gas Transportation 6,616 5,920 11.8 Total Gas Deliveries 10,600 10,488 1.1 The decrease in residential and commercial gas sales is mainly a result of milder temperatures in 1995. The overall increase of 1.1% is primarily due to the increase in transportation volumes delivered to industrial customers. Three Months Ended March 31 GAS REVENUES (000's) 1995 1994 % Change Residential $11,053 $13,403 (17.5) Commercial 5,657 6,875 (17.7) Industrial 1,587 2,231 (28.9) Other 59 47 Total Gas Sales Revenues 18,356 22,556 (18.6) Gas Transportation 607 644 ( 5.7) Total Gas Revenues $18,963 $23,200 (18.3) The decrease in residential and commercial revenues is primarily a result of decreased sales due to milder temperatures. Revenue from retail industrial sales decreased mainly as a result of the decreased sales. Transportation revenues for the first quarter of 1994 included $61,000 of take-or-pay revenues received from an industrial customer. There have been no significant developments concerning FERC Order 636 transition costs since the company's discussion of this matter in the 1994 Annual Report to Stockholders. FUEL FOR ELECTRIC GENERATION increased $1.2 million, or 8.0%, in the first quarter of 1995 compared to the same period in 1994. This increase resulted from a 3.4% increase in kilowatt-hours generated by the company and an energy clause adjustment of $1.7 million. PURCHASED POWER EXPENSE increased $0.5 million, or 4.8%, during the first quarter of 1995 compared to 1994. This increase is primarily a result of the 7.2% increase in Kwh's purchased. Capacity charges included in purchased power expense were $5.8 million for both the first quarter of 1995 and the first quarter of 1994. DEPRECIATION EXPENSE increased by $0.4 million or 5.3%. This is primarily due to increased investment in utility plant and increased depreciation rates implemented in the fourth quarter of 1994. Total INCOME TAX EXPENSE decreased appproximately $0.6 million during the first quarter of 1995 compared to the first quarter of 1994. The decrease is mainly due to lower income. PROPERTY AND OTHER TAXES increased 4.5% during the first quarter of 1995 compared to the same period in 1994. The increase is primarily attributable to higher assessed valuations in the State of Iowa. OTHER INCOME for the first quarter of 1995 includes $253,000 of energy efficiency carrying costs and curtailment credits compared to $127,000 for the same period in 1994. The increase is primarily due to an increase in the total amount of deferred energy efficiency costs ($13.9 million at March 31, 1995 compared to $10.4 million at March 31, 1994) and to an increase in the carrying cost rate. OTHER INTEREST EXPENSE increased $0.4 million primarily due to interest on short-term borrowings. Short-term interest expense was $448,000 for the first quarter of 1995 compared to $91,000 for the first quarter of 1994. The average outstanding balance of short-term borrowings during the first quarter of 1995 was $29.9 million compared to $10.8 million during the first quarter of 1994. Interest rates for the first quarter of 1995 averaged 5.99% compared to 3.34% in 1994. AVERAGE TEMPORARY INVESTMENTS during the first quarter of 1995 were $1.9 million compared to $4.2 million in 1994. The average interest rate was 5.73% in the first quarter of 1995 compared to 2.96% in 1994. FUEL INVENTORIES increased $5.8 million during the first quarter of 1995 compared to the same period in 1994. The March 31, 1994 inventory reflected a planned draw down of the coal pile at the M. L. Kapp Power Plant to facilitate a construction project. CONSTRUCTION EXPENDITURES during the first quarter of 1995 totaled $4.8 million compared to $5.8 million for the same period in 1994. Construction work in progress as of March 31, 1995 totalled $8.4 million compared to $6.2 million at March 31, 1994. Approximately $1.2 million of the 1995 construction expenditures is attributable to waste water treatment facilities at the company's M. L. Kapp generating station and two transmission line rebuild projects. The 1995 construction program is estimated to be $30 million. In 1993 the company adopted Statement of Financial Accounting Standards (SFAS) 106, "EMPLOYER'S ACCOUNTING FOR POSTRETIREMENT BENEFITS OTHER THAN PENSIONS". Under the provisions of SFAS 106, the estimated future cost of providing postretirement benefits will be accrued during the employees' service periods. The Iowa Utilities Board has allowed the company to recover SFAS 106 costs in its Iowa gas rates effective May 1993 and Iowa electric rates effective October 1993. As of March 31, 1995, the company has deferred approximately $1.9 million of SFAS 106 costs applicable to its Minnesota and FERC jurisdictions pending the filing of rate cases to recover the costs. In March 1995 the company filed an application with the Iowa Utilities Board for an increase in electric rates in an annual amount of approximately $13.1 million. The appplication includes a request for increased interim rates in an annual amount of $9.6 million. The Board has until June 29, 1995 to rule on the level and effective date of the requested interim rate increase. Any interim rate increase will be collected subject to refund upon final determination by the Board. On May 1, 1995 the company filed an application with the Minnesota Public Utilities Commission for an increase in gas rates in an annual amount of $2.4 million. A decision on the final rate increase is expected in March 1996. The company's potential liability for coal tar waste at former manufactured gas plant sites was discussed in the 1994 Annual Report to Stockholders. The status of the former manufactured gas plant sites remains substantially unchanged, except that: 1. In April 1995 the company received a deferral accounting order from the Minnesota Public Utilities Commission. The accounting order allows the company to seek recovery of certain previously expensed investigation and remediation costs in the state of Minnesota. 2. In 1994, the company filed a lawsuit in Cook County, Illinois, Circuit Court-Chancery Division against certain of its insurers to recover the costs of investigating and remediating, as necessary, the sites of former manufactured gas plants. Subsequently, in an April 1995 ruling, the Chancery Division dismissed the action on grounds of forum non conveniens. The company is evaluating its options, which include appeal or refiling the case in another jurisdiction. INTERSTATE POWER COMPANY PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Reference is made to the 1994 Form 10-K Item 3 for certain pending legal proceedings and proceedings. Reference is also made to the Management Discussion and Analysis included herein. Other than these items, there are no material pending legal proceedings, or proceedings known to be contemplated by governmental authorities, other than ordinary routine litigation incidental to the business, to which the company is a party or of which any of the company's property is the subject. ITEM 2. CHANGES IN SECURITIES The rights of holders of registered securities have not been materially modified, limited or qualified. ITEM 3. DEFAULTS UPON SENIOR SECURITIES No defaults upon senior securities. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) THE DATE OF THE MEETING AND WHETHER IT WAS AN ANNUAL OR SPECIAL MEETING. On May 2, 1995 the Annual Stockholders Meeting was held. (b) IF THE MEETING INVOLVED THE ELECTION OF DIRECTORS, THE NAME OF EACH DIRECTOR ELECTED AT THE MEETING AND THE NAME OF EACH OTHER DIRECTOR WHOSE TERM OF OFFICE AS A DIRECTOR CONTINUED AFTER THE MEETING. The two Class I members of the Board of Directors were re-elected, to hold office for terms as follows: Alfred D. Cordes term expiring in 1998 Joyce L. Hanes term expiring in 1998 Following are the Class II and III members of the Board of Directors whose terms continued after the meeting: James E. Byrns term expiring in 1996 Gerald L. Kopischke term expiring in 1996 Alan B. Arends term expiring in 1997 Nicholas J. Schrup term expiring in 1997 Wayne H. Stoppelmoor term expiring in 1997 (c) A BRIEF DESCRIPTION OF EACH OTHER MATTER VOTED UPON AT THE MEETING AND STATE THE NUMBER OF VOTES CAST FOR, AGAINST OR WITHHELD, AS WELL AS THE NUMBER OF ABSTENTIONS AND BROKER NON-VOTES, AS TO EACH SUCH MATTER, INCLUDING A SEPARATE TABULATION WITH RESPECT TO EACH NOMINEE FOR OFFICE. The election of two Class I directors, Alfred D. Cordes and Joyce L. Hanes, to hold office for a term of three years expiring at the annual meeting of stockholders of the company to be held in 1998. Votes cast were as follows: For Against Abstain Alfred D. Cordes 7,613,200 94,018 63,878 Joyce L. Hanes 7,608,901 95,528 63,878 ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) No exhibits filed as a part. (b) No reports were filed on Form 8-K. 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. Interstate Power Company (Registrant) Date May 10, 1995 /s/ W. C. Troy W. C. Troy, Controller (Duly Authorized Officer and Principal Accounting Officer) EX-27 2
UT 3-MOS DEC-31-1994 MAR-31-1995 PER-BOOK 498,235 477 61,338 63,364 0 623,414 33,475 103,127 58,063 194,665 23,958 10,819 189,050 0 0 22,100 14,000 0 112 17 168,693 623,414 82,765 4,849 66,101 70,950 11,815 159 11,974 4,217 7,757 614 7,143 4,973 15,091 127 $0.74 $0.74
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