-----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, Qqdwtn7IPNmEnijMEVGYY73mYTYA/qZEVmepvQCUIblA77b4vLbxAlic3udUFjVi B8OsYXWu1ULVB53gywsouw== 0000061339-94-000012.txt : 19941116 0000061339-94-000012.hdr.sgml : 19941116 ACCESSION NUMBER: 0000061339-94-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MADISON GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000061339 STANDARD INDUSTRIAL CLASSIFICATION: 4931 IRS NUMBER: 390444025 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01125 FILM NUMBER: 94559767 BUSINESS ADDRESS: STREET 1: 133 S BLAIR ST STREET 2: PO BOX 1231 CITY: MADISON STATE: WI ZIP: 53701 BUSINESS PHONE: 6082527923 MAIL ADDRESS: STREET 1: POST OFFICE BOX 1231 CITY: MADISON STATE: WI ZIP: 53701-1231 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 September 30, 1994 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 0-1125 MADISON GAS AND ELECTRIC COMPANY (Exact name of registrant as specified in its charter) WISCONSIN 39-0444025 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 133 South Blair Street Post Office Box 1231 Madison, Wisconsin 53701-1231 (Address of principal executive offices) (ZIP Code) (608) 252-7923 (Registrant's telephone number, including area code) Common Stock outstanding at November 14, 1994: 10,719,812 shares 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, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] PART 1. FINANCIAL INFORMATION Item 1. Financial Statements MADISON GAS AND ELECTRIC COMPANY AND SUBSIDIARIES Consolidated Statements of Income and Retained Income (Thousands of Dollars, Except Per-Share Amounts) (Unaudited)
Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 1994 1993 1994 1993 STATEMENTS OF INCOME Operating Revenues (Note 4): Electric . . . . . . . . . . . . . . $43,577 $43,066 $115,273 $112,943 Gas . . . . . . . . . . . . . . . . 8,615 10,446 69,424 63,825 Total Operating Revenues . . . . . 52,192 53,512 184,697 176,768 Operating Expenses: Fuel for electric generation . . . . 6,770 6,175 21,009 17,925 Purchased power . . . . . . . . . . 4,126 3,718 7,922 8,611 Natural gas purchased . . . . . . . 4,669 6,895 44,219 40,873 Other operations . . . . . . . . . . 13,702 13,606 42,842 41,275 Maintenance . . . . . . . . . . . . 2,419 2,695 8,881 9,496 Depreciation and amortization . . . 5,610 5,522 16,818 16,275 Other general taxes . . . . . . . . 2,114 2,088 6,533 6,216 Income tax items . . . . . . . . . . 3,995 4,167 11,164 10,392 Total Operating Expenses . . . . . 43,405 44,866 159,388 151,063 Net Operating Income . . . . . . . . 8,787 8,646 25,309 25,705 AFUDC - equity funds . . . . . . . . 36 18 91 45 Other income, net . . . . . . . . . . 423 471 1,519 1,491 Income before interest expense . . . 9,246 9,135 26,919 27,241 Interest Expense: Interest on long-term debt . . . . . 2,645 2,754 7,897 8,586 Other interest . . . . . . . . . . . 157 75 302 216 AFUDC - borrowed funds . . . . . . . (21) (10) (51) (28) Net Interest Expense . . . . . . . 2,781 2,819 8,148 8,774 Net Income . . . . . . . . . . . . . 6,465 6,316 18,771 18,467 Preferred stock dividends . . . . . . 117 121 356 369 Earnings on common stock . . . . . . $ 6,348 $ 6,195 $ 18,415 $ 18,098 Earnings per share of common stock (Note 3) . . . . . . . . . . . $0.59 $0.58 $1.72 $1.69 STATEMENTS OF RETAINED INCOME Balance at beginning of period . . . $74,964 $70,548 $ 72,865 $ 68,380 Earnings on common stock . . . . . . 6,348 6,195 18,415 18,098 Cash dividends on common stock (Note 3) . . . . . . . . . . . . . . (5,039) (4,981) (15,007) (14,716) Balance at end of period . . . . . . $76,273 $71,762 $ 76,273 $ 71,762 The accompanying notes are an integral part of the above statements. /TABLE MADISON GAS AND ELECTRIC COMPANY AND SUBSIDIARIES Consolidated Balance Sheets (Thousands of Dollars) (Unaudited)
Sept. 30, Dec. 31, 1994 1993 ASSETS Utility plant, at original cost: In service - Electric . . . . . . . . . . . . . . $476,318 $466,984 - Gas . . . . . . . . . . . . . . . . . 162,944 158,458 Gross plant in service . . . . . . . . . . . . . . 639,262 625,442 Less accumulated provision for depreciation . . . (318,785) (302,904) Net plant in service . . . . . . . . . . . . . . 320,477 322,538 Construction work in progress . . . . . . . . . . 14,016 12,251 Nuclear decommissioning fund (Note 2) . . . . . . 27,424 25,499 Nuclear fuel, net . . . . . . . . . . . . . . . . 6,006 8,305 Total Utility Plant . . . . . . . . . . . . . . 367,923 368,593 Other property and investments . . . . . . . . . . 9,501 9,822 Current Assets Cash and cash equivalents . . . . . . . . . . . . . 881 1,391 Deposits for jointly owned electric power production facilities . . . . . . . . . . . . . . 1,983 2,787 Accounts receivable, less reserves of $1,240 and $973, respectively (Note 9) . . . . . . . . . 21,783 10,593 Unbilled revenue . . . . . . . . . . . . . . . . . 5,430 11,458 Materials and supplies, at average cost . . . . . . 6,685 7,254 Fossil fuel, at average cost . . . . . . . . . . . 1,848 3,333 Stored natural gas, at average cost . . . . . . . . 9,118 10,562 Prepaid taxes . . . . . . . . . . . . . . . . . . . 4,246 5,693 Other prepayments . . . . . . . . . . . . . . . . . 1,423 1,126 Total Current Assets . . . . . . . . . . . . . . 53,397 54,197 Deferred charges . . . . . . . . . . . . . . . . . 35,828 32,752 Total Assets . . . . . . . . . . . . . . . . . . $466,649 $465,364 CAPITALIZATION AND LIABILITIES Capitalization (see statement) . . . . . . . . . . $321,775 $310,791 Current Liabilities Preferred stock sinking fund requirements . . . . . 200 100 Interim loans - commercial paper outstanding . . . 13,500 23,500 Accounts payable . . . . . . . . . . . . . . . . . 13,750 17,890 Accrued taxes . . . . . . . . . . . . . . . . . . . 3,320 2,056 Accrued interest . . . . . . . . . . . . . . . . . 3,999 2,810 Other . . . . . . . . . . . . . . . . . . . . . . . 5,211 5,998 Total Current Liabilities . . . . . . . . . . . 39,980 52,354 Other Credits Accumulated deferred income taxes . . . . . . . . . 54,791 54,167 Regulatory liability (Note 7) . . . . . . . . . . . 25,467 25,264 Investment tax credit - deferred . . . . . . . . . 13,200 13,781 Other . . . . . . . . . . . . . . . . . . . . . . . 11,436 9,007 Total Other Credits . . . . . . . . . . . . . . 104,894 102,219 Commitments and Contingencies (Note 5) . . . . . . - - Total Capitalization and Liabilities . . . . . . $466,649 $465,364 The accompanying notes are an integral part of the above balance sheets.
MADISON GAS AND ELECTRIC COMPANY AND SUBSIDIARIES Consolidated Statements of Capitalization (Thousands of Dollars) (Unaudited)
Sept. 30, Dec. 31, 1994 1993 Common Shareholders' Equity Common stock - par value $8 per share: Authorized 28,000,000 shares Outstanding 10,719,812 shares . . . . . . . . . . $ 85,758 $ 85,758 Amount received in excess of par value . . . . . . 26,372 26,372 Retained income . . . . . . . . . . . . . . . . . . 76,273 72,865 Total Common Shareholders' Equity . . . . . . . 188,403 184,995 Redeemable Preferred Stock, cumulative, $25 par value, authorized 1,191,000 and 1,199,000 shares, respectively. Series E, 8.70%, 212,000 and 220,000 shares outstanding, respectively, less current sinking fund requirements of $200 and $100, respectively . . . . . . . . . . . . . . . . . . . 5,100 5,400 First Mortgage Bonds 5.45% - 1996 series . . . . . . . . . . . . . . . 7,920 8,000 7 3/4% - 2001 series . . . . . . . . . . . . . . . 11,478 11,482 6 1/2% - 2006 series (Pollution Control Revenue Bonds, principal amount $8,780, less construction fund of $1,599 and $1,556, respectively) . . . . 7,181 7,224 8.50% - 2022 series . . . . . . . . . . . . . . . 40,000 40,000 6.75% - 2027A series (Industrial Development Revenue Bonds, principal amount $28,000, less construction fund of $9,443 and $17,426, respectively) . . . . . . . . . . . . . . . . . . 18,557 10,574 6.70% - 2027B series (Industrial Development Revenue Bonds) . . . . . . . . . . . . . . . . . 19,300 19,300 7.70% - 2028 series . . . . . . . . . . . . . . . 25,000 25,000 First Mortgage Bonds Outstanding . . . . . . . . 129,436 121,580 Unamortized discount and premium on bonds, net . . (1,164) (1,184) Total First Mortgage Bonds . . . . . . . . . . . 128,272 120,396 Total Capitalization . . . . . . . . . . . . . . $321,775 $310,791 The accompanying notes are an integral part of the above statements.
MADISON GAS AND ELECTRIC COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows (Thousands of Dollars) (Unaudited)
Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 1994 1993 1994 1993 Operating Activities Net income . . . . . . . . . . . . . . $ 6,465 $ 6,316 $18,771 $18,467 Items not affecting working capital: Depreciation and amortization . . . . 5,610 5,522 16,818 16,275 Deferred income taxes . . . . . . . . (86) 521 825 2,262 Amortization of nuclear fuel . . . . . 858 697 1,953 1,777 Amortization of investment tax credits . . . . . . . . . . . . . . . (194) (200) (581) (600) AFUDC - equity funds . . . . . . . . . (36) (18) (91) (45) Other . . . . . . . . . . . . . . . . (82) (157) 155 (384) Net Funds Provided from Operations . . 12,535 12,681 37,850 37,752 Changes in working capital, excluding cash, sinking funds, maturities, and interim loans: (Increase)/decrease in current assets . . . . . . . . . . . . . . . (724) (5,237) 290 4,799 Increase/(decrease) in current liabilities . . . . . . . . . . . . . 476 3,980 (2,474) (1,216) Other noncurrent items, net . . . . . . (2,571) (4,787) 244 (8,542) Cash Provided by Operating Activities . 9,716 6,637 35,910 32,793 Financing Activities Common stock issued . . . . . . . . . . - 142 - 142 Cash dividends on common and preferred stock . . . . . . . . . . . (5,156) (5,102) (15,363) (15,085) Sale of First Mortgage Bonds . . . . . - - - 25,000 Maturities/redemptions of First Mortgage Bonds . . . . . . . . . - (8,788) - (33,788) Other increases/(decreases) in First Mortgage Bonds . . . . . . . . . 7 18 (64) (128) Decrease in preferred stock . . . . . . (200) (200) (200) (200) Decrease in bond - construction funds . 3,141 1,159 7,940 4,007 (Decrease)/increase in interim loans . (500) 11,500 (10,000) 2,000 Cash Used for Financing Activities . . (2,708) (1,271) (17,687) (18,052) Investing Activities Additions to utility plant and nuclear fuel . . . . . . . . . . . . . (8,261) (4,416) (16,757) (12,970) AFUDC - borrowed funds . . . . . . . . (21) (10) (51) (28) Increase in decommissioning fund . . . (668) (764) (1,925) (2,195) Cash Used for Investing Activities . . (8,950) (5,190) (18,733) (15,193) Changes in Cash (Note 6) . . . . . . . (1,942) 176 (510) (452) Cash at beginning of period . . . . . . 2,823 1,402 1,391 2,030 Cash at end of period . . . . . . . . . $ 881 $ 1,578 $ 881 $ 1,578 The accompanying notes are an integral part of the above statements.
MADISON GAS AND ELECTRIC COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) September 30, 1994 The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. In the opinion of Company management, all adjustments (consisting of only normal recurring adjustments) necessary to fairly present results have been made. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and the notes thereto set forth on pages 17 through 26 of the Company's 1993 Annual Report to Shareholders as incorporated in the Company's 1993 Annual Report on Form 10-K. 1. Summary of Significant Accounting Policies The accounting and financial policies relative to the following items have been described in the "Notes to Consolidated Financial Statements" in the Company's 1993 Annual Report to Shareholders and have been omitted herein because they have not changed materially through the date of this report. a. Basis of consolidation b. Revenue recognition c. Utility plant d. Nuclear fuel e. Joint plant ownership f. Depreciation g. Income taxes h. Pension plans i. Postretirement benefits other than pensions j. Postemployment benefits other than pensions and health care k. Fair value of financial investments l. Capitalization matters: common stock; redeemable preferred stock; First Mortgage Bonds, notes payable to banks, commercial paper, and lines of credit m. Segments of business 2. Nuclear Decommissioning The Company's share of decommissioning costs for Kewaunee are estimated to be $61 million in current dollars based upon a site-specific study performed in 1992 using immediate dismantlement as the method of decommissioning. As of September 30, 1994, the accumulated provision for depreciation included accumulated provisions for decommissioning totalling $27 million. Physical decommissioning is expected to occur during the period 2014 to 2021, with additional expenditures being incurred during the period 2022 to 2050 related to the storage of spent nuclear fuel at the site. The Company's share of future year costs of decommissioning are estimated to be expended between the years 2014 to 2050 is $339.2 million. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued) The Company is currently addressing the changes in future decommissioning costs as a part of its current rate filing. 3. Per-Share Amounts Earnings per share of common stock computed on the basis of the weighted average of the daily number of shares outstanding for the three months and for the nine months ended September 30, 1994, were 10,719,812; and for the three months and nine months ended September 30, 1993, were 10,702,957 and 10,699,152 shares, respectively. Dividends declared and paid per share of common stock for the periods ended September 30, 1994 and 1993, were, respectively: for the three months, $0.47 and $0.465; for the nine months, $1.40 and $1.375. 4. Rate Matters In April 1994, the Company announced its intention to reduce electric rates by approximately $5.8 million and freeze natural gas rates. At its open meeting on November 3, 1994, the Public Service Commission of Wisconsin (PSCW) reached a tentative decision on the Company-pending rate case. The PSCW decided to effectively reduce electric rates by $5.1 million and freeze natural gas rates for the test period beginning January 1, 1995. The proposed changes would remain in effect through December 31, 1996. This decision was based on a return on common equity of 11.7 percent. 5. Commitments and Contingencies ANR Pipeline Company (ANR) and Northern Natural Gas Company (NNG) have both entered into settlements with their gas suppliers concerning take- or-pay provisions of gas supply contracts that are being canceled. Remaining charges applicable to the Company for take-or-pay to ANR are $28,000 including interest. This is being paid to ANR as a fixed charge through July 1, 1995. Also, a volumetric surcharge is being paid to both ANR and NNG. ANR's surcharge is applied through April 1998; NNG's is effective through May 1996. The PSCW has approved procedures whereby the Company is allowed to recover both fixed and volumetric take-or-pay charges in rates. 6. Supplemental Cash Flow Information Cash payments for interest (net of amounts capitalized) and income taxes for the periods ended September 30 were as follows (in thousands of dollars): Three Nine Months Ended Months Ended 1994 1993 1994 1993 Interest, net of amounts capitalized $1,589 $1,954 $6,920 $7,633 Income taxes paid $3,301 $1,501 $9,302 $7,754 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued) 7. Regulatory Liability The regulatory liability of $25,467,000, which represents the probable future cash flow associated with deferred taxes previously collected from ratepayers. 8. Accounting Policies Effective January 1, 1994, the Company adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which addresses the accounting and reporting for investments in equity securities that have readily determinable fair values and for all investments in debt securities. The adoption of SFAS No. 115 did not have a material effect on the financial position or results of operations of the Company. 9. Accounts Receivable On June 30, 1994, the Company bought back $15 million of its accounts receivable from a wholly owned subsidiary of The First National Bank of Chicago. The Company sold $15 million of its accounts receivable in December 1990. The Company issued short-term debt for the buy-back of its receivables. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations LIQUIDITY AND CAPITAL RESOURCES The Company's internally generated funds were greater than the funds used for construction and nuclear fuel expenditures during all of the periods ended September 30, 1994. It is anticipated that 1994 construction and nuclear fuel expenditures will be $24.5 million. The Company also expects to expend and capitalize about $3 million on conservation programs. The Company expects to meet these requirements with internally generated funds. A portion of the Company's electric construction program during this period will be met with construction fund draw-downs. Bank lines of credit available to the Company are currently $22 million. The Company's capitalization ratios were as follows: Sept. 30, 1994 Dec. 31, 1993 Common Shareholders' Equity 56.2% 55.3% Redeemable Preferred Stock* 1.6 1.7 Long-term Debt 38.2 36.0 Short-term Debt 4.0 7.0 *Includes current maturities and current sinking fund requirements. The Company's bonds are currently rated Aa2 by Moody's Investors Service, Inc., and AA by Standard & Poor's Corporation. The Company's dealer-issued commercial paper carries the highest ratings assigned by Moody's and Standard & Poor's. RESULTS OF OPERATIONS Electric Revenues Continued customer growth throughout the service territory led to the increase in electric sales and revenues for both the three and nine months ended September 30, 1994, over the prior year. Electric revenues increased approxi- mately 1 percent for this year's third quarter over last year's. Electric revenues increased approximately 2 percent for the nine months of 1994 when compared to the same time period a year ago. Changes in electric retail sales (MWH), as compared to the same periods the previous year, were as follows: For the periods ended September 30 Retail Electric Sales Three Months Increase in MWH Sales 15,657 Percentage Change 2% Nine Months Increase in MWH Sale 68,876 Percentage Change 4% Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Gas Revenues For the nine months ended September 30, 1994, gas revenues increased about 9 percent compared to the same 1993 period. The increase in gas revenues for the nine months ended September 30, 1994, is mainly attributable to the extremely cold first quarter of this year. For the three months ended September 30, 1994, gas revenues decreased approximately 18 percent as compared to the same period last year. The decrease in gas revenues is mainly attributable to a shift in a major customer from system rates to transporta- tion rates. Transportation revenues are only recorded on a margin basis, while system revenues are recorded on a total revenue basis. Electric Fuel and Natural Gas Costs Fuel and purchased power costs for the three- and nine-month periods ended September 30, 1994, increased 10 and 9 percent, respectively, when compared to the same periods last year. The increase in electric fuel costs for both the three- and nine-month periods is attributable to customer growth and increased electric fuel costs due to the Soo Line Railroad Company strike and increased demand throughout our region, which led to an increase in the cost of energy purchases. Purchased gas costs are 8 percent higher for the first nine months of 1994 versus 1993 due mainly to the increased demand during the first quarter of this year. Natural gas purchased for the three-month period ended September 30, 1994, decreased when compared to the same time period a year ago due to the shift of a major customer to transportation service. Other Items Interest on long-term debt decreased approximately 4 percent and 8 percent for the three- and nine-month periods ended September 30, 1994, when compared to the same periods for 1993. This is attributable in part to the Company's refinancing of several of its First Mortgage bond issues at lower interest rates and the call for redemption in September 1993 of its 8 percent, 1999 Series, First Mortgage bonds. PART I. OTHER INFORMATION Item 6 (a) Exhibits Exh. No. Description of Document 4 Indenture of Mortgage and Deed of Trust between the Company and Firstar Trust Company, as Trustee (and supplements) reference was provided in the Company's 1993 Annual Report on Form 10-K (Commission File No. 0-1125). 27 Appendix E to Item 601(c) of Regulation S-K: Public Utility Companies Financial Data Schedule UT Item 6 (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter for which this report is filed. Item 12 Ratio of Earnings to Fixed Charges Nine Months Ended Sept. 30, 1994 Earnings Income before interest expense $26,919 Add: Income tax items 11,164 Income tax on other income 374 Amortization of debt discount, premium expense 130 Allowance for funds used during construction - borrowed funds 51 Interest on rentals 164 Total Earnings $38,802 Fixed Charges: Interest on long-term debt $ 7,897 Other interest 302 Amortization of debt discount premium expense 130 Interest on rentals 164 Total Fixed Charges $ 8,493 Ratio of Earnings to Fixed Charges 4.57x S I G N A T U R E S 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. MADISON GAS AND ELECTRIC COMPANY (Registrant) Date: November 14, 1994 /s/ David C. Mebane David C. Mebane Chairman, President and Chief Executive Officer (Duly Authorized Officer) Date: November 14, 1994 /s/ Joseph T. Krzos Joseph T. Krzos Vice President - Finance (Chief Financial and Accounting Officer) EX-27 2
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM 10-Q FOR THE QUARTERLY PERIOD ENDED 9-30-1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1994 SEP-30-1994 PER-BOOK 367,923 9,501 53,397 35,828 0 466,649 85,758 26,372 76,273 188,403 0 5,100 128,272 0 0 13,500 0 200 0 0 131,174 466,649 184,697 11,164 148,224 159,388 25,309 1,610 26,919 8,148 18,771 356 18,415 (15,007) 0 35,910 1.72 1.72
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