-----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, syW/ugF0uWjstp9QIyA5APPTkyMzpTisgJiXCsqP2NKkgrJXzWa6ZSAopok0nfYn 1FXaC3t8UtLljIpAJME1vA== 0000061339-95-000007.txt : 19950814 0000061339-95-000007.hdr.sgml : 19950814 ACCESSION NUMBER: 0000061339-95-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MADISON GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000061339 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [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: 95561967 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 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: JUNE 30, 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 0-1125 MADISON GAS AND ELECTRIC COMPANY (Exact name of registrant as specified in its charter) Wisconsin 39-0444025 (State or other jurisdiction (IRS Employer of incorporation or Identification No.) organization) 133 South Blair Street, Madison, Wisconsin 53701-1231 (Address of principal executive offices and zip code) (608) 252-7000 (Registrant's telephone number including area code) Common Stock outstanding at August 11, 1995: 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 I. FINANCIAL INFORMATION Item 1. Financial Statements Madison Gas and Electric Company and Subsidiaries CONSOLIDATED STATEMENTS OF INCOME AND RETAINED INCOME (Thousands of Dollars) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 STATEMENTS OF INCOME Operating Revenues: Electric . . . . . . . . . . . . $35,980 $36,434 $70,592 $71,696 Gas . . . . . . . . . . . . . . 12,540 13,938 52,381 60,809 Total Operating Revenues . . . 48,520 50,372 122,973 132,505 Operating Expenses: Fuel for electric generation . . 7,023 7,561 13,040 14,239 Purchased power . . . . . . . . 1,781 2,130 3,643 3,796 Natural gas purchased . . . . . 6,558 8,372 32,497 39,550 Other operations . . . . . . . . 15,051 14,628 29,961 29,140 Maintenance . . . . . . . . . . 3,918 3,727 6,517 6,462 Depreciation and amortization . 6,206 5,606 12,450 11,208 Other general taxes . . . . . . 2,130 2,104 4,346 4,419 Income tax items . . . . . . . . 1,085 1,376 5,621 7,169 Total Operating Expenses . . . 43,752 45,504 108,075 115,983 Net Operating Income . . . . . . . 4,768 4,868 14,898 16,522 AFUDC - equity funds . . . . . . . 15 21 37 55 Other income, net . . . . . . . . . 785 545 2,226 1,096 Income before interest expense . . 5,568 5,434 17,161 17,673 Interest expense: Interest on long-term debt . . . 2,592 2,632 5,181 5,252 Other interest . . . . . . . . . 202 32 589 145 AFUDC - borrowed funds . . . . . (8) (12) (19) (31) Net Interest Expense . . . . . 2,786 2,652 5,751 5,366 Net Income . . . . . . . . . . . . 2,782 2,782 11,410 12,307 Preferred stock dividends (Note 4a) - 120 64 239 Earnings on common stock . . . . . $2,782 $2,662 $11,346 $12,068 Earnings per share of common stock (Note 3) . . . . . . . . . . . . . $0.26 $0.25 $1.06 $1.13 STATEMENTS OF RETAINED INCOME Balance - beginning of period . . . $80,883 $77,285 $77,358 $72,865 Earnings on common stock . . . . . 2,782 2,662 11,346 12,068 Cash dividends on common stock (Note 3) . . . . . . . . . . . . . (5,037) (4,983) (10,076) (9,969) Balance - end of period . . . . . . $78,628 $74,964 $78,628 $74,964 The accompanying notes are an integral part of the above statements. /TABLE Madison Gas and Electric Company and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOW (Thousands of Dollars) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 Operating Activities: Net income . . . . . . . . . . . . $2,782 $ 2,782 $11,410 $12,307 Items not affecting working capital: Depreciation and amortization . 6,206 5,606 12,450 11,208 Deferred income taxes . . . . . (182) 360 (240) 911 Amortization of nuclear fuel . . 356 467 1,130 1,095 Amortization of investment tax credits . . . . . . . . . . . . (192) (196) (389) (387) AFUDC - equity funds . . . . . . (15) (21) (37) (55) Other . . . . . . . . . . . . . 393 250 905 237 Net funds provided from Operations . . . . . . . . . 9,348 9,248 25,229 25,316 Changes in working capital, excluding cash equivalents, sinking funds, maturities, and interim loans: Decrease/(increase) in current assets . . . . . . . . . . . . . 8,117 (3,310) 14,652 1,014 Decrease in current liabilities . (5,983) (6,935) (3,038) (2,950) Other noncurrent items, net . . . (2,265) (2,565) 19 2,816 Cash provided by Operating Activities . . . . . . . . . . . 9,217 (3,562) 36,862 26,196 Financing Activities: Acquisition of nonregulated subsidiary . . . . . . . . . . . - - (8,036) - Cash dividends on common and preferred stock . . . . . . . . . (5,037) (5,103) (10,140) (10,208) Decrease in First Mortgage Bonds . (71) (74) (242) (71) Decrease in preferred stock . . . - - (5,300) - Decrease in bond - construction funds . . . . . . . . . . . . . . 1,734 1,365 3,493 4,799 (Decrease)/increase in interim loans . . . . . . . . . . . . . . (2,500) 14,000 (16,100) (9,500) Cash used for Financing Activities . . . . . . . . . . . (5,874) 10,188 (36,325) (14,980) Investing Activities: Additions to utility plant and (3,993) (4,822) (8,086) (8,496) nuclear fuel . . . . . . . . . . . AFUDC - borrowed funds . . . . . . (8) (12) (19) (31) Increase in decommissioning fund . (1,089) (731) (1,982) (1,257) Cash used for Investing Activities . . . . . . . . . . . (5,090) (5,565) (10,087) (9,784) Change in Cash and Cash Equivalents (Note 5) . . . . . . . . . . . . . . (1,747) 1,061 (9,550) 1,432 Cash and cash equivalents at beginning of period . . . . . . . 3,731 1,762 11,534 1,391 Cash and cash equivalents at end of period . . . . . . . . . . . . . . $1,984 $ 2,823 $ 1,984 $ 2,823 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)
June 30, Dec. 31, 1995 1994 ASSETS Utility Plant, at original cost, in service: Electric . . . . . . . . . . . . . . . . . . . . . $485,449 $479,346 Gas . . . . . . . . . . . . . . . . . . . . . . . 171,244 167,710 Gross plant in service . . . . . . . . . . . . . 656,693 647,056 Less accumulated provision for depreciation . . . (334,971) (323,511) Net plant in service . . . . . . . . . . . . . . 321,722 323,545 Construction work in progress . . . . . . . . . . 9,273 11,920 Nuclear decommissioning fund (Note 2) . . . . . . 29,797 27,815 Nuclear fuel, net . . . . . . . . . . . . . . . . 7,415 8,386 Total Utility Plant . . . . . . . . . . . . . . 368,207 371,666 Other property and investments (Note 6) . . . . . . . 18,091 9,843 Current Assets: Cash and cash equivalents . . . . . . . . . . . . 1,984 11,534 Accounts receivable, less reserves of $946 and $921, respectively . . . . . . . . . . . . . . . . . . . 21,339 25,998 Unbilled revenue . . . . . . . . . . . . . . . . . 5,327 10,411 Materials and supplies, at average cost . . . . . 6,198 6,424 Fossil fuel, at average cost . . . . . . . . . . . 2,557 2,130 Stored natural gas, at average cost . . . . . . . 3,963 8,551 Prepaid taxes . . . . . . . . . . . . . . . . . . 5,753 5,838 Other prepayments . . . . . . . . . . . . . . . . 1,019 1,456 Total Current Assets . . . . . . . . . . . . . . 48,140 72,342 Deferred charges . . . . . . . . . . . . . . . . . . 34,305 33,908 Total Assets . . . . . . . . . . . . . . . . $468,743 $487,759 CAPITALIZATION AND LIABILITIES Capitalization (see statement) . . . . . . . . . . . $317,204 $325,389 Current Liabilities: Preferred stock sinking fund requirements . . . . - 200 Long-term debt sinking fund requirements (Note 4b) 195 430 Maturity of 5.45%, 1996 series (Note 4b) . . . . . 7,840 - Interim loans - commercial paper outstanding . . . 12,500 28,600 Accounts payable . . . . . . . . . . . . . . . . . 11,972 18,360 Accrued interest . . . . . . . . . . . . . . . . . 2,796 2,803 Other . . . . . . . . . . . . . . . . . . . . . . 8,821 5,470 Total Current Liabilities . . . . . . . . . . . 44,124 55,863 Other Credits: Accumulated deferred income taxes . . . . . . . . 56,290 56,595 Regulatory liability . . . . . . . . . . . . . . . 25,269 25,204 Investment tax credit - deferred . . . . . . . . . 12,615 12,998 Other . . . . . . . . . . . . . . . . . . . . . . 13,241 11,710 Total Other Credits . . . . . . . . . . . . . . 107,415 106,507 Commitments . . . . . . . . . . . . . . . . . . . . . - - Total Capitalization and Liabilities . . . . $468,743 $487,759 The accompanying notes are an integral part of the above balance sheets. /TABLE Madison Gas and Electric Company and Subsidiaries CONSOLIDATED STATEMENTS OF CAPITALIZATION (Thousands of Dollars) (Unaudited)
June 30, Dec. 31, 1995 1994 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 . . . . . . . . . . . . . . . . . 78,628 77,359 Total Common Shareholders' Equity . . . . . . . 190,758 189,489 Redeemable Preferred Stock cumulative, $25 par value, authorized 1,175,000 and 1,191,000 shares, respectively (Note 4a) Series E, 8.70%, 0 and 212,000 shares outstanding, respectively, less current sinking fund requirements of $0 and $200, respectively . . . . . - 5,100 First Mortgage Bonds: 5.45%, 1996 series . . . . . . . . . . . . . . . . 7,840 7,920 7 3/4%, 2001 series . . . . . . . . . . . . . . . 11,302 11,478 6 1/2%, 2006 series: Pollution Control Revenue Bonds, principal amount $8,775 and $8,780 respectively, less construction fund of $1,663 and $1,618 respectively . . . . . . . . . . . . . . . . . . 7,112 7,162 8.50%, 2022 series . . . . . . . . . . . . . . . . 40,000 40,000 6.75%, 2027A series: Industrial Development Revenue Bonds, principal amount $28,000, less construction fund of $2,934 and $6,472 respectively . . . . . . . . 25,066 21,528 6.70%, 2027B series: Industrial Development Revenue Bonds . . . . . . 19,300 19,300 7.70%, 2028 series . . . . . . . . . . . . . . . . 25,000 25,000 First Mortgage Bonds Outstanding . . . . . . . . 135,620 132,388 Unamortized discount and premium on bonds, net . . (1,139) (1,158) Long-term debt sinking fund requirements (Note 4b) (195) (430) Maturity of 5.45%, 1996 series (Note 4b) . . . . . (7,840) - Total First Mortgage Bonds . . . . . . . . . . . 126,446 130,800 Total Capitalization . . . . . . . . . . . . $317,204 $325,389 The accompanying notes are an integral part of the above statements. /TABLE Notes to Consolidated Financial Statements (Unaudited) June 30, 1995 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 20 through 25 of the Company's 1994 Annual Report to Shareholders and in the Company's 1994 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 1994 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. Cash and cash equivalents g. Depreciation h. Income taxes i. Accounts receivable j. Pension plans k. Postretirement benefits other than pensions l. Fair value of financial instruments m. Capitalization matters: common stock, notes payable to banks, commercial paper, and lines of credit n. Rate matters o. Commitments p. Segments of business 2. Nuclear Decommissioning Nuclear decommissioning costs are accrued over the estimated service life of the Kewaunee Nuclear Power Plant (Kewaunee), which is through the year 2013. These costs are currently recovered from customers in rates and are deposited in external trusts. For 1995, the decommissioning costs recovered in rates will be $3.1 million. These trusts are shown on the balance sheet in the utility plant section, and as of June 30, 1995, these trusts totaled $29.8 million. Notes to Consolidated Financial Statements (continued) Decommissioning costs are recovered through depreciation expense, exclusive of earnings on the trusts. Net earnings on the trusts are included in other income. The long-term, after-tax earnings assumption on these trusts is 6.2 percent. As of June 30, 1995, the accumulated provision for depreciation included accumulated provisions for decommissioning totaling $29.8 million. The Company's share of Kewaunee decommissioning costs is estimated to be $64.3 million in current dollars based on a site-specific study performed in 1992 using immediate dismantlement as the method of decommissioning. Decommissioning costs are assumed to inflate at an average rate of 6.1 percent. Physical decommissioning is expected to occur during the period 2014 through 2021, with additional expenditures being incurred during the period 2022 through 2050 related to the storage of spent nuclear fuel at the site. 3. Per-Share Amounts Earnings per share of common stock are computed on the basis of the weighted average of the daily number of shares outstanding. For the three months and for the six months ended June 30, 1995 and 1994, there were 10,719,812 shares. Dividends declared and paid per share of common stock for the periods ended June 30, 1995 and 1994, were, respectively, for the three months $0.47 and $0.465; for the six months, $0.94 and $0.93. 4. Capitalization Matters a. Redeemable preferred stock. On February 21, 1995, the Company retired 16,000 Series E shares for $400,000 in satisfying its annual sinking fund retirement obligation. The Company repurchased all remaining shares outstanding of its Series E, 8.70%, preferred stock on the same day. The total amount of approximately $5.5 million was financed with short-term borrowings. b. First Mortgage Bonds. The annual sinking fund requirements of the outstanding First Mortgage Bonds are $430,000 in 1995. As of June 30, 1995, $195,000 is still needed to satisfy the 1995 requirements. The 5.45%, First Mortgage Bonds, 1996 series will be maturing on June 1, 1996, requiring $7.8 million to retire this series of bonds. Notes to Consolidated Financial Statements (continued) 5. Supplemental Cash Flow Information For purposes of the Consolidated Statements of Cash Flow, the Company considers cash equivalents to be those investments that are highly liquid with maturity dates of less than three months. Cash payments for interest, net of amounts capitalized, and income taxes were as follows: Three Months Six Months Ended June 30, Ended June 30, (Thousands of dollars) 1995 1994 1995 1994 Interest, net of amounts capitalized . . $3,995 $3,781 $5,872 $5,332 Income taxes paid . . . $6,980 $5,376 $8,980 $6,001 6. Acquisition of Nonregulated Subsidiary In January 1995 the Company purchased certain assets of American Energy Management, Inc. (AEM), a national energy marketing firm that provides gas marketing, energy management, energy auditing, and conservation services to customers in ten states. The acquisition has been accounted for as a purchase, and the results of AEM have been included in the accompanying consolidated financial statements since the date of acquisition. Pro forma results are not presented because the amounts do not significantly differ from historical results. The costs of the acquisition have been allocated on the basis of the estimated fair market value of the assets acquired and the liabilities assumed. The resulting goodwill is being amortized over 25 years. Additionally, the former owner has an option to purchase 20 percent of AEM at any time prior to the year 2000. 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 June 30, 1995. It is anticipated that 1995 construction and nuclear fuel expenditures will be $25 million. The Company also expects to capitalize about $2 million to $3 million of spending on conservation programs with internally generated funds. Approximately $3 million of the Company's electric construction program during this period will be met with construction fund draw-downs. During the first quarter of 1995, the Company purchased all of its outstanding 8.70%, Series E, preferred stock and acquired AEM with internally generated cash. Bank lines of credit available to the Company are currently $25 million. The Company's capitalization ratios were as follows: June 30, Dec. 31, 1995 1994 Common shareholders' equity . . 56.5% 53.4% Redeemable preferred stock* . . - 1.5 Long-term debt* . . . . . . . . 39.8 37.0 Short-term debt . . . . . . . . 3.7 8.1 *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. Business Environment On May 1, 1995, Northern States Power Company and Wisconsin Energy Corporation announced a proposed merger. If approved, the two companies would form a holding company called Primergy Corporation, creating the tenth largest utility company in the United States. The merger is subject to approval by the shareholders of both companies and various regulatory agencies including the Securities and Exchange Commission, the Nuclear Regulatory Commission, the Federal Energy Regulatory Commission, and state regulatory agencies. The outcome of this merger and the impacts it may have on the Company are unknown at this time. Regulatory Environment The Public Service Commission of Wisconsin (PSCW) has opened a docket to examine the costs and benefits of changing electric utility company structure and regulation. The PSCW's schedule is to report its findings to the legislature by the end of 1995. It is unknown at this time what impact, if any, this examination will have on the Company. Management's Discussion and Analysis (continued) Results of Operations Electric Sales and Revenues The unseasonably warm weather experienced in June of this year along with a slight increase in the electric customer base contributed to increased electric sales for the three months ended June 30, 1995, compared to the same period last year (see table below). Electric retail sales increased approximately 5 percent for the six months ended June 30, 1995, compared to the same time period a year ago. Electric Sales in Megawatt-Hours
Three Months Ended June 30, Six Months Ended June 30, 1995 1994 % Change 1995 1994 % Change Residential........ 156,625 151,795 3.18% 334,509 335,409 (0.27)% Large commercial and industrial.... 232,904 239,684 (2.83) 453,430 463,424 (2.16) Small commercial and industrial..... 176,931 173,725 1.85 336,057 335,565 0.15 Other............. 78,831 42,993 83.36 151,268 82,440 83.49 Total retail....... 645,291 608,197 6.10 1,275,264 1,216,838 4.80 Sales for resale... 3,101 5,285 (41.32) 13,909 29,899 (53.48) Total sales........ 648,392 613,482 5.69 1,289,173 1,246,737 3.40 *The significant increase in other electric sales is due to a shift in a major customer from the large commercial and industrial class.
Despite the increase in electric sales for both the three- and six-month periods, electric operating revenues decreased $0.4 million or 1.2 percent for this year's second quarter, and $1.1 million or 1.5 percent for the six months ended June 30, 1995, as compared to the same periods the previous year. The decrease in electric operating revenues was the result of the Company's latest rate reduction, which became effective January 1, 1995. Electric rates were effectively reduced by $5.1 million or 3.3 percent. Management's Discussion and Analysis (continued) Gas Sales and Revenues For the six months ended June 30, 1995, gas revenues decreased about $8 million or 14 percent compared to the same 1994 period. The decrease in gas revenues can be attributed, in part, to the warm weather experienced in the first quarter of this year as compared to the cold first quarter in 1994. For the three months ended June 30, 1995, gas revenues decreased about $1 million or 10 percent as compared to the same period last year. The decrease for both the three- and six-month periods ended June 30, 1995, compared to last year is also attributable to a shift in a major customer from system rates to transportation rates (see table). Transport customers' revenue is recorded only as margin (revenue less cost of gas). The following table illustrates gas deliveries as compared to the previous year: Gas Deliveries in Thousands of Therms
Three Months Ended June 30, Six Months Ended June 30, 1995 1994 % Change 1995 1994 % Change Residential...... 12,533 11,486 9.12% 50,717 54,109 (6.27)% Commercial and Industrial....... 13,930 15,956 (12.70) 51,338 61,177 (16.08) Total retail..... 26,463 27,442 (3.57) 102,055 115,286 (11.48) Transport........ 9,516 5,448 74.67 16,641 6,765 Total gas deliveries....... 35,979 32,890 9.39 118,696 122,051 (2.75) *Variance more than 100%.
Electric Fuel and Natural Gas Costs Fuel cost for electric generation and purchased power costs decreased approximately $0.9 million or 9 percent for the second quarter of 1995 compared to last year's second quarter. This was mainly attributable to the low cost purchased power the Company was able to buy. Purchased power cost per megawatt-hour decreased $4 or 17 percent for the three months ended June 30, 1995, compared to the same period a year ago. Fuel costs and purchased power decreased approximately $1.4 million or 7 percent for the six-month period ended June 30, 1995, when compared to the same period last year. This was due to a decrease in fuel cost at the Company's Columbia Energy Center along with a decrease in purchased power costs. The unseasonably warm June caused power demands to increase significantly. On June 20, 1995, the Company set a record for peak demand of 570 megawatts for one hour. The old record of 551 megawatts for one hour was set in June 1994. Management's Discussion and Analysis (continued) Natural gas costs for the six-month period ended June 30, 1995, decreased $7.1 million or 18 percent compared to the same six-month period a year ago. This is mainly due to a lower demand resulting from the warm weather experienced in this year's first quarter, compared to the cold weather in the first quarter of 1994, and the shift in a major customer from system rates to transport rates. The heating degree days (HDD) for this year's first quarter, measured by the number of degrees the mean daily temperature is below 65 degrees Fahrenheit, were 3,416 HDD compared to 4,010 HDD for the same period last year, or a 17 percent decrease in HDD. Natural gas costs for the three months ended June 30, 1995, versus the 1994 comparative period decreased $1.8 million or 22 percent. This is due to a decrease in the cost per therm of approximately $0.06 or 19 percent and the shift in a major customer from system rates to transport rates as described earlier. Other Operating Expenses Depreciation expense for the three months and six months ended June 30, 1995, when compared to the same time periods in 1994, increased $0.6 million and $1.2 million or 11 percent, respectively. This is attributable to an increase in decommissioning costs (see footnote 2). Income taxes decreased for both the three- and six-month periods ended June 30, 1995, compared to the same 1994 periods. For the three months ended, income taxes decreased approximately $0.3 million or 21 percent, and for the six months ended, income taxes decreased $1.5 million or 22 percent. This is due to a decrease in pretax operating income for both periods. Other Items Other income increased $1.1 million for the six months ended June 30, 1995, compared to the same period last year due to earnings realized from the Company's nonregulated business. Other interest expense increased for both the three- and six-month periods ended June 30, 1995, when compared to the same periods a year ago. This is due to higher levels of short-term debt outstanding during 1995 periods than in 1994 because of the repurchase of the Series E preferred stock earlier this year. PART II. OTHER INFORMATION Item 4 Results of Votes of Security Holders The Company's Annual Meeting of Shareholders was held on May 1, 1995, in Middleton, Wisconsin. Proxies for the meeting were solicited pursuant to Regulation 14A of the Securities Exchange Act. The election of nominees for directors of Class III to hold office until 1998 were voted upon by shareholders at the meeting. The table below briefly describes the results of the shareholders' votes extending Class III Directors' terms until 1998. For Withhold Authority Richard E. Blaney 8,792,872 91,282 Frederic E. Mohs 8,796,005 90,078 Phillip C. Stark 8,792,723 93,360 Item 5 Other Information During the scheduled maintenance and refueling outage of the Kewaunee Nuclear Power Plant (Kewaunee), inspection of the steam generators revealed higher levels of tube degradation than was anticipated. Thus, the degraded tubes were removed from service by plugging. Prior to the recent shutdown, the equivalent of approximately 12 percent of the tubes in the steam generators were plugged with no loss of capacity. When Kewaunee was returned to service on May 18, 21 percent of the tubes were plugged, resulting in a capacity reduction during Kewaunee's current operating cycle which extends into the fall of 1996. The Company's share (17.8 percent) of net Kewaunee output has been reduced from 93 megawatts to approximately 91 megawatts. The small reduction in capacity resulting from the plugging of steam generator tubes should not affect earnings significantly because of the availability of reserve capacity in our system. The study of tube repair alternatives continues. Item 6(a) Exhibits Exh. No. Indenture of Mortgage and Deed of Trust Between the 4 Company and Firstar Trust Company, as Trustee (and supplements). Reference was provided in the Company's 1994 Annual Report on Form 10-K (Commission File No. 0-1125). Exh. No. Ratio of Earnings to Fixed Charges 12 Exh. No. Appendix E to Item 601(c) of Regulation S-K: Public 27 Utility Companies Financial Data Schedule UT Other Information (continued) Exhibit Index Sequentially Exhibit No. Exhibit Numbered Page 4 Indenture of Mortgage and NA Deed of Trust Between the Company and Firstar Trust Company 12 Ratio of Earnings to Fixed 16 Charges 16 27 Regulation S-K: Financial Data 17 Schedule UT 17 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. 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. MADISON GAS AND ELECTRIC COMPANY (Registrant) Date: August 11, 1995 /s/ David C. Mebane David C. Mebane Chairman, President and Chief Executive Officer (Duly Authorized Officer) Date: August 11, 1995 /s/ Joseph T. Krzos Joseph T. Krzos Vice President - Finance (Chief Financial and Accounting Officer) EX-12 2 Ratio of Earnings to Fixed Charges Exhibit 12 Six Months Ended June 30, 1995 (000s) Earnings Income before interest expense . . . . . $17,161 Add: Income tax items . . . . . . . . . . . . 5,621 Income tax on other income . . . . . . . 1,266 Amortization of debt discount, premium 127 expense . . . . . . . . . . . . . . . . . AFUDC - borrowed funds . . . . . . . . . 19 Interest on rentals . . . . . . . . . . . 108 Total Earnings . . . . . . . . . . . . $24,302 Fixed Charges Interest on long-term debt . . . . . . . $ 5,181 Other interest . . . . . . . . . . . . . 589 Amortization of debt discount, premium 127 expense . . . . . . . . . . . . . . . . . Interest on rentals . . . . . . . . . . . 108 Total Fixed Charges . . . . . . . . . . $ 6,005 Ratio of Earnings to Fixed Charges . . . 4.05x EX-27 3
UT This schedule contains summary financial information extracted from SEC Form 10-Q. Items 1 through 22 are as of June 30, 1995. Items 23 through 38 are for the six months ended June 30, 1995. 1,000 6-MOS DEC-31-1995 JUN-30-1995 PER-BOOK 368,207 18,091 48,140 34,305 0 468,743 85,758 26,372 78,628 190,758 0 0 126,446 0 0 12,500 8,035 0 0 0 131,004 468,743 122,973 5,621 102,454 108,075 14,898 2,263 17,161 5,751 11,410 64 11,346 (10,076) 0 36,862 1.06 0
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