-----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, R8gBRvvP8ETX0rkOhtkqc6BKkRfEP8F93sT3e8en65xzqftd5LydYRw4/N23++Gz PRXl2ERbnJg3rTauBT2a0w== 0000061339-97-000017.txt : 19971113 0000061339-97-000017.hdr.sgml : 19971113 ACCESSION NUMBER: 0000061339-97-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 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: SEC FILE NUMBER: 000-01125 FILM NUMBER: 97716408 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: SEPTEMBER 30, 1997 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 Identification No.) of incorporation or organization) 133 South Blair Street, Madison, Wisconsin 53703 (Address of principal executive offices and ZIP code) (608) 252-7000 (Registrant's telephone number including area code) Common Stock Outstanding at November 13, 1997: 16,079,718 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, Except Per-Share Amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 STATEMENTS OF INCOME Operating Revenues: Electric $45,502 $44,547 $123,585 $116,621 Gas 7,655 8,345 67,736 66,700 Total Operating Revenues 53,157 52,892 191,321 183,321 Operating Expenses: Fuel for electric generation 8,341 7,246 23,833 20,047 Purchased power 3,060 3,203 11,695 7,601 Natural gas purchased 3,255 3,823 42,692 41,158 Other operations 15,041 13,902 46,497 41,934 Maintenance 2,786 2,898 9,409 7,793 Depreciation and amortization 7,348 6,514 20,115 19,039 Other general taxes 2,112 2,148 6,559 6,596 Income tax items 3,385 4,117 8,600 12,051 Total Operating Expenses 45,328 43,851 169,400 156,219 Net Operating Income 7,829 9,041 21,921 27,102 AFUDC - equity funds (12) 3 12 29 Other income, net 555 419 1,346 938 Non-utility operating (loss)/income, net (114) (1,382) 796 (4,321) Income before interest expense 8,258 8,081 24,075 23,748 Interest expense: Interest on long-term debt 2,392 2,411 7,212 7,407 Other interest 213 190 621 465 AFUDC - borrowed funds 6 (2) (6) (15) Net Interest Expense 2,611 2,599 7,827 7,857 Net Income $5,647 $5,482 $16,248 $15,891 Earnings per share of common stock (Note 3) $0.35 $0.34 $1.01 $0.99 STATEMENTS OF RETAINED INCOME Balance - beginning of period $50,761 $64,722 $50,451 $64,499 Earnings on common stock 5,647 5,482 16,248 15,891 Cash dividends on common stock (Note 3) (5,200) (5,144) (15,491) (15,330) Balance - end of period $51,208 $65,060 $51,208 $65,060 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 September 30, September 30, 1997 1996 1997 1996 Operating Activities: Net income $ 5,647 $ 5,482 $16,248 $15,891 Items not affecting working capital: Depreciation and amortization 7,348 6,514 20,115 19,039 Deferred income taxes (388) 22 (1,098) (1,677) Amortization of nuclear fuel 707 620 805 2,098 Amortization of investment tax credits (188) (200) (566) (592) AFUDC - equity funds 12 (3) (12) (29) Other 68 168 542 (2,625) Net funds provided from Operations 13,206 12,603 36,034 32,105 Changes in working capital, excluding cash, sinking funds, maturities, and interim loans: (Increase)/decrease in current assets 5,524 (626) 28,251 13,240 Decrease in current liabilities (6,838) (3,176) (23,338) (7,734) Other noncurrent items, net (4,226) (1,372) 1,079 8,447 Cash provided by Operating Activities 7,666 7,429 42,026 46,058 Financing Activities: Cash dividends on common and preferred stock (5,200) (5,144) (15,491) (15,330) Maturities/redemptions of First Mortgage Bonds - - (3,800) (7,840) Increase in long-term debt - - 5,000 - Other decrease in First Mortgage Bonds 9 9 28 29 Increase/(decrease) in interim loans 4,500 9,000 (11,750) 2,500 Cash provided by/(used for) Financing Activities (691) 3,865 (26,013) (20,641) Investing Activities: Sale of Superior Lamp, Inc. - - - 201 Additions to utility plant and nuclear fuel (5,650) (7,037) (14,877) (18,380) AFUDC - borrowed funds 6 (2) (6) (15) Increase in nuclear decommissioning fund (1,884) (1,264) (4,042) (3,516) Cash used for Investing Activities (7,528) (8,303) (18,925) (21,710) Change in Cash and Equivalents (553) 2,991 (2,912) 3,707 Cash and equivalents at beginning of period 2,929 3,560 5,288 2,844 Cash and equivalents at end of period $2,376 $6,551 $2,376 $6,551 The accompanying notes are an integral part of the above statements.
Madison Gas and Electric Company and Subsidiaries CONSOLIDATED BALANCE SHEETS (Thousands of Dollars) (Unaudited) Sept. 30, Dec. 31, 1997 1996 ASSETS Utility Plant, at original cost, in service: Electric $507,475 $500,690 Gas 180,980 178,312 Gross plant in service 688,455 679,002 Less accumulated provision for depreciation (398,941) (374,315) Net plant in service 289,514 304,687 Construction work in progress 9,003 7,517 Nuclear decommissioning fund (Note 2) 55,571 44,617 Nuclear fuel, net 8,342 8,378 Total Utility Plant 362,430 365,199 Other property and investments 6,751 7,115 Current Assets: Cash and cash equivalents 2,376 5,288 Accounts receivable, less reserves of $1,696 and $1,220, respectively 20,044 39,145 Unbilled revenue 8,037 13,852 Materials and supplies, at average cost 5,461 5,740 Fossil fuel, at average cost 2,643 1,808 Stored natural gas, at average cost 5,927 7,189 Prepaid taxes 4,499 7,258 Other prepayments 1,560 1,429 Total Current Assets 50,547 81,709 Deferred charges 30,583 30,146 Total Assets $450,311 $484,169 CAPITALIZATION AND LIABILITIES Capitalization (see statement) $309,960 $307,975 Current Liabilities: Long-term debt sinking fund requirements 200 200 Interim loans - commercial paper outstanding 18,000 29,750 Accounts payable 7,586 30,094 Accrued taxes 442 79 Accrued interest 3,557 2,322 Accrued nonregulated items 5,586 7,923 Other 7,562 7,653 Total Current Liabilities 42,933 78,021 Other Credits: Deferred income taxes 45,458 46,972 Regulatory liability - SFAS 109 24,330 23,914 Investment tax credit - deferred 10,873 11,439 Other regulatory liabilities 16,757 15,848 Total Other Credits 97,418 98,173 Commitments - - Total Capitalization and Liabilities $450,311 $484,169 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, 1997 1996 Common Shareholders' Equity: Common stock - par value $1 per share: Authorized 50,000,000 shares Outstanding 16,079,718 shares $ 16,080 $ 16,080 Amount received in excess of par value 112,558 112,558 Retained income 51,208 50,451 Total Common Shareholders' Equity 179,846 179,089 First Mortgage Bonds: 6 1/2%, 2006 series: Pollution Control Revenue Bonds 6,875 6,875 8.50%, 2022 series 40,000 40,000 6.75%, 2027A series: Industrial Development Revenue Bonds 28,000 28,000 6.70%, 2027B series: Industrial Development Revenue Bonds 19,300 19,300 7.70%, 2028 series 21,200 25,000 First Mortgage Bonds Outstanding 115,375 119,175 Unamortized discount and premium on bonds, net (1,061) (1,089) Long-term debt sinking fund requirements (200) (200) Total First Mortgage Bonds 114,114 117,886 Other Long-Term Debt: 6.01%, due 2000 11,000 11,000 6.91%, due 2004 5,000 - Total Capitalization $309,960 $307,975 The accompanying notes are an integral part of the above statements.
Notes to Consolidated Financial Statements (Unaudited) September 30, 1997 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 (SEC). 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 14 through 19 of the Company's 1996 Annual Report to Shareholders and in the Company's 1996 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 1996 Annual Report to Shareholders and have been omitted herein because they have not changed materially through the date of this report. a. General b. Utility plant c. Nuclear fuel d. Joint plant ownership e. Depreciation f. Income taxes g. Pension plans h. Postretirement benefits other than pensions i. Fair value of financial instruments j. Capitalization matters: preferred stock; and notes payable to banks, commercial paper, and lines of credit k. Gas marketing subsidiaries l. GLENCO economic benefit m. Commitments n. Segments of business o. Regulatory assets and liabilities 2. Nuclear Decommissioning Nuclear decommissioning costs are accrued over the estimated service life of the Kewaunee Nuclear Power Plant (Kewaunee), which is now through the year end 2002. These costs are currently recovered from customers in rates and are deposited in external trusts. The Company is presently funding decommissioning costs in the amount of $8.1 million annually. These trusts are shown on the balance sheet in the utility plant section. As of September 30, 1997, these trusts totaled $55.6 million (fair market value). 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. The Company's share of Kewaunee decommissioning costs is estimated to be $77.7 million in current dollars based on a site-specific study performed in 1992. Decommissioning costs are assumed to inflate at an average rate of 6.1 percent. It is currently estimated that the plant will be in mothball status for 12 years. Physical decommissioning is expected to occur during the period 2014 through 2021, with additional expenditures being incurred during the period 2022 through 2039 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 and for the nine months ended September 30, 1997 and 1996, there were 16,079,718 shares. Dividends declared and paid per share of common stock for the periods ended September 30, 1997 and 1996, were, respectively, for the three months $0.323 and $0.320; for the nine months $0.963 and $0.953. 4. Rate Matters Rate changes, effective August 20, 1997, will increase electric rates $4.9 million, or 3.1 percent, and gas rates $3.5 million, or 3.5 percent. These rates will remain in place until the next test year, which is scheduled to begin January 1, 1999. The current rates are based on a return on common stock equity of 12.0 percent. The proposed early recovery of the Kewaunee investment and accelerated decommissioning collections are the primary reasons for the increase in electric rates. Gas rates increased due to substantial technology upgrades and infrastructure improvements as well as higher operating costs due to inflation. The Company received an interim rate order from the PSCW in March 1997. The order provided for a 0.507 cent per kilowatt-hour surcharge on customers' bills to cover the continuing costs that were incurred by the Company while Kewaunee was out of service. On June 12, 1997, the repairs to Kewaunee were completed and Kewaunee began its return to commercial operation. On June 25, 1997, Kewaunee increased power to its maximum capability and started the agreed upon seven-day window needed to perform the primary to secondary tests to ensure final verification of the steam generation repairs. The surcharge ceased on July 1, 1997. Prior to the recently approved increases, rates for electric service had not been increased since 1990 and were reduced in 1993 and 1994. Gas rates had not been increased since 1989 and were reduced in 1990, 1992, and 1993. 5. First Mortgage Bonds and Other Long-Term Debt On April 18, 1997, the Company purchased on the open market $3.8 million of its 7.70%, 2028 series, First Mortgage Bonds. The Company purchased these bonds at a discount and later retired them. On June 10, 1997, the Company entered into a fixed interest rate agreement with a commercial bank in a principal amount of $5.0 million at 6.91%, maturing on June 10, 2004. 6. 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 Ended Nine Months Ended September 30, September 30, (Thousands of dollars) 1997 1996 1997 1996 Interest, net of amounts capitalized $1,244 $1,420 $6,521 $6,642 Income taxes paid $3,849 $3,702 $11,016 $13,274 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 for the nine-month period ended September 30, 1997. The Company experienced decreased additions to utility plant and nuclear fuel expenditures during the first nine months of 1997 compared to 1996. It is anticipated that 1997 construction and nuclear fuel expenditures will be approximately $30.8 million. Cash provided by operating activities decreased $4.0 million, or 8.8 percent, during the first nine months of 1997 compared to 1996 due in part to an increase in deferred charges relating to costs associated with the summer's power reliability problems and the Company's leasing of portable generators. Cash provided by operating activities during the third quarter of 1997 increased $0.2 million compared to last year's third quarter. This is mainly attributable to the decrease in current liabilities due to the timing of the Company's payables offset by a decrease in current assets. Bank lines of credit available to the Company as of September 30, 1997, were $45 million. The Company's capitalization ratios were as follows: Sept. 30, 1997 Dec. 31, 1996 Common shareholders' equity 54.8% 53.0% Long-term debt* 39.7 38.2 Short-term debt 5.5 8.8 *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 and Regulatory Environment During the summer of 1997, Wisconsin and Illinois experienced electric supply concerns due to the outage of a large number of nuclear power plants in Illinois and Wisconsin. For May and June 1997, these plants included Kewaunee (the Company owns 17.8 percent). Although Kewaunee became available for the majority of the summer, other nuclear units in Wisconsin and Illinois remained out of service for the entire summer causing electric supply shortages for some utilities in eastern Wisconsin and northern Illinois. The Company foresaw the possibility of this shortage and leased temporary diesel generators to help ameliorate the supply shortage. The Company subsequently received commission approval for rate recovery from customers for the lease expenses. As a result of leasing the equipment and the return of Kewaunee to service, the Company was the only investor-owned utility in Wisconsin that did not interrupt service to any customers during the summer of 1997. The electric reliability crisis caused the PSCW to revise its previous plans for restructuring the electric industry to assure that reliability concerns were met before any significant restructuring occurred. This conclusion was consistent with plans advocated by the Company and a broad coalition of customers and others. The new plan focuses on the construction of generation and transmission infrastructure by all Wisconsin utilities. The PSCW plans to move forward to create a strong state or regional Independent System Operator (ISO) to assure that the transmission system is operated safely, reliably, and with open and nondiscriminatory access. The PSCW has specifically indicated that the costs of this construction will be paid for by customers. The PSCW has further concluded that these infrastructure improvements must be accomplished before the PSCW proceeds with any significant industry restructuring. The PSCW has not set a date for retail competition and has concluded that any decision whether to go to retail competition in the electric industry remains to be made in the future. These conclusions are consistent with and follow plans for enhancing electric reliability in eastern Wisconsin and positions on electric industry restructuring actively advocated by the Company. The Company has expressed a willingness to participate in the construction of new generation and transmission facilities in a manner proportionate to the participation of other Wisconsin utilities. The Executive and Legislative branches of Wisconsin government are interested in the preservation of electric reliability in Wisconsin. The Company has taken a lead advocacy role with Executive and Legislative branch agencies to promote effective reliability plans. The Company's rate case order authorized a gas cost recovery mechanism that allows recovery of pipeline capacity, FERC-approved/mandated charges, and supply demand costs. Under the new mechanism, gas commodity costs will be compared to a monthly benchmark equal to the first of the month index plus adders reflecting the effects on pricing for reliability, flexibility, weather, and variable transportation costs. If actual costs are below the benchmark, full recovery is allowed. Gas commodity costs above the benchmark will be reviewed by the PSCW. A target will also be determined for capacity release. Capacity release above the target will be shared 60 percent with ratepayers and 40 percent with shareholders. Any shortfalls in capacity release will be shared 40 percent with ratepayers and 60 percent with shareholders. Results of Operations Electric Sales and Revenues Electric retail sales increased 2.0 percent for the nine-month period ended September 30, 1997, over the comparable period last year (see table).
ELECTRIC SALES IN MEGAWATT-HOURS Three Months Ended September 30, Nine Months Ended September 30, 1997 1996 %Change 1997 1996 %Change Residential 200,916 194,608 3.24% 544,340 544,853 (0.09)% Large commercial and industrial 243,417 259,585 (6.23) 716,950 716,855 0.01 Small commercial and industrial 210,055 196,611 6.84 566,229 540,584 4.74 Other 88,916 81,943 8.51 253,116 237,900 6.40 Total retail 743,304 732,747 1.44 2,080,635 2,040,192 1.98 Sales for resale 24,857 8,393 196.16 44,709 23,256 92.25 Total sales 768,161 741,140 3.65 2,125,344 2,063,448 3.00
Electric operating revenues increased $7.0 million, or 6.0 percent, for the first nine months of 1997 compared to the same period in 1996. The increase was due to an increase in the electric customer base and the 0.507 cent per kilowatt-hour surcharge related to the extended outage of Kewaunee (see footnote 4). Electric operating revenues for the three-month period ended September 30, 1997, increased $1.0 million, or 2.1 percent, compared to last year's third quarter. The increase in revenues is due mainly to the increase in electric rates (see footnote 4) and an increase in the customer base. Gas Sales and Revenues For the nine months ended September 30, 1997, gas operating revenues increased $1.0 million, or 1.6 percent, compared to the same period in 1996. This increase in revenues, despite a decrease in gas deliveries of 4.0 percent (see table), is due primarily to higher-unit gas costs, specifically during the first quarter, which were passed on to customers through the Purchased Gas Adjustment Clause (PGAC). For the three months ended September 30, 1997, gas revenues decreased $0.7 million, or 8.3 percent, compared to last year. This can be partially attributed to the relatively flat gas deliveries caused by the cooler weather in this year's third quarter compared to last year's. The following table illustrates gas deliveries as compared to the previous year:
GAS DELIVERIES IN THOUSANDS OF THERMS Three Months Ended September 30, Nine Months Ended September 30, 1997 1996 %Change 1997 1996 %Change Residential 5,533 5,702 (2.96)% 60,217 64,705 (6.94)% Commercial and Industrial 8,828 9,117 (3.18) 59,083 61,593 (4.08) Total retail 14,361 14,819 (3.09) 119,300 126,298 (5.54) Transport 10,340 9,142 13.10 29,434 28,578 3.00 Total deliveries 24,701 23,961 3.09 148,734 154,876 (3.97)
Electric Fuel and Natural Gas Costs Fuel costs for electric generation and purchased power increased 9.1 percent, or $1.0 million, for the third quarter of 1997 compared to last year's third quarter. This increase is mainly attributed to higher sales and higher generation cost during July due to the unavailability of power resulting from the regional power shortages. Fuel costs and purchased power increased 28.5 percent, or $7.9 million, for the nine months ended September 30, 1997, as compared to last year. In addition to the items mentioned above, the increase is also due to the higher cost of replacement power due to the extended outage at Kewaunee. Natural gas costs for the nine-month period ended September 30, 1997, increased $1.5 million, or 3.7 percent, compared to the same period a year ago. This is mainly due to the higher unit gas costs in the first quarter of 1997. Natural gas costs for the three months ended September 30, 1997, versus the 1996 comparative period decreased 14.9 percent, or $0.6 million, due to a decrease in the unit gas cost of $0.03, or 12.0 percent. Other Operating Expenses Income taxes decreased for both the three- and nine-month periods ended September 30, 1997, compared to the same periods last year. For the three months ended, income taxes decreased $0.7 million, or 17.8 percent, and for the nine months ended, income taxes decreased $3.5 million, or 28.6 percent. This is mainly attributable to a decrease in pretax operating income. Operations and maintenance costs increased $1.0 million, or 6.1 percent, for the third quarter of 1997 and increased $6.2 million, or 12.4 percent, for the first nine months of the year compared to the same periods a year ago. The primary reasons for the increases are the higher operating and maintenance costs for Company-owned generation due to the extended outage of Kewaunee and costs associated with the regional electric power shortages which caused other sources of energy to be unavailable. Depreciation and amortization increased $0.1 million, or 12.8 percent, for the third quarter and $1.1 million, or 5.7 percent, for the nine months ended September 30, 1997. This increase is due, in part, to the accelerated depreciation of Kewaunee. Other Items The Company's two gas marketing subsidiaries, Great Lakes Energy Corp. and American Energy Management, Inc., formed a joint venture effective January 1, 1997, with National Gas and Electric L.P. to market natural gas and energy services to industrial and commercial customers in the Great Lakes region. The joint venture is called National Energy Management, L.L.C., and is based in Chicago. The Company's non-utility operating income for the nine months ended September 30, 1997 was $0.8 million. For the same period a year ago, the Company experienced non-utility net operating losses of $4.3 million, mainly attributed to the Company's two gas marketing subsidiaries. PART II. OTHER INFORMATION Item 5 - Other Information Effective March 20, 1997, the Kewaunee owners received authorization from the PSCW to defer all costs associated with the repair of the steam generators. The co-owners of Kewaunee will be requesting rate recovery of these deferred costs in a future proceeding. Repairs are complete, and the Company's portion of these costs, which is approximately $1.9 million, has been deferred through September 30, 1997. The Company's assessment of future alternatives for Kewaunee is, and will be asserted in future steam generator replacement hearings, that early plant closure and repowering Kewaunee with gas is the most viable alternative and offers the most benefits to the Company's customers and shareholders. Kewaunee is operated by Wisconsin Public Service Corporation. The Company has a 17.8 percent ownership interest in Kewaunee. The PSCW is accelerating its review of the request for steam generator replacement at Kewaunee. A decision is expected from the PSCW in March or April of 1998. Item 6(a) - Exhibits Exhibit 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 1995 Annual Report on Form 10-K (Commission File No. 0-1125). Exhibit 12 Ratio of Earnings to Fixed Charges Exhibit 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 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: November 13, 1997 /s/ David C. Mebane David C. Mebane Chairman, President and Chief Executive Officer (Duly Authorized Officer) Date: November 13, 1997 /s/ Terry A. Hanson Terry A. Hanson Vice President - Finance EX-27 2
UT This schedule contains summary financial information extracted from SEC Form 10-Q. Items 1 through 22 are as of September 30, 1997. Items 23 through 38 are for the nine months ended September 30, 1997. 1,000 9-MOS DEC-31-1997 SEP-30-1997 PER-BOOK 362,430 6,751 50,547 30,583 0 450,311 16,080 112,558 51,208 179,846 0 0 130,114 18,000 0 0 200 0 0 0 122,151 450,311 191,321 8,600 160,800 169,400 21,921 2,154 24,075 7,827 16,248 0 16,248 (15,491) 0 42,026 1.01 0
EX-12 3 Ratio of Earnings to Fixed Charges Exhibit 12 Nine Months Ended September 30, 1997 (000s) Earnings Income before interest expense $24,075 Add: Income tax items 8,600 Income tax on other income 1,063 Amortization of debt discount, premium expense 216 AFUDC - borrowed funds 6 Interest on rentals 676 Total Earnings $34,636 Fixed Charges Interest on long-term debt $ 7,212 Other interest 621 Amortization of debt discount, premium expense 216 Interest on rentals 676 Total Fixed Charges $ 8,725 Ratio of Earnings to Fixed Charges 3.97x -----END PRIVACY-ENHANCED MESSAGE-----