-----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, EFTKDpVf6B/GNT41nQzC8Vd/h+Dx84kSUr4eQOvF1mqdJeary5IdQJYqMVqOlILu tw3Bvf75s7J12dTLGcpgzw== 0000072909-95-000006.txt : 19950516 0000072909-95-000006.hdr.sgml : 19950516 ACCESSION NUMBER: 0000072909-95-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHERN STATES POWER CO /WI/ CENTRAL INDEX KEY: 0000072909 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 390508315 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03140 FILM NUMBER: 95538876 BUSINESS ADDRESS: STREET 1: 100 N BARSTOW ST CITY: EAU CLAIRE STATE: WI ZIP: 54702 BUSINESS PHONE: 7158392621 MAIL ADDRESS: STREET 1: P O BOX 8 CITY: EAU CLAIRE STATE: WI ZIP: 54702-008 10-Q 1 United States 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 Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended MARCH 31, 1995 Commission File Number 10-3140 NORTHERN STATES POWER COMPANY, A WISCONSIN CORPORATION, MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H (1) AND (2) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT. Northern States Power Company (Exact name of registrant as specified in its charter) Wisconsin 39-0508315 (State or other jurisdiction of (I.R.S.Employer Identification No.) incorporation or organization) 100 North Barstow Street, Eau Claire, Wisconsin 54702 (Address of principal executive officers) (Zip Code) Registrant's telephone number, including area code (715) 839-2621 None Former name, former address and former fiscal year, if changed since last report 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 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, as of the latest practicable date. Class Outstanding at April 30, 1995 Common Stock, $100 par value 862,000 Shares All outstanding common stock is owned beneficially and of record by Northern States Power Company, a Minnesota corporation. Northern States Power Company (Wisconsin) NOTES TO FINANCIAL STATEMENTS In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Northern States Power Company Wisconsin's (The Company's) financial position as of March 31, 1995, and December 31, 1994 and the results of its operations and cash flows for the three months ended March 31, 1995 and March 31, 1994. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in its Annual Report on Form 10-K for the year ended December 31, 1994,(The Form 10-K). The following notes should be read in conjunction with such policies and other disclosures in the Form 10-K. 1. Subsequent Event - Proposed Business Combination The Company is a wholly owned subsidiary of Northern States Power Company, a Minnesota corporation (NSPM). On April 28, 1995, NSPM and Wisconsin Energy Corporation (WEC) entered into an Agreement and Plan of Merger (Agreement). As a result, a registered utility holding company, which will be known as Primergy Corporation (Primergy), will be the parent of NSPM and the current operating subsidiaries of NSPM and WEC. Each outstanding share of common stock of NSPM will be converted into 1.626 shares of common stock of Primergy and each outstanding share of common stock of WEC will remain outstanding as one share of common stock of Primergy. The business combination is intended to be tax- free for income tax purposes, and to be accounted for as a "pooling of interests". The Agreement is subject to various conditions, including approval of the stockholders of NSPM and WEC, and the approval of various regulatory agencies. The Company anticipates that the completion of the regulatory review and approval process will take approximately 12-18 months and, accordingly, the completion of this business combination is not anticipated until late 1996. Item 5 of Part II of this report provides additional information regarding the proposed transaction. 2. Rate Matters There were no changes in any of the Company's jurisdictions' rates since the Form 10-K was filed. The Company will be filing a rate case June 1, 1995, for a change in gas retail rates. No electric change will be proposed. 3. Contingent Liabilities On March 2, 1995, the Wisconsin Department of Natural Resources notified the Company that it is a PRP on a creosote/coal tar contamination site in Ashland, WI. An estimate of site remediation costs, and the extent of the Company's responsibility, if any, for sharing such costs, is not known at this time. The Company intends to seek rate recovery of significant costs it incurs associated with the clean-up of the Ashland Site. The Company is contingently liable to several financial institutions for debt incurred by companies under the Company's Economic Development Guaranty Program. At March 31, 1995, the Company was contingently liable for approximately $1.4 million under the agreements. No losses were sustained under these agreements during 1992, 1993, 1994, nor during the first quarter of 1995; the Company anticipates no future material losses will result from these agreements. Item 2. Management's Discussion and Analysis of Results of Operations Discussion of financial condition and liquidity is omitted per conditions set forth in general instructions H (1) and (2) of Form 10-Q for wholly-owned subsidiaries. (Reduced disclosure format.) On April 28, 1995, NSPM and WEC entered into an Agreement and Plan of Merger which provides for a strategic business combination involving the two companies in a "merger-of-equals" transaction. See Part II of this report. The Company's net income for the first quarter ended March 31, 1995 was $15.2 million, down approximately $3.1 million from the net income recorded for the comparable period a year ago. The decrease in net income was primarily due to a reduction in revenues resulting from a decrease in weather related energy sales. ELECTRIC SALES AND REVENUES Electric revenues for the first quarter of 1995 decreased $4.2 million (4.2 percent) from the electric revenues for the first quarter of 1994. Electric sales decreased 1.7 percent in the first quarter of 1995 as compared with the first quarter of 1994 mainly due to the comparably cooler temperatures in 1994. This sales decrease resulted in $2.3 million of the decrease from the first quarter of 1994. The remaining $1.9 million is a result of decreased Interchange Agreement billings to the Minnesota Company due to a decrease in transmission operating and maintenance and fuel generation in Wisconsin. GAS SALES AND REVENUES Gas revenues decreased $1.9 million (5.7 percent) compared to the first quarter, 1994. This is partly due to an 8.7 percent decrease in firm gas sales due to comparably cooler temperatures in 1994. Interruptible sales increases and 4% customer growth offset the weather decreases in part yielding a 2.1% sales decrease. Lower spot market gas costs resulted in approximately $1.7 million of purchased gas adjustment clause revenue decreases. OPERATING EXPENSES Operating expenses decreased $3.4 million in the first quarter of 1995 as compared to the first quarter of 1994. Gas purchased for resale decreases made up $1.9 million of this decrease and were the result of decreased commodity costs on the spot market combined with decreased purchased volumes to supply the decreased sales. The Company's decreased electric sales during the first quarter of 1995 from the first quarter of 1994 resulted in the Company's fuel for electric generation and its purchased power and fuel as purchased under its interchange agreement with its parent to decrease by approximately $1.1 million. Included in this decrease is an increase due to a one- time payment schedule change in the annual Department of Energy enrichment facility decommissioning and decontamination assessment. OTHER INCOME There were no material changes to other income and deductions in the first quarter of 1995 as compared with the first quarter of 1994. INTEREST CHARGES Interest on short-term borrowings from the parent company has increased by $0.3 million as a result of increases in both the debt level and the interest rate between 1994's first three months and those of 1995. PART II. OTHER INFORMATION Item 5. Other Information MERGER AGREEMENT WITH WISCONSIN ENERGY CORPORATION Northern States Power Company, a Wisconsin corporation, (NSP-W), is a wholly owned subsidiary of Northern States Power Company, a Minnesota corporation (NSP). As previously reported in NSP- W's Current Report on Form 8-K dated April 28, 1995 (The NSP-W Form 8-K Report), NSP, Wisconsin Energy Corporation, a Wisconsin corporation (WEC), Northern Power Wisconsin Corp., a Wisconsin corporation and wholly-owned subsidiary of NSP (new NSP) and WEC Sub Corp., a Wisconsin corporation and wholly-owned subsidiary of WEC (WEC Sub), have entered into an Agreement and Plan of Merger, dated as of April 28, 1995 (the Merger Agreement), which provides for a strategic business combination involving NSP and WEC in a "merger-of-equals" transaction (the Transaction). The Transaction, which was unanimously approved by the Boards of Directors of the constituent companies, is expected to close shortly after all of the conditions to the consummation of the Transaction, including obtaining applicable regulatory approvals, are met or waived. The regulatory approval process is expected to take approximately 12 to 18 months. In the Transaction, the holding company of the combined enterprise will be registered under the Public Utility Holding Company Act of 1935, as amended. The holding company will be named Primergy Corporation (Primergy) and will be the parent company of both NSP (which, for regulatory reasons, will reincorporate in Wisconsin) and of WEC's present principal utility subsidiary, Wisconsin Electric Power Company (WEPCO), which will be renamed "Wisconsin Energy Company." Wisconsin Energy Company will include the operations of WEC's other present utility subsidiary, Wisconsin Natural Gas Company, which is anticipated to be merged into WEPCO by year-end 1995, pending regulatory approval, as previously planned. It is anticipated that, following the Transaction, NSP-W will be merged into Wisconsin Energy Company. In the event NSP-W is merged into Wisconsin Energy Company, it is expected that NSP-W's first mortgage bonds will remain outstanding and Wisconsin Energy Company will assume all obligations related to such bonds in accordance with the NSP-W first mortgage bond indenture. Both NSP and WEC recognize that the divestiture of their existing gas operations and certain non-utility operations is a possibility under the new registered holding company structure, but will seek approval from the SEC to maintain such businesses. If divestiture is ultimately required, the SEC has historically allowed companies sufficient time to accomplish divestitures in a manner that protects shareholder value. The foregoing description of the Transaction does not purport to be complete and is qualified in its entirety by reference to the following documents (including the exhibits thereto) filed with the Securities and Exchange Commission (SEC): (ii) NSP-W Form 8-K Report, (ii) Current Report on Form 8-K, dated April 28, 1995, of NSP (SEC File No. 1-3034) and (iii) Quarterly Report on Form 10-Q of NSP for the quarter ended March 31, 1995 (SEC File No. 1-3034) (NSP Form 10-Q). The NSP Form 10-Q contains certain pro-forma financial information regarding the transaction and is incorporated herein by this reference. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following Exhibit is filed with this report: 27.01 Financial Data Schedule for the three months ended March 31, 1995. The following Exhibits are incorporated herein by reference: 2.01 Agreement and Plan of Merger, dated as of April 28, 1995, by and among Northern States Power Company, Wisconsin Energy Corporation, Northern States Power Company Wisconsin Corp. and WEC Sub Corp. (Exhibit (2)-1 to Northern States Power Company, a Minnesota Corporation, Current Report on Form 8-K dated as of April 28, 1995, File No. 1-3034). 99.01 Quarterly Report on Form 10-Q of Northern States Power Company, a Minnesota Corporation for the quarter ended March 31, 1995, (File No. 1-3034): 99.02 Press Release, dated May 1, 1995, of Northern States Power Company. (Exhibit (99)-1 of NSP's 4/28/95 Form 8-K. (b) Reports on Form 8-K The following report on Form 8-K was filed between March 31, 1995 and the date of this report: April 28, 1995 (Filed May 8, 1995) - Item 5. Other Events. Disclosure of an agreement and plan of merger between Northern States Power Company (a Minnesota Corporation) and Wisconsin Energy Corporation, subject to approval by stockholders and regulatory agencies. 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. NORTHERN STATES POWER COMPANY (Registrant) Date: May 15, 1995 /s/ Kenneth J Zagzebski Controller (Principal Accounting Officer) Date: May 15, 1995 Neal Siikarla Treasurer (Principal Financial Officer) NORTHERN STATES POWER COMPANY (WISCONSIN) STATEMENTS OF INCOME Three Months Ended March 31 (Thousands of dollars) 1995(*) 1994(*) Operating revenues Electric 96355 100548 Gas 31558 33456 Total 127913 134004 Operating expenses Fuel for electric generation 1158 1747 Purchased and interchange power 43584 43462 Gas purchased for resale 18021 19912 Administrative and general 6571 7018 Other operation 13219 12791 Maintenance 3893 4144 Depreciation and amortization 8115 7524 Taxes: Property and general 3521 3514 Current income tax exense 9511 10769 Net Provision for deferred income taxes 977 1091 Net investment tax credit adjustments -234 -236 Total 108336 111736 Operating Income 19577 22268 Other income Other income and deductions - net 228 52 Allowance for funds used during const-Equity 59 152 Total Other Income 287 204 Income before interest charges 19864 22472 Interest charges Interest on long-term debt 4011 3974 Other interest and amortization 838 288 Allowance for funds used during const-Debt -145 -96 Total 4704 4166 Net Income 15160 18306 STATEMENTS OF RETAINED EARNINGS Balance at beginning of period 218833 205114 Net income for period 15160 18306 Net additions 15160 18306 Dividends paid 6603 6206 Balance at end of period 227390 217214 (*) Unaudited The Notes to Financial Statements are an integral part of the Statements of Income and Retained Earnings 2 Northern States Power Company (Wisconsin) Balance Sheets March 31 December 31 1995 (*) 1994 ASSETS (Thousands of dollars) UTILITY PLANT Electric 839032 836665 Gas 88225 88350 Common 55943 54675 Total 983200 979690 Accumulated depreciation for plant -351750 -344675 Net utility plant 631450 635015 OTHER PROPERTY AND INVESTMENTS 6846 6691 CURRENT ASSETS Cash and cash equivalents. 85 61 Accounts receivable - net... 40241 36946 Materials and supplies - at average cost Fuel 2905 3413 Other 7054 12280 Accrued utility revenues 13448 16409 Prepayments and other 8100 11030 Deferred tax asset 1847 1415 Total current assets 73680 81554 DEFERRED DEBITS Unamortized debt expense 2895 2928 Regulatory assets 33176 31376 Federal Income Tax Receivable 3307 3307 Insurance receivable 1558 3091 Other 4166 4338 Total deferred debits 45102 45040 TOTAL ASSETS 757078 768300 LIABILITIES CAPITALIZATION Common Stock - authorized 870,000 shares of $100 par value, issued shares: 1995 and 1994, 862,000 86200 86200 Premium on common stock 10461 10461 Retained Earnings 227391 218833 Total common stock equity 324052 315494 LONG-TERM DEBT 213700 213700 Total capitalization 537752 529194 CURRENT LIABILITIES Notes payable - parent company 16300 41300 Long-term debt due within one year 0 2910 Accounts payable 11126 14415 Salaries, wages, and vacation pay accrued 5151 6028 Payable to affiliate companies (principally parent) 12276 8982 Federal taxes accrued 7180 0 Other taxes accrued 1719 936 Interest accrued 5160 5485 Other 2564 1463 Total current liabilities 61476 81519 DEFERRED CREDITS Accumulated deferred income taxes 101634 99748 Accumulated deferred investment tax credits 22121 22332 Regulatory liability 17499 17961 Customer advances 6052 5543 Other 10544 12003 Total deferred credits 157850 157587 TOTAL 757078 768300 (*) Unaudited The Notes to Financial Statements are an integral part of the Balance Sheet. 3 NORTHERN STATES POWER COMPANY (WISCONSIN) STATEMENTS OF CASH FLOWS Three Months Ended March 31 (Thousands of dollars) 1995(*) 1994(*) Cash Flows from Operating Activities: Net Income 15160 18306 Adjustments to reconcile net income to cash from operating activities: Depreciation and amortization 8529 7934 Deferred income taxes 1454 1091 Investment tax credit adjustments -234 -236 Allowance for funds used during construction - equity -59 -152 Insurance receivable 1533 0 Cash provided from (used by) changes in working capital 17139 7738 Cash provided from (used by) changes in other assets and liabilities -2275 -19 Net cash provided from operating activities 41247 34662 Cash Flows from Financing Activities: Issuance of long-term debt 0 0 Issuance (repayment) of short-term debt -25000 -20600 Redemption of long-term debt(Including Reacquisition Premium) -2910 0 Dividends paid -6603 -6206 Net cash used for financing activities -34513 -26806 Cash Flows from Investing Activities: Capital expenditures -4980 -5619 Increase (decrease) in construction related accounts payable -942 -1514 Allowance for funds used during construction - equity 59 152 Other -847 -1037 Net cash used for investing activities -6710 -8018 Net increase (decrease) in cash and cash equivalents. 24 -162 Cash and cash equivalents beginning of period.. 61 449 Cash and cash equivalents end of period 85 287 (*) Unaudited The Notes to Financial Statements are an integral part of the Statements of Cash Flows. 4 EX-27 2
UT 1,000 3-MOS DEC-31-1995 MAR-31-1995 PER-BOOK 631,450 6,846 73,680 45,102 0 757,078 86,200 10,461 227,391 324,052 0 0 213,700 16,300 0 0 0 0 0 0 203,026 757,078 127,913 10,254 98,082 108,336 19,577 287 19,864 4,704 15,160 0 15,160 6,603 4,011 41,247 17.58 17.58
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