-----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, UwrbY8TEZo/Dom76Cf17a54D9hGpkUpnVCA3Irm6Nq7es1KujF5j1mLnkZET2Xrk oEtifH/ZNuKx+MmPk7uq5Q== 0000072909-95-000008.txt : 19950804 0000072909-95-000008.hdr.sgml : 19950804 ACCESSION NUMBER: 0000072909-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950803 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: 95558707 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 JUNE 30, 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 June 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) BALANCE SHEETS June 30 December 31 1995 (*) 1994 (Thousands of dollars) ASSETS UTILITY PLANT Electric 846685 836665 Gas 89329 88350 Electric 57810 54675 Total 993824 979690 Accumulated provision for depreciation -358192 -344675 Net utility plant 635632 635015 OTHER PROPERTY AND INVESTMENTS 8024 6691 CURRENT ASSETS Cash and cash equivalents 142 61 Accounts receivable - net 33168 36946 Materials and supplies - at average cost Fuel 2817 3413 Other 9835 12280 Accrued utility revenues 12103 16409 Prepayments and other 10350 11030 Total current assets 68415 80139 DEFERRED DEBITS Unamortized debt expense 2847 2928 Regulatory assets 32751 32783 Federal Income tax receivable 3307 3307 Insurance receivable 1476 3091 Other 2409 2932 Total deferred debits 42790 45041 TOTAL 754861 766886 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 220048 218833 Total common stock equity 316709 315494 LONG-TERM DEBT 213235 213700 Total capitalization 529944 529194 CURRENT LIABILITIES Notes payable - parent company 26300 41300 Long-term debt due within one year 0 2910 Accounts payable 10316 14415 " Salaries, wages, and vacation pay accrued" 5048 6028 Payable to affiliate companies (principally parent) 16468 8982 Federal taxes accrued 1304 0 Other taxes accrued 1197 936 Interest accrued 5092 5485 Other 3166 1463 Deferred tax liability 1452 1953 Total current liabilities 70343 83472 DEFERRED CREDITS Accumulated deferred income taxes 99118 96380 Accum. deferred investment tax credits 21887 22332 Regulatory liability 16983 17961 Customer advances 6372 5543 Other 10214 12004 Total deferred credits 154574 154220 TOTAL 754861 766886 (*) Unaudited The Notes to Financial Statements are an integral part of the Balance Sheet. 3 NORTHERN STATES POWER COMPANY (WISCONSIN) INCOME STATEMENTS Three Months Ended Six Months Ended June 30 June 30 (Thousands of dollars) (Thousands of dollars) 1995(*) 1994(*) 1995(*) 1994(*) Operating revenues Electric 90009 88520 186364 189068 Gas 12237 11585 43795 45041 Total 102246 100105 230159 234109 Operating expenses Fuel for electric generation 631 1053 1789 2799 Purchased and interchange power 45219 43883 88803 87345 Gas purchased for resale 9186 10168 27207 30080 Administrative and general 5857 7245 12428 14263 Other operation 12755 12372 25974 25164 Maintenance 5392 5626 9285 9770 Depreciation and amortization 8181 7568 16296 15092 Taxes: Property and general 3479 3436 7000 6950 Current income tax expense 2595 375 12106 11145 Net Provision for Deferred Income Taxes -55 1341 922 2432 Net Investment tax credit adjustments -234 -236 -468 -472 Total 93006 92831 201342 204568 Operating income 9240 7274 28817 29541 Other income Other income and deductions - net 184 140 412 194 Allowance for funds used during construction-Equity 64 194 122 346 Total Other income 248 334 534 540 Income before interest charges 9488 7608 29351 30081 Interest charges Interest on long-term debt 4027 3963 8038 7937 Other interest and amortization 1238 326 2076 614 Allowance for funds used during construction - Debt -38 -122 -184 -218 Total 5227 4167 9930 8333 Net Income 4261 3441 19421 21748 STATEMENTS OF RETAINED EARNINGS Balance at beginning of period 227390 217214 218833 205114 Net income for period 4261 3441 19421 21748 Net Additions 4261 3441 19421 21748 Dividends paid 11603 6206 18206 12413 Balance at end of period 220048 214449 220048 214449 (*) Unaudited The Notes to Financial Statements are an integral part of the Statements of Income and Retained Earnings 2 Northern States Power Company (Wisconsin) Statements of Cash Flows Six Months Ended June 30 (Thousands of dollars) 1995(*) 1994(*) Cash Flows from Operating Activities: Net Income "$19,420 " "$21,748 " Adjustments to reconcile net income to cash from operating activities: Depreciation and amortization "16,960 " "15,935 " Deferred income taxes "1,841 " "5,779 " Investment tax credit adjustments (446) (740) Insurance receivable "1,615 " Allowance for funds used during construction - equity (122) (346) Cash provided from (used by) changes in working capital "17,956 " "6,837 " Cash provided from (used by) changes in other assets and liabilities (829) "(3,633)" Net cash provided from operating activities "56,395 " "45,580 " Cash Flows from Financing Activities: Issuance of long-term debt 0 0 Issuance (repayment) of short-term debt "(15,000)" "(12,800)" Redemption of long-term debt(Including Reacquisition Premium) "(3,375)" (500) Dividends paid "(18,206)" "(12,413)" Net cash used for financing activities "(36,581)" "(25,713)" Cash Flows from Investing Activities: Capital expenditures "(17,566)" "(21,875)" Increase (decrease) in construction related accounts payable (473) 924 Allowance for funds used during construction - equity 122 346 Other "(1,816)" 598 Net cash used for investing activities "(19,733)" "(20,007)" Net increase (decrease) in cash and cash equivalents 81 (140) Cash and cash equivalents beginning of period 61 449 Cash and cash equivalents end of period $142 $309 The Notes to Financial Statements are an integral part of the Statement of Cash Flows 4 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 June 30, 1995, and December 31, 1994 and the results of its operations and cash flows for the six months ended June 30, 1995 and 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. 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 filed a rate case with the Public Service Commission of Wisconsin on June 1, 1995, for a 3.6 percent increase in Wisconsin's gas retail rates that is proposed to be effective on January 1, 1996. No electric change has been proposed. 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 second quarter and six months ended June 30, 1995 was $4.3 million and $19.4 million respectively. Net income increased $0.8 million for the second quarter and decreased $2.3 million for the six months ended June 30 from the comparable periods a year ago. The increase in net income for the second quarter was primarily related to increased sales which were weather related. The decrease in net income relative to 1994 for the six month period is due to a significantly warmer January and February. ELECTRIC SALES AND REVENUES Electric revenues for the second quarter of 1995 increased $1.5 million (1.7 percent) from the electric revenues for the second quarter of 1994. Electric sales increased 3.6 percent in the second quarter of 1995 as compared with the second quarter of 1994 mainly due to weather. The sales increase was offset by a $0.5 million decrease in revenue, as the result of reduced charges to our parent company Northern States Power Company, a Minnesota Corporation, through a cost sharing arrangement (Interchange Agreement) in which electric generation and transmission costs are combined and shared. Electric revenues for the six months ended June 30, 1995 decreased $2.7 million (1.4 percent) from six months ended June 30, 1994. This decrease is primarily the result of a $2.5 million decrease in Interchange Agreement billings to the Minnesota Company due to lower transmission and generation costs in Wisconsin. Electric sales are 0.8% higher than the same period in 1994. GAS SALES AND REVENUES Gas revenues increased $0.7 million (5.6 percent) in the second quarter of 1995 compared to the second quarter 1994. This is the result of a 13.5 percent increase in gas sales, due to a combination of both normal growth and comparably cooler temperatures in 1995. Another factor with regard to the revenue is the lower spot market gas costs which reduced purchased gas adjustment revenue by approximately $1.4 million. Revenues from gas sales decreased $1.2 million (2.8 percent) in the first six months of 1995 compared to the same period in 1994. The primary reason for this is the lower commodity cost. Spot market gas costs resulted in approximately $3.1 million of purchased gas adjustment clause revenue decrease. OPERATING EXPENSES Operating expenses increased $0.2 million in the second quarter of 1995 as compared to the second quarter of 1994. Although electric sales increased, fuel for generation decreased by $0.4 million, because lower cost fuels were used. Purchased and interchange power expenses increased by $1.3 million due to higher electric sales. Gas purchased for resale decreased $1.4 million because of the lower market price. The Company's administrative and general expenses were down $1.4 million, as a result of reduced contingent liabilities associated with litigation and lower regulatory expenses. Depreciation on plant increases adds $0.6 million in operating expense over the second quarter of 1994. The second quarter's deferred tax expenses have decreased from the 1994 level largely as a result of an interest write-off in 1995 that had been deferred. Current income tax expense increased largely due to income before taxes increasing. Operating expenses decreased $3.2 million for the six months ended June 30, 1995 in relation to the same period for 1994. Fuel expense associated with electrical generation is lower because of reduced generation i Wisconsin and lower cost fuels were used. Purchased and interchange power expenses are higher due to the increased generation and purchases necessary to meet the increase in electric sales. Gas purchased for resale is $2.9 million less during this period due to decreased commodity cost on the spot market. OTHER INCOME There were no material changes to other income and deductions in the first two quarters of 1995 as compared with the first two quarters of 1994. INTEREST CHARGES The write-off of prior years' interest on income tax assessment during 1995 has increased interest expense by $0.6 million. Additional increases of $0.6 are a result of increases in both the interest rate and the level of short-term debt between 1995 and 1994. PART II. OTHER INFORMATION Item 5. Other Information Proposed Business Combination On April 28, 1995, NSP and Wisconsin Energy Corporation (WEC) entered into an Agreement and Plan of Merger, which provides for a strategic business combination involving NSP and WEC in a "merger-of-equals" transaction. On July 11, 1995, NSP and WEC filed an application and supporting testimony with the Federal Energy Regulatory Commission seeking approval of the proposed merger to form Primergy Corporation. The filing consisted of the merger application, a proposed joint transmission tariff, and an amendment to the NSP Interchange Agreement. Similar filings will be made later this year with regulatory agencies in various states, including Minnesota, Wisconsin, Michigan and North Dakota. Preliminary joint proxy materials requesting shareholder approval of the merger have been submitted to the Securities and Exchange Commission. When finalized, such joint proxies will be mailed to shareholders of NSP and WEC for their considertaion at meetings scheduled for September 13, 1995. The costs incurred associated with the proposed merger are being deferred as a component of Regulatory Assets based on NSP's current plan to request amortization and rate recovery over future periods. At June 30, 1995, $5.5 million of costs associated with the proposed merger had been deferred by Northern States Power Company (a Minnesota Corporation). 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 and six months ended June 30, 1995. The following Exhibits are incorporated herein by reference: None (b) Reports on Form 8-K None 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: August 15, 1995 /s/ Kenneth J Zagzebski Controller (Principal Accounting Officer) Date: August 15, 1995 /s/ Neal Siikarla Treasurer (Principal Financial Officer) EX-27 2
UT 1000 3-MOS 6-MOS DEC-31-1995 DEC-31-1995 JUN-30-1995 JUN-30-1995 PER-BOOK PER-BOOK 635,632 635,632 8,024 8,024 68,415 68,415 42,790 42,790 0 0 754,861 754,861 86,200 86,200 10,461 10,461 220,048 220,048 316,709 316,709 0 0 0 0 213,235 213,235 26,300 26,300 0 0 0 0 0 0 0 0 0 0 0 0 198,617 198,617 754,861 754,861 102,246 230,159 5,785 19,560 87,221 181,782 93,006 201,342 9,240 28,817 248 534 9,488 29,351 5,227 9,930 4,261 19,421 0 0 4,261 19,421 11,603 18,206 4,027 8,038 15,148 56,395 17.58 22.53 17.58 22.53
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