-----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, AtmM0Pe8JmNFFuzTlkCILm10pbr+S/GcofnAJOA+a0wNiBe2o+HCzbCXG+ZGOSe7 fXdkuPi1xhIc8aCmWBJWOw== 0000072909-97-000010.txt : 19971117 0000072909-97-000010.hdr.sgml : 19971117 ACCESSION NUMBER: 0000072909-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE 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: SEC FILE NUMBER: 001-03140 FILM NUMBER: 97721046 BUSINESS ADDRESS: STREET 1: 100 N BARSTOW ST CITY: EAU CLAIRE STATE: WI ZIP: 54702 BUSINESS PHONE: 7158392592 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 September 30, 1997 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 54703 (Address of principal executive officers) (Zip Code) Registrant's telephone number, including area code (715) 839-2416 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 November 14, 1997 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. PART 1. FINANCIAL INFORMATION Item 1. Financial Statements Northern States Power Company (Wisconsin) Statements of Income (Unaudited)
Three Months Ended Nine Months Ended September 30 September 30 1997 1996 1997 1996 (Thousands of dollars) Operating revenues Electric............................................. $95,800 $91,459 $284,834 $279,960 Gas.................................................. 8,541 8,907 61,552 60,814 Total.............................................. 104,341 100,366 346,386 340,774 Operating expenses Purchased and interchange power...................... 44,332 42,375 135,131 133,357 Fuel for electric generation......................... 3,629 923 7,546 3,523 Gas purchased for resale............................. 5,230 5,360 41,442 39,758 Other operation...................................... 10,021 11,203 34,250 34,604 Maintenance.......................................... 5,185 4,439 14,469 14,434 Administrative and general........................... 4,563 5,486 13,690 16,389 Conservation and demand side management.............. 2,234 2,279 6,701 6,838 Depreciation and amortization........................ 9,465 9,034 28,242 26,547 Taxes: Property and general.......................... 3,423 3,552 10,640 10,798 Current income tax ....................... 4,501 3,172 14,867 14,210 Deferred income tax....................... 753 1,391 2,231 2,375 Investment tax credits recognized......... (220) (227) (660) (682) Total.............................................. 93,116 88,987 308,549 302,151 Operating income...................................... 11,225 11,379 37,837 38,623 Other income (expense) Merger costs - net of applicable income taxes........ - - (523) - Other income and deductions - net of applicable income taxes 818 82 1,132 314 Allowance for funds used during construction - equity 65 65 163 276 Total other income (expense) - net.................. 883 147 772 590 Income before interest charges........................ 12,108 11,526 38,609 39,213 Interest charges Interest on long-term debt........................... 4,080 3,968 12,238 11,910 Other interest and amortization...................... (126) 863 1,111 2,429 Allowance for funds used during construction - debt.. (89) (104) (235) (276) Total.............................................. 3,865 4,727 13,114 14,063 Net Income ........................................... $8,243 $6,799 $25,495 $25,150 Statements of Retained Earnings (Unaudited) Balance at beginning of period........................ $238,005 $227,197 $234,751 $221,638 Net income for period................................. 8,243 6,799 25,495 25,150 Dividends paid to parent.............................. (7,000) (6,396) (20,998) (19,188) Balance at end of period.............................. $239,248 $227,600 $239,248 $227,600
The Notes to Financial Statements are an integral part of the Statements of Income and Retained Earnings. Northern States Power Company (Wisconsin) Balance Sheets (Unaudited)
September 30, December 31, 1997 1996 ASSETS (Thousands of dollars) Utility Plant Electric........................................................ $919,821 $894,143 Gas............................................................. 103,945 99,817 Other........................................................... 69,346 67,262 Total....................................................... 1,093,112 1,061,222 Accumulated provision for depreciation........................ (419,310) (395,619) Net utility plant........................................... 673,802 665,603 Current Assets Cash............................................................ 31 208 Accounts receivable - net....................................... 29,152 40,250 Fuel inventories - at average cost.............................. 12,826 7,780 Other materials and supplies inventories - at average cost...... 5,933 5,918 Unbilled utility revenues....................................... 10,493 21,074 Prepayments and other........................................... 11,325 11,703 Total current assets.......................................... 69,760 86,933 Other Assets Regulatory assets............................................... 35,825 37,102 Other investments............................................... 5,705 5,287 Federal income tax receivable................................... 3,307 3,307 Nonutility property - net of accumulated depreciation........... 2,768 2,799 Investments in unconsolidated affiliates........................ 2,070 2,146 Long-term prepayments and deferred charges...................... 7,263 5,954 Total other assets........................................... 56,938 56,595 TOTAL ASSETS................................................ $800,500 $809,131 LIABILITIES AND EQUITY Capitalization Common stock - authorized 870,000 shares of $100 par value, issued shares: 1997 and 1996, 862,000...................... $86,200 $86,200 Premium on common stock....................................... 10,461 10,461 Retained earnings............................................. 239,248 234,751 Total common stock equity................................... 335,909 331,412 Long-term debt.................................................. 231,754 231,688 Total capitalization........................................ 567,663 563,100 Current Liabilities Notes payable - parent company.................................. 29,200 39,300 Accounts payable................................................ 13,051 16,493 Payable to affiliate companies (principally parent)............. 16,405 15,544 Salaries, wages, and vacation pay accrued....................... 5,226 6,417 Taxes accrued................................................... 670 1,641 Interest accrued................................................ 4,408 4,459 Current deferred income taxes................................... 75 1,670 Other........................................................... 4,526 3,888 Total current liabilities................................... 73,561 89,412 Other Liabilities Accumulated deferred income taxes............................... 103,673 100,898 Accumulated deferred investment tax credits..................... 19,195 20,024 Regulatory liabilities.......................................... 19,980 19,409 Customer advances............................................... 8,416 7,334 Benefit obligations and other................................... 8,012 8,954 Total other liabilities..................................... 159,276 156,619 Commitments and Contingent Liabilities (see Note 3) TOTAL LIABILITIES AND EQUITY.............................. $800,500 $809,131
The Notes to Financial Statements are an integral part of the Balance Sheets. Northern States Power Company (Wisconsin) Statements of Cash Flows (Unaudited)
Nine Months Ended September 30 1997 1996 (Thousands of dollars) Cash Flows from Operating Activities: Net Income.......................................................... $25,495 $25,150 Adjustments to reconcile net income to cash from operating activities: Depreciation and amortization..................................... 29,131 27,216 Deferred income taxes............................................. 3,600 919 Deferred investment tax credits recognized........................ (660) (682) Allowance for funds used during construction - equity............. (163) (276) Cash provided by changes in working capital......................... 10,921 7,717 Cash used for changes in other assets and liabilities............... (2,542) (2,091) Net cash provided by operating activities............................ 65,782 57,953 Cash Flows from Investing Activities: Capital expenditures................................................ (36,514) (38,189) Increase in construction payables................................... 1,919 464 Allowance for funds used during construction - equity............... 163 276 Other............................................................... (429) (137) Net cash used for investing activities............................... (34,861) (37,586) Cash Flows from Financing Activities: Repayment of notes payable to parent - net.......................... (10,100) (1,100) Dividends paid to parent............................................ (20,998) (19,188) Net cash used for financing activities............................... (31,098) (20,288) Net increase (decrease) in cash and cash equivalents................... (177) 79 Cash and cash equivalents at beginning of period....................... 208 247 Cash and cash equivalents at end of period............................. $31 $326
The Notes to Financial Statements are an integral part of the Statements of Cash Flows. Northern States Power Company (Wisconsin) NOTES TO FINANCIAL STATEMENTS The Company is a wholly owned subsidiary of Northern States Power Company, a Minnesota corporation (NSPM). In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the financial position of Northern States Power Company, a Wisconsin corporation (the Company), as of Sept. 30, 1997 and Dec. 31, 1996, the results of its operations for the three and nine months ended Sept. 30, 1997 and 1996 and its cash flows for the nine months ended Sept. 30, 1997 and 1996. Due to the seasonality of the Company's electric and gas sales, operating results on a quarterly and year- to-date basis are not necessarily an appropriate base from which to project annual results. 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 Dec. 31, 1996 (1996 Form 10-K). The following notes should be read in conjunction with such policies and other disclosures in the Form 10-K. 1. Business Developments Termination of Proposed Merger - As discussed in the Company's Form 8-K filed on May 19, 1997, NSPM and Wisconsin Energy Corporation (WEC) announced on May 16, 1997 that they have mutually agreed to terminate their plans to merge the two companies. As a result of the merger termination, the Company's second quarter and year-to-date operating results for 1997 include a charge to nonoperating expense of approximately $900,000 for deferred merger related costs. Union Agreements - A new three-year collective-bargaining agreement was ratified by the Company's union membership on April 10, 1997. All provisions of this new agreement are effective retroactively to Jan. 1, 1997. The prior agreement had expired Dec. 31, 1996, but was extended to April 30, 1997. New Natural Gas System - Through a competitive bidding process, the Company has been selected to build, own, and operate a natural gas system at Fort McCoy, a regional U.S. Army training center near Sparta, Wis. The total project cost is expected to be approximately $2.5 million and estimated annual revenue is $1.7 million. The 10-year contract with the U.S. Army includes renewal provisions. The Company has contracted with Northern Natural Gas Company for gas transportation services for the project and, on Oct. 24, 1997, Northern Natural Gas Company filed its application with the Federal Energy Regulatory Commission (FERC) to upgrade their facilities that will be used to supply the project. Assuming timely approval of this filing, the Company anticipates that gas will flow through the pipeline by mid-December 1997 to buildings that currently have natural gas service and that additional load will be added throughout the winter as the training center's propane gas equipment is converted to use natural gas. The project is expected to be complete in the second quarter of 1998. The Company has received an order from the Public Service Commission of Wisconsin (PSCW) allowing the Company to treat the investment as utility property. PSCW approval to include the Northern Natural Gas contract in the Purchased Gas Adjustment clause is pending. Upgraded Bond Ratings - On July 15, 1997, Moody's Investors Service upgraded the credit ratings of the Company's First Mortgage Bonds from A1 to Aa3, and its unsecured Pollution Control Bonds from A2 to A1. The Company's financial and competitive position were among the factors cited for the upgrade. These ratings reflect the views of Moody's Investors Service and an explanation of the significance of these ratings may be obtained from them. A security rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating agency. Wheaton Plant Conversion - During the third quarter of 1997, the Company converted units 2 and 4 of the Wheaton generating facility to operate on both oil and natural gas. Previously, the units operated on oil exclusively. Approximately $2.3 million of the expected total capital cost of $2.7 million had been spent through Sept. 30, 1997. The conversion was prompted by an opportunity to decrease the cost of producing electricity and reduce plant emissions. Tax Dispute Settlement - In September 1997 the Company received $825,000 of a $1.8 million refund of tax and interest due from the State of Wisconsin which resulted from a favorable court decision regarding a disputed tax issue. The Company expects to receive the balance of the refund by year end 1997. 2. Regulation and Rate Matters 1997 Rate Filings - On June 9, 1997 the Company filed for a fuel cost surcharge to its retail electric rates under the fuel rules provisions of the Wisconsin Statutes. The surcharge was requested because fuel and purchased power costs had risen beyond the amount included in the Company's current rates due to unplanned and extended outages at NSPM's nuclear generating stations and higher than projected wheeling costs associated with power purchases. Effective Sept. 25, 1997 the PSCW authorized the implementation of a fuel cost surcharge factor of $0.00043 per kilowatt-hour (Kwh) for all Wisconsin retail electric customers, which is expected to produce approximately $500,000 of additional electric revenue in 1997. The surcharge represents less than 1 percent of current rates and is the first rate increase requested since January 1993. The surcharge will continue in effect on an interim basis until the next rate order is issued and is subject to refund pending final PSCW review. In its order regarding the Company's 1997 rates, the PSCW denied current rate recovery of the federal government's assessment for the decommissioning and decontamination of federal uranium enrichment facilities based on a court decision involving another utility that these assessments were unlawful. The PSCW, however, did state that they would allow future rate recovery of these costs with interest if the courts ultimately decided the assessments must be paid. While the case was under appeal, the Company continued to pay the assessments and defer the cost as a regulatory wasset. $414,000 had been deferred at Sept. 30, 1997. On May 6, 1997, the United States Court of Appeals reversed the lower court's earlier decision that these assessments were unlawful. Accordingly, the Company has requested recovery of current and deferred assessments in its 1998 retail electric rate filing. 1998 Rate Filings - The Company filed retail electric and gas rate cases with the PSCW on Nov. 14, 1997 for the test year 1998. The Company requested a 4.3% increase, approximately $12.7 million annually, in retail electric rates and a 1.9% or $1.7 million decrease in retail gas rates. The Company has requested that these changes take effect during the second quarter of 1998. Network Transmission Service Costs (NTS) - In July 1997, the Company received authorization from the PSCW to defer its share of network transmission service (NTS) costs incurred after May 23, 1997. Beginning in the third quarter of 1997, the Company began deferring these costs, including a retroactive adjustment to May 23, 1997. Through Sept. 30, 1997, $1.4 million of NTS costs had been deferred. Recovery of deferred NTS costs will be sought in the Company's 1998 retail electric rate case. Under NTS, participating utilities share the annual transmission cost for their combined joint-use systems, net of related transmission revenues, based upon each company's share of the total network load. NSPM and the Company offered NTS service to qualifying transmission customers as a result of the FERC Order No. 888. The Company's share of this expense is billed through the Interchange Agreement with NSPM. NSPM and the Company plan to file later in 1997 a rate application with the FERC to update rates for transmission service. Wisconsin Purchased Gas Adjustment Clause - In March 1996, the PSCW conducted a generic hearing to consider alternative incentive-based gas cost recovery mechanisms to replace the current purchased gas adjustment clause (PGA). In November 1996, the PSCW issued an order with general guidelines for incentive- based gas cost recovery mechanisms as well as "modified one-for-one" gas cost recovery mechanisms. All major gas utilities in Wisconsin were required to file a proposal to replace their current PGA. On Sept. 29, 1997 the Company filed its proposal with the PSCW. In the Company's proposal, allowable gas commodity cost recovery would be based on a benchmark index which is, in turn, based on the market price of gas. The allowable cost recovery of the remaining components of the cost of gas (for example, fixed pipeline transportation costs, supply reservation costs, and other costs approved by the FERC) would be based on actual costs incurred, as is the case with the Company's current PGA. The PSCW's decision is expected in April 1998. If the Company's proposal is approved, the financial impact of the new gas cost recovery mechanism will be substantially the same as with the current PGA. Approximately 70 percent of the Company's gas revenues represent recovery of gas costs through the PGA mechanism. Michigan Power Supply Cost Recovery Factor (PSCR) - On Aug. 25, 1997, the Michigan Public Service Commission (MPSC) approved the Company's application to reinstate a PSCR for Michigan electric customers in 1998. On Sept. 29, 1997, the Company filed its request for a 1998 PSCR of $.00172 per Kwh or about $250,000. The Company had suspended the PSCR during 1997 while the merger between NSPM and WEC was pending. The PSCR provides for recovery of power supply costs for electric customers based on a twelve-month projection of costs. After each twelve-month period is completed, a reconciliation is submitted to the MPSC and any over-recovery of costs is refunded and any under-recovery of costs is billed, including interest. 3. Commitments and Contingent Liabilities Environmental Contingencies - As discussed in Note 8 to the Financial Statements in the 1996 Form 10-K, the Company has been named as a potentially responsible party in connection with environmental contamination at a site in Ashland, Wis. With respect to developments since the 1996 Form 10-K was filed, the Company began discussions with the Wisconsin Department of Natural Resources in the third quarter of 1997 concerning other responsible parties and remediation options for the Ashland site. Network Transmission Costs - In October 1997, another regional utility with integrated transmission facilities which participates in FERC's transmission cost sharing network provided information to NSPM which, if accurate and reliable, could increase the Company's annual NTS costs by approximately $1 million, effective in 1997. NSPM intends to review and evaluate the information provided, assess its reliability and compliance with FERC guidelines and, if necessary, dispute amounts that they believe represent increases due to inappropriately claimed facilities or inaccurate costs related to claimed facilities These additional NTS costs have not been recognized in the Sept. 30, 1997 financial statements. If any additional NTS costs are incurred, they will be deferred as discussed in Note 2. Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 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). The Company's net income for the quarter and nine months ended September 30, 1997 was $8.2 million and $25.5 million, respectively, an increase of $1.4 million and $0.3 million, respectively from the comparable periods a year ago. The following analysis summarizes the specific revenue and expense items impacting these results. Except for the historical statements contained herein, the matters discussed in the following discussion and analysis are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate", "estimate", "expect", "objective", "possible", "potential" and similar expressions. Actual results may vary materially. Factors that could cause actual results to differ materially include, but are not limited to: general economic conditions, including their impact on capital expenditures; business conditions in the energy industry; competitive factors; unusual weather; changes in federal or state legislation; and the other risk factors listed from time to time by the Company in reports filed with the SEC, including Exhibit 99.01 to this report on Form 10-Q for the quarter ended September 30, 1997. Third Quarter 1997 Compared with Third Quarter 1996 Electric revenues in total increased $4.3 million or 4.7 percent for the third quarter of 1997 compared with the third quarter of 1996. Sales to customers increased $3.5 million mainly due to sales growth. On a weather-normalized basis, sales increased 4.6 percent in the third quarter of 1997 compared to the third quarter of 1996. The remaining $0.8 million increase in electric revenues relates to higher Interchange Agreement billings to NSPM in 1997, reflecting an increase in the Company's fuel expense. Gas revenues for the third quarter of 1997 compared with the third quarter of 1996 decreased $0.4 million or 4.1 percent primarily due to a change in the proportion of gas sold between firm and interruptible classes in 1997. Fuel for electric generation and Purchased and interchange power costs combined increased $4.7 million or 10.8 percent for the third quarter of 1997 compared with the third quarter of 1996 primarily due to additional power purchases from NSPM and the usage of higher cost peaking plants to support increased sales levels. Gas purchased for resale decreased $0.1 million or 2.4 percent in the third quarter of 1997 compared with the third quarter of 1996 primarily due to larger adjustments to match the cost of gas expense with the level of cost recovery in customer rates. Other operation, Maintenance, and Administrative and general expenses combined decreased $1.4 million or 6.4 percent in the third quarter of 1997 compared with the same period in 1996. Contributing to the decrease were lower employee benefit expenses, lower fixed charges from NSPM relating to property insurance and property taxes, and a retroactive adjustment for the deferral of NTS costs incurred as a result of FERC Order No. 888 (as discussed in Note 2). Partially offsetting these decreases were higher maintenance expenses in the transmission and distribution area and higher customer service expenses in 1997. Depreciation and amortization increased $0.4 million or 4.8 percent in the third quarter of 1997 compared with the same period in 1996 due to increases in the Company's plant in service. Property and general taxes were approximately the same in both periods. Income tax expense increased $0.7 million in the third quarter of 1997 compared with the third quarter of 1996 reflecting higher pretax operating income in 1997. Other income (expense) - net increased $0.7 million in the third quarter of 1997 as compared with the same quarter in 1996 due to recognition of tax adjustments and interest income related to the settlement of the disputed tax issue with the State of Wisconsin (as discussed in Note 1). Interest charges decreased $0.9 million in the third quarter of 1997 compared with the third quarter of 1996 primarily due to the reversal of previously recorded interest expense associated with the settlement of the disputed tax issue with the State of Wisconsin (as discussed in Note 1). First Nine Months of 1997 Compared with First Nine Months of 1996 Electric revenues in total increased $4.9 million or 1.7 percent for the first nine months of 1997 compared with the first nine months of 1996. Sales to customers increased $3.8 million largely due to sales growth, partially offset by less favorable weather in 1997. On a weather-normalized basis, sales increased 3.5 percent in the first nine months of 1997 compared with the first nine months of 1996. The remaining $1.1 million increase in electric revenues relates to higher Interchange Agreement billings to NSPM in 1997, reflecting an increase in the Company's fuel expense. Gas revenues for the first nine months of 1997 compared with the first nine months of 1996 increased $0.7 million or 1.2 percent. Higher costs per unit of purchased gas, as discussed below, were reflected in customer rates through the purchased gas adjustment clause mechanism. However, gas sales decreased 2.4 percent largely due to less favorable weather in 1997. Fuel for electric generation and Purchased and interchange power costs combined increased $5.8 million or 4.2 percent for the first nine months of 1997 compared with the first nine months of 1996 primarily due to additional power purchases from NSPM and the usage of higher cost peaking plants to support increased sales levels. Gas purchased for resale increased $1.7 million or 4.2 percent in the first nine months of 1997 compared with the first nine months of 1996 primarily due to higher costs per unit of purchased gas charged by suppliers. Partially offsetting the increase in unit costs were reduced purchases in 1997 due to lower gas sales. Other operation, Maintenance, and Administrative and general expenses combined decreased $3.0 million or 4.6 percent in the first nine months of 1997 compared with the same period in 1996. Contributing to the decrease were lower employee benefit expenses, lower fixed charges from NSPM relating to property insurance and property taxes, and lower maintenance expenses in the transmission and distribution area. Partially offsetting the decrease were $1.4 million of network transmission service costs incurred as a result of FERC Order No. 888 (net of regulatory deferrals as discussed in Note 2) and higher customer service expenses in 1997. Depreciation and amortization increased $1.7 million or 6.4 percent in the first nine months of 1997 compared with the same period in 1996 due to increases in the Company's plant in service. Property and general taxes were approximately the same during both periods. Income tax expense increased $0.5 million in the first nine months of 1997 compared with the first nine months of 1996 reflecting higher pretax operating income in 1997. Other income (expense) - net increased $0.2 million in the first nine months of 1997 compared with the same period in 1996 primarily due to recognition of tax adjustments and interest income related to the settlement of the disputed tax issue with the State of Wisconsin (as discussed in Note 1) and higher subsidiary earnings. Partially offsetting the increased income was the write- off of deferred merger costs (as discussed in Note 1). Interest expense decreased $0.9 million or 6.7 percent in the first nine months of 1997 compared with the first nine months of 1996 due to the reversal of previously recorded interest expense related to the settlement of the disputed tax issue with the State of Wisconsin (as discussed in Note 1) and lower short term debt levels in 1997. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following exhibits are filed with this report: 27.01 Financial Data Schedule for the nine months ended Sept. 30, 1997. 99.01 Statement pursuant to Private Securities Litigation Reform Act of 1995. (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) /s/ Roger D. Sandeen Controller (Principal Accounting Officer) /s/ Neal A. Siikarla Treasurer (Principal Financial Officer) Date: November 14, 1997 EXHIBIT INDEX Method of Exhibit Description Filing No. DT 27.01 Financial Data Schedule DT 99.01 Statement pursuant to Private Securities Litigation Reform Act of 1995 DT = Filed electronically with this direct transmission. EX-27 2
UT EXHIBIT 27.01 This schedule contains summary financial information extracted from the Consolidated Statements of Income, Consolidated Balance Sheets and Consolidated Statements of Cash Flows and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS DEC-31-1996 SEP-30-1997 PER-BOOK 673,802 10,543 69,760 46,395 0 800,500 86,200 10,461 239,248 335,909 0 0 231,754 29,200 0 0 0 0 0 0 203,637 800,500 346,386 16,438 292,111 308,549 37,837 772 38,609 13,114 25,495 0 25,495 20,998 12,238 65,782 $29.58 $29.58
EX-99 3 Exhibit 99.01 Northern States Power Company Cautionary Factors The Private Securities Litigation Reform Act of 1995 (the Act) provides a new "safe harbor" for forward-looking statements to encourage such disclosures without the threat of litigation providing those statements are identified as forward-looking and are accompanied by meaningful, cautionary statements identifying important factors that could cause the actual results to differ materially from those projected in the statement. Forward-looking statements have been and will be made in written documents and oral presentations of Northern States Power Company, a Wisconsin Corporation (the Company). Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. When used in the Company's documents or oral presentations, the words "anticipate", "estimate", "expect", "objective", "possible", "potential" and similar expressions are intended to identify forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements, factors that could cause the Company's actual results to differ materially from those contemplated in any forward-looking statements include, among others, the following: - - Economic conditions including inflation rates and monetary fluctuations; - - Trade, monetary, fiscal, taxation, and environmental policies of governments, agencies and similar organizations in geographic areas where the Company has a financial interest; - - Customer business conditions including demand for their products or services and supply of labor and materials used in creating their products and services; - - Financial or regulatory accounting principles or policies imposed by the Financial Accounting Standards Board, the Securities and Exchange Commission, the Federal Energy Regulatory Commission and similar entities with regulatory oversight; - - Availability or cost of capital such as changes in: interest rates; market perceptions of the utility industry, or the Company; or security ratings; - - Factors affecting operations such as unusual weather conditions; catastrophic weather-related damage; unscheduled generation outages, maintenance or repairs; unanticipated changes to fossil fuel or gas supply costs or availability due to higher demand, shortages, transportation problems or other developments; environmental incidents; or electric transmission or gas pipeline system constraints; - - Employee workforce factors including loss or retirement of key executives, collective bargaining agreements with union employees, or work stoppages; - - Increased competition in the utility industry, including: industry restructuring initiatives; transmission system operation and/or administration initiatives; recovery of investments made under traditional regulation; nature of competitors entering the industry; retail wheeling; a new pricing structure; and former customers entering the generation market; - - Rate-setting policies or procedures of regulatory entities, including environmental externalities, which are values established by regulators assigning environmental costs to each method of electricity generation when evaluating generation resource options; - - Social attitudes regarding the utility and power industries; - - Cost and other effects of legal and administrative proceedings, settlements, investigations and claims; - - Technological developments that result in competitive disadvantages and create the potential for impairment of existing assets; - - Other business or investment considerations that may be disclosed from time to time in the Company's Securities and Exchange Commission filings or in other publicly disseminated written documents. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors pursuant to the Act should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by the Company prior to the effective date of the Act. -----END PRIVACY-ENHANCED MESSAGE-----