-----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, M2e+Lt2j9fy35ZUpZ+uzuzTe4/JJMIo3iarSgUA8XrOoH3Ff+EeLNODkw2ArvKaq 8MJMOI4vmMWyMfVplci8fA== 0001047469-97-005503.txt : 19971120 0001047469-97-005503.hdr.sgml : 19971120 ACCESSION NUMBER: 0001047469-97-005503 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19971119 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OTTER TAIL POWER CO CENTRAL INDEX KEY: 0000075129 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 410462685 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: SEC FILE NUMBER: 333-11153 FILM NUMBER: 97724246 BUSINESS ADDRESS: STREET 1: 215 S CASCADE ST STREET 2: PO BOX 496 CITY: FERGUS FALLS STATE: MN ZIP: 56538-0496 BUSINESS PHONE: 2187398200 424B5 1 424B5 PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(B)(5) (TO PROSPECTUS DATED NOVEMBER 18, 1997) FILE NUMBER 333-11153 $50,000,000 OTTER TAIL POWER COMPANY SENIOR DEBENTURES, 6.375% SERIES DUE 2007 -------------- (INTEREST PAYABLE JUNE 1 AND DECEMBER 1) ------------------- The Senior Debentures, 6.375% Series Due 2007 (the "Offered Debentures") of Otter Tail Power Company (the "Company") will mature on December 1, 2007. The Offered Debentures will be unsecured obligations of the Company and will rank on a parity with all other unsecured and unsubordinated debt of the Company. Interest on the Offered Debentures is payable semi-annually on June 1 and December 1 of each year, commencing June 1, 1998. The Offered Debentures will not be redeemable prior to maturity and will not have the benefit of any sinking fund. The Offered Debentures will be represented by one or more global securities (the "Global Securities") registered in the name of The Depository Trust Company ("DTC") or its nominee. Beneficial interests in Global Securities will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its participants. See "Certain Terms of the Offered Debentures" in this Prospectus Supplement. ------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
UNDERWRITING DISCOUNTS AND PROCEEDS TO PRICE TO PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3) --------------------- --------------------- --------------------- Per Debenture............................. 98.581% 0.375% 98.206% Total..................................... $49,290,500 $187,500 $49,103,000
- ------- (1) Plus accrued interest, if any, from November 21, 1997. (2) The Company has agreed to indemnify the Underwriter against certain liabilities, including liabilities under the Securities Act of 1933. See "Underwriting." (3) Before deducting estimated expenses of $150,000 payable by the Company. ------------------- The Offered Debentures are offered by the Underwriter when, as and if delivered to and accepted by the Underwriter and subject to approval of certain legal matters by Sidley & Austin, counsel for the Underwriter, and certain other conditions. It is expected that delivery of the Offered Debentures will be made on or about November 21, 1997, through the book-entry facilities of DTC, against payment therefor in immediately available funds. ------------------- [LOGO] ------------------- NOVEMBER 18, 1997 CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE OFFERED DEBENTURES, INCLUDING OVERALLOTMENT, STABILIZING AND SYNDICATE COVERING TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." ------------------------ SELECTED CONSOLIDATED FINANCIAL DATA The financial data presented below should be read in conjunction with the Company's consolidated financial statements and notes thereto which are incorporated by reference in the accompanying Prospectus.
(THOUSANDS OF DOLLARS) YEAR ENDED DECEMBER NINE MONTHS ENDED 31, SEPTEMBER 30, ---------------------- ----------------------- 1995 1996 1996 1997 -------- ----------- ----------- -------- (UNAUDITED) Income Statement: Operating Revenue Electric.................. $203,925 $ 199,345 $ 147,079 $151,244 Health Services........... 50,896 61,697 43,598 48,277 Manufacturing............. 38,690 64,568(1) 51,133(1) 57,273 Other Business Operations.............. 32,818 43,829 34,833 30,449 Operating Income Electric.................. 47,916 45,279 33,545 33,436 Health Services........... 3,581 5,137 3,156 2,592 Manufacturing............. 3,270 6,503(1) 6,048(1) 6,420 Other Business Operations.............. 3,531 2,387 1,515 843 Net Income.................. 28,945 31,004(1) 23,097(1) 23,868 Ratio of Earnings to Fixed Charges (2)............... 3.96 3.66 3.72 3.50
SEPTEMBER 30, 1997 (UNAUDITED) ---------------------------------------- PERCENT OF AS CAPITALIZATION ACTUAL(3) ADJUSTED(4) AS ADJUSTED(4) ---------- ----------- --------------- Capitalization: Long-Term Debt.......................................................... $ 181,487 $ 202,617 45.2% Cumulative Preferred Shares............................................. 38,831 38,831 8.7% Common Share Equity..................................................... 206,479 206,479 46.1% ---------- ----------- ----- Total Capitalization.................................................. $ 426,797 $ 447,927 100.0% ---------- ----------- ----- ---------- ----------- -----
- ------------------------ (1) These items have been restated to reflect the acquisition of Chassis Liner Corporation on June 30, 1997, which was accounted for under the pooling of interests method. All of such items are unaudited, including items for the year ended December 31, 1996. (2) For purposes of computing the ratios of earnings to fixed charges: (1) earnings consist of consolidated net income to which has been added total income tax expense and fixed charges; and (ii) fixed charges consist of interest on long-term debt and other interest charges and amortization of debt expense, premium and discount. (3) Actual Long-Term Debt includes $18,800,000 of current maturities on the Company's First Mortgage Bonds, 8.75% Series due December 15, 1997. S-2 (4) Adjusted to give effect to the issuance of the Offered Debentures and the repayment or redemption of $28,870,000 aggregate principal amount of the Company's First Mortgage Bonds as described under "Use of Proceeds" in this Prospectus Supplement. USE OF PROCEEDS The net proceeds to be received by the Company from the sale of the Offered Debentures will be used in part for the payment at maturity of $18,800,000 principal amount of the Company's First Mortgage Bonds, 8.75% Series due December 15, 1997. The balance of such net proceeds will be used for the redemption in 1997 of $9,240,000 principal amount of the Company's First Mortgage Bonds, 7.625% Series due February 1, 2003 at a price of 101.36%, and $830,000 principal amount of the Company's First Mortgage Bonds, 8.125% Pollution Control (Coyote Project) Series B due August 1, 2009 at a price of 100%, in each case plus accrued interest to the date of redemption, and for general corporate purposes. CERTAIN TERMS OF THE OFFERED DEBENTURES The following description of the particular terms of the Offered Debentures supplements, and to the extent inconsistent therewith supersedes, the description of the general terms and provisions of the Debentures set forth in the accompanying Prospectus, to which description reference is hereby made. All capitalized terms used and not defined in this Prospectus Supplement shall have the same meanings ascribed to those terms in the accompanying Prospectus. GENERAL. The Offered Debentures are unsecured obligations of the Company and will rank on a parity with all other unsecured and unsubordinated debt of the Company. The Offered Debentures are limited to $50,000,000 in aggregate principal amount and will be issued under the Company's Indenture (For Unsecured Debt Securities) dated as of November 1, 1997 (the "Debenture Indenture") between the Company and First Trust National Association, as Trustee (the "Debenture Indenture Trustee"). The Debenture Indenture does not limit the aggregate amount of secured, unsecured or unsubordinated debt of the Company that may be issued from time to time. The Offered Debentures are not afforded any protection under the Company's First Mortgage Indenture. A default with respect to, or an acceleration of, any other indebtedness of the Company will not constitute an Event of Default with respect to the Offered Debentures. As of October 31, 1997, the Company on an unconsolidated basis (parent company only) had approximately $123,025,000 of outstanding secured debt, approximately $15,610,000 of outstanding unsecured and unsubordinated debt and no outstanding unsecured subordinated debt. MATURITY, INTEREST AND PAYMENT. The Offered Debentures will mature on December 1, 2007. The Offered Debentures will bear interest at the rate shown in their title, payable semi-annually on June 1 and December 1 in each year, commencing June 1, 1998, to holders registered at the close of business on the May 15 and November 15, as the case may be, next preceding such interest payment date. Interest on the Offered Debentures will accrue from November 21, 1997, or from the most recent interest payment date. NO REDEMPTION OR SINKING FUND. The Offered Debentures may not be redeemed prior to maturity by the Company and no sinking fund will be established for the benefit of the Offered Debentures. DEFEASANCE. The provisions described in the accompanying Prospectus under the caption "Description of Debentures--Defeasance" are applicable to the Offered Debentures. As set forth in such description, under the provisions of the Debenture Indenture, at the Company's election, the Offered Debentures will be deemed to have been paid for purposes of the Debenture Indenture and the entire indebtedness of the Company in respect thereof will be deemed to have been satisfied and discharged if there has been irrevocably deposited with the Debenture Indenture Trustee or any Paying Agent (other than the Company) in trust sufficient cash or certain government securities, or a combination thereof, to fully satisfy all principal of and interest on the Offered Debentures. S-3 Under existing case law and regulations, such a deposit, satisfaction and discharge (a "defeasance") is treated as a sale or exchange of the obligations in respect of the Offered Debentures for federal income tax purposes. A holder would then recognize gain or loss in the amount by which the fair market value of the Offered Debentures after the defeasance was greater or less than the holder's basis in the Offered Debentures prior to the defeasance. Such gain or loss generally would be capital gain or loss to a holder who held the Offered Debentures as capital assets. In addition, there may be other associated tax consequences. Prospective purchasers are urged to consult their own tax advisors as to the specific consequences to them of a defeasance. See "Description of Debentures--Defeasance" in the accompanying Prospectus. GLOBAL SECURITIES. The Offered Debentures will be represented by a Global Security or Securities that will be deposited with, or on behalf of, DTC and registered in the name of DTC or a nominee thereof. DTC has advised the Company and the Underwriter that DTC is (i) a limited-purpose trust company organized under the New York Banking Law, (ii) a "banking organization" within the meaning of the New York Banking Law, (iii) a member of the Federal Reserve System, (iv) a "clearing corporation" within the meaning of the New York Uniform Commercial Code and (v) a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was created to hold securities of its participating organization ("participants") and to facilitate the clearance and settlement of securities transactions, such as transfers and pledges, among its participants in such securities through electronic computerized book-entry changes in accounts of participants, thereby eliminating the need for physical movement of securities certificates. Participants include securities brokers and dealers (including the Underwriter), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Persons who are not participants may beneficially own securities held by DTC only through participants. A Global Security shall be exchangeable for Offered Debentures registered in the names of persons other than DTC or its nominee only if (i) DTC notifies the Company that it is unwilling or unable to continue as a depository for such Global Security and no successor depository shall have been appointed, or if at any time DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934, at a time when DTC is required to be so registered to act as such depository, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable or (iii) there shall have occurred and be continuing an Event of Default with respect to such Offered Debentures. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Offered Debentures registered in such names as DTC shall direct. It is expected that such instructions will be based upon directions received by DTC from its participants with respect to ownership of beneficial interest in such Global Security. Settlement for the Offered Debentures will be made in immediately available funds. So long as the Offered Debentures are represented by one or more Global Securities, all payments of principal and interest will be made by the Company in immediately available funds. So long as the Offered Debentures are represented by one or more Global Securities registered in the name of DTC or its nominee, the Offered Debentures will trade in DTC's Same-Day Funds Settlement System, and secondary market trading activity in the Offered Debentures will therefore be required by DTC to settle in immediately available funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on the trading activity in the Offered Debentures. A further description of DTC's procedures with respect to the Offered Debentures is set forth under "Description of Debentures--Global Securities" in the accompanying Prospectus. S-4 UNDERWRITING Subject to the terms and conditions contained in the Underwriting Agreement between the Company and A.G. Edwards & Sons, Inc. (the "Underwriter"), the Underwriter has agreed to purchase from the Company the entire principal amount of the Offered Debentures. The nature of the obligation of the Underwriter is such that if any Offered Debentures are purchased, all of them must be purchased. The Underwriter proposes to offer the Offered Debentures to the public at the public offering price set forth on the cover page of this Prospectus Supplement and to certain dealers at such price less a concession of not more than .25% of the principal amount of the Offered Debentures. The Underwriter may allow, and such dealers may reallow, concessions not in excess of .20% of the principal amount of the Offered Debentures to certain other brokers and dealers. After the initial public offering, the public offering price and other selling terms may be changed by the Underwriter. The Offered Debentures have no established trading market and the Company does not intend to list the Offered Debentures on any securities exchange. The Underwriter has advised the Company that it intends to make a market in the Offered Debentures. However, the Underwriter is not obligated to do so and may discontinue any market making at any time without notice. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the Offered Debentures. In connection with the offering of the Offered Debentures, the Underwriter may engage in overallotment, stabilizing transactions and syndicate covering transactions in accordance with Regulation M under the Securities Exchange Act of 1934. Overallotment involves sales in excess of the offering size, which creates a short position for the Underwriter. Stabilizing transactions involve bids to purchase the Offered Debentures in the open market for the purpose of pegging, fixing or maintaining the price of the Offered Debentures. Syndicate covering transactions involve purchases of the Offered Debentures in the open market after the distribution has been completed in order to cover short positions. Such stabilizing transactions and syndicate covering transactions may cause the price of the Offered Debentures to be higher than it would otherwise be in the absence of such transactions. Such activities, if commenced, may be discontinued at any time. The Company has agreed to indemnify the Underwriter against certain liabilities which may be incurred in connection with this offering, including liabilities under the Securities Act of 1933, or to contribute to payments which the Underwriter may be required to make in respect thereto. S-5 PROSPECTUS $50,000,000 OTTER TAIL POWER COMPANY DEBT SECURITIES ------------------ Otter Tail Power Company (the "Company") may offer from time to time up to $50,000,000 aggregate initial offering price of its debt securities, including First Mortgage Bonds and unsecured notes, debentures or other evidences of indebtedness (collectively referred to as "Debt Securities"), in one or more series, at prices and on terms to be determined at the time of sale. The terms of the Debt Securities in respect of which this Prospectus is being delivered, including, where applicable, the series designation, the principal amount of the series, the maturity, the provisions for redemption and sinking fund payments and other provisions, together with the terms of offering of such Debt Securities, will be set forth in the supplement accompanying this Prospectus (the "Prospectus Supplement"). The Company may sell the Debt Securities to or through underwriters or dealers, directly to other purchasers or through agents. See "Plan of Distribution." The Prospectus Supplement will set forth the names of any underwriters, dealers or agents, any applicable commissions, discounts or allowances and the net proceeds to the Company from such sale. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this Prospectus is November 18, 1997. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information filed by the Company can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at Seven World Trade Center, Suite 1300, New York, New York 10048 and 1400 Citicorp Center, 500 West Madison Street, Chicago, Illinois 60601. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy statements and other information regarding registrants such as the Company that file electronically with the Commission. The Company has filed with the Commission a registration statement on Form S-3 with respect to the Debt Securities (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement, which may be inspected without charge at the Public Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and copies of which may be obtained from the Commission at prescribed rates. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Commission under the Exchange Act (File No. 0-368) are incorporated herein by reference: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1996. 2. The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 1997. 3. The Company's Current Report on Form 8-K dated January 27, 1997. All other documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Debt Securities shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the respective dates of filing of such documents. Any statement contained herein or in a document all or part of which is incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus and the Prospectus Supplement to the extent that a statement contained herein or therein or in any documents subsequently filed with the Commission which also is or is deemed to be incorporated by reference herein or therein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus or the Prospectus Supplement. The Company will provide without charge to any person to whom this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the foregoing documents incorporated herein by reference (not including exhibits thereto unless such exhibits are specifically incorporated by reference into the information that the Registration Statement incorporates). Requests for such copies should be directed to Jay D. Myster, Secretary, Otter Tail Power Company, 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496, telephone number: (218) 739-8200. 2 THE COMPANY The Company is an operating public utility engaged in the production, transmission, distribution and sale of electric energy in western Minnesota, eastern North Dakota and northeastern South Dakota. The territory served by the Company's electric utility operations is predominantly agricultural, including a part of the Red River Valley. By customer category, 54.3% of 1996 electric revenues was derived from commercial and industrial customers, 33.5% from residential customers and 12.2% from other sources, including municipalities, farms and power pools. The Company, through its subsidiaries, is also engaged in other businesses located in the upper midwest region of the United States which are referred to in this Prospectus as Health Services Operations, Manufacturing Operations and Other Business Operations. Health Services Operations consist of certain businesses acquired beginning in 1993, including a diagnostic medical imaging company, a management company for a number of diagnostic medical imaging companies, and a medical imaging company that sells and services diagnostic medical imaging equipment and associated supplies and accessories. Manufacturing Operations include businesses acquired beginning in 1990 in such areas as metal parts stamping and fabrication, agricultural equipment and plastic pipe extrusion. Other Business Operations include businesses involved in such areas as electrical and telephone construction contracting, radio broadcasting, waste incinerating and telephone/cable television utility. The Company derived approximately 45% of its consolidated operating revenues from these other businesses during 1996, approximately 38% during 1995 and approximately 31% during 1994. The Company was incorporated in 1907 under the laws of the State of Minnesota. Its principal executive office is located at 215 South Cascade Street, Box 496, Fergus Falls, Minnesota 56538-0496, telephone number: (218) 739-8200. USE OF PROCEEDS The net proceeds to be received by the Company from the issue and sale of the Debt Securities offered hereby will be used to repay short-term and other indebtedness, to redeem one or more outstanding series of First Mortgage Bonds and/or Cumulative Preferred Shares and for general corporate purposes. See "Construction Program and Financing." CONSTRUCTION PROGRAM AND FINANCING The Company is continually expanding, replacing and improving its electric utility facilities. During 1996, the Company invested approximately $36,221,000 for additions to its electric utility properties. Capital expenditures of approximately $16,000,000 were made in Health Services Operations, $4,600,000 in Manufacturing Operations and $5,000,000 in Other Business Operations by Company subsidiaries during 1996. Total consolidated capital expenditures for the Company and its subsidiaries during the five-year period 1997-2001 are estimated to be approximately $169,000,000. Of this amount, $18,000,000 is for Health Services Operations, $12,000,000 for Manufacturing Operations and $12,000,000 for Other Business Operations. The Company estimates that during the five years 1997 through 2001 it will invest for electric utility construction approximately $127,000,000 (including allowance for funds used during construction). The Company continuously reviews options for increasing its generating capacity, but at this time has no firm plans for additional base load generating plant construction. The majority of electric utility expenditures for the five-year period 1997 through 2001 will be for work related to the Company's transmission and distribution system. The Company estimates that funds currently on hand, combined with funds internally generated in the next five years, will be sufficient to meet all sinking fund payments for First Mortgage Bonds and to provide for its estimated 1997-2001 consolidated capital expenditures. Additional short-term or long-term financing will be required in the period 1997-2001 in connection with the maturity of First Mortgage Bonds 3 and a Long-Term Lease Obligation ($21,000,000), in the event the Company decides to refund or retire early any of its presently outstanding debt or Cumulative Preferred Shares or for other corporate purposes. The foregoing estimates of capital expenditures and funds internally generated may be subject to substantial changes due to unforeseen factors, such as changed economic conditions, competitive conditions, technological changes, new environmental and other governmental regulations, changed tax laws and rate regulation, and acquisitions by subsidiaries. RATIOS OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31, ----------------------------------------------------- 1992 1993 1994 1995 1996 --------- --------- --------- --------- --------- Ratios of Earnings to Fixed Charges........................................ 4.06 3.98 4.23 3.96 3.66 NINE MONTHS ENDED SEPT. 30, -------------------- 1996 1997 --------- --------- Ratios of Earnings to Fixed Charges........................................ 3.72 3.50
For purposes of computing the ratio of earnings to fixed charges: (i) earnings consist of consolidated net income to which has been added total income tax expense and fixed charges; and (ii) fixed charges consist of interest on long-term debt and other interest charges and amortization of debt expense, premium and discount. DESCRIPTION OF FIRST MORTGAGE BONDS GENERAL If the Debt Securities are issued as First Mortgage Bonds, those First Mortgage Bonds will be issued in one or more series under the Company's Indenture of Mortgage dated as of July 1, 1936 to First Trust National Association (formerly named First Trust Company of Saint Paul and First Trust Company, Inc.) (the "corporate Trustee") and Louis S. Headley (James A. Ehrenberg having succeeded as individual Trustee), as Trustees (the "First Mortgage Indenture Trustees"), as supplemented by forty-five supplemental indentures (the "Prior Supplemental Indentures," the twenty-first of which, the "Revised Indenture," revised and restated the provisions of said Indenture of Mortgage as theretofore amended and supplemented), and as proposed to be further supplemented by each new supplemental indenture (a "New Supplemental Indenture") creating a new series of First Mortgage Bonds. Said Indenture of Mortgage, as so supplemented and as so to be supplemented, is herein called the "First Mortgage Indenture." As used herein, the term "New First Mortgage Bonds" refers to any new series of First Mortgage Bonds in respect of which this Prospectus is being delivered. The summaries of the First Mortgage Indenture set forth below do not purport to be complete and are subject to the detailed provisions of the First Mortgage Indenture, a copy of which is filed with the Commission as an exhibit to the Registration Statement and is incorporated in this section by reference. Capitalized terms used in this section which are not otherwise defined in this Prospectus shall have the meanings ascribed to them in the First Mortgage Indenture. Whenever particular provisions or terms defined in the First Mortgage Indenture are referred to in this section, such provisions or definitions are incorporated by reference as part of the statements made in this section, and such statements are qualified in their entirety by such reference. References to article and section numbers herein, unless otherwise indicated, are references to article and section numbers of the First Mortgage Indenture. TERMS OF NEW FIRST MORTGAGE BONDS Reference is made to the Prospectus Supplement for a description of the following terms and other information with respect to the New First Mortgage Bonds: (1) the designation and aggregate principal amount of the New First Mortgage Bonds; (2) the date on which the New First Mortgage Bonds will mature; (3) the rate per annum at which the New First Mortgage Bonds will bear interest and the date from which such interest will accrue; (4) the dates on which such interest will be payable; and (5) any 4 redemption provisions, sinking fund provisions or other specific terms applicable to the New First Mortgage Bonds. The holders of the outstanding First Mortgage Bonds do not have the right to tender such First Mortgage Bonds to the Company for repurchase upon the Company's becoming involved in a highly leveraged transaction or change of control involving the Company, and the Company does not currently intend to afford the holders of the New First Mortgage Bonds such a right. The New First Mortgage Bonds will be issued only in fully registered form, without coupons, in the denominations of $1,000 and any integral multiple thereof. The New First Mortgage Bonds will be exchangeable in the manner provided in the First Mortgage Indenture. No charge will be made by the Company for any exchange or transfer of New First Mortgage Bonds, other than for stamp taxes or other governmental charges, if any, applicable thereto. Principal of and any premium or interest on the New First Mortgage Bonds will be payable at the office of the corporate Trustee in St. Paul, Minnesota, except that interest may, at the option of the Company, be paid by checks or drafts payable to the registered holders of the New First Mortgage Bonds of such series mailed to such holders at their addresses appearing on the registry books of the corporate Trustee. The Company is not required to make transfers or exchanges of New First Mortgage Bonds for a period of 10 days next preceding any interest payment date for the New First Mortgage Bonds or any date for the selection of New First Mortgage Bonds to be redeemed. SINKING FUND The First Mortgage Indenture establishes a sinking fund into which the Company will deposit with the corporate Trustee on December 1 in each of the years that the New First Mortgage Bonds will be outstanding (commencing with the December 1 in the calendar year following the calendar year in which the New First Mortgage Bonds are issued except to the extent, if any, that the New First Mortgage Bonds will be issued to refund First Mortgage Bonds of a prior series) an amount equal to 1% of the greatest aggregate principal amount of the New First Mortgage Bonds at any time theretofore outstanding (after deducting the principal amount of any New First Mortgage Bonds refunded by the issuance of First Mortgage Bonds of another series), to be used not later than the following February 1 for the partial redemption of the New First Mortgage Bonds; provided, however, that such sinking fund requirement may be satisfied in whole or in part by surrendering to the corporate Trustee for cancellation the New First Mortgage Bonds reacquired by the Company at the amount which would have been required to effect on the following February 1 the redemption through the sinking fund of the New First Mortgage Bonds so delivered. Similar sinking funds have been established with respect to all series of First Mortgage Bonds now outstanding. (Section 8 of the Thirty-first, Forty-second and Forty-fourth Supplemental Indentures; Section 17 of the Thirty-ninth Supplemental Indenture; and Sections 8 and 17 of the Forty-third and Forty-fifth Supplemental Indentures.) DEPRECIATION REQUIREMENT The First Mortgage Indenture establishes a depreciation requirement equivalent to 2.5% per annum of the average amount of depreciable fundable property for the period for which the requirement is calculated. Provision is made for the deposit each year with the corporate Trustee of cash equal to the excess of (i) the depreciation requirement for the preceding year over (ii) the aggregate of amounts expended for fundable property during the preceding year limited, however, to the cost of fundable property retired during such preceding year. In lieu of depositing cash, the Company may elect to utilize net fundable property not theretofore utilized for any purpose of the First Mortgage Indenture. The Company is entitled to satisfy its depreciation requirement for any year by the application of any depreciation credit remaining from prior years. Cash deposited on account of the depreciation requirement for any year may be withdrawn against net fundable property or against a depreciation credit arising within three years after the deposit. Cash not so withdrawn may be applied by the Company to reimburse the Company for its cost in acquiring First Mortgage Bonds (but not in an amount exceeding the principal of and premium, if any, payable upon the voluntary redemption of such First Mortgage Bonds) or may be applied, and under certain circumstances must be set aside by the corporate Trustee to be applied, to the 5 payment of the principal of First Mortgage Bonds either at maturity or upon redemption (if and to the extent then subject to redemption). (Sections 2.01(34), 6.02, 6.05, 9.03, 11.01 and 11.02 of the First Mortgage Indenture.) SECURITY AND PRIORITY The First Mortgage Indenture constitutes, in the opinion of Dorsey & Whitney LLP, counsel for the Company, a direct first mortgage lien upon substantially all of the physical property, franchises and leases of the Company subject only to permitted encumbrances. The First Mortgage Indenture contains provisions subjecting to the lien thereof physical property, franchises and leases which the Company may subsequently acquire, subject, however, to permitted encumbrances and to liens existing or placed upon such property at the time of acquisition thereof by the Company. The First Mortgage Indenture obligates the Company not to create prior or parity liens or permit such liens to exist, except for permitted encumbrances, liens existing at date of acquisition on property acquired and purchase money mortgages created by the Company. (Granting Clauses of the First Mortgage Indenture; Sections 2.01(29) and 8.05 of the Revised Indenture.) The New First Mortgage Bonds will rank equally and ratably (except as to any sinking fund which may be established for the exclusive benefit of one or more particular series of First Mortgage Bonds) with all First Mortgage Bonds regardless of series at any time issued or outstanding under the First Mortgage Indenture. ISSUANCE OF THE NEW FIRST MORTGAGE BONDS AND OF ADDITIONAL FIRST MORTGAGE BONDS Additional First Mortgage Bonds (including the New First Mortgage Bonds) may be issued under the First Mortgage Indenture in principal amounts limited only as follows: (1) not to exceed 60% of the cost or fair value, whichever is less, of net fundable property certified to the corporate Trustee as having been constructed or otherwise acquired after December 31, 1957 and not otherwise utilized for any purpose of the First Mortgage Indenture; (2) not to exceed the amount of cash deposited with the corporate Trustee for such purpose; or (3) not to exceed the principal amount of First Mortgage Bonds previously issued under the First Mortgage Indenture which have been retired or are then being retired and which have not theretofore been utilized for any purpose of the First Mortgage Indenture or are not otherwise disqualified for such use; provided, however, that, unless such additional First Mortgage Bonds are being issued against other First Mortgage Bonds (retired or being retired), the Company's net operating earnings (after deducting the depreciation requirement) for a period of twelve consecutive calendar months within the fifteen calendar months immediately preceding the calendar month in which the application for the authentication and delivery of the First Mortgage Bonds is made shall have been at least equal to two times the annual interest charges upon all First Mortgage Bonds then to be outstanding and indebtedness of the Company, if any, secured by a lien prior to or on a parity with the lien of the First Mortgage Indenture. Such net operating earnings consist basically of the Company's operating income before income taxes. As of December 31, 1996, net operating earnings were 3.66 times such interest charges, and after the sale of $50,000,000 principal amount of Debentures (as hereinafter defined) (assuming a 7% interest rate), would be 3.03 times such interest charges. (Section 2.01(33) and Article VI of the Revised Indenture.) The New First Mortgage Bonds will be issued under item (1) or (3) above. As of December 31, 1996, the Company had certified under the First Mortgage Indenture net fundable property in excess of $47,000,000, which is available for the issuance of First Mortgage Bonds under item (1) above (entitling the Company to issue at least $28,000,000 principal amount of additional First Mortgage Bonds on the basis of 6 net fundable property). As of December 31, 1996, the Company also was entitled to issue in excess of $102,000,000 principal amount of First Mortgage Bonds on the basis of First Mortgage Bonds theretofore retired, as described under item (3) above. WITHDRAWAL OF CERTAIN CASH Cash deposited with the corporate Trustee as the basis for the issuance of additional First Mortgage Bonds may be withdrawn by the Company in the amount of 60% of the lesser of the cost or fair value of net fundable property not theretofore utilized for any purpose under the First Mortgage Indenture. Other cash held under the First Mortgage Indenture may be withdrawn by the Company in the amount of 100% of the lesser of the cost or fair value of net fundable property not theretofore utilized for any purpose under the First Mortgage Indenture. (Sections 6.05 and 11.01 of the First Mortgage Indenture.) DIVIDEND COVENANT The Company will covenant in each New Supplemental Indenture that so long as any of the New First Mortgage Bonds issued thereunder remain outstanding, the Company will not declare or pay dividends on its Common Shares (other than dividends payable in Common Shares) or make any other distribution in respect of its Common Shares unless, after giving effect thereto, the sum of all such dividends and distributions subsequent to December 31, 1976 will not exceed $8,000,000 plus the Company's net income available for Common Shares accrued after that date. Each New Supplemental Indenture will further provide that in computing such net income there shall be deducted, as an additional depreciation charge, for each year after 1976, the amount, if any, by which the First Mortgage Indenture depreciation requirement exceeds the depreciation charges against such net income actually made by the Company on account of its depreciable fundable property. The same or a less restrictive covenant applies to all of the currently outstanding series of First Mortgage Bonds. Under the most restrictive of these covenants, $10,089,000 of retained earnings of the Company at December 31, 1996 were not available for dividends or other distributions on the Common Shares. (Section 9 of the Thirty-first, Forty-second and Forty-fourth Supplemental Indentures; Section 18 of the Thirty-ninth Supplemental Indenture; and Sections 9 and 18 of the Forty-third and Forty-fifth Supplemental Indentures.) MODIFICATION OF THE FIRST MORTGAGE INDENTURE In general, modifications or alterations of the First Mortgage Indenture and of the rights or obligations of the Company and of the Bondholders may, with the approval of the Company, be made at Bondholders' meetings upon the affirmative vote of 75% of the Bondholders entitled to vote thereat with respect to matters involved. Provisions relating to such modifications or alterations are subject to certain conditions designed to safeguard the position of the Bondholders and the First Mortgage Indenture Trustees with respect to certain matters of basic importance, including payment of principal of and any premium and interest on the First Mortgage Bonds and creation of liens ranking prior to or on a parity with the lien of the First Mortgage Indenture. (Article XII of the First Mortgage Indenture.) DEFAULT PROVISIONS The First Mortgage Indenture provides that the following constitute "events of default": (a) default in the payment of interest on any First Mortgage Bond for 60 days; or (b) default in the payment of principal of any First Mortgage Bond; or (c) default in the due performance or observance of any other covenant or condition for 60 days after written notice thereof; or (d) institution of bankruptcy, insolvency or similar proceedings. The First Mortgage Indenture Trustees are required to give notice to the Bondholders of all defaults known to the First Mortgage Indenture Trustees unless such defaults have been cured before the giving of such notice or unless (except in the case of a default in the payment of principal of or any premium or interest on any of the First Mortgage Bonds, or in the payment of moneys into any sinking fund for the First Mortgage Bonds) the First Mortgage Indenture Trustees, in good faith, determine that 7 withholding of such notice is in the interests of the Bondholders. In case of an event of default, the First Mortgage Indenture Trustees may, and upon the request of the holders of at least 25% of the aggregate principal amount of the First Mortgage Bonds then outstanding shall, declare the principal of all First Mortgage Bonds then outstanding to be due and payable and, subject to the rights of the First Mortgage Indenture Trustees to receive adequate indemnification, take all needful steps for the protection of the holders of such First Mortgage Bonds upon the conditions and with the effect provided in the First Mortgage Indenture. Compliance with certain provisions of the First Mortgage Indenture is required to be evidenced by various certificates filed by the Company with the corporate Trustee; however, no periodic evidence is required to be furnished as to the absence of events of default. (Article VIII and Sections 13.01, 13.02, 13.04 and 15.02 of the First Mortgage Indenture.) CONCERNING THE FIRST MORTGAGE INDENTURE TRUSTEES First Trust National Association is corporate Trustee and James A. Ehrenberg, an officer of the corporate Trustee, is individual Trustee under the First Mortgage Indenture. The First Mortgage Indenture provides that the holders of a majority in principal amount of the First Mortgage Bonds outstanding may direct the First Mortgage Indenture Trustees to take action under the First Mortgage Indenture, but under certain circumstances the First Mortgage Indenture Trustees may decline to follow such direction or to exercise certain of their powers. Moreover, the First Mortgage Indenture Trustees are under no obligation to take such action unless furnished with indemnity satisfactory to the corporate Trustee against all expenses and liability. (Section 13.20 of the First Mortgage Indenture.) The corporate Trustee acts as agent for participants in the Company's Automatic Dividend Reinvestment and Share Purchase Plan. In the ordinary course of business, affiliates of the corporate Trustee have engaged, and may in the future engage, in commercial banking transactions with the Company and its affiliates. The corporate Trustee is also the Debenture Indenture Trustee under the Debenture Indenture (each as defined below). As such, the corporate Trustee would have a conflicting interest for purposes of the Trust Indenture Act if an Event of Default were to occur under the First Mortgage Indenture or the Debenture Indenture. In either such case, the corporate Trustee may be required to eliminate such conflicting interest by resigning as the corporate Trustee or the Debenture Indenture Trustee. There are other instances under the Trust Indenture Act which would require the resignation of the corporate Trustee, such as an affiliate of the corporate Trustee acting as underwriter with respect to any of the Debt Securities. DESCRIPTION OF DEBENTURES GENERAL The Debt Securities may be issued in one or more series under the Indenture (For Unsecured Debt Securities) (the "Debenture Indenture") between the Company and First Trust National Association, as Trustee (the "Debenture Indenture Trustee"). The Debt Securities issued under the Debenture Indenture (the "Debentures") will be unsecured obligations of the Company and shall not be afforded any protection under the First Mortgage Indenture, pursuant to which various series of First Mortgage Bonds have been, and may hereafter be, issued. The First Mortgage Indenture does not limit the aggregate amount of First Mortgage Bonds that may be issued except as described under "Description of First Mortgage Bonds-- Issuance of the New First Mortgage Bonds and of Additional First Mortgage Bonds." As of September 30, 1997, approximately $123,000,000 of First Mortgage Bonds were outstanding. The summaries of the Debenture Indenture set forth below do not purport to be complete and are subject to the detailed provisions of the Debenture Indenture, a copy of which is filed with the Commission as an exhibit to the Registration Statement and is incorporated in this section by reference. Capitalized terms used in this section which are not otherwise defined in this Prospectus shall have the meanings 8 ascribed to them in the Debenture Indenture. Whenever particular provisions or terms defined in the Debenture Indenture are referred to in this section, such provisions or definitions are incorporated by reference as part of the statements made in this section, and such statements are qualified in their entirety by such reference. References to article and section numbers herein, unless otherwise indicated, are references to article and section numbers of the Debenture Indenture. TERMS OF DEBENTURES Reference is made to the Prospectus Supplement for a description of the following terms and other information with respect to the series of Debentures in respect of which this Prospectus is being delivered: (1) the title of such series of Debentures; (2) any limit on the aggregate principal amount of such Debentures or the series of which they are a part; (3) the Person or Persons to whom interest on the Debentures of such series shall be payable if other than the Persons in whose names such Debentures are registered; (4) the date or dates on which the principal of any of such Debentures will be payable; (5) the rate or rates (which may be fixed or variable) and/or the method of determination of such rate or rates at which any of such Debentures will bear interest, if any, the date or dates from which any such interest will accrue, the Interest Payment Dates on which any such interest will be payable and the Regular Record Date for any such interest payable on any Interest Payment Date; (6) the place or places where (i) the principal of or any premium or interest on any of such Debentures will be payable, (ii) registration of transfer of such Debentures may be effected, (iii) exchanges of such Debentures may be effected and (iv) notices and demands to or upon the Company in respect of such Debentures may be served; the Security Registrar for such Debentures and, if such is the case, that the principal of such Debentures shall be payable without presentment or surrender thereof; (7) the period or periods within which, or the date or dates on which, the price or prices at which and the terms and conditions upon which any of such Debentures may be redeemed, in whole or in part, at the option of the Company; (8) the obligation or obligations, if any, of the Company to redeem or purchase any of such Debentures pursuant to any sinking fund or other mandatory redemption provisions or at the option of the Holder thereof, and the period or periods within which, or the date or dates on which, the price or prices at which and the terms and conditions upon which any of such Debentures shall be redeemed or purchased, in whole or in part, pursuant to such obligation, and applicable exceptions to the requirements of a notice of redemption in the case of mandatory redemption or redemption at the option of the Holder; (9) the denominations in which any of such Debentures will be issuable, if other than denominations of $1,000 and any integral multiple thereof; (10) if other than the currency of the United States, the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on any of such Debentures will be payable; (11) if the principal of or any premium or interest on any of such Debentures is to be payable, at the election of the Company or the Holder thereof, in a coin or currency other than in which such Debentures are stated to be payable, the period or periods within which and the terms and conditions upon which, such election is to be made; (12) if the principal of or any premium or interest on such Debentures is to be payable, or is to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such securities or other property, or the formulary or other method or other means by which such amount shall be determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made; (13) if the amount payable in respect of principal of or any premium or interest on any of such Debentures may be determined with reference to an index or other fact or event ascertainable outside the Debenture Indenture, the manner in which such amounts will be determined; (14) if other than the principal amount thereof, the portion of the principal amount of any of such Debentures which shall be payable upon declaration of acceleration of the Maturity thereof; (15) any addition to the Events of Default applicable to any of such Debentures and any addition to the covenants of the Company for the benefit of the Holders of such Debentures; (16) the terms, if any, pursuant to which such Debentures may be converted into or exchanged for shares of capital stock or other securities of the Company or any other Person; (17) the obligations or instruments, if any, which shall be considered to be Eligible Obligations in respect of such Debentures denominated in a currency other than Dollars or in a composite currency, and any additional 9 or alternative provisions for the reinstatement of the Company's indebtedness in respect of such Debentures after the satisfaction and discharge thereof; (18) if such Debentures are to be issued in global form, (i) any limitations on the rights of the Holder or Holders of such Debentures to transfer or exchange the same or to obtain the registration of transfer thereof, (ii) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of temporary form and (iii) any and all other matters incidental to such Debentures; (19) if such Debentures are to be issuable as bearer securities; (20) any limitations on the rights of the Holders of such Debentures to transfer or exchange such Debentures or to obtain the registration of transfer thereof, and if a service charge will be made for the registration of transfer or exchange of such Debentures, the amount or terms thereof; (21) any exceptions to the provisions governing payments due on legal holidays or any variations in the definition of Business Day with respect to such Debentures; and (22) any other terms of such Debentures of such series, or any Tranche thereof, not inconsistent with the provisions of the Debenture Indenture. (Section 301) Debentures may be sold at a substantial discount below their principal amount. Certain special United States federal income tax considerations applicable to Debentures sold at an original issue discount may be described in the applicable Prospectus Supplement. In addition, certain special United States federal income tax or other considerations applicable to any Debentures which are denominated in a currency or currency unit other than Dollars may be described in the applicable Prospectus Supplement. Except as may otherwise be described in the Prospectus Supplement, the covenants contained in the Debenture Indenture would not afford Holders of Debentures protection in the event of a highly-leveraged transaction or change of control involving the Company. FORM, EXCHANGE AND TRANSFER Unless otherwise specified in the applicable Prospectus Supplement, Debentures of each series will be issuable only in fully registered form without coupons and in denominations of $1,000 and any integral multiple thereof. (Sections 201 and 302) At the option of the Holder, subject to the terms of the Debenture Indenture and the limitations applicable to global securities, Debentures of any series will be exchangeable for other Debentures of the same series, of any authorized denomination and of like tenor and aggregate principal amount. (Section 305) Subject to the terms of the Debenture Indenture and the limitations applicable to global securities, Debentures may be presented for exchange as provided above for registration of transfer (duly endorsed or accompanied by a duly executed instrument of transfer) at the office of the Security Registrar or at the office of any transfer agent designated by the Company for such purpose. Unless otherwise indicated, no service charge will be made for any registration of transfer or exchange of Debentures, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Every Debenture presented or surrendered for registration of transfer or exchange shall (if so required by the Company, the Debenture Indenture Trustee or the Security Registrar) be duly endorsed or accompanied by an executed written instrument of transfer in form satisfactory to the Company, the Debenture Indenture Trustee or the Security Registrar. (Section 305) Any transfer agent (in addition to the Security Registrar) initially designated by the Company for any Debenture will be named in the applicable Prospectus Supplement. The Company may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that the Company will be required to maintain a transfer agent in each Place of Payment for the Debentures of each series. The Company may perform all functions of any office or agency. (Section 602) 10 The Company shall not be required to execute or register the transfer of or the exchange of any Debenture, or any Tranche thereof, during a period of 15 days preceding the notice to be given identifying the Debentures called for redemption, or any Debentures so selected for redemption, in whole or in part, except the unredeemed portion of any such Debenture being redeemed in part. (Section 305) PAYMENT AND PAYING AGENT Unless otherwise indicated in the applicable Prospectus Supplement, payment of interest on a Debenture on any Interest Payment Date will be made to the person in whose name such Debenture (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. (Section 307) Unless otherwise indicated in the applicable Prospectus Supplement, principal of and any premium and interest on the Debentures of a particular series will be payable at the office of such Paying Agent or Paying Agents as the Company may designate for such purpose from time to time. Unless otherwise indicated in the applicable Prospectus Supplement, the corporate trust office of the Debenture Indenture Trustee in New York, New York will be designated as the Company's sole Paying Agent for payment with respect to Debentures of each series. Any other Paying Agents initially designated by the Company for the Debentures of a particular series will be named in the applicable Prospectus Supplement. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agent or approve a change in the office through which any Paying Agent acts, except that the Company will be required to maintain a Paying Agent in each Place of Payment for the Debentures of a particular series. (Section 602) Any moneys deposited by the Company with the Trustee or any Paying Agent for the payment of the principal of or any premium or interest on any Debenture which remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be paid to the Company, and the Holder of such Debenture, as an unsecured general creditor and not as a Holder, thereafter may look only to the Company for payment thereof. (Section 603) REDEMPTION Any terms for the optional or mandatory redemption of Debentures will be set forth in the applicable Prospectus Supplement or a supplement thereto. Except as shall otherwise be provided in the applicable Prospectus Supplement with respect to Debentures that are redeemable at the option of the Holder, Debentures will be redeemable only upon notice by mail not less than 30 days nor more than 60 days prior to the date fixed for redemption, and, if less than all the Debentures of a series, or any Tranche thereof, are to be redeemed, the particular Debentures to be redeemed will be selected by the Securities Registrar by such method as shall be provided for any particular series, or in the absence of any such provision, by such method of random selection as the Security Registrar deems fair and appropriate. (Sections 403 and 404) Any notice of redemption at the option of the Company may state that such redemption will be conditional upon receipt by the Paying Agent or Agents, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and any premium and interest on such Debentures and that if such money has not been so received, such notice will be of no force and effect and the Company will not be required to redeem such Debentures. (Section 404) CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER Under the terms of the Debenture Indenture, the Company may not consolidate with or merge into any other corporation or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless (i) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a Person organized and existing under the laws of any 11 domestic jurisdiction and shall expressly assume the Company's obligations on the Debentures and under the Debenture Indenture, (ii) immediately after giving effect to the transaction, no Event of Default shall have occurred and be continuing and (iii) the Company will have delivered to the Debenture Indenture Trustee an Officer's Certificate and an Opinion of Counsel as provided in the Debenture Indenture. (Section 1101) EVENTS OF DEFAULT Each of the following will constitute an Event of Default under the Debenture Indenture with respect to Debentures of any series: (a) failure to pay any interest on any Debentures of such series within 60 days after the same becomes due and payable; (b) failure to pay principal of or premium, if any, on any Debenture of such series within three Business Days after the same becomes due and payable; (c) failure to perform or breach of any other covenant or warranty of the Company in the Debenture Indenture (other than a covenant or warranty of the Company in the Debenture Indenture solely for the benefit of one or more series of Debentures other than such series) for 60 days after written notice to the Company by the Debenture Indenture Trustee, or to the Company and the Debenture Indenture Trustee by the Holders of at least 33% in principal amount of the Debentures of such series Outstanding under the Debenture Indenture as provided in the Debenture Indenture; (d) certain events of bankruptcy, insolvency or reorganization; and (e) any other Event of Default specified in the applicable Prospectus Supplement with respect to Debentures of a particular series. (Section 801) An Event of Default with respect to a series of Debentures may not necessarily constitute an Event of Default with respect to the Debentures of any other series issued under the Debenture Indenture. If an Event of Default with respect to any series of Debentures occurs and is continuing, then either the Debenture Indenture Trustee or the Holders of not less than 33% in principal amount of the Outstanding Debentures of such series may declare the principal amount (or if the Debentures of such series are Discount Securities, such portion of the principal amount thereof as may be specified in the applicable Prospectus Supplement) of all of the Debentures of such series to be due and payable immediately; provided, however, that if an Event of Default occurs and is continuing with respect to more than one series of Debentures, the Debenture Indenture Trustee or the Holders of not less than 33% in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, may make such declaration of acceleration and not the Holders of the Debentures of any one of such series. (Section 802) Subject to the provisions of the Debenture Indenture relating to the duties of the Debenture Indenture Trustee in case an Event of Default shall occur and be continuing, the Debenture Indenture Trustee will be under no obligation to exercise any of its rights or powers under the Debenture Indenture at the request or direction of any Holder, unless such Holder shall have offered to the Debenture Indenture Trustee reasonable security or indemnity. (Section 903) Subject to such provisions of the indemnification of the Debenture Indenture Trustee, the Holders of a majority in principal amount of the Outstanding Debentures of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Indenture Trustee, or exercising any trust or power conferred on the Debenture Indenture Trustee, with respect to the Debentures of that series. (Section 812) No Holder of a Debenture of any series will have any right to institute any proceeding with respect to the Debenture Indenture, or for the appointment of a receiver or a trustee, or for any other remedy thereunder, unless (i) such Holder has previously given written notice to the Debenture Indenture Trustee of a continuing Event of Default with respect to the Debentures of such series, (ii) the Holders of not less than a majority in aggregate principal amount of the Outstanding Debentures of such series have made written request to the Debenture Indenture Trustee, and such Holder or Holders have offered reasonable indemnity to the Debenture Indenture Trustee, to institute such proceeding as trustee and (iii) the 12 Debenture Indenture Trustee has failed to institute such proceeding, and has not received from the Holders of a majority in aggregate principal amount of the Outstanding Debentures of that series a direction inconsistent with such request, within 60 days after such notice, request and offer. (Section 807) However, such limitations do not apply to a suit instituted by a Holder of a Debenture for the enforcement of payment of the principal of or any premium or interest on such Debenture on or after the applicable due date specified in such Debenture. (Section 808) The Company will be required to furnish to the Debenture Indenture Trustee annually, not later than October 1 in each year, a statement by an appropriate officer as to such officer's knowledge of the Company's compliance with all conditions and covenants under the Debenture Indenture, such compliance to be determined without regard to any period of grace or requirement of notice under the Debenture Indenture. (Section 606) RIGHT TO CURE At any time after the declaration of acceleration with respect to the Debentures of any series has been made and before a judgment or decree for payment of the money due has been obtained, the Event or Events of Default giving rise to such declaration of acceleration will, without further act, be deemed to have been waived, and such declaration and its consequences will, without further act, be deemed to have been rescinded and annulled, if (a) the Company has paid or deposited with the Debenture Indenture Trustee a sum sufficient to pay (1) all overdue interest, if any, on all Debentures of such series; (2) the principal of and premium, if any, on any Debentures of such series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Debentures; (3) interest upon overdue interest, if any, at the rate or rates prescribed therefor in such Debentures, to the extent that payment of such interest is lawful; and (4) all amounts due to the Debenture Indenture Trustee under the Debenture Indenture; and (b) any other Event or Events of Default with respect to the Debentures of such series, other than the non-payment of the principal of the Debentures of such series which has become due solely by such declaration of acceleration, have been cured or waived as provided in the Debenture Indenture. (Section 802) MODIFICATION AND WAIVER Without the consent of any Holder of Debentures, the Company and the Debenture Indenture Trustee may enter into one or more supplemental indentures to the Debenture Indenture for any of the following purposes: (a) to evidence the assumption by any permitted successor to the Company of the covenants of the Company in the Debenture Indenture and the Debentures; or (b) to add one or more covenants of the Company or other provisions for the benefit of the Holders of all or any series of Outstanding Debentures or to surrender any right or power conferred upon the Company by the Debenture Indenture; or (c) to add any additional Events of Default with respect to all or any series of Outstanding Debentures; or (d) to change or eliminate any provision of the Debenture Indenture or to add any new provision to the Debenture Indenture, provided that if such change, elimination or addition will adversely affect the interests of the Holders of Debentures of any series in any material respect, such change, elimination or addition will become effective with respect to such series only when the consent of the Holders of such series so affected has been obtained or when there is no Debenture of such series 13 remaining Outstanding under the Debenture Indenture; or (e) to provide collateral security for the Debentures; or (f) to establish the form or terms of Debentures of any series as permitted by the Debenture Indenture; or (g) to provide for the authentication and delivery of bearer securities and coupons appertaining thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for giving of notice to, and the solicitation of the vote or consent of, the Holders thereof, and for any and all other matters incidental thereto; or (h) to evidence and provide for the acceptance of appointment of a separate or successor Debenture Indenture Trustee under the Debenture Indenture with respect to the Debentures of one or more series and to add or to change any of the provisions of the Debenture Indenture as shall be necessary to provide for or to facilitate the administration of the trusts under the Debenture Indenture by more than one trustee; or (i) to provide for the procedures required to permit the utilization of a noncertificated system of registration for any series of Debentures; or (j) to change any place where (1) the principal of and any premium and interest on any Debentures shall be payable, (2) any Debentures may be surrendered for registration of transfer or exchange and (3) notices and demands to or upon the Company in respect of Debentures and the Debenture Indenture may be served; or (k) to cure any ambiguity, to correct or supplement any defective or inconsistent provision or to make or change any other provisions with respect to matters and questions arising under the Debenture Indenture, provided such changes or additions shall not adversely affect the interests of the Holders of Debentures of any series in any material respect. (Section 1201) The Holders of not less than a majority in aggregate principal amount of the Outstanding Debentures of any series may waive compliance by the Company with certain restrictive provisions of the Debenture Indenture. (Section 607) The Holders of not less than a majority in principal amount of the Outstanding Debentures of any series may waive any past default under the Debenture Indenture with respect to such series, except a default in the payment of principal, premium or interest and certain covenants and provisions of the Debenture Indenture that cannot be modified or be amended without the consent of the Holder of each Outstanding Debenture of such series affected. (Section 813) Without limiting the generality of the foregoing, if the Trust Indenture Act is amended after the date of the Debenture Indenture in such a way as to require changes to the Debenture Indenture or the incorporation therein of additional provisions or so as to permit changes to, or the elimination of, provisions which, at the date of the Debenture Indenture or at any time thereafter, were required by the Trust Indenture Act to be contained in the Debenture Indenture, the Debenture Indenture will be deemed to have been amended so as to conform to such amendment or to effect such changes or elimination, and the Company and the Debenture Indenture Trustee may, without the consent of any Holders, enter into one or more supplemental indentures to evidence or effect such amendment. (Section 1201) Except as provided above, the consent of the Holders of not less than a majority in aggregate principal amount of the Debentures of all series then Outstanding, considered as one class, is required for the purpose of adding any provisions to, or changing in any manner, or eliminating any of the provisions of, the Debenture Indenture pursuant to one or more supplemental indentures; provided, however, that if less than all of the series of Debentures Outstanding are directly affected by a proposed supplemental indenture, then the consent only of the Holders of a majority in aggregate principal amount of Outstanding Debentures of all series so directly affected, considered as one class, will be required; and provided, further, that if the Debentures of any series have been issued in more than one Tranche and if the proposed supplemental indenture directly affects the rights of the Holders of one or more, but less than all, such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Debentures of all Tranches so directly affected, considered as one class, will be required; and provided further, that no such supplemental indenture may (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Debenture, or reduce the principal amount thereof or the rate of interest thereon (or the amount of any installment of interest thereon) or change the method of calculating such rate or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of any Discount Security that would be due and payable upon a declaration of 14 acceleration of Maturity or change the coin or currency (or other property) in which any Debenture or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity of any Debenture (or, in the case of redemption, on or after the redemption date) without, in any such case, the consent of the Holder of such Debenture, (b) reduce the percentage in principal amount of the Outstanding Debentures of any series, or any Tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of the Debenture Indenture or any default thereunder and its consequences, or reduce the requirements for quorum or voting, without, in any such case, the consent of the Holder of each Outstanding Debenture of such series or Tranche, or (c) modify certain of the provisions of the Debenture Indenture relating to supplemental indentures, waivers of certain covenants and waivers of past defaults with respect to the Debentures of any series, or any Tranche thereof, without the consent of the Holder of each Outstanding Debenture affected thereby. A supplemental indenture which changes or eliminates any covenant or other provision of the Debenture Indenture which has expressly been included solely for the benefit of one or more particular series of Debentures or one or more Tranches thereof, or modifies the rights of the Holders of Debentures of such series or Tranches with respect to such covenant or other provision, will be deemed not to affect the rights under the Debenture Indenture of the Holders of the Debentures of any other series or Tranche. (Section 1202) The Debenture Indenture provides that in determining whether the Holders of the requisite principal amount of the Outstanding Debentures have given any request, demand, authorization, direction, notice, consent or waiver under the Debenture Indenture as of any date, or whether or not a quorum is present at a meeting of Holders, (i) Debentures owned by the Company or any other obligor upon the Debentures or any Affiliate of the Company or of such other obligor (unless the Company, such Affiliate or such obligor owns all Securities Outstanding under the Debenture Indenture, or all Outstanding Debentures of each such series and each such Tranche, as the case may be, determined without regard to this clause (i)) shall be disregarded and deemed not to be Outstanding; (ii) the principal amount of a Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof as provided in the Debenture Indenture; and (iii) the principal amount of a Debenture denominated in one or more foreign currencies or a composite currency that will be deemed to be Outstanding will be the Dollar equivalent, determined as of such date in the manner prescribed for such Debenture, of the principal amount of such Debenture (or, in the case of a Debenture described in clause (ii) above, of the amount described in such clause). (Section 101) If the Company shall solicit from Holders any request, demand, authorization, direction, notice, consent, election, waiver or other Act, the Company may, at its option, by Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, election, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, election, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the Outstanding Debentures have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, direction, waiver or other Act, and for that purpose the Outstanding Debentures shall be computed as of the record date. Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder shall bind every future Holder of the same Debenture and the Holder of every Debenture issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Debenture Indenture Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Debenture. (Section 104) 15 DEFEASANCE Unless otherwise indicated in the applicable Prospectus Supplement, any Debenture, or any portion of the principal amount thereof, will be deemed to have been paid for purposes of the Debenture Indenture, and, at the Company's election, the entire indebtedness of the Company in respect thereof will be deemed to have been satisfied and discharged, if there has been irrevocably deposited with the Debenture Indenture Trustee or any Paying Agent (other than the Company), in trust: (a) money in an amount which will be sufficient, or (b) Eligible Obligations (as described below), which do not contain provisions permitting the redemption or other prepaying thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide monies which, together with money, if any, deposited with or held by the Debenture Indenture Trustee or such Paying Agent, will be sufficient, or (c) a combination of (a) and (b) which will be sufficient, to pay when due the principal of and any premium and interest due and to become due on such Debentures or portions thereof. (Section 701) For this purpose, unless otherwise indicated in the applicable Prospectus Supplement, Eligible Obligations include direct obligations of, or obligations unconditionally guaranteed by, the United States, entitled to the benefit of the full faith and credit thereof, and certificates, depositary receipts or other instruments which evidence a direct ownership interest in such obligations or in any specific interest or principal payments due in respect thereof. (Section 101) For federal income tax purposes, the deposit contemplated in the preceding paragraph, together with the entire discharge and satisfaction of the Company's obligations under the Debenture Indenture and the affected Debentures thereunder, would be treated as an exchange of the affected Debentures for other securities or for a direct interest in the cash and securities held in the trust. In general, a Holder of such securities would recognize gain or loss to the extent the fair market value thereof exceeds such Holder's adjusted basis in such security. Such a Holder thereafter would be required to recognize for federal income tax purposes a share of the income, gain or loss of the trust. The amount so required to be recognized could be different from the amount that would otherwise have been recognized in the absence of such deposit. Prospective investors are urged to consult their own tax advisors as to the specific consequences to them of any such deposit. RESIGNATION OF DEBENTURE INDENTURE TRUSTEE The Debenture Indenture Trustee may resign at any time by giving written notice thereof to the Company or may be removed at any time by Act of the Holders of a majority in principal amount of Debentures then Outstanding delivered to the Debenture Indenture Trustee and the Company. No resignation or removal of the Debenture Indenture Trustee and no appointment of a successor trustee will become effective until the acceptance of appointment by a successor trustee in accordance with the requirements of the Debenture Indenture. So long as no Event of Default or event which, after notice or lapse of time, or both, would become an Event of Default has occurred and is continuing and except with respect to a Debenture Indenture Trustee appointed by Act of the Holders of a majority in principal amount of the Outstanding Debentures, if the Company has delivered to the Trustee a resolution of its Board of Directors appointing a successor trustee and such successor has accepted such appointment in accordance with the terms of the Debenture Indenture, the Debenture Indenture Trustee will be deemed to have resigned and the successor will be deemed to have been appointed as trustee in accordance with the Debenture Indenture. (Section 910) NOTICES Notices to Holders of Debentures will be given by mail to the addresses of such Holders as they may appear in the Security Register. (Section 106) 16 PERSONS DEEMED OWNERS The Company, the Debenture Indenture Trustee and any agent of the Company or the Debenture Indenture Trustee may treat the Person in whose name a Debenture is registered as the absolute owner thereof (whether or not such Debenture may be overdue) for the purpose of making payment and for all other purposes. (Section 308) GOVERNING LAW The Debenture Indenture and the Debentures will be governed by, and construed in accordance with, the laws of the State of New York, except to the extent the law of any other jurisdiction shall be mandatorily applicable. (Section 112) LIMITATION ON SUITS The Debenture Indenture limits a Holder's right to institute any proceeding with respect to the Debenture Indenture, the appointment of a receiver or trustee, or for any other remedy under the Debenture Indenture. (Section 807) MAINTENANCE OF PROPERTIES The Debenture Indenture provides that the Company shall cause (or, with respect to property owned in common with others, make reasonable effort to cause) all its properties used or useful in the conduct of its business to be maintained and kept in good condition, repair and working order and shall cause (or, with respect to property owned in common with others, make reasonable effort to cause) to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as, in the judgment of the Company, may be necessary so that the business carried on in connection therewith may be properly conducted; provided, however, that nothing shall prevent the Company from discontinuing, or causing the discontinuance of, the operation and maintenance of any of its properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business. (Section 605) CONCERNING THE DEBENTURE INDENTURE TRUSTEE See "Description of First Mortgage Bonds--Concerning the First Mortgage Indenture Trustees" for a description of certain relationships between the Debenture Indenture Trustee and the Company. GLOBAL SECURITIES Some or all of the Debentures of any series may be represented, in whole or in part, by one or more global securities (each, a "Global Security") which will have an aggregate principal amount equal to that of the Debentures represented thereby. Each Global Security will be registered in the name of a depositary (the "Depositary") or a nominee thereof identified in the applicable Prospectus Supplement, will be deposited with such Depositary or nominee or a custodian therefor and will bear a legend regarding the restrictions on exchanges and registration of transfer thereof referred to below and any such other matters as may be provided for pursuant to the Debenture Indenture. As long as the Depositary, or its nominee, is the registered holder of a Global Security, the Depositary or such nominee, as the case may be, will be considered the sole owner and holder of such Global Security and the Debentures represented thereby for all purposes under the Debenture Indenture. Except in limited circumstances, owners of beneficial interests in a Global Security will not be entitled to have such Global Security or any Debentures represented thereby registered in their names, will not receive or be entitled to receive physical delivery of certificated Debentures in exchange therefor and will not be considered to be the owners or holders of such Global Security or any Debentures represented thereby for any purpose under the Debentures or the Debenture Indenture. All payments of principal of and any 17 premium and interest on a Global Security will be made to the Depositary or its nominee, as the case may be, as the Holder thereof. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. These laws may impair the ability to transfer beneficial interests in a Global Security. Ownership of beneficial interests in a Global Security will be limited to institutions that have accounts with the Depositary or its nominee ("participants") and to persons that may hold beneficial interests through participants. In connection with the issuance of any Global Security, the Depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of Debentures represented by the Global Security to the accounts of its participants. Ownership of beneficial interests in a Global Security will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by the Depositary (with respect to participants' interests) or any such participant (with respect to interests of persons held by such participants on their behalf). Payments, transfers, exchanges and other matters relating to beneficial interests in a Global Security may be subject to various policies and procedures adopted by the Depositary from time to time. Neither the Company, the Debenture Indenture Trustee nor any of their respective agents will have any responsibility or liability for any aspect of the Depositary's or any participant's records relating to, or for payments made on account of, beneficial interests in a Global Security, or for maintaining, supervising or reviewing any records relating to such beneficial interests. PLAN OF DISTRIBUTION The Company may sell the Debt Securities to or through underwriters or dealers, directly to other purchasers or through agents. The Company may also directly solicit offers to purchase the Debt Securities. The Prospectus Supplement will set forth the terms of the offering, including the name or names of any underwriters, dealers or agents, the purchase price or prices of the Debt Securities offered thereby, the proceeds to the Company from the sale of such Debt Securities, any initial public offering price, any underwriting discount or commission and any discounts, concessions or commissions allowed or reallowed or paid by any underwriter to other dealers. Any initial public offering price and any discounts, concessions or commissions allowed or reallowed or paid to dealers may be changed from time to time. If so indicated in the Prospectus Supplement, the Company may authorize underwriters, dealers or other persons acting as the Company's agents to solicit offers by certain institutions to purchase the Debt Securities offered thereby directly from the Company pursuant to contracts providing for payment and delivery on a future date. Such contracts will be subject only to the conditions set forth in the Prospectus Supplement, which will also set forth the commission payable for solicitation of such contracts. Underwriters, dealers and agents who participate in the distribution of the Debt Securities may be entitled under agreements to be entered into with the Company to indemnification by the Company against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. The Company does not intend to apply for the listing of the Debt Securities on any national securities exchange. The Prospectus Supplement will indicate whether any underwriter, dealer or agent intends to make a market in the Debt Securities offered thereby. No assurance can be given as to the liquidity of any trading market in the Debt Securities. LEGAL OPINIONS Legal matters with respect to the Debt Securities will be passed upon for the Company by Dorsey & Whitney LLP, Minneapolis, Minnesota, and for any underwriters, dealers, purchasers or agents by Sidley & 18 Austin, Chicago, Illinois. The statements as to matters of law and legal conclusions made under "Description of First Mortgage Bonds--Security and Priority" are made on the authority of Dorsey & Whitney LLP. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference from the Company's Annual Report on Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report which is incorporated herein by reference, and have been so incorporated in reliance upon such report given upon their authority as experts in accounting and auditing. 19 - ------------------------------------------- ------------------------------------------- - ------------------------------------------- ------------------------------------------- NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH THEY RELATE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY IN ANY CIRCUMSTANCE IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ------------------- TABLE OF CONTENTS
PAGE --------- PROSPECTUS SUPPLEMENT Selected Consolidated Financial Data........... S-2 Use of Proceeds................................ S-3 Certain Terms of the Offered Debentures........ S-3 Underwriting................................... S-5 PROSPECTUS Available Information.......................... 2 Incorporation of Certain Documents by Reference.................................... 2 The Company.................................... 3 Use of Proceeds................................ 3 Construction Program and Financing............. 3 Ratios of Earnings to Fixed Charges............ 4 Description of First Mortgage Bonds............ 4 Description of Debentures...................... 8 Plan of Distribution........................... 18 Legal Opinions................................. 18 Experts........................................ 19
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