UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from ........ to ........
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification No.
1-8946 CILCORP Inc. 37-1169387
(An Illinois Corporation)
300 Hamilton Blvd, Suite 300
Peoria, Illinois 61602
(309) 675-8810
1-2732 CENTRAL ILLINOIS LIGHT COMPANY 37-0211050
(An Illinois Corporation)
300 Liberty Street
Peoria, Illinois 61602
(309) 675-8810
Indicate by check mark whether the Registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) have been subject
to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
CILCORP Inc. Common stock, no par value, 13,035,756
shares outstanding at April 30, 1994
CENTRAL ILLINOIS LIGHT COMPANY
Common stock, no par value, 13,563,871
shares outstanding and privately
held by CILCORP Inc. at April 30, 1994
CILCORP INC.
AND
CENTRAL ILLINOIS LIGHT COMPANY
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1994
INDEX
PART I. FINANCIAL INFORMATION
Page No.
Item 1: Financial Statements
CILCORP INC.
Consolidated Balance Sheets 3-5
Consolidated Statements of Income 6-7
Consolidated Statements of Cash Flows 8-9
CENTRAL ILLINOIS LIGHT COMPANY
Consolidated Balance Sheets 10-12
Consolidated Statements of Income 13
Consolidated Statements of Cash Flows 14-15
Notes to Consolidated Financial Statements
CILCORP Inc. and Central Illinois Light Company 16-18
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
CILCORP Inc. and Central Illinois Light Company 19-28
PART II. OTHER INFORMATION
Item 1: Legal Proceedings 29
Item 4: Submission of Matters to a Vote of Security Holders 30
Item 5: Other Information 30-31
Item 6: Exhibits and Reports on Form 8-K 31
Signatures 32-33
Exhibit 12: Central Illinois Light Company, Computation
of Ratio of Earnings to Fixed Charges 34
CILCORP INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
1994 1993
(Unaudited)
ASSETS
Current Assets:
Cash and Temporary Cash Investments $ 954 $ 1,440
Receivables, Less Reserves of $2,661 and $2,255 67,486 58,350
Accrued Unbilled Revenue 29,632 38,179
Fuel, at Average Cost 10,307 8,323
Materials and Supplies, at Average Cost 16,330 16,674
Gas in Underground Storage, at Average Cost 7,122 24,548
Prepayments and Other 11,796 9,441
-------- --------
Total Current Assets 143,627 156,955
-------- --------
Investments and Other Property:
Investment in Leveraged Leases 115,977 114,803
Cash Surrender Value of Company-Owned
Life Insurance, net of related policy
loans of $24,923 1,634 1,263
Other 6,303 6,190
-------- ----------
Total Investments and Other Property 123,914 122,256
-------- ----------
Property, Plant and Equipment:
Utility Plant, at Original Cost
Electric 1,077,657 1,068,818
Gas 351,218 348,541
---------- ----------
1,428,875 1,417,359
Less - Accumulated Provision for Depreciation 630,122 618,912
---------- ----------
798,753 798,447
Construction Work in Progress 29,776 31,896
Plant Acquisition Adjustments, being Amortized
to 1999 3,889 4,068
Other, Net of Depreciation 23,811 24,173
---------- ----------
Total Property, Plant and Equipment 856,229 858,584
---------- ----------
Other Assets:
Prepaid Pension Cost 13,743 13,953
Cost in Excess of Net Assets of Acquired Businesses,
Net of Accumulated Amortization of $3,654 and $3,479 25,076 25,251
Other 19,651 21,441
---------- ----------
Total Other Assets 58,470 60,645
---------- ----------
Total Assets $1,182,240 $1,198,440
========== ==========
<FN>
The accompanying Notes to the Consolidated Financial Statements are an integral part of
these balance sheets.
CILCORP INC. AND SUBSIDIARY COMPANIES
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
1994 1993
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Portion of Long-Term Borrowings $ 18,164 $ 193
Notes Payable 19,000 31,200
Accounts Payable 32,805 47,668
Accrued Taxes 12,612 5,666
Accrued Interest 4,895 9,632
Purchased Gas Adjustment Over-Recoveries and
Refunds Due Customers 6,231 3,268
Other 12,784 12,080
--------- ----------
Total Current Liabilities 106,491 109,707
--------- ----------
Long-Term Borrowings 307,678 325,711
--------- ----------
Deferred Credits:
Deferred Income Taxes 230,780 229,897
Net Regulatory Liability of Regulated Subsidiary 69,341 69,477
Deferred Investment Tax Credit 27,448 27,871
Customers' Advances for Construction and Other 28,499 27,781
--------- ----------
Total Deferred Credits 356,068 355,026
--------- ----------
Preferred Stock of Subsidiary 66,120 66,120
--------- ----------
Stockholders' Equity:
Common Stock, no par value; Authorized
50,000,000 shares - Outstanding
13,035,756 and 12,971,501 167,987 165,662
Retained Earnings 177,896 176,214
---------- ----------
Total Stockholders' Equity 345,883 341,876
---------- ----------
Total Liabilities and Stockholders' Equity $1,182,240 $1,198,440
========== ==========
<FN>
The accompanying Notes to the Consolidated Financial Statements are an integral part of
these balance sheets.
CILCORP INC. AND SUBSIDIARY COMPANIES
Consolidated Statements of Income
(Unaudited)
(In thousands)*
Three Months Ended
March 31,
1994 1993
Revenues:
Electric $ 73,707 $ 67,108
Gas 71,679 66,126
Environmental and Engineering Services 29,384 29,765
Other Businesses 2,666 1,924
-------- --------
Total 177,436 164,923
-------- --------
Operating Expenses:
Fuel for Generation and Purchased Power 27,912 24,142
Gas Purchased for Resale 42,946 38,221
Other Operation and Maintenance 57,054 53,033
Depreciation and Amortization 15,472 15,001
Taxes, Other than Income Taxes 11,220 10,820
--------- --------
Total 154,604 141,217
--------- --------
Fixed Charges and Other:
Interest Expense 6,516 7,206
Preferred Stock Dividends of Subsidiary 703 1,110
Allowance for Funds Used During Construction (91) (30)
Other 127 19
--------- --------
Total 7,255 8,305
--------- --------
Income Before Income Taxes 15,577 15,401
Income Taxes 5,876 6,016
--------- --------
Net Income Including Minority Interest 9,701 9,385
Minority Interest 0 51
---------- --------
Net Income Available for Common Shareholders $ 9,701 $ 9,334
========== ========
Average Common Shares Outstanding 13,004 12,909
Earnings Per Average Common Share $ .75 $ .72
========== ========
Dividends Per Common Share $ .615 $ .615
*Except Per Share Amounts
<FN>
The accompanying Notes to the Consolidated Financial Statements are an
integral part of these statements.
CILCORP INC. AND SUBSIDIARY COMPANIES
Consolidated Statements Of Cash Flows
(Unaudited)
(In thousands)
Three Months Ended
March 31,
1994 1993
Cash Flows from Operating Activities:
Net Income Before Preferred Dividends $10,405 $10,444
------- -------
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Non-Cash Lease Income & Investment Income (1,810) (967)
Depreciation and Amortization 15,472 15,001
Deferred Income Tax, Investment Tax Credit and
Regulatory Liability of Regulated Subsidiary, Net 324 765
Changes in Operating Assets and Liabilities:
Decrease in Accounts Receivable and Accrued
Unbilled Revenue (589) 6,029
Decrease in Inventories 15,786 5,413
Decrease in Accounts Payable (14,863) (633)
Increase in Accrued Taxes 6,946 3,944
Changes in Other Assets and Liabilities, Net (394) (6,861)
------- -------
Total Adjustments 20,872 22,691
------- -------
Net Cash Provided by Operating Activities 31,277 33,135
------- -------
Cash Flows from Investing Activities:
Additions to Property, Plant and Equipment (12,416) (18,544)
Sale of Long-Term Investments 0 1,328
Other (757) (1,699)
------- -------
Net Cash Used in Investing Activities (13,173) (18,915)
------- -------
Cash Flows from Financing Activities:
Decrease in Short-Term Debt (12,200) (6,145)
Proceeds from Issuance of Long-Term Debt 0 67,573
Repayment of Long-Term Debt 0 (77,168)
Increase of Minority Interest 0 51
Common Dividends Paid (8,012) (7,939)
Preferred and Convertible Preferred Dividends Paid (703) (1,110)
Proceeds from Issuance of Stock 2,325 0
------- -------
Net Cash Used in Financing Activities (18,590) (24,738)
------- -------
Net Decrease in Cash and Temporary
Cash Investments (486) (10,518)
Cash and Temporary Cash Investments at Beginning of Year 1,440 24,401
------- -------
Cash and Temporary Cash Investments at End of Quarter $ 954 $13,883
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $11,083 $10,849
Income Taxes 73 4,298
<FN>
The accompanying Notes to the Consolidated Financial Statements are an integral part of
these statements.
CENTRAL ILLINOIS LIGHT COMPANY
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
1994 1993
(Unaudited)
ASSETS
Utility plant, at original cost:
Electric $1,077,657 $1,068,818
Gas 351,218 348,541
---------- ----------
1,428,875 1,417,359
Less - accumulated provision for depreciation 630,122 618,912
---------- ----------
798,753 798,447
Construction work in progress 27,933 31,896
Plant acquisition adjustments, net of amortization 3,889 4,068
---------- ----------
Total Utility Plant 830,575 834,411
---------- ----------
Other Property and Investments
Cash surrender value of Company-owned life
insurance (net of related policy loans of $24,923) 1,634 1,263
Other 1,052 1,056
---------- ----------
Total Other Property and Investments 2,686 2,319
---------- ----------
Current Assets:
Cash and temporary cash investments 14 594
Receivables, less reserves of $760 and $585 41,809 34,197
Accrued unbilled revenue 17,949 25,111
Fuel, at average cost 10,307 8,323
Materials and supplies, at average cost 16,330 16,674
Gas in underground storage, at average cost 7,122 24,548
Prepaid taxes 107 856
Other 8,718 6,945
---------- ----------
Total Current Assets 102,356 117,248
---------- ----------
Deferred Debits:
Unamortized loss on reacquired debt 6,829 6,950
Unamortized debt expense 2,163 2,185
Prepaid pension cost 13,743 13,953
Other 9,631 11,259
---------- ----------
Total Deferred Debits 32,366 34,347
---------- ----------
Total Assets $ 967,983 $ 988,325
========== ==========
<FN>
The accompanying Notes to the Consolidated Financial Statements are an integral
part of these balance sheets.
CENTRAL ILLINOIS LIGHT COMPANY
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
1994 1993
(Unaudited)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholder's equity
Common stock, no par value, authorized 20,000,000
shares, outstanding 13,563,871 shares $ 185,661 $ 185,661
Retained earnings 110,547 108,645
---------- ----------
Total common shareholder's equity 296,208 294,306
Preferred stock without mandatory redemption 44,120 44,120
Preferred stock with mandatory redemption 22,000 22,000
Long-term debt 278,331 278,321
---------- ----------
Total Capitalization 640,659 638,747
---------- ----------
Current Liabilities:
Notes payable 1,000 12,400
Accounts payable 27,917 40,971
Accrued taxes 11,357 6,083
Accrued interest 4,469 8,616
PGA over-recoveries and refunds due customers 6,231 3,268
Level payment plan 831 2,944
Other 5,625 5,106
---------- ----------
Total Current Liabilities 57,430 79,388
---------- ----------
Deferred Liabilities and Credits:
Accumulated deferred income taxes 144,596 144,969
Net regulatory liability 69,341 69,477
Investment tax credits 27,448 27,871
Capital lease obligation 2,884 2,954
Other 25,625 24,919
---------- ----------
Total Deferred Liabilities and Credits 269,894 270,190
---------- ----------
Total Capitalization and Liabilities $ 967,983 $ 988,325
========== ==========
<FN>
The accompanying Notes to the Consolidated Financial Statements are an integral
part of these balance sheets.
CENTRAL ILLINOIS LIGHT COMPANY
Consolidated Statements of Income
(Unaudited)
(In thousands)
Three Months Ended
March 31,
1994 1993
Operating Revenues:
Electric $ 73,707 $ 67,108
Gas 71,679 66,126
-------- --------
Total Operating Revenue 145,386 133,234
-------- --------
Operating Expenses:
Cost of fuel 26,052 22,246
Cost of gas 42,946 38,221
Purchased power 1,860 1,896
Other operation and maintenance 28,731 24,823
Depreciation and amortization 13,752 13,280
Income taxes 6,175 6,300
Other taxes 9,863 9,490
-------- --------
Total Operating Expense 129,379 116,256
-------- --------
Operating Income 16,007 16,978
-------- --------
Other Income and Deductions:
Cost of equity funds capitalized 23 -
Company-owned life insurance, net (127) (19)
Other, net (40) 292
-------- --------
Total Other Income (144) 273
-------- --------
Interest Expenses:
Interest on long-term debt 4,796 5,074
Cost of borrowed funds capitalized (68) (30)
Other 520 904
-------- --------
Total Interest Expense 5,248 5,948
-------- --------
Net Income 10,615 11,303
-------- --------
Dividends on Preferred Stock 703 1,110
-------- --------
Net Income Available for Common Stock $ 9,912 $ 10,193
======== ========
<FN>
The accompanying Notes to the Consolidated Financial Statements are an integral part
of these statements.
CENTRAL ILLINOIS LIGHT COMPANY
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Three Months Ended
March 31,
1994 1993
Cash flows from operating activities:
Net income including preferred dividends $ 10,615 $ 11,303
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 13,931 13,458
Deferred taxes, investment tax credits
and regulatory liability, net (932) (1,371)
Increase in accounts receivable (7,612) (6,625)
Decrease in fuel, materials and
supplies, and gas in underground storage 15,787 5,413
Decrease in unbilled revenue 7,163 8,357
Decrease in accounts payable (13,054) (460)
Increase in accrued taxes and interest 1,127 315
Decrease in other assets and
liabilities, net 3,756 1,084
-------- --------
Net cash provided by operating activities 30,781 31,474
-------- --------
Cash flows from investing activities:
Capital expenditures (9,737) (17,200)
Cost of equity funds capitalized (23) -
Other (1,369) (1,699)
-------- --------
Net cash used in investing activities (11,129) (18,899)
-------- --------
Cash flows from financing activities:
Common dividends paid (8,010) (7,939)
Preferred dividends paid (703) (1,110)
Long-term debt issued - 64,937
Long-term debt retired - (65,696)
Payments on capital lease obligation (119) -
Decrease in short-term borrowing (11,400) (3,000)
--------- --------
Net cash used in financing
activities (20,232) (12,808)
--------- --------
Net decrease in cash and temporary cash
investments (580) (233)
Cash and temporary cash investments at beginning
of year 594 1,776
--------- --------
Cash and temporary cash investments at
March 31 $ 14 $ 1,543
========= ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of cost of borrowed funds
capitalized) $ 9,334 $ 8,560
Income taxes 2,271 185
<FN>
The accompanying Notes to the Consolidated Financial Statements are an
integral part of these statements.
CILCORP INC. AND CENTRAL ILLINOIS LIGHT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. Introduction
The consolidated financial statements include the accounts of CILCORP Inc.
(CILCORP or Company), Central Illinois Light Company (CILCO), Environmental
Science & Engineering, Inc. (ESE) and CILCORP's other subsidiaries after
elimination of significant intercompany transactions. Prior to the second
quarter of 1993, CILCORP and CILCO filed separate reports on Form 10-Q. The
consolidated financial statements of CILCO, a wholly-owned CILCORP subsidiary,
include the accounts of CILCO and its subsidiaries, CILCO Exploration and
Development Corporation and CILCO Energy Corporation.
The accompanying unaudited financial statements have been prepared according
to the rules and regulations of the Securities and Exchange Commission.
Although CILCORP believes the disclosures are adequate to make the information
presented not misleading, these financial statements should be read with the
financial statements and related notes presented in the Company's 1993 Annual
Report on Form 10-K.
In the Company's opinion, the financial statements furnished reflect all
normal and recurring adjustments necessary for a fair presentation of the
results of operations for the periods presented. Operating results for
interim periods are not necessarily indicative of operating results to be
expected for the year or of the Company's future financial condition.
NOTE 2. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS AND HEALTH CARE
In January 1994, CILCO adopted Financial Accounting Standards Board (FASB)
Statement No. 112, "Employer's Accounting for Postemployment Benefits"
(SFAS 112). This standard requires accrual of benefits other than pensions or
health care provided to former or inactive employees. In January 1994, CILCO
accrued a pre-tax liability of approximately $1 million, which represents the
cumulative effect of applying SFAS 112 of which approximately $250,000 will be
capitalized during the year. The effect of benefits ESE provides to former or
inactive employees is not significant.
NOTE 3. FEDERAL ENERGY REGULATORY COMMISSION ORDER 636
In 1992, the Federal Energy Regulatory Commission (FERC) issued Orders 636,
636A, and 636B (collectively Order 636). The orders have been appealed to the
United States Court of Appeals by various parties. As a result of Order 636
and subsequent regulatory filings by interstate pipelines, the pipelines are
continuing to transport gas to local gas distribution companies such as CILCO,
but this service will be administered independently of the pipelines' sales of
gas. Interstate pipelines serving CILCO have generally ceased sales of gas
and have become transporters only. CILCO currently arranges for the purchase
of gas from a variety of suppliers and has contracted for additional gas
storage capacity to meet customer demands for gas. CILCO believes it is
well-positioned to ensure the continued acquisition of adequate and reliable
gas supplies despite the regulatory changes.
Order 636 also permits pipelines to file new tariffs to provide for the
recovery from their customers, including CILCO, of prudently incurred costs
resulting from the transition to services under Order 636 ("transition
costs"). CILCO's pipeline suppliers had filed with the FERC to directly bill
CILCO, subject to refund, for approximately $1.4 million of transition costs,
including interest, as of March 31, 1994. CILCO has been billed approximately
$741,000 through March 31, 1994. CILCO estimates that it could ultimately be
billed up to $3 million, excluding interest. CILCO has recorded a liability
of approximately $680,000 and a corresponding regulatory asset on its balance
sheet, representing the minimum amount of the estimated range of such future
transition costs which CILCO expects to incur.
Transition costs are being recovered from CILCO's customers through the
Purchased Gas Adjustment Clause (PGA). The PGA allows CILCO to immediately
reflect increases or decreases in the cost of natural gas in its charges to
customers. Approximately $1 million has been recovered from customers through
March 31, 1994. On March 9, 1994, the Illinois Commerce Commission (ICC)
issued an order allowing Illinois gas utilities to recover 100% of pipeline
transition costs. While CILCO cannot at this time determine the outcome of an
expected appeal of the March 9, 1994, ICC order regarding transition costs,
management believes that based on existing law and the ICC order, any
transition charges or other billings by the pipelines to CILCO as a result of
Order 636 will be recoverable from customers through CILCO's gas rates.
Therefore, management does not expect the order will materially impact CILCO's
financial position or results of operations.
NOTE 4. CONTINGENCIES
CILCO continues to investigate former gas manufacturing plant sites to
determine if it is responsible for the remediation of any remaining waste
materials (coal tar) at those sites. The sites of five former gas
manufacturing plants are located within CILCO's present gas service
territory. CILCO previously operated three of the five plants, and of the
three sites, it currently owns two. In cooperation with the Illinois
Environmental Protection Agency (IEPA), CILCO has completed remedial action,
at a cost of $3.3 million, at one of the two owned sites at which it operated
a plant. CILCO completed an investigation plan in 1992 to define the extent
of remediation, if any, for the other owned site at which it formerly operated
a plant. The plan has been reviewed and approved by the IEPA, and CILCO is in
the process of implementing this plan. CILCO has not yet formulated a
remediation plan for the third site where it formerly operated a gas
manufacturing plant. CILCO does not currently own the two sites at which it
did not operate a plant.
CILCO expects to spend approximately $200,000 for site monitoring and
feasibility studies in 1994. Until more detailed site specific testing has
been completed, CILCO cannot determine the ultimate extent or cost of any
remediation of the two remaining sites where it operated plants. CILCO has
recorded a $4.4 million liability and a corresponding regulatory asset on its
balance sheet for coal tar investigation and remediation costs. The
$4.4 million represents the minimum amount of the estimated range of such
future costs which CILCO expects to incur. CILCO has not yet determined the
extent, if any, of its remediation responsibility for the non-owned sites at
which it never operated a gas manufacturing plant.
Prudently incurred investigation and remediation costs paid to outside parties
are presently being recovered by CILCO from its gas customers, on a current
basis with no impact on income, through a rate rider approved by the ICC on
August 2, 1991. In December 1993, the Illinois Appellate Court affirmed a
generic order of the ICC which directed that utilities recover coal tar
remediation costs over a five-year period, with no carrying costs allowed on
the unrecovered balance. In a separate decision in December 1993, the
Appellate Court directed that CILCO's coal tar rider be made consistent with
the generic order. Based upon CILCO's interpretation of existing law, CILCO
believes that coal tar expenses prudently incurred and collected prior to the
Appellate Court's decision are not subject to refund. However, expenses
incurred after the Appellate Court's decision will be subject to the generic
order. The Citizens' Utility Board (CUB) has filed an appeal with the
Illinois Supreme Court seeking disallowance of future recoveries of coal tar
costs under the generic order. On April 6, 1994, the Illinois Supreme Court
granted CUB's petition for leave to appeal. Pending a decision in that case,
CILCO's future recovery of coal tar costs will be pursuant to the Commission's
generic order.
Coal tar remediation costs incurred through March 1994 have been deferred on
the Balance Sheets, net of amounts recovered from customers. CILCO began
recovering remediation costs under its coal tar rider on October 1, 1991, and
through March 31, 1994, has recovered approximately $4 million. CILCO cannot
predict the outcome of the appeal to the Illinois Supreme Court, or whether
amounts previously recovered will be subject to refund, but believes most or
all of its future coal tar remediation costs will continue to be recoverable
from customers. Therefore, although the total cost to CILCO of any action
with respect to the unremediated sites and the possibility of recovering that
cost from insurance carriers or any potentially responsible parties cannot now
be determined, management believes that such cost will not have a material
adverse effect on CILCO's financial position or results of operations.
NOTE 5. ACCOUNTING FOR CERTAIN INVESTMENTS IN MARKETABLE SECURITIES
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," (SFAS 115), which the Company adopted on its
effective date, January 1, 1994. SFAS 115 requires an enterprise to classify
debt and equity securities into one of three categories based on its intended
use for those securities. It also requires the enterprise to adjust the
carrying value of certain owned securities to market value. The statement
did not have a material effect on the Company's financial position or results
of operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CILCORP Inc. (the Company) is the parent of two core operating businesses,
Central Illinois Light Company (CILCO) and Environmental Science &
Engineering, Inc. (ESE). The Company also has three other first-tier subsidi-
aries, CILCORP Investment Management Inc. (CIM), CILCORP Development Services
Inc. (CDS) and CILCORP Ventures Inc. (CVI), whose operations, combined with
those of the holding company (Holding Company) itself, are collectively
referred to herein as Other Businesses.
CILCO, the primary business subsidiary, is an electric and gas utility serving
customers in central and east central Illinois. ESE is a national
environmental consulting and engineering firm serving governmental,
industrial, and commercial customers. CIM invests in a diversified portfolio
of long-term financial investments which currently includes leveraged leases
and energy related interests. CDS pursues cogeneration opportunities.
CVI is a venture capital company which invests in new ventures and the
expansion of existing ventures in environmental services, energy,
biotechnology and health care.
CILCO's financial condition and results of operations are currently the
principal factors affecting the Company's financial condition and results of
operations.
Overview
The Company's earnings per share were $.75 for the quarter ended March 31,
1994, compared to $.72 per share earned during the same period in 1993.
Decreases in CILCO's interest expense and preferred stock dividends, improved
cost containment by ESE and improved results in the Other Businesses segment
all contributed to higher earnings in the first quarter of 1994 compared to
the same period in 1993. These improvements offset lower operating income of
CILCO caused primarily by higher operations and maintenance expenses.
The following table summarizes net income for the three months ended March 31,
1994 and 1993 (see Results of Operations for further discussion).
Three Months Ended
March 31,
1994 1993
(in thousands)
Core Businesses:
CILCO
Electric Operating Income $ 8,543 $ 8,629
Gas Operating Income 7,464 8,349
------- -------
Total Utility Operating Income 16,007 16,978
Utility Other Income and Deductions (5,392) (5,675)
Preferred Stock Dividends of CILCO (703) (1,110)
------- -------
Total Utility Net Income 9,912 10,193
ESE
ESE Net Loss (349) (525)
------- -------
Total Core Businesses Income 9,563 9,668
Other Businesses:
Other Businesses Net Income (Loss) 138 (334)
------ -------
Consolidated Net Income Available to
Common Shareholders $9,701 $ 9,334
====== =======
Capital Resources & Liquidity
The Company believes that internal and external sources of capital which are,
or are expected to be, available to the Holding Company and its subsidiaries
will be adequate to meet the Company's capital expenditures program, pay
interest and dividends, meet working capital needs and retire debt as it
matures.
The Company
Short-term borrowing capability is available to the Company for additional
cash requirements. CILCORP's Board of Directors has authorized it to borrow
up to $40 million on a short-term basis. On March 31, 1994, CILCORP had
committed bank lines of credit of $40 million, of which $18 million was
outstanding.
Depending on market conditions, the Company may choose to issue new shares of
common stock through the CILCO Employees' Savings Plan (ESP) and the CILCORP
Automatic Reinvestment and Stock Purchase Plan (DRIP) or to have the plans
purchase CILCORP stock on the open market. However, the Company may not
change its strategy more frequently than every three months. From December
1993 through March 1994, CILCORP issued 126,475 shares of common stock for
$4.7 million to the plans. During March, the Company suspended issuing new
common stock to the ESP and DRIP, but it may resume issuing new shares to the
plans as early as June 1994. The Company plans to issue up to
$30 million of common stock through these plans by 1996, depending on market
conditions and corporate needs, but is under no commitment to do so. The
proceeds from newly issued stock will be used to retire CILCORP short-term
debt, to meet working capital and capital expenditure requirements at CILCO,
and for other corporate purposes.
To date, the Company has issued $26 million of medium-term notes under its $75
million medium-term note program. The Company may issue additional notes
during 1994-1997 under this program to retire maturing debt of CILCORP Lease
Management Inc. (CLM), a wholly-owned subsidiary of CIM, and to provide funds
for other corporate purposes.
CILCO
Capital expenditures totaled $10 million for the three months ended March 31,
1994. Capital expenditures are anticipated to be approximately $82 million
for the remainder of 1994, including $7 million to replace CILCO's Customer
Information System. CILCO expects to complete the project in 1995 at a total
cost of $13 million. CILCO expects to finance its 1994 capital requirements
with funds provided by operating activities, issuance of secured debt, and
with capital provided by CILCORP. Capital expenditures for the years 1995 and
1996 are estimated to be $70 million and $75 million, respectively.
On December 17, 1993, CILCORP announced an agreement with Midwest Grain
Products, Inc. (MWG), one of CILCO's largest customers, to develop a gas-fired
cogeneration plant. The plant will provide steam service to MWG's Pekin,
Illinois, facility and also will generate electricity. In early 1994, CILCORP
Development Services Inc. (CDS), a newly-formed, unregulated CILCORP
subsidiary, began construction of steam boilers and other equipment at a
projected cost of $11 million. $2.5 million had been spent through April 30,
1994. On March 23, 1994, the ICC approved the cogeneration project as a
least-cost method for CILCO to meet its electric generation requirements and
authorized CILCO to complete the project. CILCO will acquire the assets
constructed by CDS, complete construction of the steam boilers and other
equipment, and also will invest approximately $5.8 million to install a
20 megawatt turbine generator and related equipment. The $16.8 million cost
of the facility is included in CILCO's capital expenditures discussed above.
Steam service is scheduled to begin January 1, 1995; the plant is scheduled to
begin generating electricity in mid-1995.
In May 1994, CILCO plans to petition the ICC for authority to issue not more
than $65 million of secured medium-term notes. CILCO expects to obtain
approval from the ICC during the second quarter of 1994, after which CILCO
will file a shelf registration statement with the Securities and Exchange
Commission. CILCO plans to sell approximately $29 million of medium-term
notes to finance its construction activities, including the Midwest Grain
Project, and to retire short-term debt. The remaining $36 million of secured
debt will be issued periodically to retire outstanding long-term debt as it
matures and for other corporate needs.
In the third quarter of 1992, CILCO began committing additional resources to
repair and replace certain portions of its Springfield gas distribution system
(see Part II. Item 5: Other Information, CILCO Gas Operations). This project
was substantially completed on September 30, 1993, at a cost of approximately
$24 million.
At March 31, 1994, CILCO had bank lines of credit aggregating $30 million
which are used to support CILCO's issuance of commercial paper. CILCO had
$1 million of commercial paper outstanding at March 31, 1994, and expects to
issue commercial paper periodically throughout the remainder of 1994.
ESE
ESE's capital additions and improvements during the first quarter were
approximately $900,000. Capital expenditures for the remainder of 1994 are
expected to be approximately $4.1 million. Working capital increased
approximately $400,000 during the first quarter.
At March 31, 1994, ESE had borrowed $21.1 million from the Holding Company, an
increase of $200,000 from December 31, 1993. ESE had an unused $1 million
bank line of credit to provide for working capital needs and had a $5 million
bank line of credit, of which $2.5 million was used at March 31, 1994, to
collateralize performance bonds issued to companies in connection with ESE
projects. ESE expects to finance its capital expenditures and working capital
needs during 1994 with a combination of funds generated internally and
periodic short-term borrowings from the Holding Company.
Results of Operations
The results of operations of CILCO, ESE, and Other Businesses for the three
months ended March 31, 1994, compared to the three months ended March 31,
1993, are discussed below.
CILCO ELECTRIC OPERATIONS
The following table summarizes the components of CILCO electric operating
income for the three months ended March 31, 1994 and 1993:
Components of CILCO Electric Three Months Ended
Operating Income March 31,
1994 1993
(In thousands)
Revenue:
Electric retail $70,005 $66,459
Sales for resale 3,702 649
------- -------
Total revenue 73,707 67,108
------- -------
Cost of Sales:
Cost of fuel 26,052 22,246
Purchased power 1,860 1,896
Revenue taxes 3,061 3,060
------- -------
Total cost of sales 30,973 27,202
------- -------
Gross margin 42,734 39,906
------- -------
Operating Expenses:
Other operation and maintenance 19,685 17,367
Depreciation and amortization 9,888 9,626
Income and other taxes 4,618 4,284
------- -------
Total operating expenses 34,191 31,277
------- -------
Electric operating income $ 8,543 $ 8,629
======= =======
Electric gross margin increased 7% for the three months ended March 31, 1994,
compared to the same period in 1993. This increase was due to greater sales
for resale and a 4% increase in retail kilowatt hour sales compared to the
first quarter of 1993. Residential and commercial sales both increased
5%, primarily due to colder winter weather. Heating degree days were 3%
higher for the quarter ended March 31, 1994 compared to the same period in
1993.
Industrial sales increased 3% for the quarter ended March 31, 1994, primarily
due to increased demand by several of CILCO's large industrial customers. The
overall level of business activity in CILCO's service territory and weather
conditions are expected to continue to be the primary factors affecting
electric sales in the near term. CILCO's electric sales may be affected in
the long-term by increased competition in the electric utility industry.
Energy sales to other utilities increased during the first quarter of 1994,
due to greater demand for electricity from neighboring utilities. Sales for
resale vary based on the energy requirements of neighboring utilities, CILCO's
available capacity for bulk power sales, and the price of power available for
sale. CILCO expects competition to continue to increase in the sales for
resale and purchased power market due to certain provisions of the Energy
Policy Act of 1992.
Substantially all of CILCO's electric generating capacity is coal-fired. The
cost of fuel increased 17%, due to increased electric generation to meet
greater demand for electricity from other utilities (sales for resale) and
from CILCO's retail customers.
Purchased power decreased slightly for the three months ended March 31, 1994,
compared to the same period in 1993. Purchased power expense varies based on
CILCO's need for energy and the price of power available for purchase. CILCO
makes use of purchased power when it is economical to do so and when required
during maintenance outages at CILCO plants. Costs and savings realized from
the purchase of power are passed through to CILCO's customers via the fuel
adjustment clause (FAC). The FAC allows CILCO to pass increases or decreases
in the cost of fuel through to customers.
Other operation and maintenance expenses increased 13% primarily due to
increased employee benefit costs, including costs resulting from the
implementation of SFAS 112, injury and damage claims and power plant
maintenance. (See Part I. Item 1: Note 2 Postemployment Benefits Other than
Pensions and Health Care Costs.)
Depreciation and amortization expense increased slightly, reflecting additions
and replacements of utility plant at costs in excess of the original cost of
the property retired.
Income and other tax expense increased due to higher pre-tax operating income
and higher corporate income tax rates enacted during 1993.
CILCO GAS OPERATIONS
The following table summarizes the components of CILCO gas operating income
for the three months ended March 31, 1994 and 1993:
Components of Gas Three Months Ended
Operating Income March 31,
1994 1993
(In thousands)
Revenue:
Sale of gas $68,409 $63,104
Transportation services 3,270 3,022
------- -------
Total revenue 71,679 66,126
------- -------
Cost of Sales:
Cost of gas 42,946 38,221
Revenue taxes 3,695 3,488
------- -------
Total cost of sales 46,641 41,709
------- -------
Gross margin 25,038 24,417
------- -------
Operating Expenses:
Other operation and maintenance 9,046 7,456
Depreciation and amortization 3,864 3,654
Income and other taxes 4,664 4,958
------- -------
Total operating expenses 17,574 16,068
------- -------
Gas operating income $ 7,464 $ 8,349
======= =======
Gas gross margin and retail sales volumes increased 3% for the quarter ended
March 31, 1994 compared to the same period in 1993 due to colder winter
weather. Residential sales increased 2% while commercial sales increased 6%
for the first quarter. Heating degree days were 3% higher than the same
period in 1993. The overall level of business activity in CILCO's service
territory and weather conditions are expected to continue to be the primary
factors affecting gas sales.
Revenue and sales volumes from gas transportation services increased 8% for
the quarter ended March 31, 1994 compared to the same period in 1993. Revenue
increased primarily due to increased purchases of gas by industrial
transportation customers from suppliers other than CILCO.
The cost of gas increased 12% for the quarter ended March 31, 1994. The
increase was primarily due to increased sales and higher natural gas costs
from CILCO's suppliers. The higher natural gas costs were passed through to
CILCO's gas customers via the PGA, which partially contributed to the 8%
increase in gas retail revenue. The PGA is the mechanism used to pass
increases or decreases in the cost of natural gas through to the customer.
Other operation and maintenance expenses increased 21% for the three months
ended March 31, 1994, compared to 1993 due to rising employee benefit costs,
including costs resulting from the implementation of SFAS 112, and higher
injury and damage claims. (See Part I. Item 1: Note 2 Postemployment
Benefits Other Than Pensions and Health Care Costs.) Decreased gas
maintenance expenses resulting from the completion of repairs to the
Springfield gas distribution system partially offset the increases. (See
Part II. Item 5: Other Information, CILCO Gas Operations).
Depreciation and amortization expense increased 6%, reflecting additions and
replacements of utility plant at costs in excess of the original cost of the
property retired.
Income and other taxes expense decreased for the quarter ended March 31, 1994,
primarily due to lower pre-tax operating income.
CILCO OTHER INCOME AND DEDUCTIONS
The following table summarizes other income and deductions for the three
months ended March 31, 1994 and 1993:
Components of Other Income and Three Months Ended
Deductions March 31,
1994 1993
(In thousands)
Income:
Interest income $ 247 $ 195
------- -------
Expenses:
Non-operating 387 379
Amortization 179 178
Interest 5,316 5,978
AFUDC (91) (30)
Company-owned life insurance 127 19
Income taxes (279) (654)
------- -------
Total expenses 5,639 5,870
------- -------
Other Income (deductions) $(5,392) $(5,675)
======= =======
Interest expense decreased due to lower interest rates on bonds issued in
refinancing transactions in 1992 and 1993.
ESE Operations
The following table summarizes the components of the environmental and
engineering services loss for the three months ended March 31, 1994 and 1993:
Three Months Ended
Components of ESE loss March 31,
1994 1993
(In Thousands)
Environmental and engineering
service revenue $29,384 $29,765
Direct Non-Labor Costs 10,413 9,867
------- -------
Net Revenues 18,971 19,898
------- -------
Expenses:
Direct salaries and
other operating costs 9,464 10,199
General & administrative 8,059 8,473
Depreciation 1,198 1,200
Amortization 296 299
------- -------
19,017 20,171
------- -------
Interest expense 405 415
------- -------
Loss before income taxes (451) (688)
Income taxes (102) (163)
------- -------
ESE net loss $ (349) $ (525)
======= =======
Net revenues declined 5% in the first quarter of 1994 primarily due to lower
demand for ESE's services in the Northeast and West Coast offices. Project
delays in the Montana consulting office also contributed to this decrease.
The overall decrease in the consulting offices was partially offset by
increased demand for ESE laboratory services. Direct non-labor costs as a
percentage of gross revenue fluctuate primarily due to subcontractor usage.
Direct salaries and other operating costs and general and administrative costs
decreased 7% and 5%, respectively, in the first quarter of 1994 compared to
1993, due to a reduction in work force associated with the overall decline in
business volume that occurred in the last half of 1993. Due to the
labor-intensive nature of ESE's business, ESE can adjust staffing levels to
appropriately recognize changing business conditions. ESE had 1,218 full-time
equivalent employees at March 31, 1994, compared to 1,316 at March 31, 1993.
Other Businesses Operations
The following table summarizes the components of Other Businesses' income
(loss) for the three months ended March 31, 1994 and 1993:
Components of Other Businesses' Three Months Ended
Net Income (Loss) March 31,
1994 1993
(In thousands)
Revenue:
Other revenue $2,419 $1,729
------ ------
Expenses:
Operating expenses 1,309 669
Depreciation and amortization 48 44
Interest expense 795 813
Income and other taxes 129 486
Minority interest 0 51
------ ------
Total expenses 2,281 2,063
------ ------
Other Businesses net income (loss) 138 (334)
====== ======
Other revenue increased during the first quarter of 1994 due primarily to the
new leveraged lease investments made by CIM subsidiaries in late 1993, and a
$500,000 fee paid by CILCO to CILCORP related to the construction of the
Midwest Grain cogeneration plant (See Capital Resources and Liquidity, CILCO).
CILCO will capitalize the fee as part of its utility plant in service when the
project is completed and will seek to include it in rate base in its next rate
proceeding.
Operating expenses increased primarily due to a one-time charge related to
CILCORP's termination of a lease at an ESE facility that ESE no longer plans
to use. The lease was entered into during negotiations which led to CILCORP's
1990 acquisition of ESE (see Part II, Item 1: Legal Proceedings).
Income and other taxes in 1994 were lower because the 1993 amount included
income taxes related to CIM's sale of Tucson Electric Power Company stock in
the first quarter and a reserve for potential income taxes if the Company's
position regarding the depreciable life of the Springerville Unit No. 1
generating station had not been ultimately upheld. The Springerville tax
dispute was favorably settled during the fourth quarter of 1993.
Minority interest in net income declined due to the 1993 purchase of the 19%
minority interest in CILCORP Lease Management Inc., a second-tier subsidiary
of CILCORP.
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
Reference is made to "Environmental Matters" under "Item 1. Business" in the
Company's 1993 Form 10-K, and "Note 4. Contingencies," herein, for certain
pending legal proceedings and proceedings known to be contemplated by
governmental authorities.
CILCO and ESE are subject to certain claims and lawsuits in connection with
work performed in the ordinary course of their businesses. In the opinion of
management, all claims currently pending either will not result in a material
adverse effect on the financial position of the Company or are adequately
covered by (i) insurance, or (ii) contractual or statutory indemnification, or
(iii) reserves for potential losses.
At the request of the South Carolina Department of Health and Environmental
Control ("DHEC"), the U. S. Department of Justice has begun an investigation
into an alleged record-keeping violation at an office operated by ESE in
Greenville, South Carolina. DHEC is also continuing its investigation. The
office was closed in May 1993. The investigation could potentially lead to
criminal charges, as well as certain sanctions and civil penalties.
Management cannot currently determine the outcome of this investigation but
does not believe it will have a materially adverse impact on the Company's
financial position or results of operations.
CILCORP, ESE and the lessor of a building in Shelton, Connecticut have
concluded settlement negotiations which will release ESE from future lease
obligations and litigation related to the lease, provided that final
settlement documents are acceptable to all parties.
After a significant number of leaks were detected in the Springfield cast iron
gas distribution system in mid-1992, CILCO began a detailed examination of its
Springfield gas distribution system and related operating practices and
procedures. The objective of this examination was to detect and repair gas
main leaks and to identify and correct any operating deficiencies. This
project was substantially completed on September 30, 1993. (See Part I. Item
2: Management's Discussion and Analysis of Financial Condition and Results of
Operations, Capital Resources and Liquidity).
In September 1992, the ICC staff began an informal review of CILCO's
Springfield gas operations and recordkeeping practices. Subsequently, at the
request of the ICC, the U.S. Department of Transportation and the U.S.
Department of Justice began conducting investigations which management
believes to be focused principally on CILCO's Springfield gas operations.
These reviews could potentially lead to criminal charges, regulatory actions
(see Gas Rate Increase Request), as well as certain sanctions and civil
penalties. Management cannot currently determine the outcome of these reviews
or their regulatory effect, but does not believe they will have a materially
adverse impact on CILCO's financial position or results of operations.
Other than these items, there are no material pending legal proceedings, or
proceedings known to be contemplated by governmental authorities, other than
ordinary routine litigation incidental to the business, to which the Company
is a party or of which any of the Company's property is the subject.
Item 4: Submission of Matters to a Vote of Security Holders
Shareholders cast the following votes at the Company's Annual Meeting of
Shareholders held April 26, 1994:
Abstentions &
Votes Against Broker
Votes for or Withheld Non-Votes
Elected to Board of
Directors:
W. Bunn III 10,771,474 273,076 0
H. J. Holland 10,737,219 313,354 0
M. Alexis 10,740,037 304,473 0
H. S. Peacock 10,806,600 236,609 0
R. N. Ullman 10,804,945 235,767 0
R. O. Viets 10,800,992 248,085 0
Appointment of
Independent Public
Accountants 10,772,616 144,936 139,843
Amend Bylaws and/or
Articles of
Incorporation to
establish a minimum
level of stock
ownership for directors 1,660,804 7,713,300 1,700,627
ITEM 5: OTHER INFORMATION
ELECTRIC COMPETITION
On April 20, 1994, the ICC adopted a "resolution recognizing the need for an
examination of changes in the structure of the electric energy industry." The
ICC has indicated it will begin a broad-based and open examination of the
purposes behind current utility laws and regulations in Illinois and whether
or not these laws and regulations should be modified in light of the expanding
presence of competitive market components within the electric energy industry.
CILCO intends to participate actively in the proceedings.
GAS RATE INCREASE REQUEST
On January 14, 1994, CILCO filed a request with the ICC to increase gas base
rates to reflect both the current costs of providing gas service and its
additional investment in the gas system, including the replacement of certain
portions of the Springfield gas distribution system (see Capital Resources and
Liquidity-CILCO). The revised rates are designed to increase annual gas
revenues approximately $15 million, or 8.9% based upon an adjusted test year
ended December 31, 1995. The filing requests a 9.4% return on original cost
rate base and a 12% return on common equity.
In April 1994, the ICC staff filed its testimony related to CILCO's gas rate
increase request. The testimony currently recommends that approximately $7.4
million of capital expenditures relating to the Springfield cast iron main
renewal program (see CILCO Gas Operations) be excluded from CILCO's gas rate
base. The amount of the proposed disallowance is subject to change. If the
ICC were to uphold the staff's proposed disallowance, Statement of Financial
Accounting Standards No. 90, "Regulated Enterprises - Accounting for
Abandonments and Disallowances of Plant Costs," would require CILCO to
recognize an expense equal to the amount excluded from rate base in the year
the disallowance becomes probable, less applicable income taxes. CILCO
strongly disagrees with the ICC staff position regarding this proposed
disallowance. Management cannot predict the outcome of CILCO's rate filing,
and accordingly has not recognized any of the proposed disallowance in the
accompanying financial statements. A decision from the ICC is not expected
until late 1994.
CILCO ELECTRIC OPERATIONS
On April 26, 1994, the United States Environmental Protection Agency issued a
Notice of Violation to CILCO regarding alleged violations of opacity emission
limits at Edwards Station for coal-fired boilers numbers 1 and 2. The Notice
of Violation is issued pursuant to Section 113(a)(1) of the Clean Air Act.
Management cannot currently determine the outcome of any actions related to
the alleged violations, but does not believe they will have a materially
adverse impact on CILCO's financial position or results of operations.
ESE OFFICER CHANGE
Effective April 1, 1994, Joseph F. Silvey was elected President and Chief
Operating Officer of ESE. Mr. Silvey had been Senior Vice President of ESE
since February 1993 and Chief Operating Officer of ESE since January 1994.
Ronald L. Rainson, former Chairman, President and Chief Executive Officer
continues as Chairman. A search will be conducted to fill the position of
Chief Executive Officer.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
(12) Central Illinois Light Company Computation of Ratios of Earnings to
Fixed Charges
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the regis-
trant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CILCORP Inc.
(Registrant)
Date May 11, 1994 R. O. Viets
R. O. Viets
President and
Chief Executive Officer
Date May 11, 1994 T. D.Hutchinson
T. D. Hutchinson
Controller
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the regis
trant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTRAL ILLINOIS LIGHT COMPANY
(Registrant)
Date May 11, 1994 T. S. Romanowski
T. S. Romanowski
Vice President and Chief
Financial Officer
Date May 11, 1994 R. L. Beetschen
R. L. Beetschen
Controller and Manager
of Accounting
CENTRAL ILLINOIS LIGHT COMPANY
Computation of Ratio of Earnings
to Fixed Charges
Twelve Months Ended
March 31, December 31,
1994 1993 1992 1991 1990 1989
(Thousands of Dollars)
Earnings, as defined:
Net Income $36,990 $37,678 $35,636 $44,231 $40,966 $44,430
Income Taxes 20,617 20,368 17,723 22,329 20,500 22,179
Fixed Charges, as below 25,923 26,335 25,130 24,295 24,095 24,540
------- ------- ------- ------- ------- -------
Total Earnings, as defined $83,530 $84,381 $78,489 $90,855 $85,561 $91,149
------- ------- ------- ------- ------- -------
Fixed Charges, as defined:
Interest on COLI $ 1,566 $ 1,434 $ 930 $ 870 $ 868 $ 798
Interest on Short-Term Debt 492 592 180 0 0 0
Interest on Long-Term Debt 19,475 19,753 20,747 21,285 21,399 21,968
Amortization of Debt Discount
& Expense and Premium 666 624 410 96 97 107
Miscellaneous Interest Expense 1,160 1,485 2,448 1,591 1,320 1,205
Interest Portion of Rentals 2,564 2,447 415 453 411 462
------- ------- ------- ------- ------- -------
Total Fixed Charges,
as defined $25,923 $26,335 $25,130 $24,295 $24,095 $24,540
======= ======= ======= ======= ======= =======
Ratio of Earnings to Fixed Charges 3.22 3.20 3.12 3.74 3.55 3.71
==== ==== ==== ==== ==== ====