UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 June 30, 1995
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; I.R.S. Employer
File Number Address; and Telephone Number Identification No.
___________ _____________________________ __________________
1-10628 CIPSCO INCORPORATED 37-1260920
(An Illinois Corporation)
607 East Adams Street
Springfield, Illinois 62739
217-523-3600
1-3672 CENTRAL ILLINOIS PUBLIC SERVICE COMPANY 37-0211380
(An Illinois Corporation)
607 East Adams Street
Springfield, Illinois 62739
217-523-3600
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 issuers'
classes of common stock, as of the latest practicable date:
CIPSCO INCORPORATED Common stock, no par value, 34,069,542
shares outstanding at July 31, 1995
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Common stock, no par value, 25,452,373
shares outstanding and held by
CIPSCO INCORPORATED at July 31, 1995
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CIPSCO INCORPORATED
AND
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1995
CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CIPSCO INCORPORATED
Consolidated Statements of Income 4
Consolidated Balance Sheets 5
Consolidated Statements of Cash Flows 6
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Statements of Income 7
Balance Sheets 8
Statements of Cash Flows 9
CONDENSED NOTES TO FINANCIAL STATEMENTS of
CIPSCO Incorporated and Central Illinois
Public Service Company 10 - 14
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations for CIPSCO Incorporated and
Central Illinois Public Service Company 15 - 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 21
Item 5. Other Information 21 - 24
Item 6. Exhibits and Reports on Form 8-K 24 - 25
Signatures 26 - 27
Exhibit Index 28
Exhibit 12 29
-2-
The unaudited interim financial statements presented herein
include the consolidated statements of CIPSCO Incorporated and
Subsidiaries ("Company") as well as separate financial statements
for Central Illinois Public Service Company ("CIPS"). The
unaudited statements have been prepared by the Company and CIPS,
respectively, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although the Company and CIPS believe the
disclosures are adequate to make the information presented not
misleading. Both the Company's consolidated financial statements
and the CIPS financial statements should be read in conjunction
with the financial statements and notes thereto included in the
combined Annual Report on Form 10-K of CIPSCO Incorporated and
CIPS for the year ended December 31, 1994.
In the opinion of the Company and CIPS, their respective interim
financial statements filed as part of this Form 10-Q reflect all
adjustments necessary to present fairly the results for the
respective periods. Due to the effect of weather and other
factors which are characteristic of CIPS' utility operations,
financial results for the periods ended June 30, 1995 and 1994
are not necessarily indicative of trends for any twelve-month
period.
This financial and other information is not given in connection
with any sale or offer to buy any security.
-3-
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
CIPSCO INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
For the Periods Ended June 30, 1995 and 1994
(in thousands except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
__________________ __________________
1995 1994 1995 1994
________ ________ ________ ________
Operating Revenues:
Electric......................... $163,500 $178,914 $316,688 $338,246
Gas.............................. 18,603 21,484 74,290 85,578
Investment....................... 1,841 2,107 3,428 4,303
________ ________ ________ ________
Total operating revenues...... 183,944 202,505 394,406 428,127
________ ________ ________ ________
Operating Expenses:
Fuel for electric generation..... 39,977 50,256 90,856 103,934
Purchased power.................. 19,132 16,152 26,238 26,100
Gas costs........................ 8,937 12,011 43,069 54,613
Other operation.................. 35,012 35,193 76,536 73,061
Maintenance...................... 18,467 16,409 30,672 31,003
Depreciation and amortization.... 20,674 20,037 41,275 40,449
Taxes other than income taxes.... 12,587 12,948 28,349 29,178
________ ________ _______ ________
Total operating expenses...... 154,786 163,006 336,995 358,338
________ ________ _______ ________
Operating Income................... 29,158 39,499 57,411 69,789
________ ________ _______ ________
Interest and Other Charges:
Interest on long-term debt of
subsidiary....................... 8,160 8,215 16,298 16,567
Other interest charges........... (39) 17 360 (3)
Allowance for funds used during
construction..................... (223) (461) (408) (485)
Preferred stock dividends of
subsidiary....................... 971 851 1,939 1,679
Miscellaneous, net............... (1,022) (671) (1,337) (1,791)
________ ________ _______ ________
Total interest and other
charges....................... 7,847 7,951 16,852 15,967
________ ________ _______ ________
Income Before Income Taxes......... 21,311 31,548 40,559 53,822
________ ________ ________ ________
Income Taxes....................... 8,425 12,003 15,105 20,518
________ ________ ________ ________
Net Income......................... $ 12,886 $ 19,545 $ 25,454 $ 33,304
======== ======== ======== ========
Average Shares of Common Stock
Outstanding........................ 34,070 34,108 34,070 34,108
Earnings per Average Share of
Common Stock....................... $ .38 $ .57 $ .75 $ .98
The accompanying condensed notes to financial statements are an integral
part of these statements.
-4-
CIPSCO INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1995 and December 31, 1994
(in thousands)
June 30, December 31,
1995 1994
___________ ____________
(unaudited)
ASSETS
Utility Plant, at original cost:
Electric.......................... $2,275,172 $2,264,930
Gas............................... 222,140 220,347
__________ __________
2,497,312 2,485,277
Less-Accumulated depreciation..... 1,101,169 1,077,533
__________ __________
1,396,143 1,407,744
Construction work in progress..... 46,899 31,816
__________ __________
1,443,042 1,439,560
__________ __________
Current Assets:
Cash.............................. 1,614 1,963
Temporary investments, at cost
which approximates market......... 14,116 5,875
Accounts receivable, net.......... 55,567 67,579
Accrued unbilled revenues......... 21,671 30,484
Materials and supplies, at average
cost.............................. 40,430 39,817
Fuel for electric generation, at
average cost...................... 46,103 30,305
Gas stored underground, at average
cost.............................. 9,382 13,167
Prepayments....................... 12,717 10,925
__________ __________
201,600 200,115
__________ __________
Investments and Other Assets:
Investment in marketable
securities........................ 45,769 43,929
Investment in leveraged leases.... 50,997 49,933
Other............................. 44,643 43,820
__________ __________
141,409 137,682
__________ __________
$1,786,051 $1,777,357
========== ==========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholders' equity....... $ 640,206 $ 649,230
Unrealized investment gains
(losses), net................... 161 (1,617)
Preferred stock of subsidiary..... 80,000 80,000
Long-term debt of subsidiary...... 479,770 459,619
__________ __________
1,200,137 1,187,232
__________ __________
Current Liabilities:
Long-term debt of subsidiary due
within one year................... - 15,000
Short-term borrowings............. 12,793 14,985
Accounts payable.................. 48,763 54,021
Accrued wages..................... 13,467 9,833
Accrued taxes..................... 14,882 12,629
Accrued interest.................. 9,452 9,408
Other............................. 44,974 31,488
__________ __________
144,331 147,364
__________ __________
Deferred Credits:
Accumulated deferred income taxes. 316,963 313,072
Investment tax credits............ 53,914 55,595
Regulatory liabilities, net....... 70,706 74,094
__________ __________
441,583 442,761
__________ __________
$1,786,051 $1,777,357
========== ==========
The accompanying condensed notes to financial statements are an
integral part of these statements.
-5-
CIPSCO INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Periods Ended June 30, 1995 and 1994
(in thousands)
(unaudited)
Six Months Ended
June 30,
______________________
1995 1994
__________ __________
Operating Activities:
Net income.............................. $ 25,454 $ 33,304
Adjustments to reconcile net income
to net cash provided:
Depreciation and amortization......... 41,275 40,449
Allowance for equity funds used during
construction (AFUDC).................. (377) (332)
Deferred income taxes, net............ 2,619 4,851
Investment tax credit amortization.... (1,681) (1,684)
Cash flows impacted by changes in assets
and liabilities:
Accounts receivable, net and accrued
unbilled revenues..................... 20,825 736
Fuel for electric generation.......... (15,798) (3,132)
Other inventories..................... 3,172 2,920
Prepayments........................... (1,792) 474
Other assets.......................... (823) 4,618
Accounts payable and other............ 8,228 5,666
Accrued wages, taxes and interest..... 5,931 11,118
Other................................... (4,078) (774)
_________ _________
Net cash provided by operating
activities............................ 82,955 98,214
_________ _________
Investing Activities:
Utility construction expenditures,
excluding AFUDC......................... (42,162) (39,969)
Allowance for borrowed funds used
during construction..................... (31) (153)
Change in temporary investments......... (8,241) (1,953)
Long-term investment in marketable
securities.............................. (62) (1,355)
Long-term investment in leveraged
leases.................................. (1,064) (1,753)
_________ _________
Net cash used in investing activities. (51,560) (45,183)
_________ _________
Financing Activities:
Common stock dividends paid............. (34,410) (33,767)
Proceeds from issuance of long-term
debt of subsidiary...................... 20,000 -
Repayment of long-term debt of
subsidiary.............................. (15,000) (20,000)
Repayment of short-term borrowings...... (2,192) -
Issuance expense, discount and premium.. (142) 11
_________ _________
Net cash used in financing activities. (31,744) (53,756)
_________ _________
Net decrease in cash.................... (349) (725)
Cash at beginning of period............. 1,963 4,630
_________ _________
Cash at end of period................... $ 1,614 $ 3,905
========= =========
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest, net of amounts capitalized.. $ 15,497 $ 15,605
Income taxes.......................... $ 15,128 $ 11,053
The accompanying condensed notes to financial statements are an
integral part of these statements.
-6-
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Statements of Income
For the Periods Ended June 30, 1995 and 1994
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
__________________ __________________
1995 1994 1995 1994
________ ________ ________ ________
Operating Revenues:
Electric......................... $163,506 $178,920 $316,701 $338,261
Gas.............................. 18,604 21,486 74,292 85,581
________ ________ ________ ________
Total operating revenues...... 182,110 200,406 390,993 423,842
________ ________ ________ ________
Operating Expenses:
Fuel for electric generation..... 39,977 50,256 90,856 103,934
Purchased power.................. 19,132 16,152 26,238 26,100
Gas costs........................ 8,937 12,011 43,069 54,613
Other operation.................. 34,708 34,902 75,844 72,385
Maintenance...................... 18,467 16,408 30,672 31,001
Depreciation and amortization.... 20,554 19,878 41,034 40,185
Taxes other than income taxes.... 12,575 12,940 28,326 29,156
Income taxes:
Current........................ 7,097 11,526 16,604 19,936
Deferred, net.................. 1,630 887 (712) 1,262
Deferred investment tax
credits, net................... (840) (842) (1,681) (1,683)
________ ________ ________ ________
Total operating expenses...... 162,237 174,118 350,250 376,889
________ ________ ________ ________
Operating Income................... 19,873 26,288 40,743 46,953
________ ________ ________ ________
Other Income and Deductions:
Allowance for equity funds used
during construction.............. 206 316 377 332
Nonoperating income taxes........ (553) (173) (820) (487)
Miscellaneous, net............... 1,185 818 1,699 2,150
________ ________ ________ ________
Total other income and
deductions.................... 838 961 1,256 1,995
________ ________ ________ ________
Income Before Interest Charges..... 20,711 27,249 41,999 48,948
________ ________ ________ ________
Interest Charges:
Interest on long-term debt....... 8,160 8,215 16,298 16,567
Other interest charges........... (56) 21 337 4
Allowance for borrowed funds used
during construction.............. (17) (145) (31) (153)
________ ________ ________ ________
Total interest charges....... 8,087 8,091 16,604 16,418
________ ________ ________ ________
Net Income......................... 12,624 19,158 25,395 32,530
Preferred Stock Dividends.......... 971 851 1,939 1,679
________ ________ ________ ________
Earnings for Common Stock.......... $ 11,653 $ 18,307 $ 23,456 $ 30,851
======== ======== ======== ========
The accompanying condensed notes to financial statements are an integral
part of these statements.
-7-
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
Balance Sheets
June 30, 1995 and December 31, 1994
(in thousands)
June 30, December 31,
1995 1994
___________ ____________
(unaudited)
ASSETS
Utility Plant, at original cost:
Electric......................... $2,275,172 $2,264,930
Gas.............................. 222,140 220,347
__________ __________
2,497,312 2,485,277
Less-Accumulated depreciation.... 1,101,169 1,077,533
__________ __________
1,396,143 1,407,744
Construction work in progress.... 46,899 31,816
__________ __________
1,443,042 1,439,560
__________ __________
Current Assets:
Cash............................. 1,500 1,320
Temporary investments, at cost
which approximates market........ 4,215 2,593
Accounts receivable, net......... 55,672 67,686
Accrued unbilled revenues........ 21,671 30,484
Materials and supplies, at average
cost............................. 40,430 39,817
Fuel for electric generation, at
average cost..................... 46,103 30,305
Gas stored underground, at average
cost............................. 9,382 13,167
Prepayments...................... 12,034 10,839
__________ __________
191,007 196,211
__________ __________
Other Assets....................... 43,784 42,879
__________ __________
$1,677,833 $1,678,650
========== ==========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common shareholder's equity...... $ 563,133 $ 574,745
Preferred stock.................. 80,000 80,000
Long-term debt................... 479,770 459,619
__________ __________
1,122,903 1,114,364
__________ __________
Current Liabilities:
Long-term debt due within one
year............................. - 15,000
Short-term borrowings............ 12,793 14,985
Accounts payable................. 48,025 53,900
Accrued wages.................... 13,467 9,833
Accrued taxes.................... 14,019 12,963
Accrued interest................. 9,452 9,408
Other............................ 44,974 31,488
__________ __________
142,730 147,577
__________ __________
Deferred Credits:
Accumulated deferred income
taxes............................ 287,580 287,020
Investment tax credits........... 53,914 55,595
Regulatory liabilities, net...... 70,706 74,094
__________ __________
412,200 416,709
__________ __________
$1,677,833 $1,678,650
========== ==========
The accompanying condensed notes to financial statements are an
integral part of these statements.
-8-
Central Illinois Public Service Company
Statements of Cash Flows
For the Periods Ended June 30, 1995 and 1994
(in thousands)
(unaudited)
Six Months Ended
June 30,
______________________
1995 1994
__________ __________
Operating Activities:
Net income.............................. $ 25,395 $ 32,530
Adjustments to reconcile net income
to net cash provided:
Depreciation and amortization......... 41,034 40,185
Allowance for equity funds used during
construction (AFUDC).................. (377) (332)
Deferred income taxes, net............ (712) 3,131
Investment tax credit amortization.... (1,681) (1,684)
Cash flows impacted by changes in assets
and liabilities:
Accounts receivable, net and accrued
unbilled revenues..................... 20,827 773
Fuel for electric generation.......... (15,798) (3,132)
Other inventories..................... 3,172 2,920
Prepayments........................... (1,195) 218
Other assets.......................... (905) 4,437
Accounts payable and other............ 7,611 5,227
Accrued wages, taxes and interest..... 4,734 9,685
Other................................... (3,837) (511)
_________ _________
Net cash provided by operating
activities............................ 78,268 93,447
_________ _________
Investing Activities:
Construction expenditures, excluding
AFUDC................................... (42,162) (39,969)
Allowance for borrowed funds used during
construction............................ (31) (153)
Changes in temporary investments........ (1,622) (1,046)
_________ _________
Net cash used in investing activities. (43,815) (41,168)
_________ _________
Financing Activities:
Proceeds from issuance of long-term
debt.................................... 20,000 -
Repayment of long-term debt............. (15,000) (20,000)
Repayment of short-term borrowings...... (2,192) -
Dividends paid:
Preferred stock....................... (1,939) (1,679)
Common stock.......................... (35,000) (34,200)
Issuance expense, discount and premium.. (142) 11
_________ _________
Net cash used in financing activities. (34,273) (55,868)
_________ _________
Net increase (decrease) in cash......... 180 (3,589)
Cash at beginning of period............. 1,320 4,038
_________ _________
Cash at end of period................... $ 1,500 $ 449
========= =========
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest, net of amounts capitalized.. $ 15,497 $ 15,605
Income taxes.......................... $ 18,829 $ 14,047
The accompanying condensed notes to financial statements are an
integral part of these statements.
-9-
CIPSCO INCORPORATED AND SUBSIDIARIES
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
(unaudited)
Note 1. GENERAL
________________
The consolidated financial statements presented herein include
the accounts of CIPSCO INCORPORATED (CIPSCO), CENTRAL ILLINOIS
PUBLIC SERVICE COMPANY (CIPS), and CIPSCO INVESTMENT COMPANY AND
SUBSIDIARIES (CIC). CIPSCO and Subsidiaries are referred to as
the "Company." CIPSCO has two first-tier subsidiaries: CIC, an
investment subsidiary, and CIPS, an electric and gas public
utility. Prior year amounts have been reclassified on a basis
consistent with the June 30, 1995 presentation.
The financial statements of CIPS, a subsidiary of CIPSCO, include
only the accounts of CIPS. Prior year amounts have been
reclassified on a basis consistent with the June 30, 1995
presentation.
Note 2. COMMITMENTS AND CONTINGENCIES
______________________________________
ENVIRONMENTAL REMEDIATION COSTS - CIPS and certain of its
predecessors and other affiliates operated facilities in the past
for manufacturing gas from coal. In connection with
manufacturing gas, various by-products were produced, some of
which remain on sites where the facilities were located. CIPS
has identified 13 of these former manufactured gas plant sites
(environmental remediation sites) which contain potentially
harmful materials. Under directives from the Illinois
Environmental Protection Agency (IEPA), CIPS has incurred costs
and associated legal expenses related to the investigation and
remediation of the sites.
One site was added to the United States Environmental Protection
Agency (USEPA) Superfund list on August 30, 1990. On September
30, 1992 the IEPA, in consultation with the USEPA, decided that
the long-term remedial plan for this site should consist of a
ground-water pump-and-treat program. The IEPA and CIPS entered
into an agreement, which received required court approval on
March 14, 1994, for CIPS to carry out the remedial action with
the IEPA providing oversight. It is not known at this time what
specific remedial action will be required at the other 12 sites.
In 1987, CIPS filed a lawsuit against a number of insurance
carriers seeking full indemnification for all costs in connection
with certain environmental sites. On May 10, 1995, the Illinois
-10-
Supreme Court denied CIPS' petition for leave to appeal its
decision upholding an Illinois Appellate Court reversal of a
circuit court verdict in favor of CIPS. As of the date of this
filing, lawsuits against all insurance carriers have either been
settled or dismissed.
The estimated incurred costs relating to studies and remediation
at these 13 sites and associated legal expenses are being accrued
and deferred rather than expensed currently, pending recovery
through rates, or from other parties. At June 30, 1995, $40.8
million has been deferred representing costs incurred and
estimates for costs of completing studies at various sites and an
estimate of remediation costs at the Superfund site. The total
of the costs deferred, net of recoveries from insurers and
through rate riders described below, was $3.4 million at June 30,
1995.
In 1992, the Illinois Commerce Commission (the "Illinois
commission") issued an Order (the "Generic Order") in its
consolidated generic proceeding regarding appropriate ratemaking
treatment of cleanup costs incurred by Illinois utilities with
respect to environmental remediation sites. The Generic Order
indicates that allowed cleanup costs may include prudently
incurred costs of investigation, assessment and cleanup of
environmental remediation sites, as well as litigation costs,
including those involved in insurance recovery claims. The
Generic Order authorizes utilities, including CIPS, to propose a
mechanism to recover cleanup costs which is consistent with the
provisions of the Generic Order. Such a mechanism must, among
other things, provide for (1) recovery of cleanup costs over a
five-year period, excluding carrying costs associated with the
unrecovered balance of cleanup costs from the time that the
recovery mechanism becomes effective; (2) a return to ratepayers
over a five-year amortization period of any reimbursement of
cleanup costs received from insurance carriers or other parties;
and (3) a prudence review of each utility's expenditures. The
Generic Order was upheld on appeal by the Third District Illinois
Appellate Court. That decision held that a rate rider mechanism
is an appropriate means for utilities to recover cleanup costs.
The matter was appealed to the Illinois Supreme Court which, in
April 1995, issued an opinion which held that (i) clean-up costs
are recoverable in rates; and (ii) use of a rider mechanism for
recovery of such costs is appropriate. The Court also held that
the evidence in the generic proceeding did not support the
Illinois commission's decision to deny recovery of carrying costs
associated with the unrecovered balance of clean-up costs.
Accordingly, the Supreme Court reversed the Generic Order of the
Illinois commission with regard to the recovery of carrying costs
and remanded the case to the Illinois commission for further
proceedings consistent with the Court's opinion. The Illinois
commission has instituted such proceedings. Management cannot
predict what further action the Illinois commission will take.
-11-
On March 26, 1993, the Illinois commission approved CIPS'
proposed environmental cost-recovery rate riders, effective with
April 1993 billings to customers. Known as the electric
environmental adjustment clause and the gas environmental
adjustment clause, the riders are designed to enable CIPS to
recover from its customers costs associated with cleanup of the
environmental remediation sites, along with associated legal
expenses, over a five year period on terms consistent with the
Generic Order. The environmental adjustment clause riders
provide for an annual review of amounts recovered through the
riders. Amounts found to have been incorrectly included would be
subject to refund. Through December 31, 1993, CIPS had collected
$2.9 million from its customers pursuant to the riders. Pursuant
to monthly filings made by CIPS under the riders, no additional
amounts have been collected from customers under the riders since
January 1994. On April 6, 1994, the Illinois commission
initiated a reconciliation proceeding to review CIPS'
environmental remediation activities and determine whether the
revenues collected by the riders in 1993 is consistent with the
amount of remediation costs prudently incurred. CIPS has filed
testimony and provided data to the Illinois commission regarding
the reconciliation proceeding. A status hearing is scheduled for
August 1995.
The total costs to be incurred for the cleanup of these sites or
the possible recovery from other parties cannot be estimated.
Management believes that any costs incurred in connection with
the sites that are not recovered from insurance carriers or other
parties will be recovered through utility rates. Accordingly,
management believes that costs incurred in connection with these
sites will not have a material adverse effect on the financial
position or results of operations of the Company or CIPS.
FERC ORDER 636 - During 1992, the Federal Energy Regulatory
Commission ("FERC") issued Order No. 636. This and successor
orders have resulted in substantial restructuring of the service
obligations of interstate pipeline suppliers. Order 636 provided
mechanisms for pipelines to recover transition costs associated
with the restructuring. CIPS has paid substantially all direct
transition costs associated with the pipeline restructuring and
is currently recovering all transition costs in its rates. Any
future transition costs identified and billed from pipeline
suppliers are expected to be recoverable from customers of CIPS.
FERC PROPOSES RULEMAKING TO CREATE OPEN ACCESS TRANSMISSION
SERVICE - In March 1995, the FERC issued a notice of proposed
rulemaking (NOPR) through which the FERC intends to require all
utilities subject to its jurisdiction to provide electric
transmission service on a non-discriminatory basis to all
interested parties. Under the NOPR as currently proposed the
"open access" tariffs which will likely result will be designed
to provide transmission access to other utility systems on a
basis comparable to the way a utility utilizes its own electric
-12-
system. The proposed rules are designed to increase competition
in bulk power markets. CIPS cannot predict when FERC will take
final action on the NOPR or whether it will be adopted in its
present form. The utility does not anticipate that operating
revenues or expenses will change materially as a result of the
NOPR. Accordingly, management believes that the NOPR will not
have a material adverse effect on financial position or results
of operations of the Company or CIPS.
CLEAN AIR ACT - CIPS' current compliance strategy to meet Phase I
and II of the sulfur dioxide emission reduction requirements of
the Clean Air Act Amendments of 1990 (Amendments) is to switch to
a lower sulfur coal at some of its units along with increased
scrubbing with its existing scrubber at Newton Unit 1. The
currently estimated capital costs of compliance based on the
current strategy are included in the five-year construction
forecast. The forecast has an estimate of $40 million for
environmental compliance including compliance with regulations
under the Clean Air Act. However, the five-year construction
costs may increase if studies being undertaken by CIPS indicate
that renovations to the Newton Unit 1 scrubber are required to
allow existing or additional levels of scrubbing or if such
studies indicate that CIPS should change its compliance strategy
to place more reliance on fuel switching.
In 1991, in accordance with the plan to switch some units to
lower sulfur coal, CIPS signed a long-term coal contract with an
existing supplier for lower sulfur Illinois coal. Due to the
magnitude of the supplier's capital investment, the contract
includes a graduated termination charge. In 1995, CIPS can
terminate the contract under certain conditions, and CIPS would
be required to pay approximately $41 million (plus an inflation
adjustment) in termination charges. During 1995, and each
subsequent year, the termination charge is reduced according to a
formula using tons of coal purchased. The termination charge
would not be effective if CIPS terminated the contract due to
failure of the coal to meet quality specifications provided for
in the contract.
LABOR DISPUTES - The International Union of Operating Engineers
Local 148 and the International Brotherhood of Electrical Workers
Local 702 have both filed unfair labor practice charges with the
National Labor Relations Board (NLRB) relating to the legality of
the lockout by CIPS of both unions during 1993. The Peoria
Regional Office of the NLRB has issued complaints against CIPS
concerning its lockout of both unions. Both unions seek, among
other things, back pay and other benefits for the period of the
lockout. CIPS estimates the amount of back pay and other
benefits for both unions to be less than $12 million dollars. A
hearing, before an administrative law judge of the NLRB, was
completed on April 25, 1995. Management believes the lockout was
both lawful and reasonable and that the final resolution of the
disputes will not have a material adverse effect on financial
position or results of operations of the Company or CIPS.
-13-
OTHER ISSUES - CIPS is involved in other legal and administrative
proceedings before various courts and agencies with respect to
rates, taxes, gas and electric fuel cost reconciliations, service
area disputes, environmental torts and other matters. Although
unable to predict the outcome of these matters, management
believes that appropriate liabilities have been established and
that final disposition of these actions will not have a material
adverse effect on financial position or results of operations of
the Company or CIPS.
Note 3. SFAS NO. 121
_____________________
Statement of Financial Accounting Standards (SFAS)No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of, which was issued in March 1995
and will be effective on January 1, 1996, establishes accounting
standards for the impairment of long-lived assets. The SFAS also
requires that regulatory assets which are no longer probable of
recovery through future revenue be charged to earnings. SFAS No.
121 is not expected to have an impact on the financial position
or results of operations of the Company or CIPS upon adoption.
Note 4. VOLUNTARY SEPARATION PROGRAM
_____________________________________
Early in 1995, the Company offered a voluntary separation program
to most of its salaried employees, which was accepted by 151
employees in February 1995. The Company recorded a $6.3 million
one-time charge in the first quarter of 1995 for separation
benefits to be provided under the program. The one-time charge
reduced first quarter 1995 earnings by 11 cents per share. The
Company estimates that the payback period resulting from reduced
operating expenses attributable to the program will be
approximately two years.
Note 5. MERGER AGREEMENT
_________________________
On August 11, 1995, the Company entered into an Agreement and
Plan of Merger (the "Merger Agreement") with Union Electric
Company ("UE"). The Merger Agreement provides for the merger of
the Company with a new holding company, Arch Holding Corp., a
Missouri corporation ("Arch Holding") and the merger of UE with a
subsidiary of Arch Holding with the result that UE and CIPS will
be subsidiaries of Arch Holding. The transactions contemplated
by the Merger Agreement are subject to shareholder and regulatory
approvals. Under the Merger Agreement each outstanding share of
UE common stock will be converted into the right to receive one
share of common stock of Arch Holding and each outstanding share
of CIPSCO common stock will be converted into the right to
receive 1.03 shares of common stock of Arch Holding. Further
information concerning the Merger Agreement is contained in Item
5 - Other Information in this Form 10-Q.
-14-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion and analysis of financial condition and
results of operations is for CIPSCO Incorporated and Subsidiaries
("Company") unless otherwise stated.
THE OUTLOOK
CIPS currently estimates that its total construction expenditures
for the 1995-1999 period will be about $449 million, including
about $7 million of allowance for funds used during construction.
In addition to funds for construction, projected capital
requirements for the remainder of 1995 and for the 1996-1999
period include $108 million for scheduled debt retirements.
Capital requirements for the 1995-1999 period are expected to be
met primarily through internally generated funds. External
financing to fund scheduled debt retirements may be required.
Included in the 5-year construction forecast is an estimate of
$40 million for environmental compliance, including compliance
with regulations under the Clean Air Act Amendments of 1990.
CIPS is evaluating alternatives for reducing fuel costs and other
expenses while maintaining environmental compliance. Maintaining
the current compliance strategy, or adoption of certain
alternatives in fuel and/or environmental strategies, could
result in substantial increases in capital expenditures in the
1995-1999 period from the amounts shown above. Additional
external financing could be required.
On June 9, 1995 CIPS issued $20 million First Mortgage Bonds,
Medium-Term Note Series 1995-1, 6.49%, due June 1, 2005. The
proceeds of this issue together with other funds were used for
general corporate purposes, including replacement of funds used
to pay at maturity the Company's $10,000,000 First Mortgage
Bonds, Series I, 4-1/2%, due May 1, 1993 and $20,000,000 First
Mortgage Bonds, Series J, 4-1/2%, due May 1, 1994. CIPS has an
effective shelf registration statement on file with the
Securities and Exchange Commission which permits the issuance
of an aggregate of up to $30 million of first mortgage bonds,
medium-term notes and/or preferred stock. Other financing under
the shelf will be for general corporate purposes including
replacing funds used to pay the $15,000,000 First Mortgage Bonds,
Series K, 4-5/8%, due June 1, 1995.
-15-
FINANCIAL CONDITION
Financial condition and changes in total Shareholder Equity of
the Company and CIPS for the six-month periods ended June 30,
1995 and 1994 are as follows:
Six Months Ended
June 30,
________________________
(in thousands)
The Company: 1995 1994
_________ _________
Common Shareholders' Equity
Net income $ 25,454 $ 33,304
Common stock dividends paid (34,410) (33,767)
Other 1,710 (789)
________ ________
Change in Shareholders' Equity $ (7,246) $ (1,252)
======== ========
Six Months Ended
June 30,
________________________
(in thousands)
CIPS: 1995 1994
_________ _________
Common Shareholder's Equity
Earnings for common stock $ 23,456 $ 30,851
Common stock dividends paid (35,000) (34,200)
Other (68) (52)
________ ________
Change in Shareholder's Equity $(11,612) $ (3,401)
======== ========
-16-
OVERVIEW
The Company's earnings per share were $.38 for the quarter ended
June 30, 1995, compared to $.57 per share earned during the same
period in 1994. The decline primarily reflects lower electric
sales due to mild weather in the second quarter this year
compared to hotter-than-normal conditions a year ago, and lower
revenues from wholesale supply agreements due to the expiration
at year-end 1994 of a portion of a power supply agreement with a
wholesale electric customer. The Company's earnings per share
were $.75 for the six months ended June 30, 1995, compared to
$.98 per share earned during the same period in 1994. The
decrease reflects the previously mentioned milder weather, power
supply agreement expiration, and the one-time cost of a voluntary
separation program.
The following table summarizes the components of consolidated net
income and CIPS earnings for common stock for both the three and
six month periods ended June 30, 1995 and 1994 (see Results of
Operations for further discussion). In this table, electric
operating margin equals electric operating revenues less revenue
taxes, fuel for electric generation and purchased power. Gas
operating margin equals gas operating revenues less revenue taxes
and gas costs.
Second Quarter Six Months Ended
Ended June 30, June 30,
__________________ __________________
1995 1994 1995 1994
________ ________ ________ ________
CIPS
Electric operating
margin $ 99,236 $106,986 $188,449 $196,808
Gas operating margin 8,506 8,062 26,618 25,744
Other deductions and
interest expenses (95,118) (95,890) (189,672) (190,022)
CIPS preferred stock
dividends (971) (851) (1,939) (1,679)
________ ________ ________ ________
Total earnings
for common stock 11,653 18,307 23,456 30,851
________ ________ ________ ________
NON-UTILITY
Investment revenues 1,676 1,958 3,059 3,983
Other deductions
and expenses (443) (720) (1,061) (1,530)
________ ________ ________ ________
Total non-utility
net income 1,233 1,238 1,998 2,453
________ ________ ________ ________
Consolidated net
income $ 12,886 $ 19,545 $ 25,454 $ 33,304
======== ======== ======== ========
-17-
RESULTS OF OPERATIONS
The results of operations of the Company and CIPS for the three
and six months ended June 30, 1995, compared to the same period
in 1994 are presented below.
The Company
Net Income
(in thousands) Earnings Per Share
________________________ ________________________
Three Months Six Months Three Months Six Months
____________ __________ ____________ __________
1995 $12,886 $25,454 $ .38 $ .75
1994 19,545 33,304 .57 .98
_______ _______ _____ _____
Decrease $(6,659) $(7,850) $(.19) $(.23)
======= ======= ===== =====
Percent
Decrease (34)% (24)% (33)% (23)%
CIPS
Earnings for Common Stock
(in thousands)
__________________________________
Three Months Six Months
____________ __________
1995 $11,653 $23,456
1994 18,307 30,851
_______ _______
Decrease $(6,654) $(7,395)
======= =======
Percent
Decrease (36)% (24)%
OPERATING REVENUES
The changes in electric and gas revenues described below are for
the Company. The only differences between changes in electric
and gas operating revenues for the Company and for CIPS are
intercompany revenues that are eliminated in the consolidated
financial statements. These intercompany amounts are immaterial.
Electric revenues decreased 9% in the second quarter of 1995
compared to the same period in 1994 due to fewer KWH sales caused
by milder weather and lower revenues from power supply agreements
due to expiration at year-end 1994 of a portion of a power supply
agreement with a wholesale electric customer. In addition,
-18-
interchange revenues were down, even though KWH sales increased,
due to lower sales prices on interchange sales in the second
quarter of 1995 compared to the same quarter in 1994.
Electric revenues decreased 6% in the first six months of 1995
compared to the same period in 1994 due to fewer KWH sales caused
by the milder weather and lower revenues due to the expiration of
the power supply agreement discussed previously. In addition,
interchange sales decreased and the sales prices on interchange
sales were lower for the first six months of 1995 compared to
1994 due to changing market conditions between the periods.
These reductions in revenues were partially offset by an increase
in public authority and other revenues due to the inclusion in
this category, in 1995, of gains on the disposition of clean air
emissions credits which are included in revenues. However, these
gains are returned to customers through the fuel adjustment
clause.
The changes in electric revenue and KWH sales are shown below:
CHANGES IN ELECTRIC REVENUE AND KILOWATTHOUR SALES
INCREASE (DECREASE) FROM PRIOR YEAR
(in thousands)
____________________________________________________________________
Second Quarter Six Months
_________________________________ _________________________________
Revenue Rev % KWH KWH % Revenue Rev % KWH KWH %
________ _____ _________ _____ ________ _____ _________ _____
Residential $ (3,447) (7)% (21,234) (4)% $ (1,952) (2)% (39,019) (3)%
Commercial (5,529) (11) (57,425) (8) (3,396) (4) (30,746) (2)
Industrial (1,820) (6) 23,755 4 (1,846) (3) ( 1,372) -
Public Authorities
and Other 835 24 223 1 2,471 36 4,674 6
________ _______ ________ ________
Total Retail $ (9,961) (7)% (54,681) (3)% $ (4,723) (2)% (66,463) (2)%
Power Supply
Agreements $ (3,766) (20)% (65,464) (18)% $ (6,043) (16)% (107,983) (14)%
Interchange Sales
(economy/emergency) (1,087) (5) 179,767 18 (9,867) (26) (110,237) (6)
Cooperatives and
Municipals (600) (11) (5,088) (4) (925) (8) (7,821) (3)
________ _______ ________ ________
Total Sales for
Resale $ (5,453) (12)% 109,215 7 % $(16,835) (19)% (226,041) (8)%
________ _______ ________ ________
Total $(15,414) (9)% 54,534 2 % $(21,558) (6)% (292,504) (4)%
======== ========= ======== ========
-19-
Gas revenues decreased 13% for both the second quarter and the
first six months of 1995 compared to the same period in 1994 due
primarily to milder weather in 1995 and lower purchased gas
costs. Gas transportation revenues decreased 10% in the second
quarter and 7% in the first six months of 1995 even though therms
transported increased 14% for the second quarter and 4% in the
first six months of 1995. The increase in transported therms and
reduced revenue in 1995 is principally due to a change in the
method of billing one large customer where revenues were reduced
with corresponding reductions in amounts charged to gas costs.
The changes in gas revenues and therm sales are shown below.
CHANGES IN GAS REVENUE AND THERM SALES
INCREASE (DECREASE) FROM PRIOR YEAR
(in thousands)
____________________________________________________________________
Second Quarter Six Months
_________________________________ _________________________________
Therms Therms
Revenue Rev % Therms % Revenue Rev % Therms %
________ _____ _________ ______ ________ _____ _________ ______
Residential $ (1,145) (9)% (136) (1)% $ (5,304) (10)% (8,104) (9)%
Commercial (569) (14) (311) (5) (2,562) (14) (3,770) (11)
Industrial (984) (37) (1,886) (26) (3,071) (41) (7,330) (36)
Transportation (160) (10) 3,645 14 (271) (7) 2,577 4
Miscellaneous (23) (20) - - (80) 23 - -
________ ______ ________ ________
Total $ (2,881) (13)% 1,312 2 % $(11,288) (13)% (16,627) (8)%
======== ====== ======== ========
OPERATIONS
__________
Fuel for electric generation declined 20% for the second quarter
and 13% for the first six months of 1995 compared to the same
periods of 1994. The declines correspond to lower sales levels.
Purchased power increased 18% for the second quarter and 1% for
the first six months compared with the same periods in 1994
reflecting greater purchases made for resale to interchange
economy and emergency customers.
Gas costs declined 26% for the second quarter and 21% for the
first six months when compared to the same periods in 1994 due to
declines in gas requirements for the CIPS system resulting from
milder weather and because of a substantially lower average cost
per therm.
Other operation expenses in the second quarter of 1995 were
comparable with 1994, but increased 5% for the first six months
of 1995 compared to the same periods of 1994. The major reason
for the increase in the first six months was a $6.3 million
charge recognized in the first quarter relating to the voluntary
separation program. This charge was partially offset by reduced
operating expenses in the first six months.
-20-
Maintenance expenses increased 13% in the second quarter of 1995
and declined 1% for the first six months of 1995 compared to the
same periods of 1994 due to the timing of major maintenance
projects scheduled in the first half of 1995.
Depreciation and amortization expense increased 3% in the second
quarter and 2% for the first six months of 1995 when compared to
1994 due to normal plant additions.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
(1) Reference is made to the fourth paragraph under Item 3.
Legal Proceedings in Part I on page 25 in the CIPSCO
and CIPS combined 1994 Annual Report on Form 10-K (the
"1994 Form 10-K") for information regarding the
settlement agreement dismissing legal claims and other
matters brought against CIPS by Soyland Power
Cooperative ("Soyland") and certain of its distribution
cooperative customers. On May 22, 1995, the settlement
agreement was executed by all parties. The courts have
dismissed the suits and the settlement by CIPS to
Soyland took place in July 1995.
(2) Reference is made to the fifth paragraph under Item 3.
Legal Proceedings in Part I on page 25 in the 1994 Form
10-K for information regarding the May and Hryhorysak
v. Central Illinois Public Service Company and Hanson
Engineers, Inc. complaint. Trial date has been set for
March 1996. CIPS is vigorously defending the action
and believes it has meritorious defenses. Management
believes that final disposition of this matter will not
have a material adverse effect on financial position or
results of operations of the Company or CIPS.
(3) CIPS received a Notice of Tax Liability and Correction
of Return dated June 23, 1995 from the Illinois
Department of Revenue claiming that CIPS owes $2.5
million in invested capital tax, penalty and interest
on a liability for revenue the utility collected
subject to refund during the years 1990, 1991 and 1992.
CIPS plans on filing a protest to this notice and
believes that no additional tax is owed.
Item 5. Other Information
(1) In May 1995 the Illinois General Assembly passed a
resolution establishing a Joint Committee of the House
and Senate for the purpose of developing legislative
proposals for reducing regulation, increasing customer
choice and promoting and facilitating competition in
Illinois' electric utility industry. A progress report
from the Joint Committee is expected in December 1995
followed by a final legislative proposal to be
delivered to the General Assembly in November 1996.
-21-
(2) Reference is made to paragraph 7 under Item 5. Other
Information in Part II on page 21 of the CIPSCO and
CIPS combined Form 10-Q Quarterly Report for the
quarter ended March 31, 1995 ("First Quarter 1994 Form
10-Q") concerning legislative action with regard to
retail competition in the electric utility industry.
In July 1995, the Governor signed Senate Bill 232 which
allows utilities, such as CIPS, to petition the
Illinois commission for approval of alternative forms
of regulation which would differ from the traditional
rate base/rate of return regulation. CIPS is studying
whether to propose an alternative regulation plan to
the Illinois commission.
(3) Reference is made to the second full paragraph under
Item 1. Business - Construction Program and Financing
on page 11 of the 1994 Form 10-K for information
regarding the utility's least cost resource plan. On
June 30, 1995, CIPS filed its most recent 20-year least
cost resource plan (the "Plan") with the Illinois
commission identifying generating unit and other
resource plans. According to the Plan, CIPS will not
require additional generating capacity or demand-side
resources to meet expected load during the 1996-2016
planning period.
(4) On July 10, 1995, CIPS filed a tariff rider with the
Illinois commission applicable to existing electric
service customers billed on certain commercial and
industrial rates. This rider allows the utility to
negotiate contractual rates with customers at rates
equal to or greater than the incremental costs of
serving that customer. Such contracts are intended for
customers having the potential to utilize an energy
source other than CIPS' electric service and/or where
the total or partial loss of customer load is imminent.
This will allow CIPS to maintain a positive
contribution to fixed costs and avoid permanent loss of
revenue.
(5) On August 11, 1995, the Company, Union Electric
Company, a Missouri corporation ("UE"), Arch Holding
Corp., a newly formed Missouri corporation 50% owned by
UE and 50% owned by the Company ("Arch Holding"), and
Arch Merger Inc., a Missouri corporation and wholly owned
subsidiary of Arch Holding ("Merger Sub"), entered into
an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which, among other things,
Merger Sub will be merged with and into UE and the
Company will be merged with and into Arch Holding (the
"Mergers") with the result that UE and CIPS will be
wholly owned operating subsidiaries of Arch Holding.
As a result of the Mergers, each outstanding share of
the Company's Common Stock, without par value ("Company
Common Stock"), will be converted into the right to
receive 1.03 shares of common stock of Arch Holding,
par value $0.01 per share ("Arch Holding Common
Stock") (or cash in lieu of fractional shares otherwise
-22-
deliverable in respect thereof) and each outstanding
share of UE common stock, par value $5.00 per share
("UE Common Stock")(other than shares with respect
to which dissenters' rights are perfected under applicable
State law), will be converted into the right
to receive one share of Arch Holding Common Stock.
After the Mergers, Arch Holding will become a
registered public utility holding company under the
Public Utility Holding Company Act of 1935, as amended.
Under the terms of the Merger Agreement, approximately
63,800 electric and 17,900 natural gas customers of UE
located in Illinois would become customers of CIPS.
Current non-utility operations of the Company will be
conducted through subsidiaries of Arch Holding. The
common stock and preferred stock of CIPS will not be
affected by the Mergers.
The Mergers are conditioned upon, among other things,
approval by holders of two-thirds of the Company's
Common Stock, by holders of two-thirds of the UE Common
Stock and of the preferred stock, without par value, of
UE voting together as a single class and upon receipt
of certain regulatory and governmental approvals. The
foregoing description of the Merger Agreement is qualified
in its entirety by reference to the Merger Agreement, which
is attached as Exhibit 2(a) hereto and incorporated herein
by reference in its entirety.
Simultaneously with their execution and delivery of the
Merger Agreement, the Company and UE entered into stock
option agreements (the "Stock Option Agreements"),
pursuant to one of which the Company granted UE the
right, upon the terms and subject to the conditions set
forth therein, to purchase up to 6,779,838 shares of
Company Common Stock at a price of $37.02 per share,
and pursuant to the other of which UE granted the
Company the right, upon the terms and subject to the
conditions set forth therein, to purchase up to
6,983,234 shares of UE Common Stock at a price of
$35.94 per share. The foregoing description of the Stock
Option Agreements is qualified in its entirety by reference
to the Stock Option Agreements which are attached as
Exhibits 10(a) and 10(b) hereto, respectively,
and incorporated herein by reference in their entirety.
The Merger Agreement provides that, after the
effectiveness of the Mergers, the corporate
headquarters and principal executive offices of Arch
Holding and UE will be located in St. Louis, Missouri,
and the headquarters of CIPS will remain in
Springfield, Illinois. Arch Holding's Board of
Directors will consist of a total of 15 directors, 10
of whom will be designated by UE and 5 of whom will be
designated by the Company. Mr. Charles W. Mueller, the
current President and Chief Executive Officer of UE,
-23-
will serve as Chairman of Arch Holding and
Mr. Clifford L. Greenwalt, the current President and
Chief Executive Officer of the Company, will serve as
Vice-Chairman. CIPS and UE will each retain its board
of directors with Mr. Greenwalt becoming an additional
member of the UE board and Mr. Mueller becoming a
member of the CIPS board. Two additional UE nominees
also will become CIPS directors.
A copy of the Press Release, dated August 14, 1995,
issued by the Company and UE relating to the Mergers
attached as Exhibit 99(a) hereto and is incorporated
herein by reference in its entirety.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits:
Exhibit 2(a) Agreement and Plan of Merger, dated as
of August 11, 1995, by and among Union
Electric Company, CIPSCO Incorporated,
Arch Holding Corp. and Arch Merger Inc.*
Exhibit 10(a) Stock Option Agreement, dated as of
August 11, 1995, by and between CIPSCO
Incorporated and Union Electric Company
Exhibit 10(b) Stock Option Agreement, dated as of
August 11, 1995, by and between Union
Electric Company and CIPSCO Incorporated
Exhibit 12 Computation of Ratio of
Earnings to Fixed Charges and
Computation of Ratio of
Earnings to Fixed Charges plus
Preferred Stock Dividend
Requirements Before Income
Taxes for CIPS.
Exhibit 27 Financial Data Schedule for
CIPSCO (required for
electronic filing only in
accordance with Item 601(c)(1)
of Regulation S-K). Financial
Data Schedule for CIPS
(required for electronic
filing only in accordance with
Item 601(c)(1) of Regulation
S-K).
Exhibit 99(a) Press Release, dated August 14, 1995,
relating to transactions between CIPSCO
Incorporated and Union Electric Company
* The registrant agrees to furnish supplementally any omitted exhibits to
the Commission upon request.
-24-
(B) Reports on Form 8-K:
Date of Report Item Reported
June 1, 1995 Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits.
Contains certain exhibits filed in connection
with the Registration Statement of CIPS
(Registration No. 33-56063) which became
effective November 21, 1994.
June 5, 1995 Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits.
Contains certain exhibits filed in connection
with the Registration Statement of CIPS
(Registration No. 33-56063) which became
effective November 21, 1994.
-25-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant, CIPSCO Incorporated, has duly caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
CIPSCO Incorporated
Date: August 14, 1995 /s/ L. E. Marlett
L. E. Marlett
Controller
(Chief Accounting Officer)
-26-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant, Central Illinois Public Service Company,
has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Central Illinois Public Service Company
Date: August 14, 1995 /s/ L. E. Marlett
L. E. Marlett
Controller
(Principal Accounting Officer)
-27-
CIPSCO INCORPORATED AND
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
EXHIBIT INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
Exhibit No. Description
___________ ___________
2(a) Agreement and Plan of Merger, dated as
of August 11, 1995, by and among Union
Electric Company, CIPSCO Incorporated,
Arch Holding Corp. and Arch Merger Inc.
10(a) Stock Option Agreement, dated as of
August 11, 1995, by and between CIPSCO
Incorporated and Union Electric Company
10(b) Stock Option Agreement, dated as of
August 11, 1995, by and between Union
Electric Company and CIPSCO Incorporated
12 Computation of Ratio of Earnings
to Fixed Charges and Computation of
Ratio of Earnings to Fixed Charges
plus Preferred Stock Dividend
Requirements Before Income Taxes for
CIPS.
27 Financial Data Schedule for CIPSCO
Financial Data Schedule for CIPS
99(a) Press Release, dated August 14, 1995,
relating to transactions between CIPSCO
Incorporated and Union Electric Company
-28-