SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
X THE SECURITIES EXCHANGE ACT OF 1934
-----
For the quarterly period ended June 30, 1994
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
----- THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-9894
WPL HOLDINGS, INC
(Exact name of registrant as specified in its charter)
Wisconsin 39-1380265
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) No.)
222 West Washington Avenue, Madison, Wisconsin 53703
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 608-252-3311
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
------ ------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock Outstanding at June 30, 1994: 30,735,596 shares
CONTENTS
PAGE
PART I. Financial Information:
Consolidated Financial Statements of WPL Holdings, Inc.
Consolidated Balance Sheets as of June 30, 1994
and 1993 and December 31, 1993 . . . . . . . . . . . . . . . 2
Consolidated Statements of Income for the Three and
Six Months Ended June 30, 1994 and 1993 . . . . . . . . . . 4
Consolidated Statements of Cash Flows - Six
Months Ended June 30, 1994 and 1993 . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 7
PART II. Other Information . . . . . . . . . . . . . . . . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 15
WPL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, June 30, December 31,
1994 1993 1993
(Thousands of dollars)
ASSETS
UTILITY PLANT:
Plant in service--
Electric........................................................ $ 1,531,411 $ 1,476,864 $ 1,518,701
Gas............................................................. 195,233 184,625 194,283
Water........................................................... 20,945 19,834 20,437
Common.......................................................... 110,565 98,864 106,803
--------- ---------- ----------
1,858,154 1,780,187 1,840,224
Dedicated decommissioning funds................................... 50,970 41,796 49,803
--------- ---------- ----------
1,909,124 1,821,983 1,890,027
Less: Accumulated provision for depreciation...................... 780,514 743,510 763,027
--------- ---------- ----------
1,128,610 1,078,473 1,127,000
Construction work in progress..................................... 76,540 57,267 75,732
Nuclear fuel, net................................................. 15,558 15,021 18,000
--------- ---------- ----------
Total utility plant............................................. 1,220,708 1,150,761 1,220,732
--------- ---------- ----------
OTHER PROPERTY AND EQUIPMENT, NET:
Other property and equipment..................................... 136,794 134,271 135,204
Less: Accumulated provision for depreciation.................... 19,510 13,106 16,817
--------- ---------- ----------
117,284 121,165 118,387
--------- ---------- ----------
INVESTMENTS, at cost................................................ 12,607 15,739 15,525
--------- ---------- ----------
CURRENT ASSETS:
Cash and equivalents.............................................. 9,198 6,452 19,468
Net accounts receivable and unbilled revenue,
less allowance for doubtful accounts of $1,313
$964 and $732, respectively..................................... 61,476 41,932 67,623
Fossil fuel, at average cost...................................... 12,772 18,097 16,042
Materials and supplies, at average cost........................... 23,124 23,620 21,679
Gas in storage, at average cost................................... 4,610 5,072 8,754
Prepayments and other............................................. 29,379 18,705 23,251
--------- ---------- ----------
Total current assets............................................ 140,559 113,878 156,817
--------- ---------- ----------
Restricted cash..................................................... 3,234 5,602 6,712
--------- ---------- ----------
Environmental remediation costs..................................... 82,280 82,475 82,380
--------- ---------- ----------
Deferred charges and other.......................................... 162,352 138,870 161,346
--------- ---------- ----------
TOTAL ASSETS........................................................ $1,739,024 $ 1,628,490 $ 1,761,899
======== ========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
WPL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, June 30, December 31,
1994 1993 1993
(Thousands of dollars)
CAPITALIZATION AND LIABILITIES
COMMON SHAREOWNERS' INVESTMENT:
Common stock, $.01 par value, authorized--
100,000,000 shares; issued and
outstanding--30,735,596, 30,320,586 and
30,438,654 shares, respectively................................. $ 306 $ 298 $ 305
Premium on capital stock & capital surplus........................ 303,441 286,981 297,916
Reinvested earnings............................................... 294,274 276,513 284,745
-------- -------- --------
598,021 563,792 582,966
PREFERRED STOCK NOT MANDATORILY REDEEMABLE:
Cumulative, without par value, authorized
3,750,000 shares, maximum aggregate stated
value $150,000,000
Cumulative, without par value, $100
stated value; 449,765, 599,630, and 449,765 shares,
respectively, outstanding....................................... 44,977 59,963 44,977
Cumulative, without par value, $25 stated value, 599,460
shares outstanding.............................................. 14,986 - 14,986
LONG TERM DEBT, NET................................................. 423,590 422,798 425,105
--------- --------- ---------
Total capitalization............................................ 1,081,574 1,046,553 1,068,034
--------- --------- ---------
CURRENT LIABILITIES:
Current maturities of long-term debt.............................. 1,528 856 782
Variable rate demand bonds........................................ 56,975 57,075 56,975
Short-term debt................................................... 64,541 33,958 91,902
Accounts payable.................................................. 53,192 53,692 78,195
Accrued payroll and vacation...................................... 15,515 15,980 17,287
Accrued taxes..................................................... 3,698 (4,032) (570)
Accrued interest.................................................. 8,995 8,844 9,282
Other............................................................. 30,602 24,675 21,168
-------- -------- --------
Total current liabilities....................................... 235,046 191,048 275,021
-------- -------- --------
OTHER CREDITS:
Accumulated deferred income taxes................................. 222,565 208,762 212,844
Accumulated deferred investment tax credits....................... 41,721 43,668 42,684
Accrued environmental remediation costs........................... 80,244 81,272 80,973
Other............................................................. 77,874 57,187 82,343
--------- -------- --------
Total other credits............................................. 422,404 390,889 418,844
--------- -------- --------
TOTAL CAPITALIZATION AND LIABILITIES................................ $1,739,024 $1,628,490 $1,761,899
========= ========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
WPL HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
(In Thousands Except
for Per Share Data)
OPERATING REVENUES:
Electric.................................. $ 125,271 $ 116,817 $ 262,468 $ 242,428
Gas....................................... 22,130 23,281 85,265 78,780
Fees, rents and other..................... 33,884 33,533 67,730 61,673
--------- --------- --------- ---------
181,285 173,631 415,463 382,881
--------- --------- --------- ---------
OPERATING EXPENSES:
Electric production fuels................. 32,646 27,235 64,932 59,789
Purchased power........................... 8,440 7,764 17,927 13,747
Purchased gas............................. 12,861 15,675 54,606 53,014
Other operation........................... 65,815 66,564 129,409 126,857
Maintenance............................... 12,387 11,747 21,759 22,617
Depreciation and amortization............. 19,569 17,185 41,034 34,497
Taxes other than income................... 8,703 7,588 17,687 15,999
--------- --------- --------- ---------
160,421 153,758 347,354 326,520
--------- --------- --------- ---------
NET OPERATING INCOME........................ 20,864 19,873 68,109 56,361
--------- --------- --------- ---------
OTHER INCOME AND (DEDUCTIONS):
Allowance for equity funds used during
construction ........................... 681 398 1,130 646
Other, net................................ 4,247 717 9,069 6
--------- --------- --------- ---------
4,928 1,115 10,199 652
INCOME BEFORE INTEREST EXPENSE.............. 25,792 20,988 78,308 57,013
--------- --------- --------- ---------
INTEREST EXPENSE:
Interest on debt.......................... 9,219 9,715 18,694 18,964
Allowance for borrowed funds used during
construction (credit)................... (245) (253) (434) (409)
--------- --------- --------- ---------
8,974 9,462 18,260 18,555
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES.................. 16,818 11,526 60,048 38,458
INCOME TAXES................................ 5,688 3,382 21,721 9,597
PREFERRED STOCK DIVIDENDS OF SUBSIDIARY..... 827 953 1,655 1,905
--------- --------- --------- ---------
NET INCOME................................... $ 10,303 $ 7,191 $ 36,672 $ 26,956
========= ========= ========= =========
EARNINGS PER SHARE OF COMMON STOCK........... $ 0.33 $ 0.25 $ 1.20 $ 0.95
========= ========= ========= =========
CASH DIVIDENDS PER SHARE OF COMMON STOCK..... $ 0.480 $ 0.475 $ 0.960 $ 0.950
========= ========= ========= =========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING .. 30,649 29,278 30,575 28,499
========= ========= ========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
WPL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended
June 30,
1994 1993
(In Thousands)
Cash flows from (used for) operating activities:
Net Income...................................................... $ 36,672 $ 26,956
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization................................. 41,034 34,355
Amortization of nuclear fuel.................................. 2,749 2,933
Allowance for equity funds used during construction........... (1,130) (646)
Investment tax credit restored................................ (963) (983)
Deferred income taxes......................................... 6,429 3,536
Changes in assets and liabilities:
Net accounts receivable and unbilled revenues................. 7,294 7,758
Coal.......................................................... 521 888
Materials and supplies........................................ (1,446) (6,822)
Gas in storage................................................ 4,144 4,094
Prepayments and other......................................... (6,129) 3,164
Accounts payable and accruals................................. (22,554) (22,599)
Accrued taxes................................................. 4,144 (1,924)
Other......................................................... 379 7,091
--------- ---------
Net cash from (used for) operating activities.............. 71,144 57,801
--------- ---------
Cash flows from (used for) financing activities:
Issuance of long-term debt...................................... - 4,919
Long-term debt maturities, redemptions and sinking
fund requirements............................................. (1,582) (165)
Net change in short term debt................................... (20,844) (35,612)
Common stock cash dividends, less dividends reinvested.......... (21,774) (16,972)
Preferred stock issuance expense................................ (648) -
Issuance of common stock........................................ 884 56,803
Other........................................................... (16) (35)
--------- --------
Net cash from (used for) financing activities................ (43,980) 8,938
---------- --------
Cash flows from (used for) investing activities:
Additions to utility plant, excluding AFUDC..................... (37,809) (52,477)
Allowance for borrowed funds used during construction........... (434) (408)
Dedicated decommissioning funding............................... (1,167) (1,419)
Additions to other property and equipment....................... (1,590) (17,076)
Restricted bond proceeds........................................ 3,234 6,527
Other........................................................... 332 228
--------- --------
Net cash (used for) investing activities...................... (37,434) (64,625)
Net increase (decrease) in cash and equivalents................... (10,270) 2,114
Cash and equivalents at beginning of period....................... 19,468 4,338
--------- --------
Cash and equivalents at end of period............................. $ 9,198 $ 6,452
========= ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest on debt, less amount capitalized..................... $ 9,461 $ 10,219
Preferred stock dividends of subsidiary....................... $ 1,655 $ 1,906
Income taxes.................................................. $ 12,561 $ 7,585
Noncash financing activities:
Dividends reinvested........................................... $ 8,462 $ 10,117
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been
prepared by WPL Holdings, Inc. (the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. The
consolidated financial statements include the Company and its wholly owned
consolidated subsidiaries including Wisconsin Power and Light Company
(WPL). These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's
latest annual report on Form 10-K.
In the opinion of the Company, the consolidated interim financial
statements reflect all adjustments necessary to fairly state the results
of operations for the interim periods presented. However, because of the
seasonal nature of the Company's operations, the results shown for
portions of a year are not indicative of annual results.
2. In November 1989, the Public Service Commission of Wisconsin ("PSCW")
concluded that WPL did not properly administer a coal contract, resulting
in an assessment to compensate ratepayers for excess fuel costs having
been incurred. As a result, the Company recorded a reserve in 1989 which
had an after-tax affect of reducing 1989 net income by $4.9 million. This
reserve included a portion payable to WPL's ratepayers and portions
payable to Wisconsin Public Service Corporation and Madison Gas and
Electric Company for their joint ownership in the generating station
served by the contract. In 1990, WPL refunded $2.0 million of the
reserve, after tax, to its own ratepayers.
The PSCW decision was found to represent unlawful retroactive
ratemaking by both the Dane County Circuit Court and the Wisconsin Court
of Appeals. The case was then appealed to the Wisconsin Supreme Court.
In February 1994, the Wisconsin Supreme Court affirmed the decisions of
the Dane County Circuit Court and Wisconsin Court of Appeals. In
management's judgement, all avenues for appeal regarding this case have
been exercised.
As a result, in March 1994, WPL reversed the unrefunded portion of
the assessment of amounts due to Wisconsin Public Service Corporation and
Madison Gas and Electric Company. This action increased in net income by
$2.9 million in the first quarter of 1994. For the portion of the
assessment which was refunded to WPL's ratepayers, a proposed plan for
recollection was submitted to the PSCW on February 15, 1994 and was
approved on May 11, 1994. With this approval, WPL recorded an additional
after-tax increase to net income to account for the remaining $2.0 million
in June, 1994.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1994 VS. JUNE 30, 1993:
OVERVIEW
The Company reported consolidated second-quarter net income of $10.3
million compared to $7.2 million for the same period in 1993. The
increase in earnings primarily reflects an increase in earnings from the
Company's utility subsidiary, WPL. The principal factors leading to
increased earnings include favorable early summer weather which yielded
higher electric margins ($1.4 million), the benefits from decreased other
operation expense due to the Company's cost management efforts ($.5
million) and a change in the mix of gas sales from lower margin to higher
margin customer classes ($1.0 million). Also, second-quarter 1994 net
income increased $2.0 million through the approval to recollect a
previously refunded penalty assessed by the PSCW relating to WPL's
administration of a coal contract.
Offsetting the above was an increase in depreciation expense which
was attributable to increased investment in property, plant and equipment
and increased decommissioning costs which reduced net income by $1.5
million.
Electric Operations
Revenues and
kWhs Sold, Generated Costs Per kWh
Revenues and Costs % and Purchased (In % Sold Generated Customers at End
(In Thousands) Change Thousands) Change and Purchased of Quarter
1994 1993 1994 1993 1994 1993 1994 1993
Residential and
Farm $42,801 $40,109 7% 602,761 602,421 0% .071 .067 322,202 315,326
Industrial 35,777 32,786 9% 955,781 878,476 9% .037 .037 755 698
Commercial 24,055 22,464 7% 393,496 382,857 3% .061 .059 43,437 42,467
Wholesale and
Class A 20,877 18,588 12% 606,255 524,416 16% .034 .035 40 38
Other 1,761 2,870 39% 12,203 13,487 -10% .144 .213 1,471 1,419
------- ------- --- --------- --------- ---- ---- ---- ------- -------
Total 125,271 116,817 7% 2,570,496 2,401,657 7% .049 .049 367,905 359,948
======= ======= === ========= ========= === ==== ==== ======= =======
Elec production
fuels 32,646 27,235 20% 2,353,828 2,027,581 16% .014 .013
Purchased Power 8,440 7,764 9% 325,804 450,839 -28% .026 .017
------- ------ ----
Margin 84,185 81,818 3%
======= ======
WPL's electric sales benefitted from June's hot weather, however, low
sales in April and May resulted in relatively flat volumes for the second
quarter of 1994 compared to 1993. Additionally, WPL experienced strong
growth in the commercial and industrial customer classes from favorable
economic conditions in the service territory.
Gas Operations
Revenues and
Revenues and Therms Sold and Costs per
Costs (In % Purchased (In % Thems Sold Customers at End
Thousands) Change Thousands) Change and Purchased of Quarter
1994 1993 1994 1993 1994 1993 1994 1993
Residential 10,337 11,853 -13% 18,154 18,207 0% .569 .651 122,476 117,721
Firm 5,930 6,720 -12% 13,022 13,404 -3% .455 .501 15,298 14,701
Interruptible 1,463 1,509 -3% 4,768 3,923 22% .307 .385 233 209
Transportation 3,384 3,088 10% 17,870 19,074 -6% .189 .162 87 74
Other 1,016 111 815% 3,740 242 1,445% .272 .459 93 90
------ ------ ---- ------ ------ ----- ---- ---- ------- -------
Total 22,130 23,281 -5% 57,554 54,850 5% .385 .424 138,187 132,795
====== ====== ===== ====== ======= ===== ===== ===== ======= =======
Purchased gas 12,942 15,675 -17% 37,794 37,386 1% .239 .363
------ ------
Margin 9,188 7,606 12%
====== ======
Gas margin increased during the second quarter of 1994 compared to the
second quarter of 1993 due primarily to a change in the mix of sales from
lower margin to higher margin customer classes. Additionally, growth
among all customer classes remained strong from the solid economic
conditions in WPL's service territory.
Other Operation Expense
Other operation expense decreased as a result of the Company's cost
management efforts.
Depreciation
Depreciation expense increased, principally reflecting increased
property additions, and increased decommissioning costs for WPL.
Other, Net
Other, net increased for the second-quarter of 1994 compared with the
same period in 1993 due to the coal contract reversal of $2.0 million
discussed in Note 2 of the Notes to Consolidated Financial Statements.
Income Taxes
Income taxes increased between second quarters, primarily due to higher
taxable income.
SIX MONTHS ENDED JUNE 30, 1994 VS. JUNE 30, 1993:
OVERVIEW
The Company reported consolidated net income of $36.7 million for the
six months ended June 30, 1994 compared to $27.0 million for the same
period in 1993. The increase in earnings primarily reflects an increase
in earnings from the company's utility subsidiary, WPL. A principal
factor which resulted in increased earnings was the favorable weather
conditions in the first six months of 1994 which yielded higher electric
and gas margins ($9.3 million). Also, net income for the six months ended
June 30, 1994 increased $4.9 million due to the reversal of a PSCW penalty
relating to WPL's administration of a coal contract.
Offsetting the above was an increase in depreciation expense which was
attributable to increased investment in plant and increased
decommissioning costs which reduced net income by $3.9 million.
Electric Operations
Revenues and
kWhs Sold, Generated Costs Per kWh
Revenues and Costs % and Purchased (In % Sold Generated Customers at End of
(In Thousands) Change Thousands) Change and Purcased Quarter
1994 1993 1994 1993 1994 1993 1994 1993
Residential and
Farm $97,356 $88,811 10% 1,389,627 1,345,225 3% .070 .066 322,202 315,326
Industrial 67,989 63,874 6% 1,822,824 1,700,873 7% .037 .038 755 698
Commercial 49,605 46,064 8% 821,480 783,911 5% .060 .059 43,437 42,467
Wholesale and
Class A 43,239 37,661 15% 1,312,372 1,109,965 18% .033 .034 40 38
Other 4,279 6,018 -29% 28,986 27,338 6% .148 .220 1,471 1,419
------- ------ ---- --------- --------- ---- ---- ---- ------ ------
Total 262,468 242,428 8% 5,375,289 4,967,312 8% .049 .049 367,905 359,948
======= ======= ==== ========= ========= ==== ==== ==== ======= =======
Elec production
fuels 64,932 59,788 9% 4,806,837 4,308,778 12% .014 .014
Purchased Power 17,927 13,747 30% 767,945 801,313 -4% .023 .017
------- -------
Margin 179,609 168,893 6%
======= ========
WPL's electric sales benefitted from June's hot weather, however, low
sales in April and May resulted in relatively flat volumes for the second
quarter of 1994 compared to 1993. Additionally, WPL experienced growth in
the commercial and industrial customer classes from favorable economic
conditions.
Gas Operations
Revenues and
Revenues and Therms Sold and Costs per Thems
Costs (In % Purchased (In % Sold and Customers at End of
Thousands) Change Thousands) Change Purchased Quarter
1994 1993 1994 1993 1994 1993 1994 1993
Residential 45,090 42,642 6% 78,399 73,434 7% .575 .581 122,476 117,721
Firm 26,060 24,035 8% 57,089 52,031 10% .456 .462 15,298 14,701
Interruptible 4,308 6,371 -32% 11,762 14,620 -20% .366 .436 233 209
Transportation 8,345 6,022 39% 42,934 42,977 0% .194 .140 87 74
Other 1,462 -290 -604% 4,898 721 579% .298 .402 93 90
------ ------ ---- ------- ------- ---- ----- --- ------- -------
Total 85,265 78,780 8% 195,082 183,783 6% .437 .429 138,187 132,795
====== ====== ===== ======= ======= ==== ===== ===== ======= =======
Purchased gas 54,710 53,014 3% 143,661 161,892 21% .279 .327
------ ------
Margin 30,555 25,766 5%
Gas margin increased for the six months ended June 30, 1994 compared to
the same period in 1993 due primarily to favorable winter weather
conditions. Also contributing to the margin increase was a change in the
mix of sales from lower margin to higher margin customer classes.
Additionally, growth among all customer classes remained strong due to
favorable economic conditions in WPL's service territory.
Fees, Rents and Other Operating Revenues ("Other Revenues")
The increase in other revenues is the result of an acquisition made
during the first quarter of 1993 by the Company's non-regulated
operations. Year to date 1994 results include a full six months of
activity vs. approximately 4 months of activity in 1993.
Other Operation Expense
Other operation expense increased for the same factor discussed above
under Other Revenues.
Depreciation
Depreciation expense increased, principally reflecting increased
property additions, and increased decommissioning costs for WPL.
Other, Net
Other, net increased for the six months ended June 30, 1994 compared
with the same period in 1993, due to the coal contract reversal of $2.0
million discussed in Note 2 of the Notes to Consolidated Financial
Statements.
Income Taxes
Income taxes increased between second quarters, primarily due to higher
taxable income.
LIQUIDITY AND CAPITAL RESOURCES
Rates and Regulatory Matters
See Part II -- Other Information, Item 1. Legal Proceedings.
Financing and Capital Structure
The level of short-term borrowing fluctuates based primarily on seasonal
corporate needs, the timing of long-term financings and capital market
conditions. To maintain flexibility in its capital structure and to take
advantage of favorable short-term rates, the Company also uses proceeds
from the sales of WPL's accounts receivable and unbilled revenues to
finance a portion of its long-term cash needs.
The Company's capitalization at June 30, 1994, including the current
maturities of long-term debt, variable rate demand bonds and short-term
debt, consisted of 50 percent common equity, 5 percent preferred stock and
45 percent long-term debt. Common equity at June 30, 1994 increased from
48 percent at December 31, 1993 due to increased earnings and the original
issuance through the Company's dividend reinvestment program of $8.5
million of Company stock during the first 6 months of 1994.
Capital Expenditures
The Company's liquidity is primarily determined by the level of cash
generated from operations and the funding requirements of WPL's ongoing
construction and maintenance programs and Heartland Development Corp.'s
capital requirements for future acquisitions and development of affordable
housing. Cash flows from operating activities, after dividends paid,
provided approximately $71,144 million and $57,801 million for the six
months ended June 30, 1994 and 1993 respectively. The Company finances
its construction expenditures through internally generated funds
supplemented, when required, by outside financing. The estimated
construction expenditures for the remainder of 1994 are $83 million. The
Company currently anticipates that it will finance approximately 68
percent of these expenditures through internally generated funds.
The expenditures for the decommissioning of the Kewaunee Nuclear Power
Plant are estimated to begin in 2014. It is anticipated that expenditures
related to the actual decommissioning of the plant will occur between 2014
and 2021 of which WPL's share in terms of future dollars, approximates
$581 million. An additional $435 million related to the storage of spent
nuclear fuel on site and other maintenance of the site will likely occur
from 2022 to 2050. By 2013, WPL currently expects to have the cost
collected through electric rates and funded in an external trust.
Therefore, such expenditures are not expected to have a direct impact on
the liquidity or the availability of capital resources.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings
On February 4, 1994, WPL filed its annual retail rate application with
the PSCW requesting no change in electric rates and a slight increase in
natural gas and water rates. The application filed with the PSCW requests
an overall increase of $3.6 million, or 2.7 percent for natural gas and a
nominal water rate increase. Subsequent to this filing the PSCW staff
completed its audit and conducted hearings. Currently PSCW staff is
recommending a decrease in electric rates of $16.1 million or 3.7 percent,
an increase in gas rates of $1.1 million or .8 percent and no change in
water rates. A final decision is not expected until the fourth quarter of
1994 with final rates becoming effective January 1, 1995.
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's annual meeting of shareowners held on May 18,
1994, (a) L. David Carley and Donald R. Haldeman were elected as directors
of the Company for terms expiring in 1995, (b) Katharine C. Lyall and
Henry F. Scheig were elected as directors of the Company for terms
expiring in 1996, and (c) Les Aspin, Erroll B. Davis, Jr., Milton E.
Neshek and Carol T. Toussaint were elected as directors of the Company
for terms expiring in 1997. The following table sets forth certain
information with respect to the election of directors at the annual
meeting:
Shares Withholding
Name of Nominee Shares Voted For Authority
L. David Carley 23,193,533 781,958
Donald R. Haldeman 23,356,430 619,061
Katharine C. Lyall 23,355,554 619,937
Henry F. Scheig 23,399,260 576,231
Les Aspin 22,643,817 1,331,674
Erroll B. Davis, Jr. 23,181,559 793,932
Milton E. Neshek 23,368,952 606,539
Carol T. Toussaint 23,341,373 634,118
The following table sets forth the other directors of the Company
whose terms of office continued after the 1994 annual meeting:
Year in Which
Name of Director Term Expires
Arnold M. Nemirow 1995
Judith D. Pyle 1995
Rockne G. Flowers 1996
Henry C. Prange 1996
In addition, at the annual meeting, shareowners approved the
appointment of Arthur Andersen & Co. as the Company's independent auditors
for the 1994 calendar year. With respect to such matter, the number of
shares voted for and against were 23,375,001 and 261,224, respectively.
The number of shares abstaining and the number of shares subject to broker
non-votes were 339,266 and 0 , respectively. At the annual meeting,
shareowners also approved the WPL Holdings, Inc. Long-Term Equity
Incentive Plan. With respect to such matter, the number of shares voted
for and against were 20,513,455 and 2,188,522, respectively. The number
of shares abstaining and the number of shares subject to broker non-votes
were 1,273,514 and 0, respectively.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
1. Exhibits:
4.1 WPL Holdings, Inc. Long-Term Equity Incentive Plan
4.2 Key Executive Employment and Severance Agreement by and between WPL
Holdings, Inc. and E.B. Davis, Jr.
4.3 Form of Key Executive Employment and Severance Agreement by and
between WPL Holdings, Inc. and each of L.W. Ahearn, W.D. Harvey,
E.G. Protsch and A.J. Amato
4.4 Form of Key Executive Employment and Severance Agreement by and
between WPL Holdings, Inc. and each of E.M. Gleason, B.J. Swan,
D.A. Doyle, N.E. Boys, D.E. Ellestad, P.J. Wegner and K.K. Zuhlke
2. Reports on Form 8-K: None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
WPL HOLDINGS, INC.
Date 08/12/94 By:/s/ Edward M. Gleason
--------------------------
Edward M. Gleason, Vice President,
Treasurer, and Corporate Secretary
(principal financial officer)
Date 08/12/94 By:/s/ Daniel A. Doyle
--------------------------
Daniel A. Doyle, Controller and
Treasurer, Wisconsin Power and Light,
(principal accounting officer and
officer authorized to sign on behalf
of the registrant.)
EXHIBIT INDEX
Exhibit
No. Description
4.1 WPL Holdings, Inc. Long-Term Equity Incentive Plan
4.2 Key Executive Employment and Severance Agreement by and between WPL
Holdings, Inc. and E.B. Davis, Jr.
4.3 Form of Key Executive Employment and Severance Agreement by and
between WPL Holdings, Inc. and each of L.W. Ahearn, W.D. Harvey,
E.G. Protsch and A.J. Amato
4.4 Form of Key Executive Employment and Severance Agreement by and
between WPL Holdings, Inc. and each of E.M. Gleason, B.J. Swan,
D.A. Doyle, N.E. Boys, D.E. Ellestad, P.J. Wegner and K.K. Zuhlke