1
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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 QUARTERLY PERIOD ENDED MARCH 31, 1995
( ) 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 1-2967.
UNION ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Missouri 43-0559760
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1901 Chouteau Avenue, St. Louis, Missouri 63103
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (314) 621-3222
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
------- -------
Shares outstanding of each of registrant's classes of common stock as of April
30, 1995:
Common Stock, $5 par value - 102,123,834
(excl. 42,990 treasury shares)
________________________________________________________________________________
________________________________________________________________________________
2
UNION ELECTRIC COMPANY
INDEX
Page No.
Part I Financial Information (Unaudited)
Balance Sheet --
March 31, 1995 and December 31, 1994 2
Statement of Income --
Three Months and Twelve Months
Ended March 31, 1995 and 1994 3
Statement of Cash Flows --
Three Months Ended March 31, 1995 and
1994 4
Notes to Financial Statements 5
Management's Discussion and Analysis 6 thru 8
Part II Other Information
3
Page 2
UNION ELECTRIC COMPANY
BALANCE SHEET
(UNAUDITED)
(Thousands of Dollars)
ASSETS
- ------
March 31, December 31,
1995 1994
----------- -----------
Property and plant, at original cost:
Electric $8,272,030 $8,200,094
Gas 163,911 160,729
Other 35,057 35,033
---------- ----------
8,470,998 8,395,856
Less accumulated depreciation and amortization 3,363,172 3,305,582
---------- ----------
5,107,826 5,090,274
Construction work in progress:
Nuclear fuel in process 143,756 134,815
Other 123,699 119,473
---------- ----------
Total property and plant, net 5,375,281 5,344,562
Regulatory asset - deferred income taxes 715,202 732,478
Deferred charges:
Unamortized debt expense 48,196 49,432
Nuclear decommissioning trust fund 59,387 53,906
Other 24,693 22,508
---------- ----------
Total deferred charges 132,276 125,846
Current assets:
Cash 1,920 1,510
Temporary cash investments 5,792 -
Accounts receivable - trade less allowance
for doubtful accounts of $5,666 and $6,277
at respective dates) 157,201 164,803
Unbilled Revenue 49,916 71,321
Other accounts and notes receivable 18,180 17,691
Materials and supplies, at average cost -
Fossil fuel 62,494 61,533
Construction and maintenance 92,151 89,683
Other 19,665 15,274
---------- ----------
Total current assets 407,319 421,815
Total Assets $6,630,078 $6,624,701
========== ==========
CAPITAL AND LIABILITIES
- -----------------------
March 31, December 31,
1995 1994
----------- --------------
Capitalization:
Common stock, $5 par value
authorized 150,000,000 shares;
outstanding 102,123,834 shares
(excluding 42,990 shares at
par value in treasury) $ 510,619 $ 510,619
Other paid-in capital 717,669 717,669
Retained earnings 1,013,382 1,040,766
---------- ----------
Total common stockholders' equity 2,241,670 2,269,054
Preferred stock not subject to
mandatory redemption 218,497 218,497
Preferred stock subject to
mandatory redemption 676 676
Capital lease obligation 53,255 88,038
Long-term debt 1,740,585 1,745,585
Unamortized discount and premium on debt (9,996) (10,134)
---------- ----------
Long-term debt, net 1,730,589 1,735,451
---------- ----------
Total capitalization 4,244,687 4,311,716
Accumulated deferred income taxes 1,334,234 1,349,239
Accumulated deferred investment tax credits 171,159 172,705
Regulatory liability 225,567 229,333
Accumulated provision for nuclear decommissioning 61,060 55,579
Other deferred credits and liabilities 141,885 131,543
Current and accrued liabilities:
Current maturity of capital lease obligation 28,893 30,318
Current maturity of long-term debt 43,000 38,000
Accounts payable 90,612 61,575
Wages payable 30,854 35,045
Accumulated deferred income taxes 27,364 28,574
Income taxes accrued 63,770 36,481
Other taxes accrued 37,413 16,954
Interest accrued 65,237 55,909
Dividends accrued 3,301 3,301
Other 61,042 68,429
---------- ----------
Total current and accrued liabilities 451,486 374,586
Total Capital and Liabilities $6,630,078 $6,624,701
========== ==========
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Page 3
UNION ELECTRIC COMPANY
STATEMENT OF INCOME
(UNAUDITED)
(Thousands of Dollars Except Shares and Per Share Amounts)
Three Months Ended Twelve Months Ended
March 31, March 31,
-------------------- ------------------------
1995 1994 1995 1994
------- ------ -------- -------
Operating revenues:
Electric $408,748 $401,967 $1,976,314 $1,964,482
Gas 38,212 36,751 87,570 86,963
Other 155 182 447 494
-------- -------- ---------- ----------
Total operating revenues 447,115 438,900 2,064,331 2,051,939
Operating expenses:
Operations
Fuel and purchased power 88,899 81,595 336,865 398,810
Other 109,385 121,219 423,832 446,850
-------- -------- ---------- ----------
198,284 202,814 760,697 845,660
Maintenance 50,168 42,385 205,543 194,500
Depreciation and nuclear decommissioning 57,600 55,182 228,464 220,610
Income taxes 23,860 24,626 205,655 181,635
Other taxes 49,897 48,742 211,631 208,135
-------- -------- ---------- ----------
Total operating expenses 379,809 373,749 1,611,990 1,650,540
-------- -------- ---------- ----------
Operating income 67,306 65,151 452,341 401,399
Other income and deductions:
Allowance for equity funds used during
construction 1,892 1,653 6,006 6,672
Miscellaneous, net 646 2,637 (1,588) 6,300
-------- -------- ----------- ----------
Total other income and deductions, net 2,538 4,290 4,418 12,972
-------- -------- ---------- ----------
Income before interest charges 69,844 69,441 456,759 414,371
Interest charges:
Interest 33,435 32,384 142,163 128,182
Allowance for borrowed funds used during
construction (1,815) (1,169) (6,159) (4,993)
-------- -------- ---------- ----------
Net interest charges 31,620 31,215 136,004 123,189
-------- -------- ---------- ----------
Net income 38,224 38,226 320,755 291,182
Preferred stock dividends 3,313 3,313 13,251 13,719
-------- -------- ---------- ----------
Earnings on common stock $ 34,911 $ 34,913 $ 307,504 $ 277,463
======== ======== ========== ==========
Earnings per share of common stock
(based on average shares outstanding) $ 0.34 $ 0.34 $ 3.01 $ 2.72
======== ======== ========== ==========
Dividends per share of common stock $ 0.61 $ 0.595 $ 2.41 $ 2.35
======== ======== ========== ==========
Average number of common shares outstanding
(in thousands) 102,124 102,124 102,124 102,124
======== ======== ========== ==========
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Page 4
UNION ELECTRIC COMPANY
STATEMENT OF CASH FLOWS
(UNAUDITED)
(Thousands of Dollars)
Three Months Ended
March 31,
---------------------
1995 1994
-------- --------
Cash Flows From Operating:
Net income $38,224 $38,226
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 55,272 52,853
Amortization of nuclear fuel 9,375 10,821
Allowance for funds used during construction
Postretirement benefit accrual 8,086 7,154
Deferred income taxes, net (2,705) (530)
Deferred investment tax credits, net (1,546) (1,547)
Changes in assets and liabilities:
Receivables, net 28,518 32,876
Materials and supplies (3,429) (7,060)
Accounts and wages payable 24,846 (72,848)
Taxes accrued 47,748 46,833
Interest and dividends accrued or declared 9,328 13,173
Other, net (10,091) (863)
-------- --------
Net cash provided by operating activities 199,919 116,266
Cash Flows From Investing:
Construction expenditures (88,384) (85,392)
Allowance for funds used during construction 3,707 2,822
Nuclear fuel expenditures (8,845) (5,274)
-------- --------
Net cash used in investing activities (93,522) (87,844)
Cash Flows From Financing:
Dividends on preferred stock (3,313) (3,313)
Dividends on common stock (62,295) (60,764)
Environmental bond funds 1,620 3,341
Redemptions -
Nuclear fuel lease (48,911) (4,100)
Short-term debt - (59,600)
Long-term debt - (25,000)
Issuances -
Nuclear fuel lease 12,704 22,521
Long-term debt - 100,000
-------- --------
Net cash used in financing activities (100,195) (26,915)
-------- --------
Net change in cash and cash equivalents 6,202 1,507
Cash and cash equivalents at beginning of period 1,510 1,297
-------- --------
Cash and cash equivalents at end of period $ 7,712 $ 2,804
======== ========
Supplemental disclosure of cash flow information:
Cash and cash equivalents include cash
on hand and temporary investments
purchased with a maturity of three
months or less
Cash paid during the period:
Interest (net of amount capitalized) $ 20,696 $ 15,850
Income taxes 1,076 145
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Page 5
UNION ELECTRIC COMPANY
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Note 1 - Financial statement note disclosures, normally included in financial
statements prepared in conformity with generally accepted accounting
principles, have been omitted in this Form 10-Q pursuant to the Rules
and Regulations of the Securities and Exchange Commission. However,
in the opinion of the registrant, the disclosures contained in this
Form 10-Q are adequate to make the information presented not
misleading. See Notes to Financial Statements included in the 1994
Annual Report on Form 10-K for information relevant to the financial
statements contained in this Form 10-Q, including information as to
the significant accounting policies of the registrant.
Note 2 - In the opinion of the registrant the interim financial statements
filed as part of this Form 10-Q reflect all adjustments, consisting
only of normal recurring adjustments, necessary to a fair statement
of the results for the periods presented. Registrant's financial
statements were prepared to permit the information required in the
Financial Data Schedule (FDS), Exhibit 27, to be directly extracted
from the filed statements. The FDS amounts correspond to or are
calculable from the amounts reported in the financial statements or
notes thereto.
Note 3 - Due to the effect of weather on sales and other factors which are
characteristic of public utility operations, financial results for
the periods ended March 31, 1995 and 1994 are not necessarily
indicative of trends for any twelve-month period.
7
Page 6
UNION ELECTRIC COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE RESULTS OF OPERATIONS
First quarter 1995 common stock earnings of $34.9 million or 34 cents
per share were unchanged from 1994's first quarter.
Common stock earnings for the twelve months ended March 31, 1995 were
$307.5 million, a $30 million increase from the preceding twelve-month period.
Earnings of $3.01 per share for the twelve months ended March 31, 1995
increased 29 cents per share from the twelve months ended March 31, 1994.
The unchanged first quarter 1995 earnings primarily resulted from
increased electric and gas revenues, offset by increased operating expenses.
The increased earnings for the twelve months ended March 31, 1995
versus the prior twelve-month period reflects higher operating revenues and
lower operating expenses, partially offset by higher interest charges.
Operating expenses are down primarily due to lower fuel and purchased power
costs and reduced gas purchased for resale. The twelve months ended March 31,
1994 reflect a full Callaway refueling outage, while the current twelve month
period does not.
The impact of significant items affecting revenues, costs and earnings
during the three-month and twelve-month periods ended March 31, 1995 and 1994
is detailed below:
Electric Operating Revenues
(Millions of Dollars)
Variations for periods ended March 31, 1995
from comparable prior periods
----------------------------------------------------
Three Months Twelve Months
------------ -------------
Effect of abnormal weather. . . . . . . . . . . . . . . . . . . . . . $3.6 $(16.4)
Growth and other. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 28.2
------ ------
$6.8 $ 11.8
------ ------
First quarter 1995 kilowatt-hour sales increased 1 percent from the same
quarter of 1994. Growth in industrial and commercial sales which rose 4 percent
and 1.5 percent, respectively, was partially offset by a 1 percent
weather-related decline in residential sales.
Kilowatt-hour sales during the twelve months ended March 31, 1995
increased 1 percent over the prior twelve-month period, reflecting growth in the
regional economy partly offset by milder summer weather in 1994. Commercial and
industrial sales were each up 3 percent, while sales to more weather sensitive
residential customers decreased 2 percent.
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Page 7
UNION ELECTRIC COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE RESULTS OF OPERATIONS (Continued)
Operating Expenses
(Millions of Dollars)
Variations for periods ended March 31, 1995
from comparable prior periods
----------------------------------------------------
Three Months Twelve Months
------------ -------------
Fuel:
Variation in generation . . . . . . . . . . . . . . . . . . . . . . $ (3.6) $ 49.6
Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.9) (66.4)
Generation efficiencies . . . . . . . . . . . . . . . . . . . . . . (.5) (4.9)
Department of Energy assessment . . . . . . . . . . . . . . . . . . .3 1.6
Net Interchange sales and purchased power variation . . . . . . . . . 16.0 (41.8)
------ ------
$ 7.3 $(61.9)
------ ------
The increase in fuel and purchased power costs during the three months
ended March 31, 1995, versus the three months ended March 31, 1994, is primarily
due to increased net purchased power costs, partially offset by reduced
generation, lower fuel prices and greater generating efficiencies.
The decreased fuel costs for the twelve months ended March 31, 1995,
versus the prior comparable period, reflects lower fuel prices, increased
generating efficiencies and reduced net purchased power costs. The 1993
flood-interrupted coal deliveries and the Callaway plant refueling outage
adversely affected these items in the prior twelve-month period. These
reductions were partially offset by increased generation in the current
twelve-month period; generation in the prior comparable period was reduced due
to coal conservation during the 1993 flood as well as the absence of a Callaway
plant refueling outage.
Other operating expense variations reflect recurring conditions such as
growth, inflation and wage increases. During the three months ended March 31,
1995, versus the comparable 1994 period, operations expenses other than fuel and
purchased power declined $12 million primarily due to an $8 million decrease in
purchased gas costs, reduced labor, employee benefits, and insurance costs,
partially offset by increased consulting expenses. Maintenance expenses during
the current three-month period were $8 million higher primarily due to increased
power plant maintenance.
For the twelve months ended March 31, 1995, versus the prior
twelve-month period, operations expenses other than fuel and purchased power,
dropped $23 million, primarily due to a $14 million reduction in purchased gas
costs, and decreases of $5 million and $7 million in employee benefit expenses
and labor costs, respectively, partially offset by higher consulting and
communication expenses. Maintenance expenses for the current twelve-month
period increased $11 million primarily due to increased maintenance expenses at
our fossil-fueled power plants and greater tree trimming expense, partially
offset by lower Callaway plant maintenance due to the absence of a refueling
outage.
Depreciation expense for the three-month and twelve-month periods ended
March 31, 1995, versus the comparable 1994 periods increased $2 million and $8
million, respectively, primarily due to increases in depreciable property.
Other taxes charged to operating expenses during the three and twelve
months ended March 31, 1995, versus the comparable 1994 periods, increased $1
million and $3 million, respectively. Real estate, gross receipts, payroll and
corporate franchise taxes all increased in both the three and twelve-month
periods.
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Page 8
UNION ELECTRIC COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE RESULTS OF OPERATIONS (Continued)
Operating Expenses (Continued)
Income taxes charged to operating expenses during the twelve months
ended March 31, 1995, versus the comparable 1994 period, increased $24 million,
primarily due to higher pretax income and increased Missouri income tax rates.
Other Income and Deductions
Miscellaneous other net income and deductions decreased $9 million for
the twelve months ended March 31, 1995, versus the comparable 1994 period,
primarily reflecting increased charitable contributions and lower miscellaneous
income.
Interest
During the three-month and twelve-month periods ended March 31, 1995
versus the comparable prior year periods, interest increased $1 million and $14
million, respectively, primarily due to higher interest rates on variable rate
long-term debt.
Allowance for Funds Used During Construction (AFC)
Variations in AFC track changes in construction work in progress and
were not significant for the reporting periods. During the twelve-month
periods ended March 31, 1995 and 1994, AFC rates averaged 9.3 percent and 8.1
percent, respectively.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
Liquidity and Capital Resources
In April 1995, the registrant redeemed $35,000,000 of 4-1/2% Series
First Mortgage Bonds due April, 1995.
10
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of stockholders of the registrant held on
April 25, 1995, the following matters, which are more fully described in
Exhibit 23 hereto, were presented to the meeting for a vote and the results of
such voting are as follows:
Item (1) Election of Directors.
Non-Voted
Name For(1) Withheld(1) Brokers(2)
---- ---- --------- ---------
William E. Cornelius . . . . . . . . . . . 85,089,445 1,344,534 8,020,368
Thomas A. Hays . . . . . . . . . . . . . . 85,127,443 1,313,086 8,020,368
Thomas H. Jacobsen . . . . . . . . . . . . 85,108,979 1,315,088 8,020,368
Richard A. Liddy . . . . . . . . . . . . . 85,049,110 1,360,590 8,020,368
John Peters MacCarthy . . . . . . . . . . . 85,116,848 1,314,552 8,020,368
Paul L. Miller, Jr. . . . . . . . . . . . . 84,955,305 1,446,742 8,020,368
Charles W. Mueller . . . . . . . . . . . . 85,100,979 1,336,396 8,020,368
Robert H. Quenon . . . . . . . . . . . . . 84,964,740 1,427,942 8,020,368
Harvey Saligman . . . . . . . . . . . . . . 84,788,247 1,574,458 8,020,368
Janet McAfee Weakley . . . . . . . . . . . 84,993,164 1,424,153 8,020,368
Item (2) Board Proposal re Long-Term Incentive Plan
Non-Voted
For Against Abstain Brokers2
--- ------- ------- --------
73,056,166 10,799,044 2,465,612 8,020,788
Item (3) Stockholder Proposal re Report on Callaway Plant Emission
Non-Voted
For Against Abstain Brokers2
--- ------- ------- --------
10,163,929 60,269,700 5,670,065 18,237,915
________________________
1 Reflects effect of cumulative voting.
2 Ascertained by deduction.
11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 12(a) - Computation of Ratio of Earnings to Fixed
Charges, 12 Months Ended March 31, 1995.
Exhibit 12(b) - Computation of Ratio of Earnings to Fixed
Charges and Preferred Stock Dividend
Requirements, 12 Months Ended March 31,
1995.
Exhibit 23* - Proxy Statement dated March 16, 1995
containing a description of the matters
referred to under Item 4.
Exhibit 27 - Financial Data Schedule
*This exhibit heretofore has been filed with the Securities and
Exchange Commission pursuant to requirements of the Acts administered by the
Commission and is hereby incorporated herein by reference.
(b) Reports on Form 8-K. None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION ELECTRIC COMPANY
(Registrant)
May 12, 1995 By /s/ Donald E. Brandt
---------------------
Donald E. Brandt
Senior Vice President
Finance and Corporate Services