ML17297B651
| ML17297B651 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 08/23/1982 |
| From: | Van Brunt E ARIZONA PUBLIC SERVICE CO. (FORMERLY ARIZONA NUCLEAR |
| To: | Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML17297B653 | List: |
| References | |
| ANPP-21472-WFQ, NUDOCS 8208270375 | |
| Download: ML17297B651 (68) | |
Text
REGULATOR'FORMATION DISTRIBUTION S
ACCESSION NBR:8208270375 DOC ~ DATE: 82/08/23 NOTARI'ZED; NO DOCKET FACIL:STN 50 528 Palo Verde Nuclear StationP Unit 1E Arizona Publi 05000528 STN-50-529 Palo Verde Nuclear Stationi Unit 2P Arizona Publi 05000529 STN-50-530 Palo Verde Nuclear Stationi Unit 3E Arizona Publi 05000530 AUTH BYNAME AUTHOR AFFILIATION VAN BRUNTiE ~ E.
Arizona Publ,ic Service Co, RECIP,NAME RECIPIENT AFFILIATION Office of Nuclear Reactor Regulationi Director
SUBJECT:
Forwards Annual Financia R
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EWZLat5 KK2MOXE IWEMHW P.o. BOX 21666 PHOENIX, ARIZONA85036 Augus t 23, 1982 ANPP-21472
-'"WFQ/NEH Director of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C.
20555
Subject:
Palo Verde Nuclear Generating Station (PVNGS) Units 1, 2 and 3
Docket Nos. STN-50-528/529/530 File:
82-056-026
Dear Sir:
Pursuant to 10 CFR Part 50.71(b), Arizona Public Service Company (APS) submi0s herewith two (2) copies of the 1981 financial statements for each of the Participants who jointly own the Palo Verde Nuclear Generating Station.
Very truly yours, EEVBJr/NEM/sp Attachments c~
niu E. E.
Van Brunt, Jr.
APS Vice President, Nuclear Projects ANPP Proj".ect Director cc:
E. Licitra P. Hourihan A. Gehr L. Bernabei (w/a) 8208270375 820823 PDR ADOCK 05000528 I
4 h
Corporate Information Figures appearing in this report are presented as general information and not in connection with any sale or offer to sell or solicitation of any offer to buy any securities nor are they intended as a representation by the Company of the value of its securities.
Annual Meeting of Shareholders AllShareholders are invited to attend the 1982 Annual Meeting of Shareholders on Monday, May 17, 1982, at 10 a.m.
El Paso time, in the El Paso Civic Center, the North Hall, El Paso, Texas.
Proxies for the meeting willbe solicited by the Board of Directors in a communication to be mailed in early April. This Annual Report is not a part of such proxy solicitation and is not intended to be used as such.
A copy of the Company's most recent 10-K Report, filed by El Paso Electric Company with the Securities and Exchange Commission, willbe made available to Shareholders without charge upon written rectuest to:
Theta S. Fields, Secretary El Paso Electric Company Post Office Box 982 El Paso, Texas 79960 Dividend Reinvestment Another year of growth was noted in the Company's Dividend Reinvestment and Stock Purchase Plan. The plan is available to holders of record of Common Stock and is a convenient method of investing dividends and optional cash payments in new shares without payment of commissions and fees. The 1982 dividends reinvested under the plan are eligible for the exclusion provided by the Economic Recovery Tax Act of 1981. An enrollment card may be obtained by writing the Company Secretary.
Common Stock Shareholders The Common Stock of the Company is held in every state of the union, the District of Columbia, some U.S. territories and many foreign countries. The number of Shareholders increased from 42,132 at December 31, 1980 to 45,952 at December 31, 1981. Our records indicate that 79% of the Company's Shareholders own less than 500 shares each.
Toll-Free Telephone System Installed The Company recently installed a toll-free telephone system for the convenience of Shareholders who may have questions or inquiries concerning their accounts. If you are calling from within Texas the number is 800-592-1634. Elsewhere in the U.S. call 800-351-1621.
Transfer Agents National Bank of North America, 80 Pine Street, New York, New York 10005. (Common and Preferred Stock)
The State National Bank of El Paso Post Office Box 1072 E<Paso, Texas 79958 (Common Stock Only)
Contents-
. 2-3
. 4-5
. 6-7 8-11 12 13 14 15-17 17 18 19 20-36 37-39 40-41 42-43 Highlights Message to Shareholders..........
Communities, We Serve...........
Company Operations, 1981........
Serving Our Customers As An Employer Directors 6 Executive Officers of the Company.
Management's Discussion and Analysis of Financial Condition and Results of Operations Market for the Company's Common Stock and Related Security Holder Matters...........
Selected Quarterly Financial Data..
Report of Independent Certified Public Accountants Consolidated Financial Statements Supplemental Information Concerning the Effects of Inflation..
Selected Financial Data...........
Selected Operating and Statistical Data ON THE COVER-A late afternoon-after dark double exposure of the El Paso skyline captures the theme of this year's annual report, "Energy for the Sun Belt."
Highlights At December 31, 1981 0 1981 Percentage Over 1980 0 1980 Figures Operating Revenues (000)
UP 18 9% over 1980 1981 -$250,379 Operattng Expenses (000)
UP 16.1% over 1980 1981 - $200,094
'fffIIIIIII tfiflf Illlillllf; lt Ilffttt flfttttfflfttt tttfltftttfffflffIIIIt 1980
$210 513 Number of Customers UP 3.0% over 1980 1981 - 186,388 Number of Employees UP 4.0% over 1980 1981 - 1,025 I'980. $ 172;296
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, 4
~4~tt'eak Load UP 2.5% over 1980 1981 -?36,000 KW 1980- $41 177 Net Income (000)
UP 37.7% over 1980 1981 - $56,69?
- ~
V'V 4
I
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Net Generating Capacity SAME as 1980 1981 - 9?7,000 KW 1980. $2.05 Net Income Per Common Share UP 8.8% over 1980 1981 - $2.23 j
ip-5R) r j jr 1980 - 180,922 1980- 986 1980 - 718,000 KW 1981 1980 - 9?7,000 KW At December 31, 1980 Operating Revenues (000)..........
Operating Expenses (000)...........
Net Income (000)
Net Income Per Common Share.....
Dividends Paid Per Common Share..
Book Value Per Common Share......
Common Shares Outstanding........
Number of Common Shareholders....
'umber of Customers............
Number of Employees Peak Load..
Net Generating Capacity...........
Average Annual Residential Use.....
Fuel Expense (000).
Energy Sales UtilityPlant (000)..
250,379 200,094 56,697 2.23 1.25 11.54 25,110,066 45,952 186,388 1,025 736,000 977,000 5,849 107,562 3,698,872 898,333 210,513 172,296 41,177 2.05 1.13 10.82 20,485,067 42,132 180,922 986 718,000 KW 977,000 KW 6,065 KWH 95,461 MWH 3,728,022 MWH 715,190
?vtdends Paid Per Common Book Value Per Share hare UP 10.6% over 1980 UP 6.Z% over 1980 981 - $ 1.25 1981 - $ 11.54 Common Shares Outstanding Number of Common UP 22.6% over 1980 Shareholders UP 9.1% over 1980 1981 - 25,110,066 1981 - 45,952 5
~g s vasermaas emaa a a now raw oe ELECIXIC Isscs vss Ikvs ov fss sr@Vs ot 1980- $ 1.13 1980 - $ 10.82 1980 - 20 485 067 1980 - 42. 132 verage Annual Residential Fuel Expense (000) se DOWN 3.6% from 1980 UP 12.Z% over 1980 981 - 5,849 KWH 1981 - $ 107,562 Energy Sales (MWH)
DOWN.8% from 1980 1981 - 3,698,8?2 UtilityPlant (000)
UP -25.6% over 1980 1981 - $898,333 4
1980 - 6,065 KWH 1980
~ $95,461 1980 - 3,728,022 1980 - $715,190
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"Growth, prosperity and a vibrant future characteri ze the prospects for the Sun Belt..."
Zvern R. Wall, President and Chairman of the Board MillsBuilding El Paso Electric Company Headquarters A share in the Sun Belt.
A message from Evern R. Wall, President.
A sense of optimism and excitement describes our view of the future for El Paso Electric, the people and the area we serve.
The Company finished 1981 much better prepared to respond to the needs of customers, shareholders and employees in the coming years.
Our optimism stems from the progress made toward our goal of enhancing the financial strength of the Company through continued improvements in the overall financial integrity. In addition, the innovation, dedication and foresight of our employees, coupled with hard work, has projected our Company toward its second goal of becoming the number one corporate citizen in our community.
Both goals were achieved while maintaining a consistently high level of service and reliability to our customers and a competitive rate of return to our Shareholders.
We live in an important region of the nationThe Buckle on the Sun Beltand for that reason we have titled this Annual Report to Shareholders:
"Energy for the Sun Belf."
To follow, we'l give you our unique view of the Sun Belt as it relates to Texas, New Mexico, Mexico, and how it also relates to our investors, our Company, our customers, our employees and our communities.
It is generally recognized that the Sun Belt begins on the west coast and follows the southern tier of states to the east coast. It extends along the border with Mexico, a country with a surging economy fueled by energy wealth just now being tapped.
Growth, prosperity and a vibrant future characterize the prospects for the Sun Belt in the coming years.
"In sheer numbers," notes Edric Weld Jr.,
a Cleveland State University urban affairs expert, "five states California, Texas, Florida, Arizona and Georgia accounted for half the growth in U.S. population from 1970-1980. We have seldom seen such a uniform shift from one part of the country to another.... This is a shift from the Old World to the New World."
While the nation's population rose in that period by 11.4%, Texas exploded by 27. 1%
and New Mexico by 17%.
The Sun Belt dominates a Chase Econometrics forecast of the 50 fastest growing job markets because "lower wages, lower taxes and good weather have drawn business away from the Northeast and Midwest." Of the ten fastest growing metropolitan centers, according to the national forecasting firm, four are in Texas, one of which is El Paso.
Newsweek has called Texas an "Economic Superstate."
Money Magazine calls Texas "...an empire to itself" and continues to note in a report on "The Surging States" that: "The West's appeal today and tomorrow rests on two promises, sometimes kept, sometimes not. They are the promises of prosperity and that elusive abstraction known as quality of life."
The report continued: "Whatever the problems of the West, its energy resources alone are sufficient grounds for optimism over its future...they are creating across the West a demand for construction, health facilities, transportation planning, social services, hotels, restaurants and plenty of other retail businesses."
Today, the El Paso Electric service area holds more potential than ever for people who want to work, attend school, retire, start a business or invest from afar in a company that' likely to thrive. In short, the spirit of the El Paso Southwest characterizes the entire Sul Belt region and willoffer tempting investments
in companies that stand to grow along with the region.
El Paso Electric, serving South Central New Mexico and Far West Texas, has been one of those growing companies during 1981.
We. are convinced that we can achieve the quantity and quality of growth that is necessary to create jobs for an increasing population and at the same time afford the people of this area an acceptable standard of living, encompassing a higher quality of life while safeguarding the environment. At the same time we willstrive toward assuring the maintenance of a reasonable social balance and improving the average level of consumption of goods and services through the availability of an abundant supply of electrical energy.
You'e already seen our expanded graphic highlights but I would like to draw your attention further to some important points:
~ Income growth continued in 1981 as net income per share of common stock increased to
$2.23 in 1981 from $2.05 in 1980. Operating revenues for the year increased to $250.4 millionfrom $210.5 milliona year ago, while operating expenses increased to $X0.1 million in 1981 from $ 172.3 millionthe previous year.
~ The Board of Directors increased quarterly dividends on Common Stock by 1.5 cents in March and an additional 1.5 cents in September, increasing the indicated quarterly dividend on Common Stock to 32 cents;or $ 1.28 for the year.
~ The Company continued in 1981 to make substantial sales of energy to Southern California Edison Company which provided approximately $6.9 million in annual revenues.
~ We have for the past eight years aggressively pursued a large-scale fuel conversion program through our involvement in the Palo Verde Nuclear Generating Station designed to reduce dependence on petroleum-based fuel and meet the growing energy demands of our customers. Palo Verde is on the threshold of beginning commercial operation in 1983.
~ The Company plans to open a vital interconnection with Southwestern Public Service Company in the next 2 years to provide an additional source of needed electricity to our service area. The agreement calls for the purchase of 100 megawatts (MW) of interruptible electric energy from Southwestern.
~
While our support for nuclear energy remains strong, the Company in 1981 entered into an agreement to sell a portion of its Evern R. Wall President and Chairman of the Board
$7 f%
neo QSA ownership in the Palo Verde Station to M-S-R Public Power Agency in California.
~ We have continued to excel in providing reliable, efficient service to our customers and in assuming a leadership role in our communities, both of which are covered in detail in this report.
~ In order to provide an opportunity to its customers to become owners of the Company, a Customer Stock Purchase Plan has been adopted. We anticipate the plan willattract as many as 2,000 new shareholders from our customer base during 1982.
We'e proud of our participation in the Sun Belt's growth; and our accomplishments and vital role in the community as a company, as a servant to our customers, as an employer and as an investment opportunity. We invite you to explore these accomplishments in the details which follow.
1977-1981 RETURN ON COMMONEQUITY 0 Industry Average.
0 El Paso Electric return above industry average.
'Projected estimate from previous 5-year average.
The Sun Belt communities we serve.
The Electric Company supplies electricity to approximately 10,000 square miles of West Texas and South Central New Mexico. The communities served by the Company extend from Van Horn, Texas to Caballo Dam in Central New Mexico.
The cities of El Paso, Texas, and Las Cruces, New Mexico, hold the majority of the population of our service area. From 1970 to 1980 the population of the City of El Paso rose to over 425,000; Las Cruces to approximately 51,000. El Paso is the 28th largest city in the U.S. and fourth largest in Texas. Las Cruces is the second largest city in New Mexico.
FOUR CORNERS. N.M.
40 MILES ELEPHANTBUTTE DAM According to Chase Econometrics, a national forecaster, El Paso is expected to be the eighth fastest growing population center in the United States with annual growth projected at 3.6%.
El Paso has grown so fast that, in terms of percentage of population change, it was surpassed in the last decade only by San Jose, California and equaled only by Phoenix, Arizona.
El Paso is the largest border port of entry for imports fromMexico. Last year over one billiondollars worth of goods passed through the border cities of Juarez, Mexico, and El Paso destined for locations throughout the U.S. The fact remains: Juarez is good for the El Paso economy and vice versa.
Two factors attributable to our border location continued to inject optimism into the unique border economy during 1981.
First, the "TwinPlant" program continued to attract major new businesses to the area; construction assembly and manufacturing CABALLO DAM TO ALBUQUERQUE ALAMOGORDO HOLLOMANA.F.B.
MAR HATCH APOLLO WHITESANDS MISSILERANGE LAS CRUCES 1Pte PALO VERDE McGREGOR RANGE NEW MEXICO NEW MEXICO MEXICO RIO GRANDE T
CIUDAD IUAREE I
NEWMAN FORT BLISS WM. BEAUMONT EL PASO 0
FABENS TEXAS SIERRA BLANCA Service Area Map VANHORN
~COMPANYLINES
~ COMPANY345KV
~ OTHER LINES 1
IOI POWER STATION
operations in Juarez and technical, distribution and management payrolls in El Paso facilities.
The El Paso Times noted: "Political stability compared to other Third World countries, a large low-cost labor force, high productivity and an adequate framework of government regulations that allow companies to work in their own environment are the major selling points to be offered businessmen building plants in Mexico."
These "smokeless" industries are, by and large, centered around electronics and apparel. In 1981 nine major firms moved operations into the El Paso area including Contico International, Woodhead El Paso, El Paso Wire Inc. and Dietzgen Corporation.
Two major expansions include ATARIInc. and Dale Electronics.
Also, 1981 was a "boom" year for industrial development in the Las Cruces and Santa Teresa, New Mexico, industrial areas. Eight firms located new facilities in these areas during the first eleven months of the year. Among these companies were Entersteel Products Co.,
Farah Manufacturing Co., Inc., Micro-Switch (a division of Honeywell Corp.), Prepared Foods Inc., Semco Manufacturing Inc., Septor Company, SWIG (pecan processing) and Tri-Color, Inc.
One factor which could have a positive effect on the local economy is the completion of a 16-inch natural gas pipeline from the heart of fuel-rich Mexico to Juarez. It is expected to eventually attract heavy industry to the border area.
Another economic plus was the designation and the start of construction of a Foreign Trade Zone, as well as the construction of a 300-room Marriott Hotel in El Paso and the opening of a $ 12.2 million regional shopping mall in Las Cruces.
During 1981 the relocation and expansion of firms to El Paso has resulted in nearly 4,000 new manufacturing jobs in the city.
Approximately 5,000 indirect jobs, mainly in the service sector, have also resulted. In El Paso alone, employment is up 3.3/o over 1980 figures to 163,400.
In Las Cruces, nonagricultural jobs have risen by approximately 15.6/o since 1974. This has resulted in a total employed work force of 35,000, up 5.2/o since 1980.
El Paso Electric has made major contributions in the communities it serves by accepting the responsibility of being one of the area's major home-based, home-managed corporations.
Corporate responsibility to the community was reflected in the Company's leadership role during 1981 in El Paso's quadricentennial, the 4 Centuries '81 celebration, as well as strong support for public television in El Paso and Las Cruces, United Way, the League of United Latin American Citizens (LULAC),Junior Achievement, The Boys'lub and the "hands-on" Insights Science Museum housed in the basement of the Company's corporate headquarters.
Key to the Company's continuing corporate responsibility role in the community is El Paso Renaissance 400, a broad community revitalization program which recruited Company President Evern Wall as its chairman.
The goal of Renaissance 400 is to promote and coordinate an increased and broader involvement of private enterprise in the continuing development and improvement of the economic and social growth of our city.
The Company has assumed this leadership role and very strongly supports sound, planned area growth because it enhances the area's overall economy and broadens the base on which the city levies taxes, consequently enhancing the ability of the city to provide needed services.
"Allof the people in this area are our customers," says Wall, "and we have a very unique responsibility to our communities. We are a leading corporation in the support of major civic projects. I believe that 1981 proved that and in 1982 The Electric Company willcontinue to accept a more responsible role in the community."
"Planning for future energy needs is an important function at The Electric Company."
Harry Zimmer, Vice President, Engineering, Transmission and Distribution Division
1977-1981 MEGAWATTHOUR (MWH)SALES Commercial and 0 Industrial Sales Residential Sales C3 Other Sales 0
- Inmillions.
The Company's operations and new developments during 1981.
Major factors and indicators contributing to the Company's operating revenues during 1981 were:
~ Total sales of electricity decreased slightly in 1981, but sales to customers in the Company's service area increased to 3,564,000 megawatt-hours (MWH). This reflects an increase of 4.1%. A record-breaking system peak load of 736,000 KW was reached on June 22, an increase of 2.5% over 1980. During 77 78 79 80 81 Residential Commercial, Large Sales to Public Authorities Other Sales for Resale Off System Sales Commercial, Small l
iiii gpss.
~i~)i'lllili-'-"
l jliillli
[lllljjjjj I l-"jjl 1981 approximately 78% of the Company's revenues were derived from Texas customers, 16% from New Mexico customers, 3% from sales for resale customers and 3% from off-system sales.
~ El Paso Electric's net generating capacity is 977 megawatts (MW)from four power stations: Rio Grande Power Station (333 MW), Newman Power Station (463 MW),
Copper Power Station (69 MW) and an entitlement from the Four Corners Power Station in northwestern New Mexico (112 MW).
~ Residential electricity usage was 966,487 (MWH)in 1981, a slight decrease from 1980. There were 4,855 new residential 1981 REVENUE DOLLARSOURCE customers added during 1981, and the average residential customer used 5,849 KWHduring the year, a decrease from 6,065 KWH in 1980.
~ Commercial and industrial customers used 1,736,182 MWH, an increase of 129,182 from 1980. The Company had a net gain of over 500 new customers in this category which includes schools, hospitals, other public facilities, stores and offices.
~ Southern California Edison Company paid approximately $6.9 millionto the Company for electricity and firm capacity in 1981 the second year of a three year contract.
~ Rates and regulations: Retail base electric rates did not increase in either the Company's Texas or New Mexico jurisdictions in 1981.
In Texas the Company is operating in compliance with an agreement reached in August 1980 between the Company, the City of El Paso and the Public UtilityCommission of Texas. The Company agreed not to implement a base rate increase until after April 1, 1982, which was voluntarily extended by the Company to October 1, 1982.
As part of the final agreement, the Company agreed to a hearing regarding its level of participation in the Palo Verde Nuclear Generating Station. The hearing is tentatively-scheduled to take place during 1982 but it could be postponed indefinitely or canceled due to the Company's agreement to sell a portion of its Palo Verde entitlement. The Commission has on two previous occasions certified the Company's fullparticipation in the project.
In New Mexico the Company is operating under a July 1980 rate order.
While the Company is keenly aware of the effects of rising energy costs on its customers, it has been able to hold the line on further base rate increases, even with its heavy construction schedule. Although financial indicators were strong in 1981, increasing costs affecting the Company willmake it necessary to seek rate increases in both jurisdictions sometime in late 1982 for implementation in early 1983.
Major expense items and developments during 1981 included:
~ Fuel expenses for the year were up 12.7% to $ 107.6 million. Approximately 43 cents of each revenue dollar went to pay the Company's fuel bill.
In 1981, the Company's fuel mix to generate electricity was 86% natural gas, 13%
coal and 1% oil. Approximately 96% of fuel costs went for natural gas, 3% for coal and 1%
for oil. The Company paid an average of $2.93 per million BTUs for natural gas, up 17% over 1980; 63 cents per million BTUs for coal, up 37% and $5.02 per millionBTUs for oil, up
1981 COST PER MILLIONBTUs OIL
$S.02 PEN MILUON NATURAL GAS
$2.93 PER MILUON Bms COAL S3C PHI MILUON Bilb OIL 1%
COAL 13%
NATURALGAS 86%
1981 FUEL MIX 19%. The Company has fuel cost recovery provisions in all of its jurisdictions.
Fuel cost control was enhanced by the modification of natural gas facilities at Newman Station during the year, allowing it to utilize interstate gas (the lowest cost fuel for local generation) as well as intrastate gas (higher, yet less expensive than oil) depending upon availability of the different fuel sources.
El Paso Electric willgain even further control over fuel and purchased power costs with the addition of nuclear energy and a proposed interconnection with Southwestern Public Service Company.
~ New interconnection agreements were completed in late 1981 for the construction of a 125-mile, 345-kilovolt (KV)transmission line from the El Paso area to Artesia, New Mexico.
The line is being constructed in conjunction with Texas-New Mexico Power Company which willown one-third of the line. Construction is scheduled to begin in 1983 and when completed willprovide an interconnection with Southwestern Public Service Company. A direct current terminal to connect the two systems, which are not synchronized electrically, willbe built by Southwestern.
The interconnection willmake available 100 MW of interruptible electric energy beginning in 1984 and will 1981 FUEL MIX ANDCOST PER BTUs OF ENERGY GENERATION 0 Oil 0 Natural Gas 0 Coal "There was no rate increase in Texas or New Mexicoin 1981...the Company's financial indicators were strong enough for us to be successful without one...."
BillyeE. Bostic, Senior Vice President, Financial Division Fuel Depreciation Other Operating Expense Interest Expense Retained Earnings Dividends Taxes allow the Company to purchase electricity at a lower cost than that generated locally by fuel oil or natural gas.
4 Environmental protection measures are important to El Paso Electric. The Company's Newman, Copper and Rio Grande Power Stations are in compliance with all existing environmental regulations and standards. A large-scale environmental protection installation is currently under way at the coal-fired Four Corners Power Station (shared with 5 other utilities in the west). Particulate removal equipment construction at the Station is scheduled for completion in December
- 1982, while sulfur dioxide removal equipment is still in design stages and not scheduled for completion until late 1984.
~ Research and development programs on new energy producing sources and techniques are actively supported by the Company through a variety of means.
El Paso Electric is currently producing electricity from an experimental 20-KW photovoltaic solar cell system installed at the Newman Power Station. The project, the first such installation in the country, started a two-year research-demonstration test period in June 1981. A joint effort with the New Mexico Solar Energy Institute (NMSEI), and supported in part by a grant from the Department of Energy (DOE), the sun-to-electricity system is providing electricity to the control computer of Newman Unit No. 4.
The Electric Company along with the NMSEI has also applied for a grant from the Texas Energy Resources Advisory Council to conduct a feasibility study for a "solar pond" to be located at Newman Station. A solar pond would utilize high concentrations of salt water to trap heat which would, in turn, boil a secondary fluid and power a generator.
Because of the storage properties of salt water, this technology could feasibly work at night as well as during cloudy days. With funding, the project could begin as early as spring 1982.
1981 REVENUE DOLLAR EXPENDITURE
10 Four Corners Power Station "The attention the Company is directing to coal and nuclear energy does not mean itis disregarding alternative energy sources."
Donald Isbell, Vice President, Energy Resource and Development Division An advanced study on a solar repowering project was started under a DOE grant in 1981.
The initial conceptual design study was conducted in 1979-1980. The proposal calls for a field of mirrors ("heliostats") focusing the sun's energy on a central receiver, or power tower, where water would boil generating enough steam to provide an estimated 50%
of the energy needed to operate Unit No.
1 at Newman Station. The new study will incorporate and refine new information into the previous design and is expected to be completed in April 1982 and could lead to a preliminary'engineering design grant during the year.
The Company initiated a wind turbine site selection and installation project in 1981 with two goals: (1) to determine the power producing potential of small wind-electric generating systems in the Company's service area; and (2) to investigate interconnection requirements, effects on the electric system and the actual power producing potential of a small (25 KW) wind turbine system.
In addition to conducting its own research, El Paso Electric also participated in research and development through its membership in organizations including The Electric Power Research Institute, Texas Atomic Energy Research Foundation and Western Energy Supply and Transmission Associates (WEST).
Palo Verde: nuclear power for the Sun Belt.
El Paso Electric is a participant with four other Sun Belt utilities in the construction of the three-unit, Palo Verde Nuclear Generating Station, 50 miles west of Phoenix, Arizona.
Construction started in 1976 and the first of the three 1,250-MW units is scheduled to begin commercial operation in May 1983.
At the close of 1981, Unit No.
1 was 95%
complete with fuel scheduled to be on-site and loaded in late 1982. Unit No. 2 was 75%
complete and due to begin operation a year later in May 1984; and Unit No. 3 was 30%
KQ
The first of three nuclear units at Palo Verde comes on line in May 1983.
11 complete and scheduled for operation in 1986.
Other participants in the Palo Verde Project include Arizona Public Service Company, Salt River Project Agricultural Improvement District, Public Service Company of New Mexico and Southern California Edison.
El Paso Electric owns a 15.8% undivided interest (200 MWfrom each unit) in Palo Verde, but late in 1981 entered into an assignment agreement to sell 25% of its participation (a total of 150 MW) to the M-S-R Public Power Agency. M-S-R is a California consortium composed of the cities of Modesto, Santa Clara and Redding.
The sale to M-S-R is contingent upon both parties obtaining all requisite approvals. M-S-R is making monthly deposits of earnest money with the Company and willcontinue to do so until the sale is completed. The closing for the sale is projected to take place in August 1982.
The addition of nuclear fuel to El Paso Electric's fuel mix is expected to have a stabilizing affect on fuel costs extending through the 1990's.
To generate electricity today and in the future, energy supplies are needed that are safe, clean, economical and available. That limits the choices to a very few. Clearly, nuclear energy is already an integral part of the nation's electric power supply system, approaching 50 percent of the generation in some parts of the country. There are now about 78 nuclear power plants in the United States licensed to operate, supplying the nation with electricity that otherwise could require burning nearly one and a half millionbarrels of oil per day.
When electric power begins flowing to The Electric Company's service area from the Palo Verde Station in 1983, uranium fuel willbe added to the Company's fuel mix. One of the principal objectives of the Company for the past several years has been to convert from its reliance on petroleum fuels toward the use of more abundant and less costly coal and nuclear energy. Palo Verde represents a major step in that direction.
A successful energy production program is based on sound planning principles. Planning for future energy needs is an important function at The Electric Company and is, at the same time, growing in complexity. Just as the Company began preparing almost a decade ago for Palo Verde it is also planning today in order to meet the needs of tomorrow's customers.
"As long as the nation needs electricity, itis going to need nuclear energy to supply much ofits electrical requirements.
The consumer willbe the ultimate beneficiary."
Holland York Senior Vice President, Power Supply Dzvxsion
12 Residential energy audit 1
i IMi "As a Company we manufacture and distribute electri atty, but our product is service...
James Jones, Vice Presi derr t, Mesilla Valley Division Serving our customers.
The Company's primary function is to manufacture and distribute electricity, but its product is service and this philosophy continued to be accented during 1981 in a myriad of customer service programs.
In an Area Development Department Program, 50 major industrial customers were called upon in 1981 by a management-service team to discuss Company services.
Under another program, mandated by Congress and implemented through the DOE, the Company conducted over 1,700 conservation energy audits on request by commercial and residential customers.
The program is the continuation of a valuable service offered by the Company for many years.
"Star Services," a service-oriented section offering special assistance to eligible customers, including alternative methods of billpayment to customers over 62 years of age on a fixed income, low income persons or those with other financial difficulties, has been fully implemented now. In 1981 Star Services employees handled over 2,900 personal contacts. The section consists of four specially trained employees. A Star Services office was also implemented and staffed with one full-timeemployee in Las Cruces.
The Company's Community Services Section offers a number of programs ranging from present and future energy-related topics and electrical safety as well as conservation information. The programs are designed to help answer questions about energy and the electric utilityindustry. During 1981 over 26,000 personal contacts were made by employees of Community Services.
Several special customer programs continued to be offered to the public, including a do-it-yourself Solar Water Heating Workshop in which over 100 customers participated in 1981. These individuals built a total of 268 solar panels with a net result of 104 new solar water heating systems being placed in service.
Contacts and communications with the customer, while most relevant on a one-to-one personal basis, remains most cost-efficient through the use of mass media including active advertising and public affairs programs.
V The Electric Company as a Sun Belt employer.
For the first time in 1981, the number of Company employees topped the one thousand mark at 1,025, up from 986 in 1980.
Of this total:
~ On the management level, of the 145 officers and managers, 14.5% are female and minorities represent 22%.
~ In the professional fields (151 employees),
39.7% are minorities and 23.8%
of the total are female.
~ 29.6% are female (compared to 28.7% in 1980) and 53.6% are minorities (up from 52.7%
in 1980).
~ 332 (32.4%) are members of Local 960 of the International Brotherhood of Electrical Workers. A two-year labor agreement between the Company and Local 960 was finalized in February 1982, and became effective on Monday, March 1, 1982. The contract contains a mutually acceptable wage agreement.
The Company actively supports an affirmative action program and is an equal opportunity employer.
The Company provides many training programs for its employees. In 1981 a super visor orientation program was initiated to better prepare employees advancing to higher positions. The program was instituted to provide supervisory personnel new to supervision with the basics for operating and managing their departments and sections.
An education tuition aid program provides reimbursement to employees of 90% of the cost of tuition for courses (completed with a specified grade) at a university, college or business/trade school. Over 170 employees participated in the program in 1981.
In addition, the Intex Communications System correspondence program offers a myriad of job-related course programs through the correspondence method.
Dedication and high performance are not cliches at El Paso Electric...they are the norm."
Charles Mais, Vice President, Administrative Division 13 w, jf~F'4~
Employees are also offered Company stock through two plans. The Employee Stock Purchase Plan allows for payroll deductions to purchase stock while the Employee Stock Ownership Plan (ESOP) provides common stock to those employees who have been with the Company a minimum of three years.
Management changes in 1981 included WilliamW. Royer who joined the Company as General Counsel in 1981 to establish, for the first time, a corporate legal division. Lawrence M. Downum, Jr. was appointed Assistant Vice President of the Mesilla Valley Division.
Downum has been with the Company 21 years, most recently as Manager of Public Affairs.
45.22%
39.06% j M!netty 53.66%
23.15%
60.23%
29.66%
192?-1981 AFFIRMATIVE ACTIONPROGRESS 0 Minority Employment-AliEmployees C3 Hispanic Percentage of Total 0 Female Percentage of Total Hispanics omale o
lgpg
Wall Harvey Boney smith Mattttn Ivey Cutler Salas Porrae Goottrnan Directors Of The Company Evern R. Wall*,
President and Chairman of the Board [7).
Paul Harvey*,
Honorary Chairman of the Board of the Company, Investments [41).
Robert E. Boney*,
Investments, Las Cruces, New Mexico [34].
Tad R. Smith, Attorney, Kemp, Smith, Duncan 6 Hammond; Counsel for the Company [21].
George G. Matkin, Senior Chairman of the Board, State National Bank of El Paso and PanNational Group, Inc. [15).
Ben L. Ivey, Farming, Chairman of the Board, Bank of Ysleta [12].
Robert H. Cutler*,
Chairman of the Board, Illinois-California Express, Inc. (common carrier, motor transportation) [11).
Leonard A. Goodman, Jr.,
Chartered Life Underwriter/General Agent, John Hancock Mutual Life Insurance Company [3].
Josefina A. Salas-Porras, Executive Director, BI Language Services [3).
- Members of the Executive Committee.
[ ) Years of service on the board.
Officers Of The Company Evern R. Wall, President and Chairman of the Board [24).
Rolland E. York, Senior Vice President [31].
Billye E. Bostic, Senior Vice President [34).
James H. Jones, Vice President [18).
Harry I. Zimmer, Vice President [36).
Donald G. Isbell, Vice President [17].
Charles Mais, Vice President [27].
Ralph G. Crocker, Treasurer [42].
William J. Johnson, Controller [4].
Theta S. Fields, Secretary [31].
William W. Royer General Counsel [1].
Robert N. Hackett, Assistant Vice President [11].
Lawrence M. Downum, Jr.
Assistant Vice President [21].
Robert L. Corbin, Assistant Treasurer 6 Assistant Secretary [33].
Richard E. Farlow, Assistant Treasurer [33).
Cecelia R. Shea, Assistant Secretary [24].
Years of service
( i.
Financial
~
EL PASO ELECTRIC COMPANYANDSUBSIDIARY MANAGEMENT'SDISCUSSION ANDANALYSISOF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS LIQUIDITYANDCAPITALRESOURCES Liquidityis a measure of a business'bility to provide cash for normal operations and for expansion of its facilities necessary to provide its product at a reasonable cost. Capital resources are those sources of cash available to the business for liquidityand include internal cash generation, short-term and long-term obligations, preferred and common stock and other financial arrangements.
During a major construction program a utility's ability to secure capital resources from external financings, such as selling common stock, preferred stock and long-term obligations, may be the best measure of its liquidity.
The Company is participating in the construction of the Palo Verde Nuclear Generating Station (Palo Verde Station) which has required substantial amounts of capital. To date the Company has been successful in securing the resources needed as.
shown in the table below. The Company expects to be able to continue to secure the funds necessary for its continuing construction program; however, due to market conditions, rate relief allowed and other uncontrollable factors, there can be no assurance that it will. The principal cash requirements of the Company and sources of such cash were approximately as follows:
15 Requirements:
Construction Sources:
Common stock Preferred stock Long-term obligations and other Short-term obligations, net of repayments.
Internally generated 1981
$148,000 48,000 58,000 43,000 11,000 1980 (In thousands)
$ 130,000 56,000 15,000 25,000 21,000 15,000 1979
$ 114,000 35,000 26,000 55,000 (8,000) 10,000 The Company's capital structure has changed from 45'/o long-term obligations, 15/0 preferred stock and 40/0 common
'quity at December 31, 1978, to 41/0 long-term obligations, 13/0 preferred stock and 46/0 common equity at December 31, 1981
~ The change in the Company's capitalization structure has improved the Company's indenture of mortgage coverage from 3.02 at December 31, 1978, to 4.84 at December 31, 1981, and would have allowed the issuance of an additional $162,700,000 in first mortgage bonds at an assumed rate of 160/o. The Company's Restated Articles of Incorporation contain restrictions on the issuance of preferred stock. The most restrictive of these conditions would have allowed the issuance of an additional
$97,300,000 in preferred stock at December 31, 1981, at an assumed dividend rate of 13'io.
Rate relief to support construction and financing has'been aggressively pursued and has resulted in the granting of rate increases of approximately $52,300,000 over the past three years from all jurlsdtctions. Whtle the Company has been successful in the past, there can be no assurance that the Company willcontinue to receive rate increases or that the rate increases, if granted, willbe in the amounts requested.
The Company's estimated construction expenditures for 1982 through 1985, including allowance for funds used during construction, are approximately $677,300,000. Of this amount, approximately $481,900,000 willbe spent for the construction of the Palo Verde Station. External financing for the 1982 through 1985 construction program willbe approximately $373,000,000 and willbe accomplished through a combination of first mortgage bonds, preferred stock, common stock, other secured and unsecured debt and pollution control bonds. The timing and amount of additional external financing willdepend upon market conditions, rate increases, the possible sale by the Company of 250/0 of its ownership interest in the Palo Verde Station and other factors. The above construction and financing estimates do not take into account the possible Palo Verde sale. Such sale, ifconsummated in August 1982 as currently scheduled, would provide approximately $ 180,000,000 to $200,000,000 cash proceeds to the Company either at such time or within a twelve-month period after August 1982. In addition, the purchaser would assume responsibility for future construction costs applicable to its interest in the Palo Verde Station, thereby substantially reducing the Company's estimated construction expenditures for the Palo Verde Station during the 1982-1985 period.
The Company expects that its current capitalization ratio, as discussed above, willnot change substantially for the next several years.
16 Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY RESULTS OF OPERATIONS Operating Revenues Operating revenues increased approximately $39,900,000 in 1981 over 1980 representing an 18.9/o increase. While recovery of escalating fuel costs represented approximately $ 15,300,000 of this increase, the balance of the increase resulted from base rate increases authorized by the Public UtilityCommission of Texas (Texas Commission) and the New Mexico Public Service Commission (New Mexico Commission), partially offset by a slight decrease in volume. Special sales to Southern California Edison Company (SCE), including fuel, were approximately the same in 1981 and 1980. Special sales to Comision Federal de Electricidad (CFE), Ciudad Juarez, Mexico, decreased in 1981 as compared to 1980 by approximately $ 14,200,000, including fuel.
Operating revenues increased approximately $50,800,000 in 1980 over 1979 representing a 31.8~/o increase. While recovery of escalating fuel costs represented approximately $17,000,000 of this increase, the major portion resulted from base rate increases authorized by the Texas and New Mexico Commissions and special sales to SCE and CFE. Sales to SCE and CFE totaled approximately $21,400,000, including fuel, during 1980. There were no special sales to SCE and CFE in 1979. Of the increase in base revenues, average base rates and volume accounted for 79'/0 and 21/0, respectively.
The increases in average base rates for all periods reflect increases in rates allowed by the various regulatory bodies which became effective in June and November 1979, and April,July and November 1980.
Operating Expenses Increases in operating expenses for 1981 over 1980 and 1980 over 1979 were primarily due to increases in fuel expense and Federal income taxes. Increases in other operations expense also contributed to the increase for 1981 over 1980. Fuel expense, Federal income taxes and other operations expense accounted for 44/o, 18/o and 15/0, respectively, of the total increase for 1981 over 1980. Fuel expense and Federal income taxes accounted for 38/0 and 34/0, respectively, of the total increase for 1980 over 1979.
Fuel expense increased in 1981 over 1980 and 1980 over 1979 primarily due to escalating fuel costs. The Company's primary fuel source for generation of electricity for all periods has been natural gas (86'/o in 1981, 81/0 in 1980 and 79'/0 in 1979). It is anticipated that fuel expense willincrease during the coming year based upon increased natural gas prices recently announced by the Company's supplier. Natural gas willlikely continue to be the Company's primary fuel source until the Palo Verde Station starts commercial operation. Unit 1 of this station is scheduled to start operation in 1983. The Company also has an interest in an electrical interconnection system scheduled to start operation in early 1984. With this system, the Company willbe supplied with interruptible electric energy and it is anticipated that this willsave on overall fuel and purchased power expenditures.
Total Federal income tax expenses increased in 1981 over 1980 primarily due to increased taxable income and increased provision for deferred income taxes relating to the borrowed portion of allowance for funds used during construction. Total Federal income tax expenses increased in 1980 over 1979 primarily due to increased taxable income and increased provision for deferred income taxes relating to the borrowed portion of allowance for funds used during construction, changes in deferred fuel balances and taxes capitalized.
Other operations expense increased in 1981 over 1980 primarily as a result of increased payroll, provision for uncollectible accounts, employee benefits and pensions, travel, automobile usage, general office supplies and property insurance.
Allowance for Funds Used During Construction (AFUDC)
AFUDC increased in 1981 over 1980 and in 1980 over 1979 due to the increased cumulative construction expenditures principally associated with the Palo Verde Station and the adoption of AFUDC compounding in 1980 on major projects, as well as increased accrual rates.
AFUDC amounted to 70/0, 630/0 and 63/0 of net income applicable to common stock during the years ended December 31, 1981, 1980 and 1979, respectively. AFUDC's contribution to net income is net of the effect of deferred Federal income taxes on the borrowed portion of AFUDC. See Note I of Notes to Consolidated Financial Statements for further details and a discussion of the non-cash nature of AFUDC.
17 Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY Other Income, Net of Other Expenses and Federal Income Taxes The increase in.1981 as compared to 1980 is primarily due to interest earned on pollution control bond proceeds held in trust during 1981.
Interest Charges Interest on long-term obligations increased in all periods primarily due to the issuance of an additional first mortgage bond series, long-term floating rate notes and pollution control bonds. Additionally, average prime interest rates used to determine interest costs on the floating rate notes increased in all periods.
The changes in other interest in 1981 and 1980 over the respective prior years reflect increased short-term borrowing and higher prevailing average interest rates.
Supplemental Information Concerning the Effects of Inflation Information required in regard to the effects of inflation is included on pages 37 through 39 of this report.
MARKETFOR THE COMPANYS COMMONSTOCK ANDRELATED SECURITY HOLDER MATTERS The Company's Common Stock is traded in the over-the-counter market. The bid quotations as reported on the National Association of Securit1es Dealers Automated Quotations System (NASDAQ) and published by The Wall Street Journal and the quarterly dividends per share for the periods indicated were as follows:
1980 First Quarter Second Quarter Third Quarter Fourth Quarter 1981 First Quarter Second Quarter Third Quarter Fourth Quarter
~Hi h 10 9~re 10'0>n 11 Ile Bid otation 774 83'l~
9 gs>i 10'ividends
$0.275 0.275 0.29 0.29 0.305 0.305 0.32 0.32 The above quotations do not include retail mark-ups, mark-downs, or comm1ssions and do not necessarily represent actual transactions.
At February 25, 1982 there were 47,657 holders of record of the Company's common stock.
The Company's Restated Articles of Incorporation, the original Indenture of Mortgage and certain of the supplemental indentures relating to the various series of first mortgage bonds contain restrictions as to the payment of dividends on the common stock of the Company and as to the purchase or retirement of capital stock of the Company. At December 31, 1981 the amount available for dividends on the common stock under the most restrictive of those provisions was approximately
$54,000,000.
The Company hns paid quarterly dividends on its common stock without interruption since distribution of the common stock to the public in 1947 (34 years).
At its meeting in January 1982 the Board of Directors declared a cash dividend of $0.32 per share of common stock, payable March 15, 1982, to shareholders of record at the close of business on February 25, 1982. The current 1ndicated annual dividend rate is $ 1.28 per share. The Company intends to continue to pay quarterly dividends on its common stock, but future dividends willdepend upon earnings, cash flow, the financial condition of the Company and other factors.
18 Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY SELECTED QUARTERLYFINANCIALDATA For the years ended December 31, 1981 and 1980 (Unaudited)
Operating Revenues Net Income Applicable Operating Operating Net to Common
~Ex nses Income Income Stock (In thousands of dollars except for per share data)
Net Income Per Share of Common Stock 1981 First Quarter Second Quarter Third Quarter Fourth Quarter 1980 First Quarter Second Quarter Third Quarter Fourth Quarter
$54,400 61,933 73,532 60,514 38,761 49,372 65,860 56,520
$42,142 49,302 57,465 51,185 31,993 41,187 53,519 45,597
$ 12,258 12,631 16,067 9,329 6,768 8,185 12,341 10,923
$ 12,520 13,145 17,864 13,168 6,415 9,107 14,131 11,524
$ 10,741 11,365 16,085 11,388 4,972 7,665 12,688 9,734
$.52
.55
.70
.46
.32
.48
.74
.50
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Shareholders and Board of Directors El Paso Electric Company:
We have examined the consolidated balance sheets of El Paso Electric Company and Subsidiary at December 31, 1981 and 1980, and the related consolidated statements of income, retained earnings and changes in financial position for the three years ended December 31, 1981, 1980 and 1979. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairlythe consolidated financial position of El Paso Electric Company and Subsidiary at December 31, 1981 and 1980, and the consolidated results of operations and changes in financial position for the three years ended December 31, 1981, 1980 and 1979, in conformity with generally accepted accounting principles applied on a consistent basis.
COOPERS 6 LYBRAND Dallas, Texas February 12, 1982
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY CONSOLIDATEDBALANCESHEETS ASSETS December 31 1981 1980 (In thousands)
Utilityplant (Notes B, E and H):
Electric plant in service Less accumulated depreciation and amortization Net plant in service Construction work in progress.
Held for future use Other investments Net utilityplant Nonutility property and investments, at cost net of accumulated depreciation of $268,000 and $ 150,000, respectively Current assets:
Cash (Note F).
Accounts receivable, principally trade (less allowance for doubtful accounts of $436,000 and $371,000, respectively)
Federal income taxes refundable Inventories:
Materials and supplies.
Fuel (Note H)
Prepayments Other Total current assets.
$328,694 92,565 236,129 561,851 7,788 805,768 11,656 13,555 24,486 2.694 4,868 14,380 2,896 567 63,446
$315,551 62 239 233,312 386,149 397 13 093 632 951 2 239 7,799 25,042 2,694 4,572 10,551 1,961 11 52 630 Deferred charges and other assets 9,201 3 172 Total assets
$890,071
$690 992 The accompanying notes are an integral part of the consolidated financial statements.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY CONSOLIDATEDBALANCESHEETS CAPITALIZATIONANDLIABILITIES December 31 1981 1980 (In thousands) 21 Capitalization:
Common stock, no par value, 40,000,000 and 30,000,000 shares authorized, respectively.
Issued and outstanding 25,110,066 and 20,485,067 shares, respectively (Note C)
Retained earnings (Note E)
Common stock equity.
Preferred stock, cumulative, no par value, 2,000,000 and 1,000,000 shares authorized, respectively (Note D):
Redemption required, issued and outstanding 642,000 and 646,000 shares, respectively Redemption not required, issued and outstanding 190,000 shares.
Long-term obligations (Note E).
Total capitalization Current liabilities:
Current portion of long-term obligations (Note E).
Notes payable banks (Note F)
Notes payable other (Note F).
Commercial paper (Note F)
Fuel purchase commitment (Note H)
Accounts payable, principally trade.
Taxes accrued Interest accrued Other Total current liabilities.
Deferred credits and other liabilities:
Accumulated deferred Federal income taxes Accumulated deferred investment tax credit.
Other (Note H).
Total deferred credits and other liabilities.
Commitments and contingencies (Notes H and J)
Total capitalization and liabilities.
$210,148 79,602 289,750 64,200 18,873 252,415 625,238 1,736 54,200 2,265 63,508 14,279 13,682 7,563 6,042 4,515 167.790 46,554 42,499 7,990 97,043
$890,071
$ 162,303 59 383 221,686 18,873 202 263 507 422 54 16,225 15,850 44,836 10,449 9,244 9,121 4,351 4 594 114 724 33,260 31,721 3 865
$690 992 The accompanying notes are an integral part of the consolidated financial statements.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 1981, 1980 and 1979 Operating revenues 1981 1980 1979 (In thousands) 5250.579
$ 210 513
$ 159 712 Operating expenses (Note I):
Operations:
Fuel Purchased and interchanged power Other Maintenance Depreciation and amortization (Note B).
Taxes (Note G):
Federal income, current Federal income, deferred.
Charge equivalent to investment tax credit, net of amortization.
Other 107,562 2,551 29,113 10,087 10,508 3,691 13,005 12,505 11,072 95,461 (820) 24,839 7,925 9,090 5,396 8,743 9,941 11 721 81,669 (3,531) 20,962 6,725 8,245 1,238 6,138 4,083 10 114 Operating income.
200.094 172 296 135 643 50.285 38 217 24 069 Other income (deductions):
Allowance for equity funds used during construction (Note I).
Other income, net of other expenses and Federal income taxes (Note G).
Income before interest charges.
22,813 14,377 1.842
~366) 24.155 14 011 74.440 52 228 7,450 292 7 742 31 811 Interest charges (credits):
Interest on long-term obligations.
Other interest (Note B).
Other interest capitalized (Note B).
Allowance for borrowed funds used during construction (Note I).
27,401 14,218 (1.498) 16,875 10,533 (1,980) 11,589 7,420 (1,643)
~22.978)
~14 377)
~8745) 17.745 11 051 8 621 Net income (Note I).
Preferred stock dividend requirements.
56,697 7,118 41,177 6 118 23,190 3 948 Net income applicable to common stock (Notes C and I).
5 49.579
$ 35 059 19 242 Net income per share of common stock, based on weighted average number of shares outstanding during the year (Notes C and I).
$2.23
$2.05
$ 1.45 Weighted average number of common shares outstanding (Note C).
22.250.664 17 063 864 13 252 102 The accompanying notes are an integral part of the consolidated financial statements.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY CONSOLIDATEDSTATEMENTS OF RETAINED EARNINGS For the years ended December 31, 1981, 1980 and 1979 Retained earnings at beginning ofyear.
Add:
Net income 1981 8 59,383 56,697 116,080 1980 (In thousands)
$ 45,097 41 177 86 274 1979
$ 40,753 63 943 Deduct:
Cash dividends:
Preferred stock.
Common stock Capital stock expense.
7.118 28,448 912 36,478 6,118 20,012 761 26 891 3,948 14,523 375 18 846 Retained earnings at end of year.
$ 79.602
$ 59 383
$ 45 097 The accompanying notes are an integral part of the consolidated financial statements.
24 Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY CONSOLIDATEDSTATEMENTS OF CHANGES IN FINANCIALPOSITION For the years ended December 31, 1981, 1980 and 1979 Source of funds:
From operations:
Net income.
Items not requiring (providing) working capital:
Depreciation and amortization.
Deferred Federal income taxes.
Investment tax credit Allowance forequity funds used during construction Other Funds provided by operations.
From financings and external sources:
Sale of common stock...
Sale of preferred stock Long-term obligations:
Sale offirstmortgage bonds.
Pollution control obligation, net of amount on deposit with trustee Sale of unsecured promissory notes Other Earnest money deposits on proposed sale.
Sale of uranium venture and nuclear fuel to trust.
Sale of assets.
Deferred gain on capital lease.
Long-term purchase commitment Short-term obligations Total from financings and external sources.
Decrease in working capital other than short-term obligations*.
Total source of funds.
1981
$ 56,697 10,508 12,979 12,492 (22,813)
~1.7101 68,153 47,845 40,000 7,366 4,401 3,500 4,376 1,284 44.744 153,516
$ 221,669 1980 (In thousands)
$ 41,177 9,090 8,387 10,641 (14,377) 337 55 255 55,974 15,000 18,000 12,477 2,386 124 506
$ 179 761 1979
$ 23,190 8,245 6,875 4,083 (7,450) 278 35 221 35,060 26,000 4,712 591 116 363 6 789
$ 168 373 Application of funds:
Gross additions to plant.
Allowance forequity funds used during construction.
Gross additions to nonutilityprdperty.
Dividends on preferred stock Dividends on common stock Redemption of preferred stock Reduction of long-term obligations..
Increase (decrease) in deferred charges and other assets.
Transfer of long-term purchase commitment to current liabilities..
Other, net.
Short-term obligations*.
Increase in working capital other than short-term obligations".
Total application of funds.
$ 191,969 (22,813) 9,535 7,118 28,448 400 1,736 (1,059) 3,841 2,494
$ 221,669
$ 158,008 (14,377) 32 6,118 20,012 400 (380) 865 9 083
$ 179 761
$ 130,048 (7,450) 794 3,948 14,523 4,549 876 7,754 (193) 3,524
$ 158 373
e Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY CONSOLIDATEDSTATEMENTS OF CHANGES IN FINANCIALPOSITION - (Continued)
For the years ended December 31, 1981, 1980 and 1979 1981 Increase (decrease) in components of working capital other than short-term obligations*:
1980 (In thousands) 1979 Current assets:
Cash Accounts receivable, principallytrade.
Federal income taxes refundable.
Materials and supplies.
Fuel Prepayments Other
$ 5,756 (556) 296 3,829 935 556 10,816
$ (2,885) 6,715 692 2,491 249
~10)9) 6 243
$ 4,652 3,002 (3,344) 1,059 (789)
(76)
~1096) 3 408 Current liabilities:
Turbine contract payable.
Fuel purchase commitment.
Accounts payable, principallytrade.
Taxes accrued.
Interest accrued.
Other 3,830 4,438 (1,558) 1,691
~79)
(7,754) 2,491 (1,363) 2,998 1,168
~380) 7,754 (789) 1,625 704 352 551 8,322
~2840) 10 197 Increase (decrease) in working capital other than short-term obligations.
$ 2.494
$ 9 083
~$
6 789)
- Short-term obligations are represented by the current portion of long-term obligations, notes payable banks, notes payable other and commercial paper.
The accompanying notes are an integral part of the consolidated financial statements.
26 Financial EL PASO ELECTRIC COMPANY ANDSUBSIDIARY NOTES TO CONSOLIDATEDFINANCIALSTATEMENTS A. Summary of Significant Accounting Policies General The Company maintains its accounts in accordance with the Uniform System of Accounts prescribed for electric utilities by the Federal Energy Regulatory Commission (FERC).
Reclassification In accordance with an FERC requirement, during 1980 the Company began charging all capital stock expense incurred directly to retained earnings. The Consolidated Statement of Retained Earnings for the year ended December 31, 1979 has been reclassified to reflect the amount of capital stock expense incurred. Certain immaterial amounts in the consolidated financial statements for 1980 and 1979 have been reclassified to be consistent with classifications in 1981.
Princi les of Consolidation The consolidated financial statements include El Paso Electric Company and its wholly-owned subsidiary. Allintercompany balances and significant intercompany transactions have been eliminated in consolidation.
~Utllll Plant Utilityplant is stated at original cost. The Company provides for depreciation on a straight-line basis at annual rates which willamortize the undepreciated cost of depreciable property over estimated remaining service lives.
The Company charges the cost of repairs and minor replacements to the appropriate operating expense and capitalizes the cost of renewals and betterments. The cost of depreciable plant retired or sold and the cost of removal, less salvage, are charged to accumulated depreciation.
Inventories Inventories are valued at the lower of average cost or market.
Revenues Revenues are recognized based on cycle billings rendered to customers monthly. The Company does not accrue revenues with respect to energy consumed but not billed at the end of a fiscal period.
Unamortized Debt nse and Premium or Discount on Debt Unamortized amounts apply to outstanding issues and are being amortized ratably over the lives of such issues.
" Federal Income Taxes and Investment Tax Credit Accelerated methods of computing depreciation of utilityplant are used for Federal income tax reporting purposes which differ from the methods used for financial reporting purposes. Differences in the tax and financial methods of accounting for fuel costs and other capitalized costs also exist. In accordance with regulatory authority requirements, provision has been made in the financial statements for Federal income taxes deferred to future years as a result of these items. In addition, deferred Federal income taxes are provided on the borrowed portion of AFUDC.
Investment tax credit utilized is deferred and amortized to income over the estimated useful lives of the related properties after such properties are placed in service.
Net Income'Per Share of Common Stock Net income per share of common stock is computed using the weighted average number of common shares outstanding during the year. Common equivalent shares related to the Amended Employee Stock Purchase Plan are not significant.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATEDFINANCIALSTATEMENTS - (Continued)
B. UtilityPlant During the years ended December 31, 1981, 1980 and 1979, interest in the amount of $1,498,000, $ 1,980,000 and
$ 1,643,000, respectively, relative to funds borrowed by a turbine trust and the Company's subsidiary has been capitalized. The borrowed funds, at rates ranging from 4-1/4% to 21-1/2%, were used to acquire utilityplant and various other assets. The interest amount has been included in the Consolidated Statements of Income as "Other Interest" with a corresponding amount included in "Other Interest Capitalized."
The Company has a 7% undivided interest in Units 4 and 5 of the Four Corners Project (coal-fired generating station) located in northwestern New Mexico and a 15.8% undivided interest in Units 1, 2 and 3 of the Palo Verde Station which is under construction near Phoenix, Arizona. The Company also has an interest in constructing transmission facilities related to the Palo Verde Station. Participants in the joint plants are responsible for obtaining their respective financing. The extent of the Company's interests in these facilities (Palo Verde Project and Four Corners Project), excluding nuclear fuel, is as follows:
1981 December 31 1980 Electric plant in service.
Accumulated depreciation.
Construction work in progress.
Palo Verde
~Pro'ect 547,648 Four Corners Palo Verde
~Pro ect
~Pro'ect (In thousands)
$ 17,095 (3,986) 10,317 378,516 Four Corners
~Pro ect
$15,425 (3,500) 3,108 The Company's direct expenses associated with the in-service portion of the Four Corners Project are included in the applicable operating expense categories of the Consolidated Statements of Income.
Total depreciation was $10,201,000 in 1981, $9,004,000 in 1980 and $8,531,000 in 1979, of which $281,000, $257,000 and
$286,000, respectively, was applicable to transportation equipment and has been charged to other accounts. Additionally, amortization of electric plant under capital lease, commencing in June 1980, amounted to $588,000 for 1981 and $343,000 for 1980.
The average annual depreciation rate used by the Company for the year ended December 31, 1979 was 2.93%. Effective November 1980, in accordance with a Texas Commission order, the rate was changed from 2.93% to 3.28%. That rate was in effect through December 31, 1981.
C. Common Stock Under a shareholder approved employee stock purchase plan, qualified employees may purchase shares of the Company's common stock at two specified dates each year for a period ending no later than June 30, 1984. The purchase price is 90% of the average bid price of the stock at the option dates. In the event the option price exceeds the average of the bid and ask prices at the purchase date, then the options lapse and shares are purchased in the open market by the Company. During 1981, 1980 and 1979, 14,305, 12,388 and 6,717 shares of common stock, respectively, were issued at an aggregate amount of
$ 124,000, $ 106,000 and $63,000, respectively. The cumulative aggregate corresponding fair market values as of the option dates were $ 138,000, $ 117,000 and $70,000 in 1981, 1980 and 1979, respectively. At December 31, 1981, 40,185 shares were reserved for future purchases under the plan. Proceeds from issuances are credited to common stock and no charges are reflected in income with respect to the plan.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATEDFINANCIALSTATEMENTS - (Continued)
The Company has a dividend reinvestment and stock purchase plan which provides holders of its common stock the option to invest cash dividends and/or optional cash payments (up to $3,000 per calendar quarter) in additional shares of the Company's common stock. During 1981, 1980 and 1979, 405,360, 292,136 and 178,652 shares, respectively, were purchased by shareholders who reinvested dividends and invested cash in the amounts of $4,210,000, $2,711,000 and $ 1,854,000, respectively. The purchase price is the average of the highest closing bid and lowest closing ask price of the stock on the purchase date. At December 31, 1981, 384,699 shares were reserved for future purchases under the plan. In January 1982, an additional 1,500,000 shares were reserved.
The Company has an employee stock ownership plan (ESOP). In accordance with Federal income tax provisions, effective through 1982, common stock with a value equal to the sum of a specified amount of the Company's investment tax credit and employee cash participation willbe contributed to the plan. Under the provisions of the Economic Recovery Tax Act of 1981, the ESOP investment tax credit based on investment in property willterminate with respect to qualifying investments made after 1982. Beginning in 1983, the ESOP investment tax credit willbe based upon payroll costs. In October 1981, 1980 and 1979, the Company and participating employees contributed 205,334, 177,170 and 126,633 shares of stock, respectively, with a market value of $2,191,000, $ 1,709,000 and $ 1,287,000, respectively, to the plan. At December 31, 1981, 714,334 shares were reserved for future contributions under the plan.
In November 1981, the Company implemented a customer stock purchase plan. The shares are being offered to the Company's Texas and New Mexico customers who enroll in the plan. The purchase price per share is the average of the highest closing bid and lowest closing ask price on the investment date. Customers may purchase shares by making cash payments in amounts of not less than $25 per payment nor more than $3,000 total investment per calendar quarter. Dividends paid on all shares purchased by a participant willbe automatically reinvested in additional shares, except for those participants who request the stock certificates and cash dividends. At December 31, 1981, 500,000 shares were reserved for future purchases under the plan. In January and February 1S82, a total of 61,417 shares were purchased by participants.
The Company's Restated Articles of Incorporation were amended in June 1S81, to increase the number of authorized shares of common stock from 30,000,000 to 40,000,000.
Changes in common stock are as follows:
Common Stock Balance, December 31, 1978.
Sales of Common Stock:
1979 1980.
1981.
Balance, December 31, 1981 Shares 11,191,371 3,312,002 5,981,694 4 624 999 26 110 066 Amount (In thousands)
$ 71,269 35,060 55,974 47 846
$210 148 Net income applicable to common stock, net income per share of common stock and weighted average number of common shares outstanding for the year ended December 31, 1981, would have been $52,221,000, $2.08 and 25,110,066, respectively, assuming that the proceeds (before expenses of sale) of $47,845,000 from the sale of common stock during the year were used to retire short-term obligations outstanding during the year.
~ Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATEDFINANCIALSTATEMENTS - (Continued)
D. Preferred Stock (1) Preferred Stock Redem tion r uired Following is a summary of outstanding preferred stock - redemption required:
$ 10.75 Dividend.
$ 8.44 Dividend.
$ 8.95 Dividend.
$ 9.00 Dividend.
$ 8.80 Dividend.
$ 9.50 Dividend.
Shares 92,000 150,000 150,000 100,000 50,000 100 000 642 000 December 31 Shares 96,000 150,000 150,000 100,000 50,000 100 000 646 000 1981 Amount (In thousands)
$ 9,200 15,000 15,000 10,000 5,000 10 000
$ 64 200 1980 Amount (In thousands)
$ 9,600 15,000 15,000 10,000 5,000 10 000
$64 600 Optional Redemption Price Per Share at December 31, 1981
$108.00 108.44 108.95 The $ 10.75 preferred shares are entitled to the benefits of an annual sinking fund whereby on January 1 of each year, beginning in 1980, the Company willredeem 4,000 shares at the sinking fund redemption price of $100 per share plus accrued dividends. The $ 10.75 preferred shares are redeemable at the option of the Company; however, no optional redemption of the shares may be made prior to January 1, 1985, as a part of, or in anticipation of, any refunding involving the issue of indebtedness or preferred stock having an effective interest or dividend cost of less than 10.75% per annum.
The $8.44 preferred shares are entitled to the benefits of an annual sinking fund whereby on October 1 of each year,
.- beginning in 1984, the Company willredeem 4% (and may, at its option, redeem an additional 4%) of the aggregate maximum number of shares outstanding at the sinking fund redemption price of $100 per share plus accrued dividends. The $8.44 preferred shares are redeemable at the option of the Company; however, except as set forth above, no optional redemption of the shares may be made prior to October 1, 1988, as a part of, or in anticipation of, any refunding involving the issue of indebtedness or preferred stock having an effective interest or dividend cost of less than 8.44% per annum.
The $8.95 preferred shares are entitled to the benefits of an annual sinking fund whereby on October 1 of each year, beginning in 1985, the Company willredeem 5% (and may, at its option, redeem an additional 5%) of the aggregate maximum number of shares outstanding at the sinking fund redemption price of $ 100 per share plus accrued dividends. The $8.95 preferred shares are redeemable at the option of the Company; however, no optional redemption of the shares may be made prior to October 1, 1984, as a part of, or in anticipation of, any refunding involving the issue of indebtedness or preferred stock having an effective interest or dividend cost of less than 8.95% per annum.
The $9.50 preferred shares are entitled to the benefits of an annual sinking fund whereby on July 1 of each year, beginning in 1986, the Company willoffer to purchase on the next succeeding October 1, out of funds legally available for the purchase or redemption of $9.50 preferred shares, not less than 20,000 shares (or the number of such shares then outstanding if less than 20,000) at a purchase price of $ 100 per share, plus accrued dividends. The Company is required to redeem on October 1, 1990, all shares then outstanding at a redemption price equal to $ 100 per share plus an amount equal to accrued and unpaid dividends to and including the date of redemption. The $9.50 preferred shares are redeemable at the option of the Company, however, no optional redemption of the shares may be made prior to October 1, 1987.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATED FINANCIALSTATEMENTS - (Continued)
Sinking fund requirements for each of the above series are cumulative and, in the event they are not satisfied at any redemption date, the Company is restricted from paying any dividends on its common stock (other than dividends in common stock or other class of stock ranking junior to the preferred stock as to dividends or assets).
The $9.00 preferred shares have no provision for a sinking fund, are not redeemable at the option of the Company, and must be redeemed in full on October 1, 1986, at $ 100 per share plus accrued dividends. In the event the Company fails to provide sufficient funds for redemption, the Company is restricted from paying any dividends on its common stock (other than dividends in common stock or other class of stock ranking junior to the the preferred stock as to dividends and assets).
The $8.80 preferred shares have no provision for a sinking fund and are not redeemable at the option of the Company until October 1, 1987. On October 1 of each year, beginning in 1990, the Company willoffer to purchase on the next succeeding February 1, out of funds legally available for the purchase or redemption of the $8.80 preferred shares, any or all outstanding shares of $8.80 preferred shares at a purchase price of $ 100 per share, plus accrued dividends. In the event the Company fails to provide sufficient funds for redemption, the Company is restricted from paying any dividends on its common stock (other than dividends in common stock or other stock ranking junior to the preferred stock as to dividends and assets).
The aggregate amounts of the above preferred stock required to be retired for each of the next five years are as follows:
1982 1983..
1984..
1985 1986 Inthousands 400 400 1,000 1,750 13,750 Sales and redemption of preferred stock redemption required were as follows:
Balance, December 31, 1978.
Issuance of Preferred Stock, $8.44 Dividend Issuance ofPreferred Stock, $8.95 Dividend Issuance of Preferred Stock, $9.00 Dividend Balance, December 31, 1979.
Redemption of Preferred Stock, $ 10.75 Dividend.
~
~
Issuance ofPreferred Stock, $8.80 Dividend Issuance ofPreferred Stock, $9.50 Dividend.
Balance, December 31, 1980.
Redemption of Preferred Stock, $ 10.75 Dividend.
Balance, December 31, 1981 Shares 240,000 10,000 150,000 100 000 500,000 (4,000) 50,000 100 000 646,000
~40001 642 000 Amount (In thousands)
$24,000 1,000 15,000 10 000 50,000 (400) 5,000 10 OCO 64,600
~40D
$64 2CO
31
- Financial
. EL PASO ELECTRIC COMPANY ANDSUBSIDIARY NOTES TO CONSOLIDATEDFINANCIALSTATEMENTS - (Continued)
(2) Preferred Stock Redem tion not r uired Following is a summary of preferred stock which is not redeemable except at the option of the Company:
$4.50 Dividend.
$4.12 Dividend.
$4.72 Dividend.
$4.56 Dividend.
$8.24 Dividend.
Shares 15,000 15,000 20,000 40,000 100 000 Amount December 31 1980 1981 (In thousands) 1,534 1,534 1,506 1,506 2,001 2,001 4,000 4,000 9 832 9 832
$ 18 873
$ 18 873 Optional Redemption Price Per Share at December 31, 1981
$ 109.00 103.98 104.00 100.00 107.52 The above preferred shares are redeemable at the option of the Company; however, no optional redemption of the $8.24 shares may be made prior to April 1, 1982, directly or indirectly as part of, or in anticipation of, any refunding involving the issue of indebtedness or preferred stock having an effective interest or dividend cost less than 8.38% per annum.
There have been no changes in preferred stock - redemption not required during the three years ended December 31, 1981.
Allpreferred stock issues (redemption required and redemption not required) are entitled, in preference to common stock, to $100.00 per share, plus accrued dividends, upon involuntary liquidation. Allissues except the $9.00, $8.80 and $9.50 preferred stock issues, are entitled to an amount per share equal to the applicable optional redemption price, plus accrued
- dividends, upon voluntary liquidation. The $9.00, $8.80 and $9.50 preferred stock issues are entitled to a fixed price ($109.00,
$ 108.80 and $ 109.50 per share at December 31, 1981, respectively), plus accrued dividends, upon voluntary liquidation.
The Company's Restated Articles of Incorporation were amended in June 1981, to increase the number of authorized shares of preferred stock from 1,000,000 to 2,000,000.
32 Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATEDFINANCIALSTATEMENTS - (Continued)
E. Long-term Obligations Outstanding long-term obligations are as follows:
December 31 1981 1980 (In thousands)
Redemption Price at December 31, 1981 First mortgage bonds:
3~/s%
Series, due 1984..
4~/4%
Series, due 1988.
16.35%
Series, due 1991.
4s/s%
Series, due 1992.
6s/4%
Series, due 1998.
7s/4%
Series, due 2001.
9%
Series, due 2004.
9.95%
Series, due 2004.
10~/z%
Series, due 2005.
87/z%
Series, due 2007.
4,950 6,100 40,000 10,385 24,800 15,838 20,000 25,000 15,000 25 000 187,073 4,950 6,100 10,385 24,800 15,838 20,000 25,000 15,000 25 000 147,073
$ 100.45 101.45 102.02 103.73 105.85 106.45 109.95 109.05 107.55 9% Pollution Control Revenue Bonds 1981 Series A, due 1984, net of
$28,074,000 on deposit with trustee, collateralized by second mortgage bonds.
Unsecured promissory notes, floating rate (15.75fo at December 31, 1981 and 20.50% to 21.50% at December 31, 1980):
Due 1984.
Due 1985..
Obligation under capital lease.
Other secured and unsecured notes payable, interest at rates ranging from 8.8125% to 14% per annum, due in installments through 1998...
7,366 25,000 18,000 13,725 5 174 256,338 25,000 18,000 12,477 2 075 204,625 Current maturities of long-term obligations...
Unamortized premium and discount.
(1,736)
(54)
~2187)
~2308)
$ 252 415
$202 253 The premiums reflected in the redemption prices shown above continue at reduced amounts in future years, finally resulting in each case in redemption at par at maturity.
The Company's indenture of mortgage securing its first mortgage bonds provides for sinking and improvement funds. For each series other than the 9.95% and 16.35% series, the Company is required to make annual payments to the trustee equivalent to 1% ($1,230,000 at December 31, 1981 and 1980) of the greatest aggregate principal amount of such series outstanding prior to a specified date. The Company has generally satisfied the 1% requirements by relinquishing the right to use a net amount of additional property for the issuance of bonds or by purchasing bonds in the open market and expects to continue this practice. With respect to the 9.95% series, commencing April30, 1985, the Company willbe required to make annual cash payments to the trustee equivalent to 4-1/4% of the greatest aggregate principal amount of such series outstanding at any one time prior to a specified date. The 4-1/4% cash payments must be applied to redeem bonds of the 9.95% series at 100% of the principal amount thereof plus accrued interest. No sinking fund is required for the 16.35% series.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATED FINANCIALSTATEMENTS - (Continued)
Scheduled maturities of long-term obligations at December 31, 1981, excluding obligation under capital lease and sinking fund requirements are as follows (in thousands):
1982 1983.
1984.
1985 1986.
Thereafter 298 408 37,652 18,374 417 185,464 The funds on deposit with a trustee at December 31, 1981 represent a portion of the proceeds from pollution control revenue bonds issued in June 1981. The Company can draw funds from the trustee account as qualified construction expenditures for pollution control are made.
Substantially all of the Company's utilityplant is subject to a lien under the indenture of mortgage collateralizing the Company's first mortage bonds and a lien collateralizing the Company's second mortgage bonds. The second mortgage bonds in the amount of $35,440,000 were issued solely to secure $35,440,000 principal amount of 9% Pollution Control Revenue Bonds 1981 Series A, due 1984.
In accordance with certain provisions of the indenture covering the first mortgage bonds, payments of cash dividends on common stock are restricted to an amount equal to retained earnings accumulated after December 31, 1966, plus $4,100,000.
Retained earnings in the amount of approximately $54,000,000 are unrestricted as to the payment of cash dividends at December 31, 1981.
The unsecured floating rate notes due in 1984 and 1985 may be prepaid at the option of the Company without premium.
At December 31, 1979 the Company had a commitment in the amount of $7,754,000 to purchase a turbine from an independent trust no later than a specified date in 1980. During 1980 the turbine and related equipment were sold to a second independent trust and an arrangement was made whereby the Company leased the turbine and certain other related equipment
~ from the trust-lessor for a twenty-year period with renewal options for up to seven more years. Semi-annual lease payments, including interest, commencing in January 1982, are $719,000 through January 1991 and $861,000 thereafter to July 2000. The effective annual interest rate implicitin this lease is calculated to be 9.6%. The total cost of the equipment to the trust-lessor of
$ 11,800,000 plus $ 1,925,000 interest accrued is reflected in long-term obligations at December 31, 1981. Of the $ 11,800,000 approximately $8,400,000 was paid to the equipment trust which owned the turbine and approximately $3,400,000 was paid to the Company for its interest in the turbine and certain other related equipment. The difference between the sales price and the original basis of the turbine and related equipment is being amortized to income over the lease term.
F. Notes Payable and Commercial Paper The Company and its subsidiary have informal lines of credit with various lenders. Certain of these arrangements provide for the maintenance of compensating balances for the available lines of credit and the loans outstanding. At December 31, 1981 the lines of credit available under these arrangements totaled $ 127,316,000 (including subsidiary lines of $9,316,000 not guaranteed by the Company). Average bank balances of $9,788,000 were maintained a's compensating balances at December 31, 1981 in connection with the informal lines of credit. The amount of unused lines of credit at December 31, 1981 was
$84,165,000. In January 1982, an independent trust increased the available line of credit to the Company and subsidiary from
$30,000,000 to $70,000,000 which increased the unused line of credit by $40,000,000 pending expenditures by the trust for nuclear fuel.
Through December 31, 1982, the FERC has authorized the Company to incur short-term debt (in the form of promissory notes or commercial paper) in an amount not to exceed $ 175,000,000 outstanding at any one time, exclusive of short-term debt of the Company's subsidiary. The interest rates are to be at the prime rate in effect at the time of issuance, plus in some cases, provisions for compensating balances of 20% under certain conditions. The net proceeds from the issuance of the short-term debt are to be used primarily for construction expenditures.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATED FINANCIALSTATEMENTS - (Continued)
G. Federal Income Taxes The provisions (credits) for deferred Federal income taxes, which arise from timing differences between financial and tax reporting, are as follows:
Years Ended December 31 Tax effect of:
Operating income:
Depreciation differences.
Deferred fuel costs.
Allowance for borrowed funds used during construction Other Other income.
1981 1,550 270 10,294 891 48
$ 13 063 1980 (In thousands) 1,566 226 6,613 338
~609)
$ 8 134 1979 1,769 (1,074) 4,023 1,420
$ 6 138 Federal income tax provisions are less than the amounts computed by applying the statutory rate of 46% to book income before Federal income taxes. Details are as follows:
Years Ended December 31 Tax computed at statutory rate.
Decreases due to:
Allowance for equity funds used during construction Other Total Federal income tax expense.
Effective Federal income tax rate.
1981
$40,003 (10,494) 757
$30 266 34.8 1980 (In thousands)
$ 30,103 (6,613) 774
$ 24 264 37.1%
1979
$ 16,062 (3,427)
~907)
$ 11 728 33 Total Federal income tax expense is as follows:
Current income taxes operating.
Current income taxes other income.
Total current.
Deferred income taxes operating.
Deferred income taxes (credit) other income.
Deferred investment tax credit operating.
Deferred investment tax credit other income.
Amortization of deferred investment tax credit operating 1981
$ 3,691 1 030 4,721 13,005 48 12,939 (13)
~434)
$ 30 266 Years Ended December 31 1980 (In thousands)
$ 5,396 93 5,489 8,743 (609) 10,355 700
~4) 4)
$ 24 264 1979 1,238 269 1,507 6,138 4,379
~296)
$ 11 728 At December 31, 1981, the Company had available for Federal income tax purposes an investment tax credit carryforward of approximately $ 16,100,000 expiring in 1996.
Financial
~ EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATED FINANCIALSTATEMENTS - (Continued)
H. Commitments and Contingencies The Company has approximately a 15.8% interest in three units of a nuclear plant (Palo Verde Station) and related transmission lines and switchyard facilities presently under construction. Transmission lines represent approximately 6% of the aggregate costs of these projects. The estimated aggregate costs of these projects to be incurred by the Company subsequent to December 31', 1981, are approximately $507,000,000, including approximately $219,700,000 of allowance for funds used during construction (AFUDC).
The Company has entered into an assignment agreement, subject to certain conditions, for the sale of 25% of the Company's interest in the Palo Verde Station and related switchyard as well as nuclear fuel and uranium venture interest held by the trust discussed below. The proposed sales price is expected to exceed the carrying value of the assets. As of December 31, 1981, the Company had received $3,500,000 in earnest money deposits related to the sale which are included in other deferred credits. The estimated costs in the preceding paragraph do not give effect to the sale.
The Company is also'committed at December 31, 1981 for construction of pollution control facilities in the amount of approximately $39,300,000, including approximately $ 13,700,000 of AFUDC.
The above estimated amounts were computed assuming an estimated average annual inflation rate of 9% and an average AFUDC rate of 13.5%.
The Company has an agreement with an independent trust whereby the trust purchases, at cost, all of the Company's nuclear fuel requirements and amounts related to a uranium venture. Under the trust agreement the Company has the option of either repurchasing the fuel from the trust or leasing the heat generated by the fuel. Management of the Company intends to enter into a basic heat supply contract whereby title to the fuel remains with the trust and the Company willmake lease payments for the heat generated.
Based on this intention and in accordance with industry practice, the nuclear fuel and uranium venture assets and their related liabilities are not included in the accompanying balance sheets. The aggregate investment at December 31, 1981 amounted to approximately $27,700,000. The Company is committed to reimburse the trust for its cash investment in nuclear fuel and uranium venture costs, not expected to exceed a maximum cash amount of $93,000,000 during the ten-year period ending December 31, 1991, as well as for interest and other carrying costs of the trust.
Included in the aggregate investment of the trust, described in the preceding paragraph, at December 31, 1981, is a
$4,900,000 joint venture interest in certain mining claims and leases. In 1981, two of the participants in the venture expensed their investment in the venture due to their determination that production from the venture's mining claims and leases was not feasible in view of limited reserves and depressed market prices. The Company believes these revaluations to be inappropriate and at this time does not intend to provide for a reduction in the value of the investment of the trust. A minimum amount of exploration and development work is presently being performed.
The Company's fuel supply arrangements include short-term commitments under a fuel supply arrangement with a trust, whereby the Company concurrently assigned its principal long-term fuel supply contract to the trust and agreed to purchase all fuel oil delivered to the trust by the fuel supplier. Payments to the trust for fuel oil purchases consist of the trust's cost of oil determined on an average cost basis plus related administrative and carrying costs. For financial reporting purposes, purchases of the trust are assumed to have been made on behalf of the Company. Accordingly, the balance sheets at December 31, 1981 and 1980, include $ 14,279,000 and $ 10,449,000, respectively, recorded as fuel and fuel purchase commitment, representing the Company's commitment to purchase the trust's fuel oil inventory as of those dates.
In December 1981, the Company entered into an agreement with Texas-New Mexico Power Company (TNP) for the purpose of constructing, operating and maintaining a transmission system. This system includes a transmission line connecting with an existing switchyard in New Mexico, related switchyards and communication equipment. Completion of this system will allow the Company to purchase interruptible electric energy from another utility. In the performance of this agreement, the Company has been named Project Manager and willbe responsible for all construction, operation and maintenance work. The agreement provides for the Company to receive advance funds, on a monthly basis, from TNP in order to perform all required work. The Company's interest in the construction, operation and maintenance costs is approximately 67%. The estimated cost of construction to be incurred by the Company subsequent to December 31, 1981, is approximately $ 14,600,000, including
$900,000 of AFUDC.
In December" 1981, the Company entered into an agreement with Southwestern Public Service Company (SPS) for the purpose of constructing a direct current terminal in New Mexico. The Company is obligated to advance funds, on a monthly basis, to SPS who willperform the construction work. The Company's interest in the construction is approximately 67%. The estimated cost of construction to be incurred by the Company subsequent to December 31, 1981, is $ 19,400,000, including
$ 1,800,000 of AFUDC.
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY NOTES TO CONSOLIDATED FINANCIALSTATEMENTS - (Continued)
I. Allowance for Funds Used During Construction (AFUDC)
The applicable regulatory uniform system of accounts provides for AFUDC which is defined as an amount which includes the net cost during a period of construction of borrowed funds used for construction purposes plus a reasonable rate on other funds when so used. While AFUDC results in an increase in utilityplant under construction for ratemaking purposes with a corresponding credit to income, it is not a current cash item. AFUDC is realized in cash net of certain tax effects after the related plant is placed in service and the depreciation charges based on the total cost of the plant, including AFUDC, are allowed in cost of service amounts by regulatory authorities.
The amount of AFUDC is determined by applying an accrual rate to the balance of certain utilityplant construction. In this connection, the FERC has promulgated procedures for the computation (a prescribed formula) of the accrual rate. The rates used by the Company do not exceed those permitted by the FERC.
The Company used an accrual rate of 11.0% in 1979. Effective January 1, 1980, the Company increased the accrual rate to 11.9%. During 1981, the Company increased the accrual rate to an effective rate of 13.8%.
The increase in the AFUDC rate used during 1980 increased net income and net income applicable to common stock (excluding effect of compounded AFUDC) by $ 1,490,000 and net income per share by $.09. The increase in the AFUDC rate used during 1981 increased net income and net income applicable to common stock (excluding effect of compounded AFUDC) by $4,060,000 and net income per share by, $.18.
Effective January 1, 1980, the Company began semi-annual compounding of AFUDC on major construction projects.
Compounding involves using previously capitalized AFUDC as part of the cost base on which to apply the AFUDC rate. The increase in net income and net income applicable to common stock related to compounded AFUDC for 1980 and 1981 was
$2,444,000 and $2,965,000, respectively. The increase in net income per share of common stock related to compounded AFUDC for 1980 and 1981 was $.14 and $.13, respectively.
J. Pension Plan The Retirement Income Plan (the plan) covers employees who have completed one year of service with the Company. The plan is a noncontributory defined benefit plan. Upon retirement or death of a vested plan participant, assets of the plan are used to purchase an annuity contract with an insurance company. Therefore, assets available for plan benefits and the present value of vested benefits represent amounts attributable to active employees only.
The financial statements of the plan are presented on a cash basis. Under this method of accounting, certain revenue and expense items are not recognized when earned and incurred, but rather when cash is actually received or paid.
Contributions from the Company are based on the amounts required to be funded under provisions of the plan as actuarially calculated. The benefits to be provided under the plan are valued using the Frozen Initial Liabilityvariation of the Entry Age Normal Cost Method. The weighted average assumed rate of return used in determining the actuarial present value of accumulated plan benefits presented below was 6%, compounded annually.
Accumulated net assets available for plan benefits and the actuarial present value of accumulated plan benefits as of the most recent actuarial determination date are presented below:
1981 June 30, 1980 Net assets available for plan benefits.
Actuarial present value of accumulated plan benefits:
Vested benefits:
Participants currently receiving payments.
Other participants 225 8 239 180 7 736 (In thousands)
$7 682
$6 440 Nonvested benefits.
Total actuarial present value of accumulated plan benefits.
8,464 695
$9 159 7,916 401
$8 317 The pension expense in 1981, 1980 and 1979 was $920,000, $800,000 and $751,000, respectively, which includes amortization of past service cost over a 30-year period beginning in 1972.
37
" Financial
, EL PASO ELECTRIC COMPANYANDSUBSIDIARY SUPPLEMENTAL INFORMATIONCONCERNING THE EFFECTS OF INFLATION(Unaudited)
The followingsupplementary information is supplied in accordance with the requirements of Financial Accounting Standards Board (FASB) Statement No. 33, Financial Reporting and Changing Prices, for the purpose of providing certain information about the effects of changing prices. It should be viewed as an estimate of the approximate effect of inflation, rather than as a precise measure.
Constant dollar amounts represent historical costs stated in terms of dollars of equal purchasing power, as measured by the Consumer Price Index for AllUrban Consumers. Current cost amounts reflect the changes in specific prices from the date the plant was acquired to the present, and differ from constant dollar amounts to the extent that specific prices have increased more or less rapidly than prices in general.
The current cost of plant net of accumulated depreciation and amortization, which includes electric plant in service, construction work in progress, other investments and nonutility property, represents the estimated cost of replacing existing plant assets and was determined by indexing the surviving plant by the Handy-Whitman Index of Public UtilityConstruction Costs. The current year's provision for depreciation and amortization on the constant dollar and current cost amounts of plant was determined by applying effective depreciation and amortization rates to the indexed plant amounts.
Fuel inventories and the cost of fuel used in generation have not been restated from their historical cost in nominal dollars.
Regulation limits the recovery of fuel costs through the operation of adjustment clauses or adjustments in basic rate schedules to actual costs. For this reason fuel inventories are effectively monetary assets.
As prescribed in FASB Statement 33, income taxes were not adjusted.
Under the rate making prescribed by the regulatory commissions to which the Company is subject, only the historical cost of plant is recoverable in revenues as depreciation. Therefore, the excess of the cost of plant stated in terms of constant dollars or current cost over the historical cost of plant is not presently recoverable in rates as depreciation, and is reflected as a reduction to net recoverable cost. While the rate making process gives no recognition to the current cost of replacing plant
'ssets,'based on past practices, the Company believes it willbe allowed to earn on the increased cost of its net investment when replacement of facilities actually occurs.
To properly reflect the economics of rate regulation in the Supplemental Consolidated Statement of Income from Operations Adjusted for Changing Prices, the reduction of plant to net recoverable amount should be offset by the gain from the decline in purchasing power of net amounts owed on a constant dollar basis. Meanwhile, on a current cost basis the excess of the increase in general price level over the increase in specific prices at the net recoverable amount should be offset by the gain from the decline in purchasing power of net amounts owed. During a period of inflation, holders of monetary assets suffer a loss of general purchasing power while holders of monetary liabilities experience a gain. The purchasing power gain on net monetary items owed is equal to the net gain found by restating in constant dollars the opening and closing balances of, and transactions in, monetary assets and liabilities. The gain from the decline in purchasing power of net amounts owed is primarily attributable to the substantial amount of debt which has been used to finance plant assets. Since the depreciation of plant is limited to the recovery of historical costs, the Company does not have the opportunity to realize a holding gain on debt and is limited to recovery only of the embedded cost of debt capital.
Restated net assets (which is equal to common stock equity and preferred stock) is measurable by adjusting the amount reported for net assets in the balance sheet for the difference between the historical cost and the restated constant dollar amounts or lower recoverable amounts of property less reserves.
Because of the "lower recoverable amounts" provision, the determination of net assets for a utilitycompany is based on the historical cost at year end, after conversion to constant dollars, with no aging of property required. FASB Statement 33 did not define what should be included in net assets, leaving the calculation open to experimentation. The Company calculates net assets by restating net utilityplant, net nonutility property and monetary items on a constant dollar and current cost basis.
Inferences which, in the case of some industries may be drawn from information in the nature of that presented below as to the adequacy of future cash flows in relation to future plant replacement requirements are believed by the Company to be less valid in the case of public utilities which, like itself, should be able to establish rates to cover increased costs of new plant.
However, the information may provide some indication of the expanded capital structure that willbe required for making plant replacements and additions with inflated dollars.
38 Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY SUPPLEMENTAL INFORMATIONCONCERNING THE EFFECTS OF INFLATION(Unaudited) (Continued)
Supplemental Consolidated Statement Of Income From Operations Adjusted For Changing Prices For the year ended December 31, 1981 (Unaudited)
Operating revenues.
Fuel, purchased and interchanged power Other operating and maintenance expenses.
Depreciation and amortization.
Federal income taxes.
Interest expense Other income.
Net income.
Conventional Historical Cost
$ 250 379 110,113 50,272 10,508 29,201 17,743
~24 1SS 193 682
$ 56 697 Constant Dollar Average 1981 Dollars (lnthousands)
$ 250 379 110,113 50,272 22,479 29,201 17,743
~24 155 205 653 44 726 (2)
Current Cost Average 1981 Dollars
$ 250 379 110,113 50,272 23,180 29,201 17,743
~24 155 206 3S4
$ 44 025 Increase in specific prices (current cost) of plant held during the year (1)
Reduction of plant to net recoverable amount.
Effect of increase in general price level.
Excess of increase in general price level over increase in specific prices at net recoverable amount Gain from decline in purchasing power of net amounts owed.
Net
$ 84,494,
$ (48,922)(2)
(38,062)
~91 022 (44,590) 32 306 32 306
~$ 16 616
~$ 12 284 (1) At December 31, 1981, current cost of plant net of accumulated depreciation was $1,219,234,000 while historical cost or net amount recoverable through depreciation was $817,424,000.
(2) Inclusion of the reduction to net recoverable amount in net income on a constant dollar basis produces a loss of $4,196,000.
W Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY SUPPLEMENTAL INFORMATIONCONCERNING THE EFFECTS OF INFLATION(Unaudited) (Continued)
Five Year Comparison Of Selected Supplementary Financial Data Adjusted For Effects Of Changing Prices (1)
(Unaudited)
Years ended December 31 0
ratin revenues 1981 1980 1979 1978 (In thousands except for per share amounts) 1977 Historical cost.
Constant dollars Net income Historical cost.
Constant dollars Current cost.
Net income r share of common stock Historical cost.
Constant dollars Current cost.
Net assets at ear-end at net recoverable amounts Historical cost.
Constant dollars Current cost.
Excess of increase in eneral rice level over increase in s cific rices at net
$250,379 250,379
$ 56,697 44,726 44,025 2.23 1.69 1.66
$372,823 360,770 360,770
$210,513 232,349
$ 41,177 35,195 33,663 2.05 1.67 1.58
$ 305,159 321,693 321,693
$ 159,712 200,118
$ 23,190 19,824 16,925 1.45 1.13
$ 220,299 261,024 261,024
$136,556 190,368
$ 112,339 168,601 recoverable amount current cost
$ 44,590
$ 59,204
$ 53,762 Other information Gain from decline in purchasing power of net amounts owed, constant dollars.
Cash dividends declared per share of common stock:
Historical cost.
Constant dollars Market price per share of common stock at year-end:
Historical cost.
Constant dollars Average consumer price index.
$ 32,306
$ 38,130
$ 37,585 1.25 1.25 10.88 9.50 9.38 10.53 10.01 11.11 272.4 246.8 217.4 10.88 12.00 14.61 17.56 195.4 181.5 1.13 1.07 1.02
.99 1.25 1.34 1.42 1.49'1)
Constant dollars and current cost amounts are stated in average 1981 dollars.
40 Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY SELECTED FINANCIALDATA For the years ended December 31 (In thousands except for per share amounts) 1981 1980 1979 Operating revenues.
Fuel Operation and maintenance.
Depreciation and amortization.
Taxes.
Other income 107,562 41,751 10,508 40,273
~24 165 95,461 31,944 9,090 35,801
~14 011 81,669 24,156 8,245 21,573
~7742
$250 379
$210 513
$ 159 712 175 939 127 901 Income before interest charges Total interest charges.
Income before cumulative effect on prior years of change in accounting method.
Cumulative effect to January 1, 1974, of change in accounting for fuel costs, net of related income taxes ($912,000).
Net income.
74,440 17 743 52,228 11 051 31,811 8 621 56,697 41,177 23,190
$ 56 697 41 177
$ 23 190 Net income per share of common stock, based on weighted average number of shares outstanding during each year:
Income applicable to common stock before cumulative effect of change in accounting method...
Cumulative effect to January 1, 1974, ofchange in accounting forfuel costs.
Net income applicable to common stock Pro forma amounts assuming the new method of accounting for fuel costs is applied retroactively:
Net income applicable to common stock 2.23 2.23 2.05 2.05 1.45 1.45 Net income per share ofcommon stock Dividends per share paid on common stock Gross utilityplant 1.25 1.13 1.07
$898 333
$715 190
$ 560 932 Total assets.
$890 071
$ 690 992
$ 537 118 Long-term obligations and preferred stock redemption required
$316 615
$266 863
$ 221 721
1978 1977 1976 1975 1974 1973 1972
$ 136 556
$ 112 339
$ 111 188 91 461
$ 63 072
$ 49 483 43 284 73,447 21,171 7,361 14,128
~3688 59,442 16,68S 6,498 12,377
~1689 53,154 17,954 6,233 15,727
~838 44,714 14,516 5,506 11,197
~l 423 24,914 11,463 4,345 9,809
~770 15,766 8,160 4,102 9,573 84 10,951 8,101 3,776 9,279
~668 112 419 93 313 92 230 74 510 49 761 37 517 31 439 24,137 8,113 16,024 19,026 7 604 11,422 18,958 7 442 11,516 16,951 6,853 10,098 13,311 5 280 8,031 11,966 3 962 8,004 11,845 3 591 8,254 988 16 024 11 422
$ ll 516 10 098 9 019 8 004 8 254 1.30 1.11 1.29 1.30 1.19 15 1.19 1.22 1.30 1.11 1.29 1.30 1.34 1.19 1.22 8 270 8 035 1.29 1.25 1.02
.99
.95
.91
.86
.83
$ 437,468
$ 338 598
$ 274 502
$ 250 375
$ 227 196
$ 185 058
$ 174,485
$ 415 975
$ 326 910
$ 258 407
$ 240 659
$ 206 490
$ 156 435
$ 146 401
$ 150,152
$ 128 171
$ 102 290
$ 103 104
$ 85 906
$ 66 309
$ 66 299
Financial EL PASO ELECTRIC COMPANYANDSUBSIDIARY SELECTED OPERATING ANDSTATISTICALDATA Population served at retail, estimated.
Number of customers:
Residential Commercial and industrial, small.
Commercial and industrial, large.
Other Total 1981 610 000 167,625 16,724 43 1 996 162,770 16,169 42 1 94!
180 922 1979 157,601 15,791 44 1 875 175 311 Annual native system peak load, net kilowatts.
Output, net generated and purchased, thousand kilowatt-hours:
Steam Other Purchased and interchanged.
Total (a).
Sales of electricity, thousands of dollars:
Residential Commercial and industrial, small.
Commercial and industrial, large.
Other Total Sales, thousand kilowatt-hours:
Residential Commercial and industrial, small.
Commercial and industrial, large Other Total (a).
Average annual use per residential customer, KWH Average annual revenue per residential customer.
736 000 718 000 3,790,666 25,704 138 104 3,928,860 47,969 9 794
$ 79,019 76,585 38,625 55 128
$ 63,659 58,679 28,155 59 043
$249 357
$ 209 536 966,487 1,033;859 702,323 996 203 972,070 985,123 621,877 1 148 952 3 698 872 3 728 022 5 849
$ 478.21 6 065
$ 397.74 3 954 474 3 986 623 3,771,043
~119 166 3 651 877
$ 52,899 46,741 26,402 32 577
$ 158 619 c 937,858~
949,514 682,163 854 749 3 424 284 6 072
$ 342.49 Average revenue per KWHsold, cents (b):
Residential Commercial and industrial, small.
Commercial and industrial, large.........
Average revenue per KWH; total sales.
Electric line, pole miles:
Over 15,000 volts.
Less than 15,000 volts (c).
Total.
Total employees.
(a) Differences between total output and total sales represent Company (b) Includes adjustments under existing fuel clauses.
(c) Includes minor amounts of line on poles owned by telephone utility.
8.184 7.41 5.50 6.74 2,157 2 865 5 022 1,025 use and line losses.
6.564 5.96 4.53 5.64 2,131 2 841 4 972 5.64'.92 3.87 4.63 2,070 2 794 4 864
43 1978 544 000 1977 532 000 1976 520 000 1975 1974 495 000 1973 1972 475 ODO 150,739 15,381 47 1 842 143,645 14,518 46 1 715 135,344 14,203 39 1 748 130,010 13,294 32 1 663 126,760 13,163 29 1 S45 123,653 12,816 27 1 445 119,170 12,333 27 1 351 168 009 690 000 159 924 151 334 677 000 144 999 141 497 137 941 132 881 618 000 543 400 3,673,685
~84 609 3,475,753
~3574 3,501,416 51 013 3,433,698 15 837 3,369,606
~13 709 3,450,021
~180 767 3,075,013
~112 435 3 589 076 3 472 179 3 552 429 3 449 53S 3 355 897 3 269 254 2 962 578
$ 44,178 39,780 22,402 29 289
$ 34,484 33,583 17,666 25 581
$ 31,415 33,628 15,709 29 537
$ 27,080 28,870 11,816 22 880
$ 20,126 19,192 7,824 15 595
$ 16,749 14,942 6,061 11 416
$ 15,133 12,948 5,231 9 696
$ 135 649
$ 111 314
$ 110 289
$ 90 646
$ 62 737
$ 49 168
$ 43 008 907,956 913,038 650,542 849 113 3 320 649 6 153
$ 299.40 874,140 902,699
~ 617,955 847 930 3 242 724 6 261
$ 246.99 816,169 929,556 582,125 1 030 812 782,285 909,967 513,637 1 006 311 6 193
$ 238.36 6 097
$ 211.04 3 3SB 662 3 212 200 765,636 853,960 508,482 980 175 3 108 253 6 116
$ 160.72 755,701 799,997 536,754 958 252 694,855 696,584 487,945 853 978
$ 137.59
$ 129.53 3 050 704 2 733 362 6 211 5 948 4.874 4.36 3.44 4.09 3.944 3.72 3.47 3.45 3.85'.62 2.70 3.30 3.461t'.17 2.30 2.82 2.634 2.25 1.54 2.02 2.224 1.87 1.13 1.61 2.18<
1.86 1.07 1.57 1,999 2 759 4 758 1,811 2 755 4 566 1,759 2 727 1,706 2 691 816 778 4 486 4 397 1,647 2 673 4 320 726 1,581 2 616 4 197 704 1,539 2 565 4 104 659
El Paso Electric Company P.O. Box 982 El Paso, Texas 79960 BULKRAT U.S. POSTAL PAID
---..',,'L PASO, TERt',
PERMIT NO. 153
Southern California Edison Company l982 IFjtjntz11e1zl a118 Stzt1st1ezl Repoxt Contents Tnble iVurnber 1
Highlights 2
Statements of Income 3
Operating Ratios 4
Pcr Share Data Common Stock 5
Operating Revenues r
6 Kilowatt-Hour Sales 7
Customers and Population 8
Energy 9
Taxes 10 Balance Sheets 11 Statements of Sources of Funds Used for Construction Expenditures 12 Statements of Earnings Rcinvested in thc Business and Additional Paid-in Capital 13 System Rate Base 14 Statements of Long-term Debt
.15 Detail of UtilityPlant 16 Statements of Capital Stock 17 Capitalization and Plant Ratios 18 Operating Statistics 19 Existing Generating Capacity Resources 20 Projected Generating Resource Additions 21 Regulation 22 Projections Sales, Demand, Capital Requirements and Generation Mix Directors and OAicers Page iVuraber 10 10 12 12 13 14 14 15 17 18
Foreword Southern California Edison Company provides electric service in a 50,000 square-mile area of Central and Southern California.
This area includes some 800 cities and communities with a population of more than nine million people. Edison's gross investment in utility plant totals nearly $ 10.8 billion. Area generating capacity at peak during 1982 totaled 15,349 mega-watts (MW), which included 13,269 MW of Company-owned facilities and 2,080 MW of capacity from other sources. Of thc Company-owned facilities, 78% was comprised of oil-and gas-fired generating units. SCE's interest in coal-fired generating units accounted for another 12%,
and 7%
was in renewable/
alternate generation (including hydro). The Company's 80%
interest in a nuclear plant accounted for thc remaining 3%.
WASHINGTON Pe lee H
~ CM ORTGON ei TVAOA c
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Q Serene TCHHCIT CIIN.Heec Veneee HV)
TN*HHeelee Lleee MONTANA IDAHO WTO VTAH OO 8
ro. 8 oen
~
Moiovo ARI?ONA Pace ee e 1
Highlights (a)
Earnings Per Share Common Dividends Paid Per Share (b)......
Rate of Return on Common Equity........
Operating Revenues................
Fuel and Purchased Power Costs Operating Expenses Net of Fuel Costs and Taxes on Income (c)..................
Taxes on Operating Income............
Net Income Earnings Available for Common and Original Preferred Stock.................
Payroll.......................
Employees.....................
Population of Service Area Total Customers..................
Kilowatt-Hour Sales (000)
Area Peak Demand (Mw).............
Area Generating Capacity at Peak (Mw).....
Gross UtilityPlant.................
1982 5.13 3.31 14.89%
$ 4,302,602
$ 2,227,901 993,158 177,251 555,754 S
483,358 S
521,072 15,797 9,134,000 3,275,144 59,326,853 13,149 15,349
$ 10,764,078 1977 3.80 1.92 11.98%
$ 2,064,914
$ 1,189,597 625,309 68,792 251,979 S
206,330 267,216 12,671 8,258,000 2,900,856 57,726,273 11,564 14,278 S 6,191,733 5-Year Contpound Annual Growth Rate 6.2%
I 1.5 4,4 15.8 13.4 9.7 20.8 17.1 18.6 14.3 4.5 2.0 2.5 0.5 2.6 1.5 I 1.7 1972 2.51 1.56 9.42%
927,674 240,135 S
425,047 44,542 135,648 110,469 177,422 12,907 7,523,000 2,566,341 52,309,906 10,317 12,819
$ 4,233,067 l0-Year Compound Annual Growth Rate 7.4%
7.8 4.7 16.6 25.0 8.9 14.8 15.1 15.9 I 1.4 2.0 2.0 2.5 1.3 2.5 1.8 9.8 (a)
Dollars in thousands, except per share data.
(bJ On September 16, 1982, SCF's Board ofDirectors authorized anincreasein the Common Stack quarterly dividend to $0.88from $0.8l per share effective with the October 3l. 1982 payment, which is equivalent to $3.52 per share on an annual basis.
(c)
Fuel costs include fuel, purchased power, and the provision for energy cost adjustments.
t 2
Statements of Income 1982 1981 1980 1979 1978 Thousands ofDollars Year Ended December 3l, 1977 1972 l0-Year Cotnpound Annual Growth Rate OPERATING REVENUES:
Sales Other........
Total operating revenues..
OPERATING EXPENSES:
Fuel...........
Purchased power....
Provision for energy cost adjustments...
Other operation expenses.......
Maintenance Provision for depreciation.....
Taxes on income-currcnt and deferred Property and other taxes.........
Total operating expenses....
OPERATING INCOME OTHER INCOME AND INCOME DEDUCTIONS:
Allowance for equity funds used during construction.....
interest income.....
Taxes on non-operating income credit Other net Total other income and income deductions...
TOTAI. INCOME BEFORE INTEREST CHARGES...
INTEREST CHARGES:
interest on long-term debt.........
Other interest and amortization.....
Total interest charges Allowance for debt funds used during construction.....
Net interest charges....
NET INCOME DIVIDENDSON CUMULATIVE PREFERRED AND PREFERENCE STOCK.
EARNINGS AVAILABLEFOR COMMON AND ORIGINAL PREFERRED STOCK
$4,266,950 35,652
$4,026,548
$3,631,373 27,808 29,744
$2,553,126 10,848
$2,294,543 34,255
$2,050,578 14,336 4,302,602 4,054,356 3,661,117 2,563,974 2,328,798 2,064,914 1,778,553 449,348 367,565 2,078,393 1,729,552 479,813 280,675 1,433,658 99,245 (90,273) 361,600 (188,880) 1,086,051 118,698 1,113,028 76,569 35,280 (149,506) 496,585 210,160 220,927 441,939 193,397 392,593 228,269 202,182 187,959 177,251 197,865 38,683 65,486 59,885 69,652 322,191 177,407 178,637 100,292 56,428 283,622 164,111 157,203 72,803 86,429 241,963 133,166 140,520 68,792 109,660 3,765,875 536,727 3,563,201 3,288,983 491,155 372,134 2,178,978 2,004,197 1,734,192 324,601 330,722 384,996 209,485 34,571 100,655 965 162,879 39,025 54,261 13,896 121,488 33,889 30,358 1,524 92,019 22,860 23,519 1,360 58,471 15,337 20,782 (4,800) 46,233 12,803 11,902 (2,608) 345,676 270,061 187,259 139,758 89,790 68,330 882,403 761,216 559,393 524,754 414,391 399,052 360,915 59,367 420,282 281,626 59,351 340,977 227,163 55,493 282,656 179,626 25,456 205,082 154,301 28,357 182,658 143,152 17,926 161,078 (93,633)
(69,673)
(40,799)
(26,547)
(19,950)
(14,005) 326,649 271,304 489,912 555,754 241,857 178,535 162,708 147,073 317,536 346,219 251,683 251,979 72,396 67,888 60,950 53,738 49,457 45,649 483,358 422,024 256,586 292,481 202,226 206,330
$918,767 8,907 927,674 220,630 19,505 16.6%
14.9 16.6 23.2 36.8 162,634 70,586 104,434 I I.S I 1.5 7.8 44,542 14.8 87,393 709,724 2i7,950 (2.8) 18.2 9.4 5,489 4,091 234 (2,027) 43.9 23.8 83.4 7,787 46.1 225,737 14.6 25,179 I I. I
$ 110,469 15.9%
90,888 14.8 864 52.7 91,752 16.4 (1,663) 49.6 90,089 13.7 135,648 15.1 iVEIGHTEDAVERAGE SHARES OF COMMON AND ORIGINAL PREFERRED STOCK AND COMMON STOCK EqulvALENTs <oooo'..
94,257 EARNINGS PCR SHARE...
~
$5.13 Hole: For operating ratios and per share data 85,610 73,241
$4.93
$3.50 see page 3 ofthis report.
64,202
$4.56 57,477
$3.52 54,347
$3.80 43,965
$2.51 7.9%
7.4%
3 Operating Ratios 1982 1981 1980 1979 1978 1977 1972 PERCENT OF OPERATING REVENUES:
Fuel Purchased power Energy cost adjustments Other operation expenses Maintenance..................
Provision for depreciation...........
Property and other taxes Operating expenses (bel'ore taxes on income)..
Taxes on income current and deferred...
Operating income...............
Total 41.3 %
10.5 8.5 1 1.6 4.9 5.1 1.5 83.4 4.1 12.5 100.0 %
51.3 %
1 1.8 (2.2) 10.9 4.8 5.0 1.4 83.0 4.9 12.1 100.0 %
47.2 %
7.7 9.9 10.7 6.2 5.1 1.9 88.7 1.1 10.2 100.0 %
55.9 %
3.9 (7.4) 12.6 6.9 7.0 2.2 81.1 3.9 15.0 100.0 %
46.6 %
5.1 1.5 12.2 7.1 6.8 3.7 83.0 3.1 13.9 100.0 %
53.9 %
3.7 (7.2) 11.7 6.5 6.8 5.3 80.7 3.3 16.0 100.0 %
23.8 %
2.1 17.5 7.6 1 1.3 9.4 71.7 4.8 23.5 100.0 %
9.2 %
10.1 9.6 13.6 8.1 9.6 8.8 10.4 6.9 %
7.3 6.9 9.4 3.04 2.97 2.89 3.21 3.07 2.78 3.39 3.21 2.90 2.96 2.64 2.44 2.80 2.69 2.45 2.95 2.80 2.55 2.40 2.18 2.06 6.55%
7.21 6.84%
7.25 7.41%
7.53 10.41%
8.26 4
Per Share Data Common Stock RATE OF RETURN ON WEIGHTED AVERAGE:
Rate base...................
10.4 %
10.1 7.9 %
8.5 %
Net utilityplant................ '2.5 12.3 8.8 9.4 Invested capital................
11.7 11.1 8.2 8.6 Common equity (a)..............
14.9 14.9 10.7 12.0 INTEREST COVERAGE BEFORE INCOME TAXES:
Mortgage bond interest............
~
3.31 2.44 3.01 Total debt interest...............
2.96 2.21 2.78 Fixed charges (b) 2.72 2.09 2.53 INTEREST COVERAGE AFrER INCOME TAXES:
Mortgage bond interest............
2.72 2.78 2.67 2.53 Total debt intcrcst...............
2.44 2.51 2.47 2.49 Fixed charges (b)...............
2.26 2.33 2.27 2.42 EMBEDDED COST OF CAPITAL(AT YEAR END):
Long-term debt 9.66%
8.40%
5.46%
Preferred and preference stock 7.99 7.94 6.45 (a)
Includes Original Preferred Stack.
(b)
Fixed charges include interest on long-and short-term debt, antortization ofdebt discount, expense and preinium, interest on Iong-term purchased power contracts, interest on affiliate indebtedness, and the interest factor relating to certain significant rentals plus one-third ofall remaining annual rentals. The ratios exclude fixed charges applicable to indebtedness ofa nuclear fuel supplier far nuclear fiielnot yet in use.
1982 1981 1980 1979 1978 1977 1972 Earnings per share (a):
Primary..................
Fullydiluted................
Dividends pcr sharc:
PaidDeclared..................
Year-end data:
Dividend rate Dividend yield (rate)
Dividend payout ratio (paid)
Book value(a)...............
Market/book ratio Price/earnings ratio............
Prices High Low Year-end..............
Shares outstanding at year end (000)
Weighted avcragc shares of Common and Original Preferred Stock Outstanding and Common Stock Equivalents (000)
(a)
Includes Original Preferred Stock.
S 5.13 S 5.09 S 3.31 S 3.38
$ 3.52 10.0 %
64.5 %
$34.96 100.5 %
6.8
$ 37'/s
$ 28
$ 35i/s 96,692 94,257
$ 4.93
$ 4.91 S 3.03 S 3.10 S 3.24 11.3 lo 61.5 %
$33.74 85.2 %
5.8
$ 30%
S 227/s 283/s 87,603 85,610 S 3.50 S 3.48
$ 2.78
$ 2.84
$ 2.96 1 1.6 %
79.4 %
$33.19 77.2 %
7.3 S 27'/s S 20'/s S
25Ys 75,854 73,241
$ 4.56
$ 4.39
$ 2.54
$ 2.60
$ 2.72 1 1.1 %
55.7 %
$34.22 71.6 %
5.4 S 27'ls S 23'/s S 24'/s 64,895 64,202
$ 3.52
$ 3.38
$ 2.24
$ 2.30
$ 2.48 9.6 %
63.6 %
$32.57 79.1 7.3
$ 27
$ 22'/s
$ 25'li 62,537 57,477
$ 3.80
$ 3.63
$ 2.51
$ 2.43
$ 1.92 S 2.06 1.56 S
1.56 S 2.24 8.5 %
50.5 %
$32.30 81.7 %
6.9
$ 27'/s
$ 2 1 '/s 26s/s 54,646 S
1.56 5.6 %
62.2 %
$27.14 102.2 %
1 1.1
$ 317/s
$ 23 27s/s 43,485 54,347 43,965
6 5
Operating Revenues Year Ended December 31, 1982 1981 1980 1979 1978 1977 1972 cLAss oF sERYIcE DoLLARs (000):
Residential............
Agricultural Commercial Industrial.............
Public Authorities Interdepartmental Resale (a)
Customer refunds Sales of electric energy....
Other...............
Total operating rcvcnucs..
$ 1,233,338 68,281 1,226,532 1,112,784 370,726 127 255,162 4,266,950 35,652
$4,302,602 S
704,658 40,449 610,735 593,580 206,838 30 138,253
$ 1,026,778 68,503 979,051 997,831 315,985 51 243,174
$ 1,115,758 75,257 1,090,694 1,063,823 336,979 77 343,960 S
764,595 47,146 663,678 683,013 225,351 39 169,304 616,520 50,781 505,469 481,587 188,054 22 208,145 4,026,548 27,808 2,553,126 10,848 3,631,373 29,744 2,294,543 34,255 2,050,578 14,336
$4,054,356
$3,661,117
$2,563,974
$2,328,798
$2,064,914
$350,027 23,306 237,120 183,822 89,299 24 38,711 (3,542) 918,767 8,907
$927,674 CLASS OF SERVICE PERCENT:
Residential.........
Agricultural Commercial Industrial..........
Public Authorities Resale (a)
Customer refunds Sales of electric energy Other............
Total.........
28.7%
1.6 28.5 25.9 8.6 5.9 99.2 0.8 100.0%
27.5%
1.9 26.9 26.2 8.3 8.5 99.3 0.7 100.0%
28.1%
1.9 26.7 27.3 8.6 6.6 99.2 0.8 100.0%
29.8%
1.8 25.9 26.7 8.8 6.6 99.6 0.4 100.0%
30.2%
1.7 26.2 25.5 8.9 6.0 98.5 1.5 100.0%
29.8%
2.5 24.5 23.3 9.1 10.1 99.3 0.7 100.0%
37.7%
2.5 25.6 19.8 9.6 4.2 (0.4) 99.0 1.0 100.0%
5,685
$ 35.62 7.524 L
s ofelectricity to RESIDENTIALSALES DATA:
Average sales per residential customer (Kwtl)........
Average monthly revenue per residential customer......
Average revenue per residential customer per Kwu (a)
Includes revenues attributable to sale consumers.
5,879
$ 32.76 5,939
$ 30.85 6,010
$ 23.65 5,883
$ 22.48 5,630 S 20.25 5,777 13.03 6.69'.23) 4.72(
4.58$
4.32) 2.714 other electric utilities and to cities or other public authorities for distribution to ultitnate 6
Kilowatt-Hour Sales Year Ended December 31, 1982 1981 1980 1979 1978 1977 1972 cLAss oF sERvtcE Kwtl (000):
Residential............
Agricultural Commercial Industrial.............
Public Authorities Interdepartmental Resale (a)
SUB-TOTAI.
Special Contracts.........
Total kilowatt-hour sales..
16,403,116 856,929 15,557,692 15,675,707 4,515,855 1,279 4,237,698 57,248,276 2,078,577 59,326,853 16,688,956 1,116,308 15,562,087 17,000,598 4,667,700 1,218 4,539,467 59,576,334 2,874,985 62,4 5 1,3 19 16,191,091 975,311 14,454,319 17,351,728 4,701,251 1,134 4,426,206 16,471,840 964,452 14,778,843 16,777,563 4,623,886 1,138 4,415,038 14,285,971 1,377,939 13,388,075 16,393,105 4,646,504 731 4,061,526 15,369,184 851,017 13,937,000 16,652,243 4,656,895 1,015 4,170,027 12,933,823 1,279,186 12,043,940 15,742,819 4,497,110 797 3,825,777 58,032,760 1,882,427 58,101,040 1,416,821 55,637,381 1,389,654 54,153,851 3,572,422 50,323,452 1,986,454 59,915,107 59,517,361 57,027,035 57,726,273 52,309,906 CLASS OF SERVICE PERCENT:
Residential............
Agricultural Commercial Industrial.............
Public Authorities Resale (a)
SUB-TOTAL Special Contracts.........
Total,............
(a) lnpludes kilowatt-hour sales to other 27.7%
1.5 26.2 26.4 7.6 7.1 96.5 3.5 100.0%
26.7%
1.8 24.9 27.2 7.5 7.3 95.4 4.6 100.0%
electric utilities and to cities 27.5%
1.6 24.7 28.0 7.7 7.4 96.9 3.1 100.0%
or other public 27.2%
1.6 24.3 29.2 7.9 7.4 97.6 2.4 100.0%
authorities for 27.0%
1.5 24.4 29.2 8.2 73 97.6 2.4 100.0%
distribution to 24.8%%u 2.4 23.2 28.4 8.0 7.0 93.8 6.2 100.0%%u ultimate consumers.
24.7%
2.5 23.0 30.1 8.6 73 96.2 3.8 100.0%
7 Customers and Population 1982 1981 1980 December 31, 1979 1978 1977 1972 CUSIOMERS:
Residential Agricultural....
Commercial....
Industrial Public Authorities.
Interdepartmental Resale.......
2,900,529 27,236 278,643 32,857 35,858 2
19 2,865,364 26,847 271,093 34,006 35,358 2
17 2,806,085 25,852 262,320 34,580 35,109 2
20 2,733,435 25,768 252,594 35,792 34,769 2
22 2,648,841 25,802 242,264 35,126 34,491 2
19 2,572,826 25,888 234,276 33,791 34,053 2
20 2,268,723 24,418 212,714 30,510 29,954 2
20 Total customers APPROXIMATE POPULATION OF SERVICE AREA 3,275,144 3,232,687 3,163,968 3,082,382 2,986,545 2,900,856 9,134,000 8,964,000 8,798,000 8,648,000 8,441,000 8,258,000 2,566,341 7,523,000 8
Energy Year Ended December 31, 1982 1981 1980 1979 1978 1977 1972 AVERAGE ANNUALENERGY COST UNIT OF EXPENSE (a):
Oil ($/bbl)
Gas ($/mcf)
Coal ($/ton)
$ 44.69
$ 43.52
$ 32.16
$ 20.65 S
17.69 15.42 5.25 3.97 3.50 2.52 2.17 1.94 16.60 16.12 13.24 13.90 10.28 8.09
$ 4.80
.39 4.09 AVERAGE COST ($/m'btu):
Oil.............
GasCoal............
Nuclear..........
Average cost all sources 7.30 4.99
.84 (b) 4.41 S
7.10 S
5.31 3.40 2.91 3.77 3.33 2.39 2.05
.81
.69
.71
.53 (b)
.82
.43
.36 4.20 3.58 2.58 2.24 2.54 1.85
.41
.34 2.00 S
.78
.37
.21
.19
.46 AVERAGE COST ((/KWH):
Oil...............
GasCoal..............
Nuclear............
Purchased Power Average cost all sources..
ENERGY CONSUMPTION:
Oil (bbls) (000)
Gas (mcf) (000)
Coal (tons) (000) 7.570$
i 5.499 0.982 (b) 1.988 3.346 4,454 257,328 5,059 6.733) 4.046 0.953 (b) 2.708 3.698 23,588 244,459 4,340 5.0814 3.506 0.804 0.899 2.252 3.071 30,206 197,866 4,457 3.3304 2.516 0.823 0.464 1.631 2.315 47,665 152,257 3,887 2.9204 2.138 0.605 0.391 1.127 1.886 45,121 109,964 3,487 2.499(
1.890 0.462 0.363 1.274 1.878 57,691 90,093 4,491 0.7574 0.368 0.233 0.198 0.764 0.431 23,908 4,765 424 OIL INVENTORYYEAR END (bbls) (000)...........
i 14,238 13,153 16,145 (af There is no uniform unit ofexpense for nuclear fuel.
(b)
San Onofre Nuclear Unit l was not in service for a significant portion of l982 and 10,302 9,075 17,400 5,978 s available.
l98l, therefore no comparable average cost i
9 Taxes Tlrousands of Dollars Year Ended December 3l, 1982 1981 1980 1979 1978 1977 1972 Current:
Federal State
$ 140,350 I $ 44,800 55,621 '5,629
$ 38,582 36,909 6,717 4,019
$ (49,219)
$ (48,360)
$ 40,999 3,567 1,233 8,031 Deferred Federal and State:
Investment tax credits net Regulatory balancing accounts Customer refunds Other Total taxes on income 195,971
'4,612 (192,726) 8,739 (119,375)
S 76,596, 70,429 75,491 10,736 (45,652)
(47,127) 49,030 47,386 26,548 25,235 (107,322) 45,533 34,148 (759) 14,921 (13,644) 32,568 (15,904) 78,801 2,208 26,886 81,101 (5,315) 1,345 (781)
(1,840)
(2,101) 73,175 (67,166) 66,037 97,673 104,017 (4,722)
$ 143,604 8,325
$ 76,773
$ 52,021
$ 56,890
$ 44,308 Taxes on income included in operating expenses...
I $ 177,251
$ 197,865
$ 38,683
$ 100,292
$ 72,803
$ 68,792
$ 44,542 Taxes on income included in other income......
'I (100,655),'54,261)
(30,358)
(23,519)
(20,782)
(11,902)
(234)
Total taxes on income
'76,596 I $ 143,604 8,325
$ 76,773
$ 52,021 S 56,890 S 44,308 Diffcrcnces between the federal statutory tax rate and thc Company's elfective tax rate are reconciled as follows:
Computed "expected" current federal income tax Adjustments:
Allowance for debt and equity funds used during construction Excess of tax over book depreciation......
Percentage repair allowance Administrative and general expenses capitalized Investment tax credits net..........
Ad valorem lien date adjustment........
Federal deduction for state taxes on income..
Nuclear fuel lease interest capitalized Taxes capitalized State tax provision All other dilfcrenccs Total taxes on income Pretax income.....................
Effective tax rate (Total taxes on income pretax income)...................
Other taxes included in operating expenses:
Property Payroll and other..................
I
$290,861 I $291,398
$ 149,877
$ 194,557
$ 145,765
$ 148,244
$ 86,373 (3,433)
(27,591)
(28,914)
(18,408)
(8,880)
(7,082)
(20,355)
(1,720)
(8,972)
(281)
(5,581) 14,363 (5,524)
S 56,890 (139,434)
I (106,974)
(33) 10,176 (74,652)
(3,902)
(11,500)
(11,160)
(22,214)
(951)
(3,219)
(10,810)
(7,383) 6,997 (2,758)
(54,540)
(16)
(13,800)
(9,292)
(34,043)
(1,019)
(9,084)
(3,997)
(6,306) 19,747 (5,434)
(37,642)
(10,483)
(14,400)
(8,162)
(25,459) 12,776 (8,114)
(1,773)
(5,322) 14,565 (9,730)
(2,678)
(4,475)
(294) 1,521 (9,756)
(27,232)
(1,314)
(14,253)
(18,917)
(14,877) 30,985 4,368 (13,449),
(31,502)
'2,692)
(5,518)
(20,555) l (20,721)
'1,997,',642 i
$ 76,596
$632,350 12.1%
i (1,629) 7,762 (11,248)
$ 143,604 S
8,325
$ 76,773 S 52,021
$ 44,308
$ 179,956
$633,516
$325,861
$422,992
$303,704
$308,869 2.6%
18.1%
17.1%
18.4%
24.6%
22.7%
$ 46,126
$ 41,632
$ 54,114
$ 48,300
$ 74,665
$ 98,370 19,360 18,253 15,538 8,128 11,764 11,290
$ 82,019 5,374
$ 65,486
$ 59,885 8 69,652
$ 56,428 8 86,429 SI09,660 8 87,393
10 Balance Sheets ASSETS 1982 1981 1980 Thousands of Dollars December 31, 1979 1978 1977 1972 UTILITY PLANT:
Utilityplant, at original cost...
Less Accumulated provision for depreciation........
~ $ 6,6O9,54O 2,185,667
$6,115,484 2,015,212
$5,785,200
$5,502,984
$5,303,746
$4,964,888 1,840,233 1,676,148 1,519,174 1,383,009
$3,935,689 851,910 Construction work in progress Nuclear fuel, at amortized cost 4,423,873 4,108,878 45,660 4,100,272 3,377,644 24,542 3,944,967 2,600,460 20,649 3,826,836 2,058,958 15,728 3,784,572 1,493,573 13,572 3,581,879 1,209,502 17,343 3,083,779 280,737 16,641 Less Accumulated deferred income taxes (a) 8,578,411 I
79,084 8,499,327 7,502,458 25,972 7,476,486 6,566,076 5,901,522 5,291,717 4,808,724 26,965 27,320 27,652 27,198 6,539,111 5,874,202 5,264,065 4,781,526 3,381,157 33,921 3,347,236 OTIIER PROPERTY AND INVESTMENTS:
Real estate and other, at cost-less accumulated provision for dcprcciation..........
Subsidiary companies 11,383 104,378 115,761 9,194 124,558 133,752 9,754 96,757 106,511 11,110 93,725 104,835 7,658 85,818 93,476 6,024 82,579 88,603 11,619 44,844 56,463 CURRENT ASSETS:
Cash and cquivalcnts.......
Cash investments financing subsidiary...........
Rcccivables, less reserves for uncollectible accounts.....
Fuel stock, at cost (first-in, first-out)..............
Materials and supplies, at avcragc cost.........
~
Regulatory balancing accounts-net(b).............
Accumulated deferred income taxes net..........
Prepayments and other (taxes, insurance, ctc.)
DEFERRED cnARGES:
Unamortized debt expense..
Accumulated deferred income taxes net........
Other deferred charges....
120,661 127,849 306,041 605,162 64,185 198,939 42,563 1,465,400 29,169 21,892 26,015 77,076
$ 10,157,564 10,409 7,642 4,705 87,990 9,245 306,267 579,633 63,197 39,441 4,872 38,943 1,042,762 22,368 27,203 49,571 288,979 593,008 48,942 29,343 54,040 1,021,954 18,880 20,477 39,357 212,728 317,908 39,388 307,090 43,717 925,536 16,589 28,755 45,344 211,625 163,021 28,463 115,408 28,983 635,490 14,709 22,305 37,014 213,002 277,586 28,016 135,062 60,973 723,884 14,110 78,801 11,144 104,055
$8,702,571
$7,706,933
$6,949,917
$6,030,045
$5,698,068 118,668 75,080 54,079 22,837 42,832 313,496 2,844 1,840 18,864 23,548
$3,740,743 (a)
The balance sheets for l972 through l98I have been restated to conform with the current year classifications ofaccumulated def taxes.
(b)
Regulatory balancing accounts result principallyfrorn the Company's Energy Cost Adjustment Clause established in 1976.
erred income
1982 1981 1980 Thousands of Dollars December 3I, 1979 1978 1977 1972 CAPITALIZATIONAND LIABILITIES CAPITALIZATION:
Preferred Stock subject to mandatory redemption/
repurchase requirements:
Cumulative Preferred...
Preference Stock Preferred Stock other:
Original Preferred Cumulative Preferred...
Preference Stock Common Stock, including additional stated capital Additional paid-in capital Capital Stock expense Earnings reinvested in the business..........
Long-term Debt:
Bonds...........
Debentures Other 383,000 62,000 4,000 458,755 8,265 856,152 1,142,932 1,393,780 3,529,647 440,753 337,500 62,000 4,000 458,755 13,553 776,523 953,268 337,500 62,000 4,000 458,755 19,897 673,921 763,519 262,500 62,000 4,000 458,755 27,067 577,259 601,578 3,224,867 219,213 2,938,796 7,028 2,685,632 60,575 1,238,317 1,092,137 1,054,296 135,000 62,000 4,000 458,755 40,895 547,166 569,673 931,217 2,388,212 75,046 14,216 135,000 62,000 4,000 458,755 55,417 470,374 443,109 862,956 2,219,716 75,135 20,023 4,000 358,755 74,998 362,376 316,636 (1,981) 512,164 1,705,139 75,579 7,991 8,279,284 7,287,996 6,357,553 5,793,662 5,226,180 4,806,485 3,415,657 CURRENT LIABILITIES:
Accounts payable.........
Commercial paper payablc....
Notes payable to banks Short-term borrowings-financing subsidiary...........
Long-term debt due within one year..............
Preferred stock to be redeemed within one year........
Customer refunds Taxes accrued Interest accrued Customer deposits Dividends declared........
Regulatory balancing accounts-net(b).............
Accumulated deferred income taxes net..........
Other...............
411,240 23,992 123,300 53,500 4,500 166,139 112,666 16,732 90,636 360,018 266,500 28,687 121,025 3,939 61,774 85,089 12,518 75,036 356,340 164,975 19,998 143,548 66,160 121,916 66,124 11,242 60,292 362,187 37,518 26,167 38,094 '2,330 1,402,986 1,086,916 1,074,280 288,897 134,340 19,840 84,544 58,139 73,312 55,619 14,583 48,381 89,893 18,130 885,678 154,495 19,986 33 737 52,724 92,550 51,069 15,601 43,205 60,797 16,743 540,907 169,128 135,365 35,500 95,753 47,802 14,267 35,223 71,150 13,809 617,997 64,667 54,558 26,814 7,456 19,355 10,406 183,256 CONTRIBUTIONS IN AID OF CONSTRUCTION (c)..
RESERVES AND DEFERRED CREDITS:
Customer advances and other dcfcrred credits........
Customer refunds Accumulated deferred investment tax credits...........
Accumulated deferred income taxes net (a)........
Reserves for pensions, insurance, etc.
146,877 274,280 54,137 475,294
$ 10,157,564 66,697 63,652 51,598 46,115 40,804 58,454 107,774 149,657 200,598 153,212 127,977 82,444 49,876 39,223 39,937 32,548 327,659 275,100 270,577
$8,702,571
$7,706,933
$6,949,917 26,625 29,453 262,958 273,586
$6,030,045
$5,698,068 21,141 18,299 3,796 94,311 19,667 3,542 1,561 22,749 47,519
$3,740,743 (cf In 1974 Contributions in AidofConstruction (C/ACj were disposed ofin contpliance with FERC orders. Since l974 CIAChave been reJlected in Plant in Service and the Depreciation Reserve.
11 Statements of Sources of Funds Used for Construction Expenditures Thousands ofDollars Year Ended December 3l, 1982 1981 1980 1979 1978 1977 1972 Funds Provided By Operations:
Net income............
Non-cash items in net income:
Depreciation........
Allowance for debt and equity funds used during construction...
Investment tax credits deferred net.....
Other net........
Total funds from operations Dividends..........
$ 555,754
$ 489,912 220,927 202,182 187,959 178,637 157,203 140,520 (303,118) 64,612 99,609 (232,552)
(162,287)
(118,566) 47,386 3,701 25,235 29,271 45,533 7,136 (78,421) 32,568 5,180 (60,238) 26,886 8,601 637,784 (395,103) 510,629 (336,546) 397,714 (273,312) 458,959 (221,400) 368,213 (182,738) 367,748 (157,561)
$ 317,536
$ 346,219
$ 251,683
$ 251,979
$ 135,648 104,434 (7,152)
(781) 3,347 235,496 (94,238)
Total funds from operations-reinvested..........
242,681 '74,083 124,402 237,559 185,475 210,187 141,258 Funds Provided By Long-term Financing:
Sales of securities:
Long-term debt........
Preferred Stock........
Common Stock(a)
Reduction for long-term debt due within one year........
Reduction for preferred stock to be redeemed within onc year.,
Conversion of preference stock...
Total funds from long-term financing Other Sources (Uses) Of Funds:
Working capital changes:
Cash and equivalents.....
Receivables net Fuel stock and materials and supplies Regulatory balancing accounts net Accounts payable.......
Nct short-term borrowings Long-term debt and preferred stock due within one year Other changes in working capital Net (increase) decrease in working capital.....
Sale of non-current assets Other-net.............
Total other sources (uses) of funds Funds Used For Construction Expenditures........
576,864 634,435 49,474 264,634 292,356 (53,500)
(121,025) 350,000 355,000 75,000 127,500 258,607 62,002 200,000 203,364 200,000 60,000 43,323 (143,548)
(84,544)
(33,736)
(35,500)
(4,500),
(5,290)
'27,682 (6,344) 799,422 (7,169)
(13,828) 532,890 446,130 (14,522) 355,106 42,419 310,242 (238,101) l 226 (26,517),
196,059 51,222 (147,895),
(2,767)
(17,288)
(2,937) 83,285 (76,251)
(1,103)
(880)
(284,654)
(165,812)
(37,568) 3,678 110,214 235,512 67,443 30,793 (162,586) 134,402 134,194 78,745 1,377 114,118 9,301 (14,633)
(115,379) 833 (86,554)
(84,672)
(74,034) 43,998 99,315 (63,025)'(22,523) 121,463 (41,038) 59,004 50,808 63,274 (18,462)
(1,764)
(60,462) 35,500 21,711 (106,568) 30,108 (8,172) 50,623 (59,193) 92,184 89,557 (57,523) 54,726 (64,268) 11,303 15,947 (43,903) 10,883 12,860 (76,460)
(16,742) 124,218 (9,542) 27,250 (20,160)
$ 993,903
$ 956,763
$ 781,510
$ 674.147
$ 567,831
$ 500,269 125,000 75,000 200,000 109,881 (85,677)
(15,492) 12,199 (95,457)
~
(74,546)
(13,068)
(87,614)
$253,644 (a) includes conversions of Preference Stock, 5.20%%uo Convertible Series, to Contnton Stack.
12 Statements of Earnings Reinvested in the Business and Additional Paid-in Capital Thousands ofDollars Year Ended December 3I, 1982 1981 1980 1979 1978 1977 1972 EARNINGS REINVESTED IN TIIE BUSINESS:
Balance at January I
ADD:
Net income Transfer of amortization rcscrvc-Federal(a)............
555,754 489,912 317,536 346,219 251,683 251,979 1,794,071 1,582,049 1,371,832 3,801 1,277,436 1,118,440 1,021,404
$ 1,238,317 I $ 1,092,137
$ 1,054,296 931,217 862,956 769,425 470,754 135,648 606,402 DEDUCT:
Dividends declared on capital stock:
Original Preferred.........
Cumulative Prcfcrred.......
Preference.............
Common..............
Capital Stock expense........
1,589 67,291 5,105 321,118 5,188 400,291 1,454 62,504 5,384 267,204 7,186 343,732 1,334 55,230 5,720 211,028 6,383 279,695 1,219 47,574 6,164 166,443 1,740 223,140 1,075 42,532 6,926 132,205 4,485 187,223 922 38,423 6,844 111,372 887 158,448 749 21,753 3,900 67,836 94,238 Balance at December 31(b)
ADDITIONALPAID.IN CAPITAL:
Balance at January I
Premium received on sale of Common Stock Payments made in lieu of issuing fractional shares of Common Stock.
Balance at December 31.........
$ 1,393,780 953,268 189,668 (4)
$ 1,142,932
$ 1,238,317
$ 1,092,137
$ 1,054,296 931,217 862,956 512,164 189,754 161,949 31,908 126,572 15,690 (5)
(8)
(3)
(8)
(3) 953,268 763,519 601,578 569,673 443,109 316,636 763,519 601,578 569,673 443,109 427,422 316,636 (a)
In 1978, pursuant lo a FERC order, an operating reserve relating to cerlain federally-licensed hydroelectric projects was transferred to Earnings Reinvested in the Business and became an appropriation thereof.
(b)
Includes Imdistributed earnings of unconsolidated subsidiaries of $4,867,000 and appropriated earnings related to certain federally-licensed hydroelectric projects of $4,/77,000 al December 3I, 1982.
13 System Rate Base (a) 1982 1981 1980 Thousands of Dollars December 3I ~
1979 1978 1977 1972 FIXED CAPITAL:
Plant in service Construction work in progress (b)...
Property held for future usc and other.
Total lixed capital...........
ADJUSTMENTS (c)
WORKING CAPITAL RESERVES:
Depreciation.............
Accumulated deferred income taxes Other.................
Total reserves SYSTEM RATE BASE
$6,339,407 228,380 77,801 6,645,588 (36,868) 694,616 (2,104,389)
(14,178)
(20,248)
(2,138,815)
$5,164,521
$5,878,200 200,354 71,190
$5,596,989 137,525 70,826
$5,355,301 100,297 76,435
$5,080,680 64,976 74,561
$4,796,029 73,714 78,595 6,149,744 5,805,340 5,532,033 5,220,217 4,948,338 (36,484)
(35,089)
(32,723)
(29,691)
(24,664) 730,124 635,265 313,424 388,255 311,331 (1,925,204)
(1,757,223)
(1,597,469)
(1,446,570)
(1,317,901)
(16,076)
(18,019)
(20,068)
(22,175)
(24,319)
(19,140)
(17,111)
(12,737)
(12,661)
(13,571)
(1,960,420)
(1,792,353)
(1,630,274)
(1,481,406)
(1,355,791)
$4,882,964
$4,613,163, $4,182,460
$4,097,375
$3,879,214
$3,837,984 102,838 41,174 3,981,996 (99,827) 135,403 (814,304)
(34,972)
(20,300)
(869,576)
$ 3,147,996 (a)
IVeighted average depreciated book costs. Calculations are in accordance with CPUC rate procedures.
(b)
Represents that portion not included in the allowance forfimds used during consiruction base.
(c)
Primarily Custonter Advances for Conslruclion. Contributions ht AidofConstruction (CIAC) were includedin l972. In l974 CIACwere disposed ofin contpliance with FERC orders. Since 1974 CIAC have been reflected in Plant in Service and the Depreciation Reserve.
10
14 Statements of Long-term Debt 1982 1981 December 3l, Thousands ofDollars December 3l, 1981 1982 FIRST AND REFUNDING MORTGAGE Series H Due 2/15 1982 Series I Due 7/1 1982 Series J Due 9/1 1982 Series K Due 9/1 1983 Series II Due 7/1 1984 Series SSP Due 1/15 1985 Series L Due 2/1 1985 Series M Due 9/1 1985 Series N Due 4/1 1986 Series LL Due 3/18 1987 Series 0 Due 5/1 1987 Series P Due 11/1 1987 Series Q Due 5/15 1988 Series R Due 3/1 1989 Series S Due 2/15 1990 Series T Due 5/15 1991 Series PP Due 5/15 1991 Series U Due 8/15 1991 Series V Due 5/15 1992 Series W Due 2/15 1993 Series X Due 1/15 1994 Series Y Due 10/15 1994 Series Z Due 12/1 1995 Series AA Due 9/15 1996 Series BB Due 8/15 1997 Series CC Due 2/1 1999 Series DDP Due 7/1 1999 Series FF Due 3/1 2000 Series GG Due 3/15 2001 Series HH Due 7/1 2002 Series JJ Due 11/1 2003 Series KK Due 6/15 2004 Series MM Duc 10/15 2004 Series NN Due 4/1 2005 Series OO Due 11/15 2010 Series RR Due 12/1 2011 Series TT Due 4/15 2012 Series UU Due 11/I 2012 Series VVP Due 11/1 2012 Series QQP Due 8/1 2021 BONDS 4'/4%
4'/e%
4i/e%
411'%i/e%
10%)
5%)
4e/e%
4'h%
9/e%
4i/e%
4'/i%
4e/e%
4e/e lo 4 /e%
5i/e%
15i/e o) 6i/e%
5e/e%
6'le%
7'/e%
8'le%
7i/e%
8%)...
7'/e%)..
8i/e%)..
7%)...
ge/e%
8'/e%
8i/e%
9/e%
9.95 o 1 I e/e%
15'le%
13/i%
15'/e%
I 2%I IO'/e%)
IOi/e%)
37,500 40,000 40,000 50,000 75,000 30,000 60,000 30,000 50,000 40,000 50,000 60,000 60,000 60,000 75,000 200,000 80,000 80,000 100,000 75,000 100,000 100,000 100,000 125,000 100,000 15,030 150,000 125,000 125,000 200,000 105,000 200,000 200,000 150,000 200,000 8,300 50,000 75,000 176,800 30,000 60,000 30,000 50,000 40,000 50,000 60,000 60,000 60,000 75,000 200,000 80,000 80,000 100,000 75,000 100,000 100,000 100,000 125,000 100,000 15,030 150,000 125,000 125,000 200,000 105,000 200,000 200,000 150,000 200,000 125,000 200,000 80,000 8,300 3,760,130 3,295,830 PROMISSORY NOTES (5'/e%):
Due 2/28 & 8/31 1982 Due 2/28 & 8/31 1983 Foreign exchange gain PROMISSORY NOTES:
16'/e% Series, Due 11/15 1986 14%
Series, Due 4/1 1987 14e/e% Scrics, Duc 7/I 1988 12%
Series, Duc 11/ I 1988 151re% Scrics, Due 5/I 1989 13%
Scrics, Duc 8/ I 1994 POLLUTION CONTROI. INDEBTEDNESS:
1981 Series A, Duc 3/I 1984 (8i/e%)
8,000 6,000 8,000 6,000 12,000 12,000 8,000 60,000 3,500 3,500 75,000 50,000 50,000 75,000 75,000 50,000 375,000 92,500 8,000 6,000 8,000 6,000 12,000 12,000 8,000 60,000 4,635 4,220 (1,828) 7,027 75,000 50,000 50,000 175,000 92,500 Principal amounts outstanding..
Long-term debt duc within one year Unamortized premium (discount) nct........
Securities held by trustees....
Total long-term debt 4,291,130 (53,500)
(22,024)
(245,206) 3,630,357 (121,025)
(16,252)
(49,000)
$3,970,400(a)
$3,444,080 FIRST MORTGAGE BONDS (CALECTRIC):
3i/e% Series, Due 5/1 1984 3e/e% Series, Due 9/ I 1985 4'/e% Series, Due 10/1 1986 4'%eries, Due 4/1 1987 4i/e% Series, Duc 3/1 1988 5'/e% Scrics, Due 5/1 1990 5%
Series, Due 7/1 1991 Comp YP, DLI 3, i983 any >ss e 2003 (al The IVI ary ued First and Refundin in the principal amounr g hiorrgage Bonds, Series of$88,000,000 on Febru-15 Detail of UtilityPlant 1982 1981 Thousands ofDollars December 3l, 1980 1979 1978 1977 1972 Production:
Stcam Nuclear Hydro Other.................
Total production...........
Transmission..............
Distribution General.................
Plant held for future use and other Experimental electric plant unclassified Gas and water (Catalina)
Utilityplant, at original cost Less accumulated provision for depreciation.............
Construction work in progress Nuclear fuel, at amortized cost Less accumulated deferred income taxes................
11 I $ 1,426,380 300,708 239,820 373,471 2,340,379 1,401,848 2,573,793 196,102 25,766 65,062 6,590 6,609,540 2,185,667 4,423,873 4,108,878 45,660
',578,411 79,084
$8,499,327
$ 1,380,217 256,794 236,458 358,527 2,231,996 1,257,728 2,397,367 181,990 25,875 14,245 6,283 6,115,484
$ 1,302,084 133,516 215,523 201,088
$ 1,323,603 145,565 215,647 350,002
$ 1,340,840 156,027 216,809 354,680
$ 1,357,301 169,779 234,723 354,637 1,852,211 1,127,702 1,820,103 130,863 29,341 699 3,969 2,034,817 1,164,523 1,930,266 139,258 28,489 217 6,176 2,068,356 1,186,035 2,069,431 146,706 26,184 107 6,165 2,116,440 1,236,762 2,215,891 169,803 25,781 14,283 6,240 5,785,200 5,502,984 5,303,746 4,964,888 2,015,212 1,840,233 1,676,148 1,519,174 1,383,009 4,100,272 3,377,644 24,542 3,944,967 2,600,460 20,649 3,826,836 2,058,958 15,728 3,784,572 1,493,573 13,572 3,581,879 1,209,502 17,343 7,502,458 6,566,076 5,901,522 5,291,717 4,808,724 27,198 25,972 26,965 27,652 27,320
$7,476,486
$6,539,111
$5,874,202
$5,264,065
$4,781,526
$ 1,104,993 68,482 214,287 57,155 1,444,917 925,546 1,449,115 99,594 13,055 3,462 3,935,689 851,910 3,083,779 280,737
~ 16,641 3,381,157 33,921
$3,347,236
16 Statements of Capital Stock Shares Outstanding Redemption Price Per Share Decetnber 31, l982 l982
/98I Thousands of Dollars December 3I, PREFERRED STocK Subject to Mandatory Redemption/Repurchase Requirements:
$ 100 Cumulative Preferred (a):
7.325% Series..........
7.80 % Series..........
8.54 % Series..........
8.70 % Series A 12.00 % Series..........
12.31
% Series..........
Less: Preferred Stock to be redeemed within one year Preference (b) 7.375% Series PREFERRED STocK Other:
Original Preferred (c)..................
Cumulative Preferred authorized 24,000,000 shares, par value $25 pcr share:
4.08% Series 4.24% Series 4.32% Series 4.78% Series 5.80% Scrics 8.85% Series 9.20% Series
$ 100 Cumulative Prcfcrred (a):
7.58% Series 8.70% Series 8.96% Series Preference (b) 5.20% Convertible Series
$ 100 Preference authorized 2,000,000 shares, par value $ 100 per share................
COMt4ott SrocK authorized 140,000,000 shares, par value
$8N per sharc, including additional stated capital....
750,000 600,000 750,000 525,000 750,000 500,000 2,480,000 480,000 1,000,000 1,200,000 1,653,429 1,296,769 2,200,000 2,000,000 2,000,000 750,000 500,000 500,000 330,617 96,691,973
$ 110.00 110.00 108.54 110.00 112.00 105.83
$ 25.25
$ 25.50 25.80 28.75 25.80 25.25 26.50 26.50 102.50 107.00 107.00
$ 25.00
$ 75,000 60,000 75,000 52,500 75,000 50,000 387,500 4,500
$383,000 S 62,000 4,000
$ 25,000 30,000 41,336 32,419 55,000 50,000 50,000 75,000 50,000 50,000
$458,755 S
8,265
$856,152
$ 75,000 60,000 75,000 52,500 75,000 337,500
$337,500 S 62,000 S
4,000 S 25,000 30,000 41,336 32,419 55,000 50,000 50,000 75,000 50,000 50,000
$458,755 S
13,553
$776,523 (a)
Authorized l2,000,000 shares, par value $ 100 per share.
(b)
Authorized l0,000,000 shares, par value $25 per share.
(c) 5%, prior, cumulative, participating, not redeentable, authorized 480,000 shares, par value $8Yi per share.
17 Capitalization and Plant Ratios r
1982 1981 1980 1979 1978 1977 1972 CAPITALIZATIONRATIOS (a):
Long-term debt:
Bonds Dcbenturcs......
Other Prcferrcd Stock rcdcmption required Preferred Stock other........
Common Equity Total.................
42.6%
5.3 47.9 5.4 5.7 41.0 100.0%
44.3%
46.2%
3.0 0.1 47.3 46.3 5.5 6.3 6.5 7.6 40.7 39.8 100.0%
100.0%
46.4%
45.7%
1.4 1.0 0.3 47.4 47.4 5.6 3.8 8.5 9.6 38.5 39.2 100.0%
100.0%
46.2%
1.5 0.4 48.1 4.1 10.8 37.0
'00.0%
49.9%
2.2 0.3 52.4 12.8 34.8 100.0%
PLANT RATIOS:
Gross utility plant to (b):
Operating revenues Kilowatts of system peak Net utility plant in service to (c):
Operating revenues Kilowatts of system peak Accumulated depreciation as a percent of gross utility plant(b) 2.5
$835.59 1.0
$343.42 20.3%
2.3 2.3 3.0 2.9 3.0
$709.22
$666.53
$607.96
$567.72
$550.52 1.0 1.1 1.5 1.6 1.7
$305.53
$312.79
$307.03
$315.46
$318.47 4.5
$431.29 3.3
$314.19 21.2%
21.9%
- 22. 1%
22.3%
22.3%
- 20. 1%
(a)
Excludes long-term debt and preferred stock due within one year.
(b)
Gross utilityplant consists of utilityplant at original cost, construction work in progress and nuclear fuel at amortized cost.
(c) ¹I utilityplant in service consists ofutilityplant at original cost less the accumulated provision for depreciation.
12
18 Operating Statistics Year Ended December 3I, 1982 1981 1980 1979 1978 1977 1972 AREA GENERATING CAPACITYAT PEAK (MtV):
Edison Owned:
Oil and Gas.................
Coal.....................
Nuclear Renewable/Altcrnatc Including Hydro...
Non-Edison Owned Purchase/Interchange:
System (a)..................
Renewable/Alternate Including Hydro...
Total 10,400
~
1,631 I
349
'89
'99 1,081
'5,349 10,400 1,631 349 889 1252 1,071 15,592 10,354 1,631 349 887 1253 1,030 15,504 10,293 1,631 349 854 914 1,030 15,071 10,246 1,631 349 854 914 972 14,966 9,886 1,631 349 854 586 972 14,278 8,647 1,564 344 854 504 906 12,819 AREA GENERATING CAPACITY AT PEAKPERCENT:
Edison Owned:
Oil and Gas.................
Coal.....................
Nuclear Renewable/Alternate Including Hydro...
Non-Edison Owned Purchase/Interchange:
System (a)..................
Renewable/Alternate Including Hydro...
Total 67.8%
10.6 2.3 5.8 65 7.0 100.0%
66.7%
10.5 2.2 5.7 8.0 6.9 100.0%
66.8%
10.5 2.3 5.7 8.1 6.6 100.0%
68.3%
10.8 2.3 5.7 6.1 6.8 100.0%
68.5%
10.9 2.3 5.7 6.1 6.5 100.0%
69.2%
I 1.5 2.4 6.0 4.1 6.8 100.0%
67.5%
12.2 2.7 6.6 3.9 7.1 100.0%
GENERATION (MtVH):
Edison Owned:
Oil and Gas.................
Coal.....................
Nuclear Rencwablc/Alternate Including Hydro...
Non-Edison Owned Purchase/Interchange:
System (a)..................
Renewable/Alternate Including Hydro...
Total 27,027,650 9,493,153 388,348, 6,488,165
'1,186,620, 1,994,604, 38,128,951 37,923,981 44,502,704 38,490,674 44,843,511 36,961,761 8,042,190 8,024,940 7,136,144 6,500,969 8,642,291 8,918,738 623,633 637,752 2,665,312 2,127,008 1,855,304 2,249,624 3,977,840 6,007,589 5,094,520 5,952,430 1,585,836 3,639,245 17,267,868 11,075,412 5,789,265 1,139,159 1,789,604 1,028,965 9,672,101 1,133,934 5,886,416 2,965,380 531,348 952,028 66,578,540 69,179,641 65,459,278 66,216,910 63,877,116 63,344,706 55,686,776 GENERATIONPERCENT:
Edison Owned:
Oil and Gas.................
Coal.....................
Nuclear Renewable/Alternate Including Hydro...
Non-Edison Owned Purchase/Intcrchangc:
System (a)..................
Rcncwable/Alternate Including Hydro...
Total 40.6%
'4.3 0.6 9.7 31.8 3.0 100.0%
55.1%
I 1.6 0.9 5.8 25.0 1.6 100.0%
57.9%
12.3 1.0 9.2 16.9 27 100.0%
67.2%
10.8 4.0 7.7 8.7 1.6 100.0%
60.3%
10.2 3.3 9.3 15.1 1.8 100.0%
70.8%
13.7 2.9 2.5 9.3 0.8 100.0%
66.4%
16.0 4.0 6.6 5.3 1.7 100.0%
AREA PEAK DEMAND(MW).............
13,149 ANNUAI.AREA SYSTEM LOAD FACTOR.......
56.5%
'YERAGE HEAT RATE (I)TU per net KwH).....
10,913 (a)
Includes system and unit purchases and net interchange.
13,738 55.6%
10,572 12,841 56.9%
10,361 12,662 58.8%
10,200 12,159 59.1%
10,241 11,564 60.4%
10,016 10,317 62.7%
9,990 13
19 Existing Generating Capacity Resources As of December 31, 1982 (Summer Effective Rating)
Station EDISON OWNED GENERATION Oil and Gas (Main System):
Alamitos..............
Cool Water El Segundo Etiwanda Highgrove.............
Huntington Beach.........
Long Beach Mandalay.............
Ormond Beach Rcdondo..............
San Bernardino Combustion Turbine........
Subtotal Oil and Gas (Isolated System):
Combustion Turbine........
Axis................
Pebbly Beach Subtotal Coal:
Four Corners Mohave Subtotal Nuclear:
San Onofre Total Thermal Generation...
iVutnber Capacity of Urrits (Megawatts) 1,950.0 628.0 1,020.0 904.0 154.0 870.0 636.0 430.0 1,500.0 1,602.0 126.0 580.0 10,400.0 21.6 25.0(a) 6.2 52.8 768.0(a) 884.8(a) 1,652.8 348.8(a) 12,454.4 Station Renewable/Alternate (including hydro):
Northern Hydro Division Southern Hydro Division Bishop Hydro Division Cogeneration Subtotal Total Edison Owned Generation..
NON-EDISON OWNED PURCHASE/INTERCHANGE System:
BPA Navajo Project PGE Assignment Washington Water and Power.....
Arizona Power Pooling Assoc. Sale..
Subtotal Renewable/Alternate (including hydro):
Hoover, USBR to Edison.......
CDWR, Oroville-Thcmalito......
Parker Davis, USBR Exchange....
Cogcncration Wind Small Hydro..............
Subtotal Total Non-Edison Owned Purchase/Interchange TOTAL GENERATION CAPACITY RESOURCES.............
Capacity (Megawatts) 752.0 100.1 52.2 12.5 916.8 13,371.2 550.0 327.5 100.0 60.0 (36.7) 1,000.8 391.0 340.0 18.5 12.0 3.0
.5 765.0 1,765.8 15,137.0(b)
(a)
Represents the Company's share.
(b) l982 Peak main system area capacity was 15,349 MIV.
20 Projected Generating Resource Additions ScE Area Total Capacity Scheduled (h(egawatts)
Operating Date Total Capacity Scheduled (Megawatts)
Operating Date EDISON OWNED RESOURCES Nuclear San Onofre 2 &3...
Palo Verde I, 2 & 3 NoN-EDIsoN OwNED PURCHASE/INTERCHANGE (Continued)
Renewable/Alternate Large Hydro Small Hydro......
Cogeneration Wind Geothermal Solar Fuel Cells.......
1651 1983 579 1984, 1985, 1986 815(b) 149 749 168 517 197 27 Renewable/Alternate 1988 1982-1988 1988-1992 1982-1990 1985-1990 1987-1990 200 55 32(a) 88(a) 153(a) 28 Large Hydro Small Hydro.
Wind Geothermal Solar Fuel Cells..
EDISON RESEARCH AND DEYELOPMENT Coal Gasification Combined Cycle 100 CONTINGENT RESOURCES SYSTEM NEED Capacity Retirements......
(1992)
Luccrne Valley Combined Cycle.
1160 347 1986 NDN-EDIsoN OIVNED-PURCHASE/INTERCHANGE System Cholla 4...........
1984 San Onofre Resale Cities'hare...........
109 1983 Palo Verde Resale Cities'hare...........
30 Intermountain Rcsalc Cities'harc.......
255 1987, 1988 (a) include's corrrrnercialization of units currently under Research and Development.
(b) includes replacement ofexisting contract for 340 h(IVwhich ternrinates in 1983.
1983-1988 1983-1992 1982-1992 1982-1992 1984-1991 1983-1991 1987-1990 1984 1985, 1986 14
21 Regulation CALIFORNIAPUBLIC UTILITIESCOMMISSION (CPUC)
The Company is subject to regulation by thc CPUC which has thc authority to establish retail rates; to regulate security
- issues, accounting practices and depreciation; and to issue Certificates of Public Convenience and Necessity for significant plant additions.
The California Constitution provides for a commission comprised of five members who are appointed for six-year terms by the Governor, subject to State Senate confirmation.
In setting rates, thc CPUC utilizes a forward test year for establish-ing operating revenues and expenses, and average rate base. An Electric Revenue Adjustment Mechanism provides a mechanism for collecting a target level of revenue authorized regardless of fluctua-tion in the level of sales. Original plant cost, less depreciation and accumulated deferred income taxes, is used to determine the test year average rate base. Average-year embedded capital cost ofsenior securities is utilized in establishing the allowable rate of return. An Attrition Rate Adjustment helps ofl'set cost increases in operation and maintenance and capital-related expenses between biennial rate cases. In addition, the CPUC uses a procedure to reduce regulatory lag in order to process decisions within one year from the filingof the application.
The CPUC currently provides for Energy Cost Adjustment Clause (ECAC) adjustmcnts in rates three times a year. Each adjustment is based on estimates of fuel prices and balancing account amounts at the adjustmcnt date as well as forecasted energy mix and sales esti-mates. Thc period over which amounts in thc balancing account arc to be amortized is determined at thc time of each adjustment, rather than using a standard 12-month period. The rate for accruing inter-est on undcrcollections or overcollcctions in the balancing account is a variable rate equal to the Federal Reserve Bank three-month Prime Commercial Paper Rate.
Commencing with Edison's May 1983 ECAC revision, revised ECAC procedures willbc implemented which willrecover 90% ofall energy-rclated costs through a balancing account mechanism. The remain-ing 10% ofcncrgy-related costs willbe recovcrcd through the Annual Energy Rate (AER) which is not subject to balancing account treatment.
The present CPUC Commissioners are:
Year First Age Appointed Ternl Expires Leonard Grimes, President Victor Calvo Priscilla Grew Donald Vial Vacancy Democrat, former Secretary of the State Consumer Scrviccs Agency, past Vice Prcsidcnt of Golden State Mutual Life Insurance Company....
- Democrat, former member of state legislature; Chairman of Assembly Resources, Land Use and Energy Committee..............
Democrat, former director of the State Department of Conservation....
Democrat, former director of thc State Dcpartmcnt of Industrial Relations and member of Governor Brown's Cabinet. Replaces Richard Gravellc To bc filled by Governor Deukmejian subject to California Senate confirmation. Rcplaccs John Bryson 59 1979 59 1981 41 1981 58 1983 January I, 1985 January I, 1987 January I, 1987 January I, 1989 January I, 1985 CPUC address: State Building, San Francisco, California 94162
SUMMARY
OF CPUC GENERAL RATE INCREASES Application Date Test Year Decision Egective Date Additional Revenue (Millions)
Rate Base Common Equity Rate of Return Authorized I 1.90%
12.25 12.25 12.63 12.63 13.49 14.95 14.95 16.00 12/01/70 1972 07/15/71
$ 105.5 7.90%
08/01/72 1973 10/10/73 89.1 8.19 06/07/74 Partial 1976 12/31/75 79.6 8.70 Final 01/13/77 122.5(a) 8.80 10/07/77 Partial 1979 07/26/78 102.1 8.98 Final 01/01/79 124.0(a) 9.60 12/26/79 1981 01/01/81 294.2 11.20 12/26/79 (b) 01/01/81 91.9 11.20 12/18/81 1983 01/01/83 566.8(c) 12.55 (a)
Includes revenues from the partial decision, but does not rejlect concurrent CPUC decisions related to energy costs.
(b)
The CPUC authorized an additional attrition allowance of$9I.9 million effective January I, I982, in conjunction with the I98l General Rate Case.
(c)
In a related decision, the CPUC granted a $23.2 million increase for conservation, load manageinent and fuel inventory costs.
15
SUMMARY
OF ECAC CHANGES Application Date Decision Egective Date Additional Revenue (Millions)
(Annualized) 10/19/76 01/13/77 S (44.5)(a) 04/01/77 06/08/77 82.8 06/22/77 09/13/77 136.8 09/21/77 01/17/78 146.7 04/01/78 07/26/78 (102.1)(a) 10/02/78 07/03/79 69.6 03/23/79 II/OI/79) 08/17/79 II/OI/79j 12/21/79 02/03/80 338.0 03/05/80 05/20/80 560.4 07/23/80 10/09/80 (236.3) 11/10/80 01/01/81 (193.8) 03/02/81 IO/25/811 07/01/81 10/25/8IJ 10/31/81 01/05/82 545.5 03/OI/82 05/04/82 (719.4) 07/01/82 09/22/82 11/01/82 01/01/83 (286.8)
(a)
The reduction in ECAC revenue was offset by an increase in base rates of the satne amount, producing no net change in rates.
(b)
Combined increase granted from two separate decisions.
Base rates were reduced, ECAC rates increased and the Annual Energy established.
Rate was CALIFORNIAENERGY COMMISSION (CEC)
The CEC is the sole state agency with the authority to license sites for power plants in California. One of the primary rcsponsibilitics of thc CEC is to develop statewide and utility service area electricity demand forecasts covering five, twelve, and twenty-year time hori-zons. Based on the forecasts, thc CEC determines the need for addi-tional power plants. Ifadditional plants arc needed, the CEC also determines the locations of the plants from among the alternatives proposed by the applicants.
The present CEC Commissioners are:
In addition to these three main functions, the CEC also coordinates a variety of energy research and development projects, sets appliance and building efficiency standards, and maintains a statewide plan of action in case of any energy shortage.
The Commission consists of five members appointed by the Governor for five-year terms, subject to State Senate confirmation.
Year First Term Age Appointed Expires Charles R. Imbrecht*,
Chairman Russell L. Schwcickart Arturo Gandara Karen Edson Geoffrey Commons Attorney member, former State Assemblyman Scientist member, assistant to Governor Brown for Science and Technology, Astronaut on Apollo9............................
Economist
- member, former RAND Corp. energy program project leader.
Member, L. A. Regional Water Quality Control Board Environmental member, former legislative lobbyist for CEC Public member, private economic development consultant 34 1983 47 1979 38 1981 31 1981 44 1982 January 7, 1988 January 4, 1985 January 4, 1987 January 7, 1984 January 6, 1986
- Requires Senate confirmation CEC address:
1516 Ninth Street, Sacramento, California 95814 OTHER REGULATION, Approximately 5.9%of SCE's revenues,and other matters including to various governmental licensing requirements, to Securities and accounting, depreciation and the acquisition and disposition of cer-Exchange Commission filing and financial disclosure requirements, tain property,aresubject torcgulation by the Fcdcral Energy Rcgu-and to certain other federal, state and local laws and regulations, latory Commission (FERC). This includes licensing of hydroelectric including those related to nuclear energy and nuclear plant construc-projects as well as SCE involvement in the transmission and sale for tion, environmental protection, fuel supplies and land use.
resale of electric energy in interstate commerce. SCE also is subject 16
22 Projections Sales, Demand, Capital Requirements and Generation Mix The data shown below include projections which are used for planning purposes. They are subject to frequent changes and, as the underlying assumptions and even the methods of forecasting are changed, such changes may produce material variations in the information shown below.
Compound Annual Recorded Estimated (as of February 1983J Growth Rate 1982 1983 1984 1985 1986 1987 1982-87 SALES AND DEMAND DATA Population at year end (000)............
Customers at year end (000)............
Total Sales (million Kwn) (a)
Percent change from prior year.........
Area peak demand (Mw)(a)............
Percent change from prior year.........
Edison generating capacity at peak (Mw) (b) (c)
Firm Purchase/Interchange at peak (Mw) (c) (d)
Area generating capacity at peak (Mw) (b) (c) (d)
Installed area rescrvc margin at peak cAPITALREQUIREMENTs (millions)
Construction expcnditurcs (e) (f):
Production....................
Transmission Distribution...................
Other Subtotal 9,134 3,275 59,327 (5.0)%
13,149 (4.3)%
13,269 2,080 15,349 16.7%
$ 1,013 63 196 25 1,297 9,308 3 333 59,462
.2%
13,340 1.5%
13,974 2,288 16,262 21.9%
933 124 277 80 1,414 9,487 3,398 59,917
.8%
13,680 2.5%
15,007 2,561 17,568 28.4%
9,651 3,477 60,530 1.0%
13,810 1.0%
14,827 2,839 17,666 27.9%
453 423 167 104 313 351 69 64 1,002 942 9,805 3,556 61,890 2.2%
13,950 1.0%
13,429 3,266 17,695 26.8%
9,964 3,634 63,280 2.2%
14,340 2.8%
13,435 3,544 16,979 IS.4%
280 252 91 112 372 389 60 52 803 805 1.8%
2.1%
1.3%
1.7%
.2%
11.2%
2.0%
Total I983-1987
$2,341 598 1,702 325 4,966 Less:
Allowance for debt funds used during construction..
Allowance for equity funds used during construction Funds used/required for construction expenditures Maturing securities issues Total capital requirements 94 209 994 121
$ 1,115 89 246 1,079 58
$ 1,137 39lll 852 180
$ 1,032 26 69 847 296
$ 1,143 23 57 723 141 864 23 57 725 224 949 200 540 4,226 899
$5,125 oTIIER slGNIFlcANT FQREchsT ITEMs (millions)
Effective annual AFUDC rate (net-of-tax method)
Dcprcciation expense (book) (g)...........
Deferred income taxes and investment tax credits (h)
Normalized ACRS dcprcciation Normalized investmcnt tax credits Investment tax credits flowed through (i).....
Deferred income taxes and ITCnet 9.2%
221 52 69 (46) 75 9.9%
10.0%
309 441 10.0%
499 10.0%
10.0%
533 563 129 119 110 117 119 90 70 70 70 70 (9)
(12)
(16)
(20)
(24) 210 177 164 167 165 41%
33%
32%
30%
14 14 13 12 5
18 19 20 9
7 6
6 GENERATION MIXPERCENT Edison owned:
Oil and Gas.......................
40%
29%
Coal...........................
14 12 Nuclear....................'.....
I 20 Renewable/Alternate (including hydro)........
10 6
Non-Edison owned Purchase/Interchange:
System Purchases....................,
32 29 26 24 25 25 Renewable/Alternate Purchases............
3 2
2 6
7 8
TOTAL ENERGY REQUIREMENTPERCENT..........
100%
100%
100%
100%
100%
100%
TGTAL ENERGY REQUIREMENTKwkt (Millions).......,
66,579 67,226 68,411 71,491 73,173 74,890 (aJ The Coinpany's long-term projections for this decade are for 2% annual growth in both total sales and peak deinand.
(bJ Reflect contingent retirements ofoil and gas fired units totaling l,992 hIIVin I98S and I986.
(cJ Rated capacity for l982<6 reduced for "adverse year hydro" conditions.
(dJ Includes hietropolitan IVater District (hIIVDJ hydro capacity and Resale Cities Generation which is integrated into Edison's planning area.
(eJ iVuclearfuel requireinents forSan Onofre were provided through leasing arrangements in 1982 and are expected to continue through at least 1987.
(f)
Construction expenditure projections are escalated at 9%.
(gJ The l982 composite rate was 3.6%. The current estimated eoinposite rate for l983 through I987 is 4.2%.
(hJ Economic Recovery Tax Aet of I98l.
(iJ For l982 includes the 4%%uoinvestment tax credit flowed through imder the transition rules ofthe l98I Tax Aet. In addition forallyears, includes the ratable flow-back investinent tax credit deferred in previous years.
17
SOUTHERN CALIFORNIAEDISON COMPANY ORGANIZATIONCHART (EXECUTIVE OFFICERS)
WILUAMR. COULD orrosaos el rae dcord ssd Or<<os fs oesave Odc<<
HOWARD P. ALI.EN H. FRED CHRISTIE fso<<are Yco dread<<d osd Ohel Paosclol Odcw DAVIDJ. FOGARTY tsocroore Yrce Proao<<d A.L MAXWELL Yee Plead<<o <<d EDWARD A. MYERS, Jr.
Vde Pread<<iC
~orrooo d Rsrssse des<<coo MICHAELL NOEL vlcc Re<<doss old Yrooas<<
HONOR MULLER Soccer<<s i
p~
IL ARENAL vice Plead<<e fodros<<ad osd
- 'e GA. BJORKLUND Vde Pre<<deal dyorae Croroscpsrenl ROBER'T DIETCH Vice Prosol<<d Oslo<<or fopsiewad
~sd +erorr<<re JOE T. HEAD,Jl.
Yce Plead<<e peri<< frdsrls LT. PAPAY Yde Plead<<e RdrsOCed fsdrso<<ad R. H. SRIDENSECKER Vice pre<<dere F roo fsddrF C.E. HATHAWAY Yee Plead<<e ra<<so Rsoorsceo (Q
P.L MARTIN Vde Posed<<d rooosrsr dorrrce ROBERT E. UMBAUGH Yde Preadosl Rdlossoeoece JOHN R. BURY vice plead<<d ood o<<a sl oaa<<r REPORTS TO THE PRESKIENT REPORTSTOTHECH A~OF~
Board of Directors William R. Gould Howard P. Allen Roy A. Anderson Norman Barker, Jr.
Edward W. Carter Warren Christopher Walter B. Gerken Joan C. Hanley Jack K. Horton Frederick G. Larkin, Jr.
T. M. McDaniel, Jr.
- John V. Newman Gerald H. Phipps Henry T. Segerstrom-E. L. Shannon, Jr.
H. Russell Smith
- Richard R. Von Hagen Chairman ofthe Board and Chief Executive OfJicer President Chairman of the Board and Chief Executive OfJtcer, Lockheed Corporation, Burbank, California Chairman of the Board and Chief Executive Ofltcer, First Interstate Bank of California, and Vice Chairman of the Board, First Interstate Bancorp, Los Angeles, California Chairman of the Board, Carter Haivley Hale Stores, Inc., Los Angeles, California Senior Partner, Law Firm of O'Melveny dc Myers, Los Angeles, California Chairman of the Board and Chief Executive Ojlicer, Pacific Mutual Life Insurance Company, Iileivport Beach, California General Partner and Manager, Miramonte Vineyards, Rancho California, California Chairman ofthe Executive Committee and Consultant (Retired Chairman of the Board and Chief Executive Ofhcer, Southern California Edison Company), Los Angeles, California Chairman of the Executive Committee, Security Pacific iVational Bank, Los Angeles, California Corporate Director and Consultant (Retired President, Southern California Edison Company),
San Marino, California President, CBS-Sony California, Inc. (Citrus Production), Oxnard, California
%resident, Gerald H. Phipps, Inc., General Contractors (Building Construction), Denver, Colorado Managing Partner, C.J. Segerstrom & Sons (Real Estate Development), Costa Mesa, California Chairman of the Board and Chief Executive Ofltcer, Santa Fe International Corporation (Oil Service, Engineering, Petroleum Exploration and Production), Alhambra, California Chairman of the Board, Avery International (Manufacturer ofSelf-Adhesive Products),
- Pasadena, California President, Lloyd Corporation, Ltd. (Real Estate Development and Production of Oil and Gas),
Beverly Hills, California SOUTHERN CALIFORNIAEDISON COMPANY ORGANIZATIONCHART (Please turn this page)
- Messrs. Newman and Von Hagen, having reached retireinent age, are not Nominees for reelection to the Board of Directors in 1983.
Southern California Edison Company 2244 Walnut Grove Avenue
- Rosemead, California 91770 Telephone (213) 572-1212 For Investor Relat contact the Assist~
Manager of Invest
-~ Telephone (213) 5 NOTICE Stock Transfer Ag Southern CalifornI
- Rosemead, Califo'egistrar of Stock Security Pacific g Los Angeles, Calij Stock Exchange Common Stock:
New York Stock Pacific Stock Exc(
London Stock ExtI Preferred and Pre American Stock Pacific Stock Exc DEADLINE RETURN DATE THE ATTACHED Fii slE OFFICIAL RECORDS OF THE DIVISION OF DOCUMENT CONTROL.
THEY HAVE BEEN CHARGED TO YOU FOR A LIMITEDTIME PERIOD AND MUST BE RETURNED TO THE RECORDS FACILITY BRANCH '016.
PLEASE DO NOT SEND DOCUMENTS CHARGED OUT THROUGH THE MAIL. REMOVALOF ANY PAGEIS) FROM DOCUMENT FOR REPRODUCTION MUST BE REFERRED TO FILE PERSONNEL.
Ticker Symbol SCE (Common S Media Listing SCalEd RECORDS FACILITYBRANCH This Financial and Statistical Report is designed to supplement the Annual Report to Shareholders. It is intended primarilyto meet the needs of institutional investors and s'ecurity analysts in making a more thorough analysis ofthe Company than would otherwise be possible from the usual reference sources. The Notes to Financial Statements in the Annual Report to Shareholders are applicable to the financial statements presented in this report for the years 1982, 1981, and 1980.
This Finanetal and Statistical Report and the statements and statistics contained herein have been assembled forgeneralinformative purposes and are not intended to induce, orfor use in connection with. any sale or purchase ofsecurities. Under no circumstancesis this report or any part ofits contents to be considered a prospectus, or as an oper to sell, or the so1ieitation ofan oPer to buy, any securities.
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