ML20009C972
| ML20009C972 | |
| Person / Time | |
|---|---|
| Site: | Callaway  |
| Issue date: | 07/17/1981 |
| From: | Bryan J UNION ELECTRIC CO. |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20009C973 | List: |
| References | |
| ER-81-180, ULNRC-465, NUDOCS 8107220263 | |
| Download: ML20009C972 (151) | |
Text
-_- _
f UNION ELECTRIC COMPANY 1901 GRATIOT STREET Sr. LOues. MISSOURI JOHN K. BRYAN , som 343 v....., .v. tou .. ui ouai .. ..
July 17, 1981
_h
/U' # '3 Mr. Harold R. Denton (8 \gN C}
Director of Nuclear Reactor Regulation 9 2 U. E. Nuclear Regulatory Commission 0J 4 Washington, D.C. 20555 f $
S
Dear Mr. Denton:
ULNRC- b5' 9
DOCKET NUMBER 50-483
- CALLAWAY PLANT, UNIT 1 FINANCIAL QUALIFICATION INFORMATION
Reference:
NRC letter dated April 30, 1981, from R. L. Tedesco The referenced letter requested additional information concernir:p the financial qualifications of Union Electric.
Transmitted herewith are responses to questions in the referenced letter. This submittal supplies the financial information requested in 10 CFR 50,33 (f) which we committed to provide in our Operating License Application (ULNRC-326 dated October 19, 1979).
We are providing six copies of the requested information. By copy of this letter, we are also sending one copy directly to Mr. Jim Peterson (NRC). This information is hereby incorporated into the Callaway Application.
Very truly yo rs,
\A John c. Br an 6
DS/afg T
}r>O s
/
F)107220263 PDR ADOCK 05000483 810717 ]4 I PDRj
STATE OF MISSOURI )
Robert J. Schukai, of lawful age, being first duly sworn upon oath says that he is General Manager-Engineering (Nuclear) for Union Electric Company; that he has read the foregoing document and knows the content thereof; that he has executed the same for and on aehalf .of said company with full power and
, authority to do so; and that the facts therein stated are true and correct to the best of his knowledge, information and belief.
I (
By
- D ~
Rober . S c ai Gener Mana r-Engineering Nuclear SUBSCRIBED and sworn to before me this 17th day of July, 1981.
t AbM - b4 BARSARA J.YFAFF [ !
NOTARY PUBUC. STATE OF MISSOURI Mf COMMISSION EXPIRES APP.il 22,1985 ST. LOUIS COUNTY.
i l
l l
[
i l
o 1
i f
l 1
cc: Mr. Jim Peterson U.S. Nuclear Regulatory Commission 4550 Montgomery Avenue Room 2016 Bethesday, Maryland 20014 r
cc:. Glenn L. Koester Vice President Operations Kansas Gas & Electric P.O. Box 208 Wichita, Kansas 67201 John E. Arthur Chief Engineer Rochester Gas & Electric Company 89 East Avenue Rochester, New York 14649 A. V. Dienhart Vice President Plant Engineering and Construction Northern States Power 414 Nicollet Mall Minneapolis, Minnesote 55401 Donald T. McPhee Vice President Kansas City Power and Light Company 1330 Baltimore Avenue Kansas _ City, Missouri 64141 Gerald Charnoff, Esq.
Shaw, Pittman, Potta & Trowbridge 1800 M. Street, N.W.
Washington, D.C. 20036-Nicholas A. ?etrick '
Executive Di rector SNUPPS 5 Choke Cherry Road Rockville, Maryland 20850 W. Hansen Callaway Resident Office U.S. Nuclear Regulatory Commission RR#1 Steedman, Missouri 65077 Gordon Edison Project Manager-SNUPPS U.S. Nuclear Regulatory Commission Washington, D. C. 20555 j
r .
t .SNUPPS-C s.
Question 1.a. Indicate the estimated annua'l cost by year to operate each unit of the subject facility for the first seven full years of each unit's commercial operation. The types-of costs included in the estimates should be indicated and included (but not necessarily be-limited to) operation and maintenance expense (with fuel costs shown separately), depreciation, taxes and a reasonable return on investment. (Enclosed is a form which should be used for each year of the seven year period.) Indicate the projected plant capacity factor (in percent) for each unit during each of the seven years. Provide separate estimates using 50 pet :nt and 60 percent plant capacity factors.
1.b. Indicate the unit price per kWh experienced by each applicant on system-wide sales of electrical power to all customers for the most recent 12-month period.
Response 1.a. See Tablas 1-1 through 1-24. Tables 1-1 through 1-8 provide the requested information for capacity factors which reflect historical capacity factors of similar nuclear units. Tables 1-9 through 1-16 and Tables 1-17 tnrough 1-24 provide requested information for 50 percent and 60 percent capacity factors, respectively.
Transmission expense on Tables 1-1 through 1-24 represent annual right-of-way maintenance clearing, tower painting, and insulator and line maintenance.
1.b. The unit price of system-wide sales of electrical power to all customers for calendar year 1980 was (3.7350)/kWh.
w 1-1
. SNUPPS-C TABLE l-1 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 19G3'(9 Months)
(thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 52.5%) . . . . . . . . 24,458 Other operating expenses. . . . . . . . . . . . . . . . . 10,100 Maintenance expenses. . . . . . . . . . . . . . . . . . . 6,800 Total nuclear power generation. . . . 41,358 Transmission expenses . . . . . . . . . . . . . . . . . . . 68 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 3,280 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 2,769 Total A.&G. expenses. . . . . . . . . 6,049 TOTAL O&M EXPENSES. . . . . . . . . . 47,475 Depreciatio'n.. expense. . . . . . . . . . . . . . . . . . . . 31,526 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 4,500 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,603 Total taxes other than income taxes . 21,103 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 2,524 Deferred income taxes - net . . . . . . . . . . . . . . . . . 56,486 Deferred investment tax credit adjustments - net . . . . . . 8,264 Return (rate of return: 11.25%) . . . . . . . . . . . . . . 123,898 TOTAL ANNUAL COST OF OPERATION. . . . $291,276
I .
4 5
SNUPPS-C TABLE l-2 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR'THE CALENDAR YEAR 1984 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 58%) . . . . . . . . . 35,631 Other operating expenses. . . . . . . . . . . . . . . . . 14,600 Maintenance expenses. . . . . . . . . . . . . . . . . . . 9,700 Total nuclear power generation. . . . 59,931 Transmission expenses . . . . . . . . . . . . . . . . . . . 97 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 3,900 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 3,994 Total A.&G. expenses. . . . . . . . . 7,894 TOTAL O&M EXPENSES. . . . . . . . . . 67,922 Depreciation- expense . . . . . . . . . . . . . . . . . . . . 46,439 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 33,020 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,266 Total taxes other than income taxes . 56,286 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 57,937 Deferred income taxes - net . . . . . . . . . . . . . . . . . 26,576 Deferred Investment tax credit adjustments - net . . . . . . (4,775)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 157,798 TOTAL ANNUAL COST OF OPERATION. . . . $408,183 D
O
SNUPPS-C TABLE l-3 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1985 ,
(thousands of dollars)
Operation and maintene.nce expenses Nuclear power generation Nuclear fuel expense (plant factor 62%) . . . . . . . . . 35,887 Other operating expenses. . . . . . . . . . . . . . . . . 15,700 Maintenance expenses. . . . . . . . . . . . . . . . . . . 10,400 Total nuclear power generation. . . . 61,987 Transmission expenses . . . . . . . . . . . . . . . . . . . 104 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,115 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,161 Total A.&G. expenses. . . . . . . . . 8,276 TOTAL O&M EXPENSES. . . . . . . . . . 70,367 Depreciation-expense. . . . . . . . . . . . . . . . . . . . 49,642 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . . 28,633 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,474 Total taxes other than income taxes . 51,107 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 57,963 Deferred income taxes - net . . . . . . . . . . . . . . . . . 19,658 Deferred Investment tax credit adjustments - net. . . . . . . (3,438)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 148,986 TOTAL ANNUAL COST OF OPERATION. . . . $394,285 l
l I
O 9
O
SNUPPS-C
. TABLE l-4 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1986 (thousands of dollars)
_ Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 65%) . . . . . . . . . 37,937 Other operating expenses. . . . . . . . . . . . . . . . . 16,900 Maintenance expenses. . . . . . . . . . . . . . . . . . . 11,300 Total nuclear power generation. . . . 66,137 Transmission expenses . . . . . . . . . . . . . . . . . . .
113 Administrative and general expenses Property and liability in.3urance. . . . . . . . . . . . . 4,308 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,432 Total A.&G. expenses. . . . . . . . . 8,740 TOTAL O&M EXPENSES. . . . . . . . . . 74,990 Depreciation-expense. . . . . . . . . . . . . . . . . . . . 52,044 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,726 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . _22,005 Total taxes other than incorae taxes . 50,731 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 54,251 Deferred income taxes - net . . . . . . . . . . . . . . . . . 16,038 Deferred. Investment tax credit adjustments - net. . . . . . . (3,191)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 141,185 TOTAL ANNUAL COST OF OPERATION. . . . $386,048 a --
y .< , . .--
w - , _ - a
SNUPPS-C s TABLE l-5 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR'THE CALENDAR YEAR 1987 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 67%) . . . . . . . . . 42,071 Other operating expenses. . . . . . . . . . . . . . . . . 18,200 Maintenance expenses. . . . . . . . . . . . . . . . . . . 12,200 Total nuclear power generation. . . . 72,471 Transmission expenses . . . . . . . . . . . . . . . . . . . 121 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,593 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,715 Total A.&G. expenses. . . . . . . . . 9,308 TOTAL O&M EXPENSES. . . . . . . . , . 81,900 Depreciation--expense. . . . . . . . . . . . . . . . . . . . 53,645 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,819 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,704 Total taxes other than income taxes . 50,523 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 52,599 Deferred income taxes - net . . . . . . . . . . . . . . . . . 10,863 Deferred Investment tax credit adjustments - net. . . . . . . (3,080)
Return (rate of return: 11.25%) . . . . . - . . . . . . . . . 134,325 TOTAL ANNUAL COST OF OPERATION. . . . $380,775 M
^ - - - . - .
n.. ., ,,,-__e. ,- -.
4 SNUPPS-C
' TABLE l-6 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1988 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 68%) . . . . . . . . . 45,625 Other operating expenses. . . . . . . . . . . . . . . . . 19,600 Maintenance expenses. . . . . . . . . . . . . . . . . . . 13,100 Total nuclear power generation. . . . 78,325 Transmission expenses . . . . . . . . . . . . . . . . . . . 131 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,814 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,991 Total A.&G. expenses. . . . . . . . . 9,805 TOTAL O&M EXPENSES. . . . . . . . . . 68,261 Depreciatiom expense. . . . . . . . . . . . . . . . . . . . 54,446 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,872 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,390 Total taxes other than income taxes . 51,262 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 61,097 Deferred income taxes - net . . . . . . . . . . . . . . . . . 13,376 Deferred investment tax credit adjustments - net. . . . . . . (3,505)
Return (rate of return: 11.25%) . . . . . . . . . . . .. . . 127,875 TOTAL ANNUAL COST OF OPERATION. . . . $392,812 M
w g,em--e ,ym ey,.- --yw - .-g - - +
SNUPPS-C TABLE l-7 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1989 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 68%) . . . . . . . . . 48,468 Other operating expenses. . . . . . . . . . . . . . . . . 21,100 Maintenance expenses. . . . . . . . . . . . . . . . . . . 14,100 Total nuclear power generation. . . . 83,668 Transmission expenses . . . . . . . . . . . . . . . . . . . 141 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 5,071 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 5,254 Total A.&G. expenses. . . . . . . . . 10,325 TOTAL O&M EXPENSES. . . . . . . . . . 94,134 Depreciation expense. . . . . . . . . . . . . . . . . . . . 54,446 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,975 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . ?l,887 Total taxes other than income taxes . 50,862 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 59,363 Deferred income taxes - net . . . . . . . . . . . . . . . . . 7,064 Deferred investment tax credit adjustments - net. . . . . . . (3,549)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . . 121,666 TOTAL ANNUAL COST OF OPERATION. . . . $383,986 6
m
SNUPPS-C
' TABLE l-8 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR PHE CALENDAR YEAR 1990 (thousands of dollars) .
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 68+%). . . . . . . . . 51,538 Other operating expenses. . . . . . . . . . . . . . . . . 22,800 Maintenance expenses. . . . . . . . . . . . . . . . . . . 15,200 Total nuclear power generation. . . . 89,538 Transmission expenses . . . . . . . . . . . . . . . . . . .. 152 Administrative and general expenses Property and liability. insurance. . . . . . . . . . . . . 5,942 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 5,553 Total A.&G. expenses. . . . . . . . . 11,495 TOTAL O&M EXPENSES. . . . . . . . . . 101,185 Depreciation expense. . . . . . . . . . . . . . . . . . . . 54,446
. Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 29,053 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,714 Total taxes other than income taxes . 50,767 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 59,205 s Deferred income taxes - net . . . . . . . . . . . . . . . . . 2,673 Deferred investment tax credit adjustments - net. . . . . . . (3,513)
Return.(rate of return: 11.25%) . . . . . . . . . . . . . . 116,182 TOTAL ANNUAL COST OF OPERATION. . . . $380,945 O
^
,-w- - - . . - , . , . , +,e ,
^
. SNUPPS-C
' TABLE l-9 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1983 (9 Months)
(thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . . 23,928 Other operating expenses. . . . . . . . . . . . . . . . . 10,100 Maintenance expenses. . . . . . . . . . . . . . . . . . . 6,800
, Total nuclear power generation. . . . 40,828 Transmission . expenses . . . . . . . . . . . . . . . . . . . 68 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 3,280 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 2,769 Total A.&G. expenses. . . . . . . . . 6,049 TOTAL O&M EXPENSES. . . . . . . . . . 46,945 Depreciation.. expense. . . . . . . . . . . . . . . . . . . . 39,632 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 4,500 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,456 Total taxes other than income taxes . 21,956 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 9,350 Deferred income taxes - net . . . . . . . . . . . . . . . . . 56,500 Deferred investment tax credit adjustments - net. . . . . . .. 8,284 Return (rate of return: 11.25%) . . . . . . . . . . . . . . 123,575 TOTAL ANNUAL COST OF OPERATION. . . . $306,242 w
0 1
m
, . SNUPPS-C TABLE 1-10 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST Oh OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1984 (thousands of ' dollars )
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . . 31,902 Other operating expenses. . . . . . . . . . . . . . . . . 14,600 Maintenance expenses. . . . . . . . . . . . . . . . . . . 9,700 Total nuclear power generation. . . . 56,202 Transmission expenses . . . . . . . . . . . . . . . . . . .
97 __
Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 3,900 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 3,994 Total A.&G. expenses. . . . . . . . . 7,894 TOTAL O&M EXPENSES. . . . . . . . . . 64,193 Depreciation.. expense. . . . . . . . . . . . . . . . . . . . 52,988 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 33,029 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,496 Total taxes other than income taxes . 56,525 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 59,867 Deferred income taxes - net . . . . . . . . . . . . . . . . . '26,540 Deferred investment tax credit adjustments - net. . . . . . . (4,782)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 156,876 TOTAL ANNUAL COST OF OPERATION. . . . $412,207 m
s SNUPNS-C TABLE l-11 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF Ol'ERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1985 (thousands of dollars)
Operation and maintenance expenses, Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . . 30,361 Other operating expenses. . . . . . . . . . . . . . . . . 15,700 Maintenance expenses. . . . . . . . . . . . . . . . . . . 10,400 Total nuclear power generation. . . . 56,461 Transmission expenses . . . . . . . . . . . . . . . . . . . 104 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,115 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,161 Total A.&G. expenses. . . . . . . . . 8,276 TOTAL O&M EXPENSES. . . . . . . . . . 64,841 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,843 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,683 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,008 Total taxes other than income taxes . 50,691 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 54,602 Deferred income taxer - net . . . . . . . . . . . . . . . . . 19,523)
Deferred investment tax credit adjustments - net. . . . . . . (3,440)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 147,039 TOTAL ANNUAL COST OF OPERATION. . . . $386,099 4
x
4 SNUPPS-C TABLE l-12 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1986 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . 2 29,873 Other operating expenses. . . . . . . . . . . . . . . . . 16,900 Maintenance expenses.-. . . . . . . . . . . . . . . . . . 11,300 Total nuclear power generation. . . . 58,073 Transmission expenses . . . . . . . . . . . . . . . . . . . . 113 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,308 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,432 Total A.&G. expenses. . . . . . . . . 8,740 TOTAL O&M EXPENSES. . . . . . . . . . 66,926 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,843 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,827 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,987 Total taxes other than income taxes . 49,814 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 46,587 Deferred income taxes - net . . . . . . . . . . . . . . . . . 16,349 Deferred investment tax credit adjustments - net. . . . . . . (3,189)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 138,867 TOTAL ANNUAL COST OF OPERATION. . . . $368,197 m
O
^
s SNUPPS-C TABLE l-13 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1987 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . . 31,274 Other operating expenses. . . . . . . . . . . . . . . . . 18,200 Maintenance expenses. . . . . . . . . . . . . . . . . . . 12,200 Total nuclear power generation. . . . 61,674 Transmission expenses . . . . . . . . . . . . . . . . . . . 121 Administrctive and general expenses Property and liability insurance. . . . . . . . . . . . . 4,593 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,715 Total A.&G. expenses. . . . . . . . . 9,308 TOTAL O&M EXPENSES. . . . . . . . . . 71,103 Depreciation-expense. . . . . . . . . . . . . . . . . . . . 52,843 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 29,007 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,403 Total taxes other than income taxes . 49,410 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 47,932 Deferred income taxes - net . . . . . . . . . . . . . . . . . 9,632 Deferred investn.ent tax credit adjustments - net. . . . . . . (4,353)
~
Return (rate of return: 11.21%) .. . . . . . . . . . . . . 131,383 TOTAL ANNUAL COST OF OPERATION. . . . $357,941 nm O
^
w . _ , , . ~ ,r ., __. , _ _
SNUPPS-C TABLE l-14 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR'THE CALENDAR YEAR 1988 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . . 34,130 Other operating expenses. . . . . . . . . . . . . . . . . 19,600 Maintenance expenses. . . . . . . . . . . . . . . . . . . 13,100 Total nuclear power generation. . . . 66,830 Transmission expenses . . . . . . . . . . . . . . . . . . . 131 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,814 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,991 Total A.&G. expenses. . . . . . . . . 9,805 TOTAL O&M EXPENSES. . . . . . . . . . 76,766 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,988 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,706 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,006 Total taxes other than income taxes . 49,712 __
Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 55,669 Deferred income taxes - net . . . . . . . . . . . . . . . . . 11,089 Deferred investment tax credit adjustments - net. . . . . . . (3,288)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 125,592 TOTAL ANNUAL COST OF OPERATION. . . . $368,528 i
ENUPPS-C TABLE l-15 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1989 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . . 35,781 __
Other operating expenses. . . . . . . . . . . . . . . . . ,21,100 Maintenance expenses. . . . . . . . . . . . . . . . . . . 14,100 Total nuclear power generation. . . . 70,981 __ ;
Transmission expenses . . . . . . . . . . . . . . . . . . . 141 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 5,071 Other A.&G. expenses. . . . . . . . . . . ; . . . . . . . 5,254 Total A.&G. expenses. . . . . . . . . 10,325 TOTAL O&M EXPENSES. . . . . . . . . . 81,447 Depreciation-expense. . . . . . . . . . . . . . . . . . . . 52,843 -
Taxes other than income taxes Property taxes. . ,. . . . . . . . . . . . . . . . . . . . . 28,858 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,400 Total taxes other than income taxes . 49,258 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 51,579 Deferred income taxes - not . . . . . .. . . . . . . . . . . . 7,210 Deferred investment tax credit adjustments - net. . . . . . . (3,301)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 118,851 TOTAL ANNUAL COST OF OPERATION. . . . $357,887
+
0 9
- a
. SNUPPS-C TABLE l-16 ATTACHMENT FOR ITEM NO. 1. a .
ESTIMATED ANNU.'t. COST OF OPERATING NUCLEAR GENERATING UN17: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1990 (thousands of' dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%) . . . . . . . . . 37,610 Other operating expenses. . . . . . . . . . . . . . . . . 22,800 Maintenance expenses. . . . . . . . . . . . . . . . . . . 15,200 Total nuclear power generation. . . . 75,610 Transmission expenses . . . . . . . . . . . . . . . . . . . 152 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 5,942 Other A.&G. expensns. . . . . . . . . . . . . . . . . . . 5,553 Total A.&G. expenses. . . . . . . . . 11,495 TOTAL O&M EXPENSES. . . . . . . . . . 87,257 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,843 Taxes other than income taxcs l'roperty taxes . . . . . . . . . . . . . . . . . . . . . . . 29,089 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,930 Total taxes other than income taxes . 49,019 Current Income Taxes. . . . . . . . . . . . . . . . . . . . 47,991 Deferred income taxes - net . . . . . . . . . . . . . . . . . 3,276 Deferred investment tax credit adjustments - net. . . . . . . (2,921)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 112,191 TOTAL ANNUAL COST OF OPERATION. . . . $349,656
SNUPPS-C TABLE l-17 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING
[
UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1983 (9 Months)
(thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 28,087 Other operating expenses. . . . . . . . . . . . . . . . . 10,100 Maintenance expenses. . . . . . . . . . . . . . . . . . . 6,800 Total nuclear power generation. . . . 44,987 Transmission expenses . . . . . . . . . . . . . . . . . . . 68 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 3,280 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 2,769 Total A.&G. expenses. . . . . . . . . 6,049 TOTAL O&M EXPENSES. . . . . . . . . . ~51,104 Depreciation--expense. . . . . . . . . . . . . . . . . . . . 39,64.
Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 4,500 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,791 Total taxes other than income taxes . 22,291 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 11,942 Deferred income taxes - net . . . . . . . . . . . . . . . . . 55,173 Deferred investment tax credit adjustments - net. . . . , . - 8,535 Return (rate of return: 11.25%) . . . . . . . . . . . . . . 123,443 TOTAL ANNUAL COST OF OPERATION. . . . $312,129
~
o
,e , ,, y g g c- -y - - - - - - + - -
e -, . -
y
SNUPPS-C TABLE l-18 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1984 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 37,446 Other operating expenses. . . . . . . . . . . . . . . . . 14,600 Maintenance expenses. . . . . . . . . . . . . . . . . 9,700 Total nuclear power generation. . . . 61,746 Transmission expenses . . . . . . . . . . . . . . . . . . .
97 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 3,900 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 3,994 Total A.&G. expenses. . . . . . . .. . 7,894 TOTAL O&M EXPENSES. . . . . . . . . . 69,737 Depreciation expense. . . . . . . . . . . . . . . . . . . . 53,000 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 32,381 Other . . . . . . . . . . . . . . . . . . . . . . . . . . 23,930 Total taxes other than income taxes . 56,911 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 63,471 Deferred income taxes - net . . . . . . . . . . . . . . . . . 25,267 Deferred investment tax credit adjustments - net. . . . . . . (4,776)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 156,210 TOTAL ANNUAL COST OF OPERATION. . . . $419,820 O
. SNUPPS-C TABLE 1-19 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR~THE CALENDAR YEAR 1985 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 34,652 Other operating expenses. . . . . . . . . . . . . . . . . 15,700 Maintenance expenses. . . . . . . . . . . . . . . . . . . 10,400 Total nuclear power generation. . . . 60,752 Transmission expenses . . . . . . . . . . . . . . . . . . . 104 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,115 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,161 Total A.&G. expenses. .. . . . . . . 8,276 TOTAL O&M EXPENSES. . . . . . . . . . 69,132 Depreciation-expense. . . . . . . . . . . . . . . . . . . . 52,855 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,577 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,394 Total taxes other than income taxes . 50,971 Current Incone Taxes. . . . . . . . . . . . . . . . . . . . . 57,583 Deferred income taxes - not . . . . . . . . . . . . . . . . . 18,064 Deferred investment tax credit adjustments - net. . . . . . . (3,436)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 147,714 TOTAL ANNUAL COST OF OPERATION. . . . $392,883 e
- -n- c
SNUPPS-C TABLE l-20 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1986 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 35,541 Other operating expenses. . . . . . . . . . . . . . . . . 16,900 Maintenance expenses. . . . . . . . . . . . . . . . . . . 11,300 Total nuclear power generation. . . . 63,741 Transmission expenses . . . . . . . . . . . . . . . . . . . 113 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,308 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,432 Total A.&G. expenses. . . . . . . . . 8,740 TOTAL O&M EXPENSES. . . . . . . . . . 72,594 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,855 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,693 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,876 Total taxes other than income taxes . 50,569 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 53,483 Deferred income taxes - net . . . . . . . . . . . . . . . . . 17,556 Deferred investment tax credit adjustments - net. . . . . . . (3,188)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 139,921 TOTAL ANNUAL COST OF OPERATION. . . . $383,790 m
+
- SNUPPS-C TABLE 1-21 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1987 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 38,161 Other operating expenses. . . . . . . . . . . . . . . . . 18,200
, Maintenance expenses. . . . . . . . . . . . . . . . . . . 12,200 Total nuclear M er generation. . . . 68,561 Transmission expenses . . . . . . . . . . .. . . . . . . . 121 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 4,593 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,715 Total A.&G. expenses. . . . . . . . . 9,308 TOTAL O&M EXPENSES. . . . . . . . . . 77,990 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,855 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,801 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,123 Total taxes other than income taxes . 49,924 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 48,350 ,
Deferred income taxes - not . . . . . . . . . . . . . . . . . 12,038 Deferred investment tax credit adjustments - net. . . . . . . (3,073) _
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 132,487 TOTAL ANNUAL COST OF OPERATION. . . . $370,571
- _ . ,_w , _.-
. SNUPPS-C TABLE l-22 ATTACP. MENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL CO3T OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 TOR TH3 CALENDAR YEAR 1988 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 40,472 Other operating expenses. . . . . . . . . . . . . . . . . 19,600 Maintenance expenses. . . . . . . . . . . . . . . . . . . 13,100 Total nuclear power generation. . . . 73,172 Transmission expenses . . . . . . . . . . . . . . . . . . . 131 Administrative and general expenses F1operty and liability insurance. . . . . . . . . . . . . 4,814 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 4,991 Total A.&G. expenses. . . . . . . . . 9,805 TOTAL O&M EXPENSES. . . . . . . . . . 83,108 Depreciation expense. . . . . . . . . . . . . . . . . . . . 53,000 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 28,895 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,326 Total taxes other than income taxes . _50,221 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 53,016 Deferred income taxes - net . . . . . . . . . . . . . . . . . 12,188 Deferred investment tax credit adjustments - net. . . . . . . (3,506)
Retura (rate of return: 11.25%) . . . . . . . . . . . . . . 126,112 TOTAL ANNUAL COST OF OPERATION. . . . $374,139 l
0
,, _ _ , - , - - n v , -
s SNUPPS-C TABLE l-23 A'iFACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1989 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 42,908 Other operating expenses. . . . . . . . . . . . . . . . . 21,100 Maintenance expenses. . . . . . . . . . . . . . . . . . . 14,100 Total nuclear power generation. . . . 78,108 Transmission expenses . . . . . . . . . . . . . . . . . . . 141 Administrative and general expenses Property and liability insurance. . . . . . . . . . . . . 5,071 Other A.&G. expenses. . . . . . . . . . . . . . . . . . . 5,254 Total A.&G. expenses. . . . . . . . . 10,325 TOTAL O&M EXPENSES. . . . . . . . . . 88,574 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,855 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 29,047 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,910 Total taxes other than income taxes . 49,957 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 52,032 Deferred income taxes - net . . . . . . . . . . . . . . . . . 7,533 Deferred investment tax credit adjustments - net. . . . . . . (3,549)
Return (rate of return: 11.25%) . . . . . . . . . . . . . .
119,439 TOTAL ANNUAL COST OF OPERATION. . . . $366,841 9
-s_, - - - r - _ _v., -,, . .--. , , -w.. , -- - r
}
SNUPPS-C TABLE l-24 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT: CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1990 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%) . . . . . . . . . 44,647 Other operating expenses. . . . . . . . . . . . . . . . . 22,800 Maintenance expenses. . . . . . . . . . . . . . . . . . . 15,200 Total nuclear power generation. . . . 82,647 Transmission expenses . . . . . . . . . . . . . . . . . . . 152 Administrative and general expenses Propertf and liability insurance. . . . . . . . . . . . . 5,942 Other a.&G. expenses. . . . . . . . . . . . . . . . . . . 5,553 Total A.&G. expenses. . . . . . . . . 11,495
, TOTAL O&M EXPENSES. . . . . . . . . . 94,294 Depreciation expense. . . . . . . . . . . . . . . . . . . . 52,855 Taxes other than income taxes Property taxes. . . . . . . . . . . . . . . . . . . . . . . 29,185 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,619 Total taxes other than income taxes . 49,804 Current Income Taxes. . . . . . . . . . . . . . . . . . . . . 50,809 Deferred income taxes - net . . . . . . . . . . . . . . . . . 3,221 Deferred investment tax credit adjustments - net. . . . . . . (3,501)
Return (rate of return: 11.25%) . . . . . . . . . . . . . . 114,253 TOTAL ANNUAL COST OF OPERATION. . . . $361,735
, SNUPPS-C Question 2. Indicate the estimated costs of permanently shutting down each unit of the facility, stating what is included in such costs, ?.he assumptions made in estimating the costs, the type of shutdown contemplated, and the intended source of funds to cover these costs.
Response: The only type of shutdown contemplated for Callaway Unit 1 is decommicaioning at the end of its useful life. Refer to the Env'.ronmental Report - Operating License Stage, Section 5.8 for a discussion of approaches to decommissioning. The two basic approachec discussed are Immediate Dismant)ement and Safe Stcrage with Deferred Dismantlement. l The source of funds is through increased depreciation of the plant.
\
l l
l I
/
2-1
SNUPPS-C I
Question 3. Provide an estimate of the annual cost to maint ain each unit of the shutdown facility in a safe condition. Indicate what is included in the estimate, assumptions made in estimating costs, and r
the intended source of funds.
Response: Refer to the Response to Question 2. The referenced ER Section includes costs for Safe Storage and Continuing Care for the Safe Storage with Deferred Dismantlement approach.
9 i
O e F i
6 l
4 I '
e e-3-1
- SNUPPS-C Question 4. If the: 27eility is jointly-owned, provide copies of the join't participation agreement setting forth the procedures by which the applicants will share operating expenses and decommissioning costs.
Response: Callaway Plant Unit 1 is solely owned and operated by Union Electric Company.
0 s
9 6
4 I
J f .
4-1
. SNUPPS-C 4
Ctw; tion 5. Provide copies of the prospectus for the most recent security issue and copies of the most recent SEC Form 10-K and 10-Q. Provide copies of the preliminary prospectus for any pending security issue. Submit copies of the Annual Report to Stockholders each year as required by 10CFR50.71(b).
Response: Copies of the following are attached:
a) The prospectus for our most recent security issue --
$150,000,000 of 15 3/8% First Mortgage Bonds due 1991.
b) SEC Form 10-K for 1980.
'c) SEC Form 10-Q for the quarter ended March 31, 1981.
d) Preliminary prospectus for the sale of 3,000,000 shares of preferred stock. Such sale was scheduled for May 1981 but has been postponed and tentatively rescheduled for the fall of 1981.
Twenty-five copies of the Union Electric Company, 1980 Annual Report to Stockholders were submitted per 10CFR50.71(b) by ULNRC-444 dated May 15, 1981.
f e
5-1
5 .
, SNUPPS-C Question 6. Describe. aspects of its regulatory environment including, but not necessarily limited to, the following: prescribed treatment of allowance for funds used during construction; rate base (original cost, fair value, other); accounting for deferred income taxes and investment tax ccrdits; fuel adjustment clauses in effect or proposed; iistorical, partially projected, or fully projected test year.
Response: The ratemaking body having primary rate jurisdiction over UE's electric utility bLsiness is the Missouri Public Service Commission (Mo.P.S.C). In 1980, Missouri retail consumers accounted for 72% of the total company electric operating revenues and 62% of total kilowatt-hour sales. Other agencies regulating UE's electric rates are the Illinois Commerce Commission, the Iowa State Commerce Commission, and the Federal Energy Regulatory Commission (FERC).
UE's. rate for determining Allowance for Funds Used During Construction (AFUDC) is calculated persuant to the requirements of FERC's Order No. 561 and the same rate is applied in all regulatory jurisdictions.
None of the agencies regulating UE's electric rates permit the Company to include any Construction Work in Progress (CWIP) in rate base.
~ Electric rates- authorized by the regulatory commissions in Missouri and Illinois are based upon both an original cost and a fair value rate base.
The Report and Order of these two commissions in rate proceedings include a rate btae determination on both an original cost ard a fair value basis and both are considered it. the electric rates approved. The Company's wholesale electric rates, as well as the retail rates in Iowa, are only based upon original cost rate base determinations.
The currently effective electric rates in all of the Company's four regulatory jurisdictions essentially reflect full income tax normalization. For income tax purposes, the Company computes depreciation using the most liberalized method allowed by the Internal Revenue Code. With respect to all property additions after 1974, and' prior additions in Illinois, the reduction in taxes applicable to this liberalized depreciation, are accounted for as deferred ir;rme taxes and amortized over the estimated useful lives of the related properties. In addition, UE normalizes the income tax effects of the repa'ir allowance, the debt component of AFUDC and taxes and expenses capitalized. The Company normalizes the additional investment tax credit 6-1 1 -
CNUPPS-C benefits resulting from the Tax Reduction Act of 1975 with respect to properties in all states. The Company is flowing-through to income only the 4%
investment tax credit on Missouri and Iowa properties which are not " qualified progress expenditures" under the Tax Reduction Act of 1975.
On September 27, 1979 in compliance with an order of the Missouri Supreme Court, the Missouri Public Service Commission ordered the termination of UE's fuel adjustment clause (FAC) for Missouri retail customers effective October 1, 1979. Since that time, the additional revenues necessary to compensate for higher fuel costs have only been received via increased electric tariffs authorized by the Mo.P.S.C. in full scale rate proceedings. However, in recent Missouri rate decisions, the Mo.P.S.C. has authorized utilities to implement rates reflecting projected fuel costs, with the proviso that these fuel costs are to be reviewed at the time they become actual, the electric rates are to be adjusted and any overcollections resulting from estimating errors will be refunded with interest. Legislation authorizing 1 the existence of a FAC was recently considered in the first regular session of 81st General Assembly of the Missouri legislature but a final vote was not taken before the session's June 15, 1981 temrination date.
In all of its other regulatory jurisdictions, the Company has a FAC in effect.
The Mo.P.S.C. -does not currently authorize electric rates based upon fully projected test years. It has, on a case-by-case basis, allowed the use of partially projected test years. In all cases where an historical test year is utilized, this Commission will recognize in the cost of service all known and measurable changes occurring prior to the operation of law date (approximately eleven months following the date of the Company's tarrif filing). UE's electric rates in Illinois and Iowa are based upon historical test jaars, normalized for unusual and non-recurring conditions and annualized for revenue and expense chnnges which are known but only '
partially or not yet, reflected in the cost of service. The Company's wholesale electric rates are based upon a fully projected test year in accordance
.wi th the ratemaki ng practices of the FERC.
6-2
r .
SNUPPS-C Question 7. Describe the nature and amount of its most recent rate relief action (s). In addition, indicate the nature and amount of any pending rate relief action (s). Use the attached form to provide this information. Provide copies of the submitted financially related testimony and exhibits of the staff and company in the most recent rate relief action or pending action. Furnish copies of the hearing examiner's report and recommendation, and final opinion last issued with respect to each participant, including all financially related exhibits referred to therein.
Response: On May 30, 1980, the Missouri Public Service Commission granted Union Electric a $22.5 million rate increase based on a negotiated settlement. In November, 1980, a $96.6 million rate increase was filed based on the forecast test year ending September 30, 1981. A negotiated settlement was approved by the Commission on July 13, 1981. It provided an increase of $49,975,000 exclusive of gross receipts taxes, to become effective on July 17, 1981. An additional increase to reflect the actual Jcly 1981 coal costs, primarily the effect of the recent UMW 1 abor contract, will be verified at a July 30, 1981 hearing and would become effective about August 15, 1981. This is estimated to add approximately $14,500,000 to the increase.
The Illinois Commerce Commission on April 15, 1981, granted Union Electric a $10.7 million rate increase based on a 1979 test year. No rate requests are pending.
On May 2, 1980, the Iowa State Commerce Commission
! granted Union Electric a $.5 million rate increase for the year 1978 and a $1.2 million rate increase for the year 1979. In December, 1980, a $3.6 million rate increase was filed based on the forecast test year ending September 30, 1981. The rates were placed in effect subject to refund on April 22, 1981.
Hearings are scheduled to begin in September, 1981.
On March 27, 1981, the Federal Energy Regclatory Commission granted an increase of $8,835,000 for.
wholesale rates. These rates were effective on March 27, 1978. In May, 1981, a $19.1 million rate increase was filed based on the forecast year ending June 30, 1982. On July 2, 1981, the Commission allowed summary disposition _of certain items, which reduced the Company's request to approximately $12.9 million. These revised rates were ordered to become effective, subject to refund, on July 9, 19El-l 7-1
. SNUPPS-C See Tables 7-1 through 7-4 for further detail on rate developments.
The following documents are attached:
- 1) Union Electric Company, Direct Testimony and Exhibits of W. E. Cornelius before the Missouri Public Service Commission, Case No. LR-81-180, (Sworn February 5, 1981).
- 2) Union Electric Company, Direct Testimony and Exhibits of Jerre E. Birdsong before the Missouri Public Service Commission, Case No. ER-81-180, (Sworn February 3, 1981).
- 3) Office of Financial Analysis, Missouri Public Service Commission, Direct Testimony and Exhibits of Ronald L. Shackelford before the Missouri Public Service Commission, Case No. ER-81-180, (Sworn May 27, 1981).
4 t
4 l
I i
i
+
i l
7-2
(
. SNUPPS-C TALLE 7-1 ATTACHMENT FOR ITEM NO. 7 RATE DEVELOPt!ENTS Missouri Electric Granted Tsst year utilized . . . . . . . . . . 12 Months Ending 3-31-79 Annual amount of revenue increase requested-test year basis (OOO's). . . $81,600 $55,596 Rev.(1)
Date petition filed. . . . . . . . . . 7-06-79 Annual amount of revenue increase allowed-test year basis (000's). . . $21,708 Parcent increase in revenues allowed . 3.68%
Date of final order. . . . . . . . . . 4-30-80 Effective date . . . . . . . . . . . . 5-30-80 Rate base finding (000's). . . . . . . $1,312,254 Construction work in progress included in Rate base (000's). . . . . . . . None Rate of return on rate base authorized 9.6%
Rnte of return on common equity authorized . . . . . . . . . . . . . 13.5%
Rsvenue Effect (000's)
Amount received in year granted. . . . $13,000 Amount received ,in subsequent year . . $22,500 (If not available, annualize amounts received in year granted)
Panding Requests Tcst year utilized . . . . . . . . . . 12 Months Ending 9-30-81 Amount (000's) . . . . . . . . . . . . $96,610 Porcent increase . . . . . . . . . . . 15.08%
Date petition filed. . . . . . . . . . 11-26-80 Date by which decision must be issued. 10-25-81 Rate of return on rate base requested. 10.88% .
Rate of return on common equity requested 15.50%
l Amour.t of rate base requested. . . . . $1,432,330,000 Amount of construction work in progress rec,uasted for inclusion in rate base None (1) Total request was reduced to $55,596,000 as a result of the Commission's decision in Case No. ER-80-140 which eliminated the fuel rider but allowed current fuel costs to be rolled into the basic rates as of 10/1/79.
(2) On July 13, 1981, the Commission approved a negotiated settlement to provide an increase of $49,975,000, exclusive of l gross receipts taxes, to become. effective July 17, 1981. It also provides a mechanism for an additional increase of approximately $14,500,000 to reflect the effect of the recent These prices
~
-UMW 1 abor contracts on July, 1981 coal prices.
will be verified at a true-up hearings scheduled for July 30, 1981.
- SNUPPS-C TABLE 7-2 ATTACHMENT FOR ITEM NO. 7 RATE DEVELOPMENTS Illinois Electric Granted Tast year utilized . . . . . . . . . . . . 1979 Annual amount of revenue increase rcquested-test year basis (OOO's). . . . . $15,152 Date petition filed. . . . . . . . . . . . 5-22-80 Annual amount of revenue increase allowed-test year basis (000's). . . . . $10,700 Parcent increase in revenues allowed . . . 10.04%
Date of final order. . . . . . . . . . . . 4-15-81 Effective date . . . . . . . . . . . . . . 4-18-81 Rate base finding (000's). . . . . . . . . $188,102 Construction work in progress included in Rate base (000's) . . . . . . . . . . None Rate of return on rate base aathorized . . 10.92%
Rute of return on common equity authorized . .. . . . . . . . . . . . . 15.30%
~
R2 venue Effect (000's)
Amount received in year granted. . . . . . $7,000 A' m oun; received in subsequent year . . . . $11,000 (If not available, annualize amounts received in year granted)
Pending Requests . . . . . . . . . . . . . None Test year utilized Amount (000's)
Percent increase Date petition filed Date by which decision must be issued Rate of return on rate base requested Rate of return on common equity requested Amount of rate base requested Amount of construction work in progress requested for inclusion in rate base 4
O
. . _ _ _ _ _ _ _ _ _ _m_____________ _ _ _ _ _ _ ________
. l I
- SNUPPS-C TABLE 7-3 ATTACHMENT FOR ITEM NO. 7 RATE DEVELOPMENTS 1
Iowa Electric Granted Tsst year utilized . . . . . . . . . . . 1978 Annual amount of revenue increase requested-test year basis (OOO's) . . . $2,748 Date petition filed. . . . . . . . . . . 5-01-78 Annual amount of revenue increase allowed-test year basis (000's). . . . $1,233 Parcent increase in revenues allowed . . 4.87%
Date of final order. . . . . . . . . . . 5-02-80 Effective date . . . . . . . . . . . . . 6-01 $498
. . . . . . . . . . . . . 1-01 $1,233 Rate base finding (000's). . . . . . . . $57,148,000 Construction wcrk in progress included in Rate base (OOO's) . . . . . . . . . None Rate of return on rate base authorized 9.18%
- Rate of return on common equity authorized . . . . . . . . . . . . . . 12.50%
Rsvenue Effect (000's)
Amount received in year granted. . . . . $498 Amount received in subsequent year . . . $1,233 (If not available, annualize amounts received in year granted)
Pending Requests -
Test year utilized . . . . . . . . . . . 12 Months Eading 9-30-81 Amount (000's) . . . . . . . . . . . . $3,606 Porcent increase . . . . . . . . . . . . 10.12%
Date petition filed. . . . . . . . . . . 12-23-80 Date by which decision must be issued. .
R2te of return on rate base requested. . 10.88%
Rate of return on common equity requested 15.50%
Amount of rate base requested. . . . . . $189,500,000 Amount of construction work in progress requested for inclusion in rate base . None
.' . SNUPPS-C TABLE 7-4 ATTACHMENT FOR ITEM NO. 7
. RATE DEVELOPMENT _S Federal Energy Regulatory Commission
. Electric (Wholesale)
Granted Tast year utilized . . . . . . . . . . . . 12 Months Ending 9-30-78 Annual amount of revenue increase rcquested-test year basis (OCO's). . . . . $14,975 Date petition filed. . . . . . . . . . . . 9-26-77 Annual amount of revenut increase allowed-test year basis (000's). . . . . $8,835 Parcent increase in revenues allowed . . . 10.64%
Date of final order. . . . . . . . . . . . 3-27-81 Effective date . . . . . . . . . . . . . . 3-27-78 Rate base finding (000's). . . . . . . . . $221,876 Construction work in progress included in Rate base (000's) . . . . . . . . . . None Rnte of return on rate base authorized . . 9.25%
Rate of return on common equity authorized . . . . . . . . . . . . . . . 13.00%
9 R venue Effect (000's)
Amount received in year granted. . . . . . $6,600 Amount received in subsequent year . . . . $8,800 (If not available, annualize amounts received in year granted)
Panding Requests .
Test year utilized . . . . . . . . . . . . 12 Months Ending 6-30-82 Amount (000's) . . . . . . . . . . . . . . $19,140 (1)
Parcent increase . . . . . . . . . . . . . 14.5%
Date petition filed. . . . . . . . . . . . 5-8-81 Date by which decision must be issued. . . ----
l Rnte of return on rate base requested. . . 11.25%
Rate of return on common equity requested. 15.50%
Amount of rate base requested. . . . . . . $244,255,000 Amount of construction work in progress requested for inclusion in rate base . . None (1) On July 2, 1981, the Commission granted ~ summary disposition of certain items which reduced the request to approximately
$12,900,000 and ordered these revised rates to become effective, subject to refund, on July 9, 1981.
i
. SNUPPS-C Question 8. - Complete the enclosed form entitled, " Financial Statistics," for the most recent twelve-month period and for the previous three calendar years.
Response See Tables 8-l'through 8-4.
D i
e I
i 0
1 4
e O
9 9
- e 8-1
, TABLE 8-1
. UNION ELECTRIC COMPANY & SUBSIDIARIES
," EINANCIAL STATISTICS ITEM 8 12 month's ended (dollars in millions) 12/31/78 Ecrnings available to common equity $ 96.9 Average common equity 768.3 Rate of return on average common equity 12.6%
Times total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT total interest charges + amortization of debt discount and expense. Including AFDC 2.98 Excluding AFDC 2.80 Times long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferre/ IT
- long-term interest charges + amot Azation of debt discount and expense. Including AFDC 3.12 Excluding AFDC 2.93 Bond ratings (end of period) A Standard and Poor's A Moody's Times interest and preferred dividends earned after FIT:
Gross income (both including and excluding AFDC) total interest charges + amortization of debt discount and expense + preferred dividends. In'cluding AFDC 1.72 Excluding AFDC 1.65 AFDC (net) $ 24.1 Net income after preferred dividends 96.9
% 24.9 Market price of common $13.375 Book value of common 16.11 Market-book ratio (end of period)* 83.0%
Earnings avail. for common less AFDC +
depreciaton and amortization, deferred taxes, and invest. tax credit adjust.-
deferred. $190.8 Common dividends 67.6 Ratio 2.82 Short-term debt $ 29.6 Bank loans 14.4 Commercial paper 15.2 Capitalization (Amount & Percent) ~~
$2,397.3 100.0%
Long-term debt' 1,238.9 51.7
' referred stock 322.4 13.4 t non equity 836.0 34.9
- 1, ubsidiary company, use parent's data.
TABLE 8-2 e UNION ELECTRIC COMPANY & SUBSIDIARIES
. FINANCIAL STATISTICS ITEM 8 12 month's ended (dollars in millions) 12/31/79 Enrnings available to common equity $ 91.1 Average common equity 850.6 Rate of return on average common equity 10.7% -
Times total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT
- total interest charges + amortization of debt -
discount and expense. Including AFDC 2.33 Excluding AFDC 2.04 Times long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT
- long-term interest charges + amortization of debt discount and expense. Including AFDC 2.67 Excluding AFDC 2.33 Bond ratings (end of period) A Standard and Poor's A Moody's Times interest and preferred dividends earned efter FIT:
Gross income (both including and excluding AFDC)
- total interest charges + amortization of debt discou.nt and expense + preferred dividends. Including AFDC 1.48 Excluding AFDC ,
1.35 AFDC (net) 45.2 Not income after preferred dividends 91.1
% 49.6 Market price of common $12.00 Book value of common 15.82 Market-book ratio (end of period)*
75.9%
l Earnings avail. for common less AFDC +
j depreciaton and amortization, deferred taxes, and invest. tax credit adjust.-
deferred. $174.2 Common dividends 75.5 Ratio 2.31 Short-term debt $ 96.9 Bank loans 36.6 Commercial paper 60.3 Capitalization (Amount & Percent) $2,633.8 100.0%
Long-term debt 1,308.0 49.7 Preferred stock 395.4 15.0 Common equity 930.4 35.3
- If subsidiary company, use parent's data.
umAM-Ts -
TACLE 8-3 UNION ELECTRIC COMPANY & SUBSIDIARIES
. FINANCIAL STATISTICS ITEM 8 12 month's ended (dollars in millions) 12/31/80 Enrnings available to common equity $125.0 Average common equity 954.0 Rate of return on average common equity 13.1%
Times total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT
- total interest charges + amortization of debt discount and expense. Including AFDC 2.46 Excluding AFDC 2.11 Times long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT
- long-term interest charges + amortization of debt discount and expense. Including AFDC 2.81 Excluding AFDC 2.41 Bond ratings (end of period) A-Standard and Poor's A Moody's Times interest and preferred dividends earned after FIT:
Gross income (both including and excluding AFDC) total interert char 5es + amortization of debt discount and expense + preferred dividends. Including AFDC 1.49 Excluding AFDC 1.34 AFDC (net) 69.9 Not income after preferred dividends 125.0
% 55.9 Market price of common $10.875 Book value of common 15.78 Market-book ratio (end of period)* 68.9%
Earnings avail. for common less AFDC +
depreciaton and amortization, deferred taxes, and invest. tax credit adjust.-
deferred. $184.9 Common dividends 88.1 Ratio 2.10 Short-term debt $140.9 Bank loans 41.4 Commercial paper 99.5 Capitalization (Amount & Percent) $2,916.2 100.0%
Long-term debt 1,479.2 50.7 Preferred stock 393.4 13.5 Common equity 1,043.6 35.8
- If subsidiary company, use parent's data.
ugt9A,gqq .
TABLE 8-4
,, UNION ELECTRIC COMPANY & SUBSIDIARIES PINANCIAL STATISTICS ITEM 8 12 month's ended (dollars in millions) 3/31/UL Earnings available to common 'quity e $116.7 Average common equity 978.5 Rate of return on average common equity 11.9%
Times total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT
- total interest charges + amortization of debt discount and expense. Including AFDC 2.18 Excluding AFDC 1.83 Times long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT long-term interest charges + amortization of debt discount and expense. Including AFDC 2.53 Excluding AFDC 2.12 Bond ratings (end sf period) BBB+
Standard and Poor's Baa Moody's Times interest and preferred dividends earned after FIT:
Gross income (both including and excluding AFDC) total interest charges + amortization of debt discount and expense + preferred dividends. Including AFDC 1.37 Excluding AFDC 1.23 AFDC (net) 77.7 Not income after preferred dividends 116.7
% 66.6 Market price of common $10.875 Book value of common 15.55
- Market-book ratio (end of period)* 69.9%
Earnings avail. for common less AFDC +
depreciaton and amortization, deferred ,
taxes, and invest, tax credit adjust.- ,
deferred. $166.4 Common dividends 92.1 Ratio 1.81 Short-term debt $ 89.9 Bank loans 52.9 Commercial paper 37.0 Capitalization (Amount & Percent) $3,035.0 100.0%
Long-term debt 1,606.8 52.9 Preferred stock 393.4 13.0 Common equity 1,034.8 34.1
- If subsidiary company, use parent's data.
u I
I Q M 5, I h a-t
{ PROSPECTUS
> $150,000,000 i
', Union Electric Company i First Mortgage Bonds,15%% Series due 1991 l Due February 1,1991 t
i
'V The New Bonds will be redeemable at any time on and after February 1,1988, in whole or in part, h on 30 days' notice at a redemption price of 100%. See DESCRIPTION OF NEw BONDS.
i~ Application will be made to lirt the New Bonds on the New York Stock Exchange.
l l 4, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE I SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Underwriting
- Price to Discounts and Proceeds to Pubhc(1) Commission.< 2 ) Company (l)(3) j
'I Per Unit . 99.625 % .750 % 98.875 %
,, .r. $148,312,500 Total - $149,437,500 $1,125,000 (1) Plus accrued interest from February 1,1981 to date of delivery.
(6 (2) See UNDERWRmNG for indemnification arrangements.
(3) Before deducting expenses payable by the Company estimated at $400,000.
j; :-
s The New Bonds are offered by the several Underwriters when, as and ifissued by the Company and
)
accepted by the Underwriters and subject to their right to reject orders in whole or in part. A portion of the New Bonds is being offered to certain institutions by the Company through the several Underwriters for delivery on July 15,1981. See DELAYED DELIVERY ARRANGEMFNTS herein. It is expected that delivery l~ ~ of the New Bonds offered by the Underwriters will be made in New York City on or about February 19, 1981.
Merrill Lynch White Weld Capital Markets Group I Merrill Lynch, Pierce, Fenner & Smith Incorporated i Bache Halsey Stuart Shields Incorporated f
Goldman, Sachs & Co.
Shearson Loeb Rhoades Inc.
1 The date of this Prospectus is February 11,1981
'l
'I __ _ _ _ --- _ . . _ , , . _
.f m
IN CONNECTION WITH THIS OFFEP.ING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NEW BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER
, MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DIS-CONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS BY
!, k >
REFERENCE AND ADDITIONALINFORMATION g: ' The Company h subject to the information requirements of the Securities Exchange Act of 1934 (the
" Exchange Act") aan 4 :.ccordance therewith, fdes reports and other in ormation r with the Securities and Exchange Commission. Information as of particular dates concerning directors and officers, their
[g remuneration, the principal holders of securities of the Company and any material interest of such persons in transactions with the Company is disclosed in reports of the Company fded with the Commission.
j The following documents, which have been filed by the Company with the Commission, are s incorporated by reference in this Prospectus and shall be deemed to be a part hereof:
- (1) *Ihe Company's Prospectus dated December 9,1980, fded pursuant to Rule 424(b) under the Securities Act of 1933 with respect to the Company's Registration Statement on form S-7 (File iD No. 2-69821);
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 L. and beptember 30, 1980 and the Company's Report en Form 8-K dated February 5,1981 fded ,
pursuant to the Exchange Act (File No.1-2967); and f (3) The Company's Proxy Statement dated March 20, 1980 for its Annual Meeting of Stockholders held on April 22,1980 fded pursuant to the Exchange Act (File No.1-2967).
- i - All documents fded by the Company with the Commission pursuant to Section 13,14 or 15(d) of the Exchange Act subsequent to the date of this Prosp-ctus and prior to the termination of the offering made C*p ' by this Prosocctus shall be deemed to be incorporated by reference and to be a part hereof.
Such reports, proxy statements and otherinformation can be inspected and copied at the offices of the Commission at Room 6101, 1100 L Street, N.W., Washington, D.C.; Room 1228, Everett McKinley
- 9. Dirksen Building,219 South
Dearborn Street,
Chicago, Illinois; Room 1100, Federal Building,26 Federal P Plaza, New York, New York; and Suite 1710, Tishman Building,10960 Wilshire Boulevard, Los Angeles,
{*-- California. Copies of such material can also be obtained from the Public Reference Section of the Commission in Washington, D.C. 20549 at prescribed rates. Such material can. also be inspected at the office of the New York Stock Exchange,20 Broad Street, New York, N.Y.10006.
'Ihe Company hereby undertakes to provide without charge to each person to whom a copy of this Prospectus has been delivered on the written request of any such person, a copy of any or all of the i ;
i documents referred to above which have been or may be incorporated in this Prospectus by reference, other than exhibits to such documents. Written requests for such copies should be directed to Mr. G. R.
Murray, Secretary, Union Electric Company,1901 Gratiot Street, St. Imuis, Missouri 63103.
',- Except as otherwise indicated by the context, this Prospectus speaks as of the date hereof and does not (j purport to reflect any changes which may have occurred in the affairs of the Company or its subsidiaries thereafter. Neither the delivery of this P ospectus nor any sale made hereunder shall, under any circumstances, create an implication that tPt* to been no change in the affairs of the Company or its subsidiaries since the date hereof.
2 g .
e
5 -
THE ISSUE IN BRIEF Thefollowing materia!is quahped in its entirety by, and should be read in conjunction with, information and fnancial statements appearing elsewhere in this Prospectus and in the documents and information incorporated in this Prospectus & reference.
THE OFFERING issuer- _ .
Union Electric Company Securities Offered __ _ $150,000,000 First Mortage Bonds,15%% Series due 1991 Interest Payment Dates._ February I and August 1 Use of Proceeds - To repay short-term borrowings incurred to finance construction Listing._ Application will be made to list on the New York Stock Exchange
! THE COMPANY in Business - _ _
Primarily an electric utility ,
Service Area - Electric service to an approximately 24,000 square mile area, primarily covering the eastern and central portions of Missouri, portions of Illinois adjacent to St. leuis, Missouri, and the southeastern portion s
of Iowa; and gas service to Alton, Illinois, and vicinity and 90 Missouri communities 4, Service Area Population (estimated) ... Electric-2,700,000; Gas-352,000
'+ ~ Customers.... _ _ _
__ Electric-976,000; Gas-106,000 Revenue Distribution (12 Months Ended November 30,1980) . Electric-92.6%; Gas-6.1%; Other-l.3%
Sources of kWh Generation (12
- Months Ended November 30,1980) Coal-95.1%; Hydro-4.5%; Other .4%
, Property and Plant, net (at November 30,1980)- . . $3,124,704,000
. CONSOLIDATED FINANCIAL INFORMATION (Thousands of dollar acept ratios)
- 12 Months Ended i~ December 31, November 30, December 31,
{ -' Iv79 1980 1980
$946,797 $1,075,233 $1,077,876
- D Operating Revenues -
$ 191,156 Operating Income- $ 166,466 $ 193,877 l3 Net Income - .
$118,(.55 $ 156 620 $ 154,737
)
Ratio of Earnings to Fixed Charges
?
2.61 2.92 2.85 Actual -
l 2.16 Pro Forma l
i Capitalization as of Noiember 30,1990 lt ^: Actual Ratio As Adjusted' Ratio
- Long. term Debt (excluding current maturity). $1,478,071 51.9% $1,628,071 53.3 %
! 112,040 3.7 Preferred Stock Subject to Mandatory Redemption ._, 112,040 3.9
! Preferred Stock Not Subject to Mandatory Redemp-281,355 9.9 281,355 9.2 i tion = _ .
Common Equity. 977,331 34.3 1,033,074 33.8 Total Capitalization $2,848,797 100.0 % $3,054,540 100.0 %
l Short-term Debt and Current Maturity of Long-term
! $ 105,849 den _ .
- Adjusted to give effect to the sale of the New Bonds o,Tered hereby and the issue and sale of 5,500,000 shares f, of the Company's Commen Stock in December 1980.
.I i 3
- T L
n
( .-
7, - . . - , .. . . . . . . -
6
- c. . . . - - ~ ~
_THE COMPANY "
' Union Electric Company, incorporated in Missouri in 1922, is successor to a number of companies, the oldest of which was organized in 1881. The Company owns all of the common stock of Missouri Power &
Q, ,
Light Company, Missouri Edison Company, Missouri Utilities Company and Union Colliery Company.
yt ,
As used hereafter in this Prospectus the term Company means Union Electric Company and its
- consolidated subsidiaries unless the context requires otherwise. The Company's principal office is at 1901 j .
Gratiot Street, St. louis, Missouri 631"", and its telephone number is (314) 621-3222.
I.I
{,'
APPLICATION OF PROCEEDS AND CONSTRUCTION PROGRAM fi. ; p
' The net ' roceeds to be received by the Company from the sale of the $150,000,000 principal amount t 'v.
of First Mortgage Bonds (the "New Bonds") offered hereby, estimated at $147,912,500, will be used to
% repay in part short-term debt (expected to aggregate approximately $170,000,000 at the time ofissuance 7? -
of the New Bonds to be sold to the Underwriters) incurred to finance the construction program, the largest 4 single project of which is the Callaway nuclear plant. -
Expenditures for the construction program, including amounts for allowance for funds used during construction and excluding nuclear fuel, amounted to $421,000,000 for the year 1980 and are estimated to
$[5i. -
^
amount to $509,000,000 for 1981 and $461,000,000 for 1982. The Company's estimated cash
' requirements for such program, excluding amour.ts for allowance for funds used during construction and
.;;~
nuclear fuel, are $382,000,000 for 1981 and $298,000,000 for 1982. The Company presently anticipates 1
that approximately 10% of such cash requirements in each of the years 1981 and 1982 will be obtained from internally generated funds, assuming that the Company receives a major portion of the requested rate
[jf .
relief discussed under RECENT DEVELOPMENTS.
d( ,
The following table sets forth the Company's actual and estimated construction expenditures, i inclu,Bg allowance for funds used during construction and excluding nuclear fuel, for the periods y
- indicated:
.d - Actual Estimated
- i (Millions of Dollars)
Total 1976 1900 1981 1982 1983 1984 1985 1981-1985 1
(- Generation-Nuclear S 977 $309 $290 $276 $336 , 3431 51,642 Generation-Other(t) 179 94 65 60 22 53
' 294 I~ Transmission and Distribution 325 76 78 79 79 Other 82 394 69 30 23 24 23 21 126
\ Total $1.550 $509 $461 $439 $460 $587
.E , $2.456
- g. (t) Primarily environmental control expenditures.
' The major portion of the Company's planned .:onstruction expenditures are related to the Callaway y'
& nuclear plant, the only major generating facility under construction or planned by the Company. As described below, the Company has heretofore deferred the scheduled completion dates and increased estimated expenditures for each of the two Callaway Units because of regulatory delays, inflationary cost LT !';
increases, labor difficulties, a change in Missouri law prohibiting the inclusion of construction work in progress in rate base resulting from a public referendum and lower than anticipated productivity resulting w .
4' >
s+
t
[. *
, ~. . l w
___________m.__.___-___-_a__.____ - - - - - A.__- - . _ _ . _ - - _ _
I f
l Il t
r primarily from additionallabor required to comply with increasingly stringent regulations. Such factors, as well as others, could result in further revisions in construction plans and increased costs for either Unit.
I Various approvals are required from several Federal and State agencies (proceedings before the NRC, the l* Missouri Public Service Commission and others are currently in progress) which could adversely affect the construction and operation of the Units or result in the termination of construction of the second Unit.
- ! (See BUSINESS AND PaoPERTY-Nuclear Power in the Prospectus dated December 9,1980 incorporated herein by reference).
Plans for all projects under construction undergo periodic review, and actual expenditures and completion dates may vary from present estimates, as they have in the past, for the above reasons and g others, including continuing inflation (a rate of 7%% on major projects has been assumed), legislative, regulatory and other legal action (including the extent to which adequate and timely rate relief is received), difficulties in financing the construction program, public concern over nuclear energy, and changes in business conditions.
(, The following table se.ts forth the Company's actual and estimated construction expenditures, st including allowance for funds used during construction and excluding nuclear fael, with respect to the Callaway Plant:
Actual Estimated Expected Estimated Net Cost Per Kilowatt In. Service Through After Total Facility 1985 Cost Kilowatt Capacity Date 1980 1981 1985
- and location (Millions of Dollars)
!',. Callaway Nuclear Plant Callaway County, Mo. $- $1,586 $1,379 5 958 5 628
'. . Unit No. I 1,150,000 1,150,000 1983 1988 51 1,006 y 1,758 51,529 Unit No. 2
[I ' * $1,0t ) 51,634 $701 53,344 I 96 When plans for the Callaway Plant were announced in 1973 the two units were scheduled to be completed in 1981 and 1983 at an approximate cost of $550 million each. By 1975 changes in assumptions which recognized higher inflation rates, higher interest costs and actual and projected costs of other nuclear facilities, raised the estimated cost of the units to about $900 million each, In 1977 the in-service
,; dates of the Units were deferred until 1982 and 1987, which, combined with still higher escalation and interest rate assumptions, added approximately $193 million to the cost of the first unit and $434 million to Ir the cost of the second unit. The 1977 deferrals resulted primarily from a change in piissouri public utility
}'
- law which prohibited the inclusion of cons ruction work in progress in rate base and also because projected j load growth was less than previously anticipated. As a result of this change in Missouri public utility law, 8 (I) the amount of cash generated internally is declining, and (2) the amount of allowance for funds used during construction ("AFC") included in the Company's earnings is increasing (in 1982 AFC is expected f' to account for substantially all of such earnings) which has adversely affected the quality of such earnings and the Company's ability to issue first mortgage bonds. See NOTE ( A) under NOTE TO CONSOUDATED STATEMENT OF EARNINGS and the paragraph following MANAGEMENT'S DISCUS $10N AND ANALYSIS OF THE CONSOLIDATED STATEMEdfr OF EARNINGS in the Prospectus dated December 9,1980 incorporated herein by reference. Early in 1980 the expected in-service date of the second unit was deferred because of further 1
5
- ' - - - - ~ ---. -- ., c.,_. ,_, ,,__
l
- k. . ,
t 1
I m ) revisions of projected load growth. Such change, together with design and speci6 cation improvements since the last revision of estimates, increased estimated costs by $229 million for the Erst unit and $373 1
million for the second unit. Later,in October 1980, the Company announced a six-month deferrafto April
- 1983 in the expected completion of the first unit. Such deferral, combined with the effects of continuing ,
inflation, added an estimated $269 million to the cost of the first unit and $89 mdhon to the cost of the L' second unit.
T l; In addition to the funds required for construction during the 1981-1985 period, $123,522,000 will be required to retire currently outstanding long-term debt maturing during the period and for sinking fund L
i payments on First Mortgage Bonds. In addition, approximately $13,880,000 of preferred stock will be 3
required to be retired during such period. The types, amounts and timing of future financings will depend upon market conditions, regulatory actions, rate levels, and other factors, including the Company's ability ab --
to comply with the various financing restrictions discussed herein under DESCRIFTION OF Nsw BONDS
-Issuance of Additional Bonds and under APPLICATION OF PROCEEDS AND CONSTRUCTION PRO-( s onAu-Financing Restrictions in the Prospectus dated December 9,1980 incorporated herein by reference.
b Adequate and timely rate relief will be required to finance the Company's construction program. Major '
rate relief, currently estimated at approximately 25%, will be required when Callaway Unit No. I is placed
{,- in service to offset the discontinuance of recording AFC relating to such Unit as a r sa-cash item ofincome
+1 as rail as to meet the expenses associated with the operation of the Unit.
The Company has entered into a nuclear fuel lease providing for Saancing up to $100,000,000 of nuclear fuel at any one time. The Company is currently negotiating a modification of this leasing
.F arrangement to provide for financing up to an additional $100,000,000 of nuclear fuel at any one time.
These leasing arrangements will require payments in undeterminable amounts commencing with the
, operation of Callaway Unit No.1, which payments are not included in the above estimates.
S The Company expects to enter into a four year revolving credit agreement with certain commercial
,y banks early in 1981 which would permii the Company to borrow up to $100,000,000 at any one time.
i :.:
< :a n
e 6 a
~
o mm r .
1 .
. 1 4
b
' ~
r l -
CERTAIN FINANCIAL INFORMATION
{
' Set forth below is a summary of certain information concerning the results of operations of the '
Company. Except for the ratios of earnings to fixed charges the information, insofar as it relates to the five s
years ended December 31,1979, was derived from the Company's audited financial statements contained 1 - in the Prospectus dated December 9,1980 incorporated herein by reference. Such Prospectus also contains
$- the report thereon of Price Waterhouse & Co., the Company's independent accountants, and manage-ment's discussion and analysis of the consolidated statement of earnings. See INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE AND ADDITIONAL INFORMATION. In the opinion of the Company all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results g*' for the unaudited 12-month period ended November 30,1980 have been included.
~
12 Months Ended
} Year Ended December 31 November 30, 4 1980 1975 1976 Ig 1978 Ig (Unaudited)
(Thousands of dollars except share and per there amounts and ratios) k _ . $ 583,455 $ 682,456 5 765,102 $ 903.988 $ 946,797 $1,075,233 Operating Revenues 780,331 881,356 446,569 5I8,342 605,963 727,756 Operating Expenses 193,877 136,886 164,114 159,139 176,232 166,466 Operating income
- Allowance for Funds Used During Construction
- ( All funds prior to January 1,1977 and equity 15,980 31,245 44,157
'- funds after December 31,1976) 23,107 12,379 8,301 1,403 (2,554) 1,389 2,8% 879 3,198 OtherInwme-Miscellaneous 107,383 128,879 75,361 78,529 84,015 90,699
- Interest on Debt and Other items Allowance for Borrowed Funds Used During 26,848 44,267 Construction after December 31,1976. - - 10,721 15,489
'f. 86,035 95,410 95,535 119,898 118,055 156,620 Ne Income . . ~
26,948 29,714 19,640 19,640 20,367 23,040
- - Preferred Dividend Requirements of Company 66,395 75,770 75,168 96,858 91,107 126,906 J Earnings on Common Stock
/ Average Number of Common Shares Out-37,240,134 40,795.152 45,110,245 48,260,596 52,577,432 $9,032,%9
( standing Earnings Per Share of Common Stock ( based on s average shares outstanding) $1.78 $1.86 $1.67 $2.01 $1.73 $2.15
- $1.48
' $1.28 $1.34 $1.36 $1.40 S t.44
, Dividends Declared Per Share of Common Stock Ratio of Earnings to Fixed Charges ( A) 2.51 2.79 2.81 3.18 2.61 2.92 Actual 2.16 Pro Forma (B)
( A) Earnings used in computing the Ratio of Earnings to Fixed Charges consist of net income plus h
) 7 fixed charg-s (interest on debt, related amortization, preferred dividends of subsidiaries and an 6 appropriate amount of rentals charged to operating expenses) and income taxes.
b' (B) After giving effect to (1) annual interest requirements on all long-term debt outstanding at h.-
4 November 30,1980; (2) annual interest on the New Bonds (assumed interest rate of 14%%); (3) annual
- interest on $100,000,000 Union Electric Company revolving credit agreement exrected to be entered into early in 1981 (assumed interest rate of 14%); (4) annual interest on $10,000,000 of Bonds of Missouri Utilities Company (assumed interest rate of 15%) to be sold in 1981; (5) annual interest on $4,000,000 of Bonds of Missouri Edison Company (interest rate of 14%%) to be sold in 1981; (6) additional interest on s
projected average short-term borrowings of $84,000,000 to be outstanding during the next twelve months at an assumed weighted average interest rate of 16% versus the actual interest expense on short-term H
7 4
- f. ? .
y
- .- r
! borrowings as recorded during the current twelve-month period; and (7) reduced ennual interest o i Union Electric Company $25,000,000 of 2%% Bonds retired in December 1980. A diference of %%
actual rate from the assumed rate on the New Bonds would chan;e the Pro Forma Ratio of Earnin Fixed Charges by approximately .002.
I
(,e For the twelve months ended December 31,1980 the Company's consolidated operating revenue were $1,077,876,000, consolidated operating income was $191,156,000, consolidated net income was
$154,737,000, consolidated earnings on Common Stock and earnings per share of Common Stock were
}., 5125,042,000 and $2.10, respectively, and the ratio of earnings to Exed charges was 2.85. In the V
P Company's opinion all adjustments, consisting only of normal recurring adjustments, necessary for a statement of the results for such period have been included.
[s t A restructured rate design which increases the Company's revenues during the June through Octob g
(
~
billing periods and decreases revenues by an equivalent amount during the November through M periods was put into efect May 30,1980. Until rates based on the restructured rate design have been in
- y. ~
effect for a full year, comparisons of Scancial results with prior periods will be afected.
[
+ The Company expects that its operating revenues will decline in 1981 as compared to 1980 because of 1
decreased kilowatt-hour sales due to the projection ofnormal temperatures in 1981 as mmpared to the weather experienced in the summer of 1980. 'Ihis decline in operating revenues, combined with anticipated mcreases in interest and other costs, is expected to cause the Company's estnings, the r
! :, earnings to 6xed charges and indenture coverage ratios to decline significantly until the Company rec a major portion of the rate reliefit is currently seeking as discussed below.
r
, O i d -RECENT DEVELOPMENTS The Company has reported to the Nuclear Regulatory Commission that shallow areas of unsoucd
- E concrete have been detected in the dome of the reactor building for Unit No. I of the Company's C
. M nuclear plant (see APPUCADON OF PaOCEEDs AND CONSTaUCUON PROGRAM). An initial assessmen I
t;.
+ indicates that the condition is act structurally signi6 cant and can Ise repaired with conventional pro without impacting the construction schedule. However, the Company is performing tests to assure that all unsound areas have been identi5ed and that the full extent of the condition is de6ned.
The Missouri Public Service Commission has suspended the e5ectiveness of proposed new schedules 2, of electric rates designed to produce an increase in annual revenues of approximately $91,000,000,
! 'r exclusive of gross receipts taxes, Sled by the Company on November 26,1980. Hearings are expecte
- be held during the summer of 1981. Under Missourilaw the Missouri Commission must render a decision on the proposed new rates by October 25,1981. The Company also has pending reqw
- s for increased electric rates in the amounts of $15,200,000 annually in Illinois and $3,600,000 annually in Iowa. See BUSINESS AND PaoPEaTY-Rates in the Prospectus dated December 9,1980 incorporated herein reference. '
On January 27,1981, the Company was advised by Standard and Poor's Corporation that it had lowered its ratings on the Company's First Mortgage Bonds and collateralized pollution control revenue 8
l
...-. ~ .. - -
4 f
s
} , -
m g
+n e #
bonds to BBB+ from A , preferred stock to 3GB- from BBB and commercial paper to A3 from A2.
Standard and Poor's indicated it had taken srch action as a result of the financial stress plaud upon the c..
- Company by unfavorable regulatory treatment in Missouri and substantial continuing investment in the l
- . Callaway nuclear plant, citing " serious concerns" over whether Callaway Unit No. I will h pbced in fI f,
service on a timely basis and whether the " massive relief" required to " restore long-term financial strength" will be granted on a timely basis. On Jaruary 30,1981, Moody's Investors Service advised the i 0 Company that it had lowered its ratings on the Company's First Mortgye Bonds, secured indebtedness and preferred stock to Baa from A and had lowered the first mortgage bond ratings for two of the Company's utility subsidiaries to Baa from A. Moody's said it would continue the present ratings on the 1 Company's unsecured indebtedness at Baa.
1
- DESCRIPTION OF NEW BONDS The New Bonds are to be issued under the Indenture of Mortgage and Deed of Trust dated June 15, y k- % 1937 between the Company and St. Louis Union Trust Compuy, as Trustee, as amended and g
supplemented by supplemental indentures including a Supplemented Indenture to be dated February 1, 1981. Copies of the Indenture of Mortgage and Deed of Trust and supplements and amendments thereto, herein sometimes called the " Mortgage", are fded as exhibits to the Registration Statement of which this Prospectus forms a part.
The following statements are an outline of certain provisions mntained in the Mortgage. They do not purport to be complete and are qualified in their entirety by reference to the Mortgage and by express
$ reference to Sections and Articles noted below. Certain of the terms used herein without definition are
'f defined in the Mortgage.
The New Bonds will mature on the date and will bear interest at the rate shown on the mver page
. -* f hereof, payable semi-annually on August I and February I commencing August 1,1981. Principal and h (
interest are payab!e at the office of the Trustee in St. Louis, Mo. or at Bankers Trust Company in New York, N. Y.; provided that, at the option of th( Company, interest may be paid by checks mailed to the registered owners of the New Bonds. The New Bonds are to be issued as registered Bonds without f
coupons in denominations of $1,000 or multiples thereof. The Ne u Bonds may be exchanged for other h
) ,
New Bonds of different authorized denominations and may be transferred without charge to the holders L- thereof other than for applicable governmental taxes.
, f '
i Redemption. The New Bonds may not be redeemed for any purpose prior to February 1,1988, and and afler that date are to be redeemable, in whole or in part upon at Igast 30 days' notice, at the l
election of the Company and otherwise with moneys in the trust estate pursuant to the terms of the Mortgage, at a redemption price of 100% of their principal amount, together in each case with interest j accrued to the redemption date. (February 1981 Supplemental Indenture, Art. III.)
l i
- l. 'Ihere is no purchase, sinking, amortization, improven ent, ma ntenance or analogous fund for the l New Bonds.
Improvement and Maintenance Funds of Prior Series. There is no purchase, sinking, amortization, improvement, maintenance or analogous fund for the New Bonds similar to the funds provided for certain
' ! presently outstanding series of Bonds described in the following two paragraphs.
9 3
1 . . . . n, . . . _.
-~.y~. *+ ... v~- . . . .n. ,
9
- g
=
l . .
f So long as Bonds of certain prior series are outstanding, the Company is required, with cenain exceptions, to provide an annual Improvement Fund on or before April 15 in each year for each series of i .
such Bonds in an amount equal to 1% of the greatest principal amount of such Bonds issued prior to January I of such year, less any such Bonds retired by application of certain moneys included in the trust ,
' estate, which amounts may either be paid in cash or satisfied (i) by delivery of any such Bonds theretofore issued and outstanding, or (ii) by application thereto of 60% of the amount of Net Bondable Value of Property Additions not subject to an Unfunded Prior Lien which the Company elects so to use.' Moneys paid into the Improvement Funds for such Bonds do not become pan of the trust estate and are to be applied to the redemption of such Bonds. (1952 through 1979 Supplemental Indentures, Arts.
IV, Secs.1.)
So long as Bonds of certain prior series are outstanding, the Company is required, on or before April T.
- 15 in each year, to deposit with the Trustee an amount in cash equal to 15% ofits Gross Operating Revenues for the preceding year (after certain deductions including expenditures for maintenance and
' " repairs). Such deposit may be reduced by certain credits, including the amount of propeny retirements not in excess of property additions, any available balance of Net Bondable Value of Propeny Additions not i subject to an Unfunded Prior Lien and the principal arr.ount of Bonds retired (except out of trust estate 6 moneys). Under terms of the Bonds of prior series now outstanding the last such deposit would bc required April 15,2006. Moneys paid into the Maintenance Fund become part of the trust estate and ma3 be added to any of the Improvement Funds for Bonds of prior series which may be selected by the
~
Company and applied to redemption of the Bonds to which such Impro, snent Fund relates. (1941 Supplemental Indenture, Pan IV, Sec. 5; 1952 through 1977 Supplemental Indentures Arts. IV, Secs. 5
,I f 1978,1979 Supplemental Indentures, Arts. IV, Secs. 4.)
+
See BUStNESS AND PROPERTY-Other Litigation in the Prospectus dated December 9,1980 in-
'Ip corporated herein by reference for certain information with respect to pending lawsuits brought by three i
/ holders of the Company's First Mortgage Bonds,10%% Series due 2005, individually and as representa-tives of a class composed of such bondholders which suits seek, among other things, c:rtain restrictions on J
i the special redemption of Bonds of such series utilizing cash deposited in satisfaction of the Improvement Fund for Bonds of such series or utilizing cash deposited in sadsfaction of the Maintenance Fund described i N in the preceding paragraph for that and other series of Bonds.
i Security. In the opinion of counsel for the Company, Schlafly, Griesedieck, Ferrell & Toft, the New Bonds will be secured, together with all other Bonds now or hereafter issued under the Mortgage, by a valid and direct first lien (subject to certain leases, Permitted Liens and other minor matters) on substantially all the properties and franchises of the Company other than cash, accounts receivab!e and other liquid assets, securities not specifically pledged and electric energy, materials, supplies or other 7 products produced or purchased by the Company for use, sale or lease.
t The Mortgage contains provisions subjecting after-acquired property (with certain exceptions) to the
- lien of the Mortgage.
Issuance of Additional Bonds. Additional Bonds ranking equally with the New Bonds may be issued l- -
up to (i) 60% of the Net Bondable Value of Property Additions not subject to an Unfunded Prior Lien, (ii) the amount of Bonds retired or to be retired (except out of trust estate moneys), (iii) the amount of
, cash deposited with the Trustee for such purpose, which cash may thereafter be withdrawn upon the same 10
.. . - . . ~.- -
Y ' .
___..____---J
p f i
?
b.
(-
basis that additional Bonds are issuable under (i) and (U). ( Arts. III and VIII.) The New Bonds will be f
' issued against the deposit of cash, which cash will be withdrawn under clauses (i) and (U) above. At '
November 30,1980, the aggregate principal amount of Bonds issuable under clauses (i) and (U) above was approximately $488,000,000 (without giving effect to the issuance of the New Bonds).
)j Additional Bonds may not be issued (i) unless Net Earnings of the Company Available for Interest
[
' and Property Retirement Appropriations for 12 consecutive months within the 15 months preceding such
- issuance shall have been equal to the greater of twice the annual interest charges on, or 10% of the principal amount of, all Bonds and Prior Lien Bonds then outstanding and then being issued, nor (U) unless Net Earnings of the Company Available for Interest After Property Retirement Appropriations for W
' such period shall have been equal to twice the annual interest on all such Bonds and Prior Lien Bonds.
Such earnings tests need not be complied with to issue Bonds to refund Bonds theretofore issued, or to
- refund a Prior Lien which simultaneously becomes a Funded Prior Lien upon the Property Additions made the basis of such application,if application to issue additional Bonds for either of these two purposes is made at any time after a date two years prior to the maturity of the Bonds or Prior Lien Bonds being
( *p" - i refunded. ( Art. III, Secs. 3,4 and 6; February 1981 Supplemental Indenture, Art. IV, Sec. 2.) The ratio under the test set forth under (ii) above, which is more restrictive than the test set forth under (i) above, was 3.23 for the twelve months ended November 30,1980, and would permit the Company to issue an additional $379,000,000 of First Mortgage Bonds (14.5% annual interest rate assumed). Net Earnings of 2
f the Company Available for Interest After Property Retirement Appropriations is defined as total operating f
revenues and net non-operating revenues (which net non-operating revenues, including AFC, may not
( exceed 10% of the portion of such Net Earnings which do not constitute net non-operating income so long Ir 4
as certain series of Bonds other than the New Bonds are outstanding),less operating expenses and less the i f[
( T, greater of (i) provisions for depreciation and expenditures for maintenance and repairs or (U) 15% of gross operating revenues (as defined) for the period in question. (July 1956 and March 1958 f - Supplemental Indentures, Arts. V, Secs. 2.)
Prior Lien Bonds secured by an Unfunded Prior Lien may be issued under the circumstances and subject to the limitations contained in the Mortgage. (Art. IV, Secs.15 and 16; February 1981 f Supplemental Indenture, Art. IV, Sec. 4.)
o e
Dividend Restriction. So long as any New Bonds are outstanding, the Company will not declare any i'
dividend on its Common Stock (other than in Common Stock) or make any distribution on or acquire for value any ofits Common Stock (otherwise than in exchange for, or out of proceeds of sale of, Common
)i2 Stock) if the amount thereof, together with the aggregate of all payments made since June 30,1961 would exceed $22,700,000 plus the net income applicable to the Common Stock subsequent to June 30, 1961.
(February 1981 Supplemental Indenture. Art. IV, Sec. 6.)
Modification of the Mortgage. With the consent of 80% in amount of Bonds and 80% in amount of Bonds of each affected series ifless than all are affected, the Mortgage may be changed except to affect the j -
terms of payment of the principal or interest on any Bond or to reduce the percentage of Bondhc!ders E required to effect any change. (Art. XV ) The Company has reserved the right to amend the Mortgage without any consent or other action by holders of Bonds of any series created by the Supplen. ental 7
Indenture of August 16, 1976, or by any supplemental indenture dated thereafter, including the 1
L SupplementalIndent..e of February 1,1981, so as to substitute for the foregoing provision a provision to I 11 s .
A - - . - . . - _ . - - . - - , , -
i
. I the efect that the Mortgage may be modified or altered and the rights of the holders of Bonds may be afected with the consent of the holders of 60% of the Bonds; and ifless than all series of Bonds are afected, the consent also of the holders of 60% of the Bonds of each series afected. Additionally, the Company has reserved the right to amend the Mortgage, as supplemented, to authorize amendments thereto by an appropriate written consent of the holders of 60% of the Bonds without a meeting of such
}' Bondholders. (February 1981 Supplemental Indenture, Art. VII.)
Insofar as the holders of the Bonds of 2004 Series and all series issued subsequent thereto, including d t'c! ~
the New Bonds, are concerned, the Mortgage is amended by the February 1974 Supplemental Indenture (Art. Vll) to include construction work in progress on nuclear facilities and nuclear fuel as bondable propeny. (February 1981 SupplementalIndenture, Art. VI.)
p Defaults.
r
- Defaults are denned as being: default in payment of principal; default for 30 days in payment of interest or satisfaction of the Company's obligation respectmg any sinking,' improvement, f' i maintenance or analogous fund; default in payment of principal of, or interest on, any Prior I.ien Bonds; certain events in bankruptcy, insolvency or reorganization; default in other covenants for 60 days after
[ ,
notice by the Trustee or the holders of 15% of the outstanding Bonds; failure under certain circumstances q pf to discharge, or provide for, judgments; or termination of corporate franchise without continuance of business by a successor corporation. ( An. IX, Sec.1.)
'The Trustee or the holders of not less than 25% of the outstanding Bonds may declare the entire g#.
L principal due on default, but the holders of a majority of outstanding Bonds may annul such declaration if such default has been cured. (Art. IX, Sec.1.) The Trustee is required to enforce the lien of the Mongage
,9 upon request of the holders of a majority in amount'of the outstanding Bonds on default. (Art. IX, Sec.
4.) The Trustee has no obligations to ~rr'se any of its trusts or powers at the request of any of the
&! Bondholders unless indemnified to its satisfaction, but the Trustee is not relieved ofits obligation to act
- w. upon the occurrence of an event of default. (Art. XIII, Sec. l.)
Evidence to be Furnished to the Trustee. Compliance with Mortg' age provisions is evidenced by
,g written statements by Company officers, opinions of wunsel and certificates of an enginee'r, accountant, E appraiser or other expen (who in some instances must be independent). Various cenificates and other
,' papers are required to be filed annually a'id in certain events.
s Concerning the Trustee. St. Louis Union Trust Company, St. Louis, Missouri, is the Trustee under
~,
the Mortgage, the Trustee under a trust agreement establishing a pension trust for the payment of
' retirement income for employees of the Company, and the St. Louis Trarisfer Agent for the Company's f Common Stock.
r ,
, (
9 m $
- e .
9
y .- , ,
n -
, y I
EXPERTS .
e i The audited consolidated financial statements included in the Company's Prospectus dated December q
9,1980 incorporated by reference in this Prospectus, have been so incorporated in reliance on the report of Price Waterhouse & Co., independent accountants, given on the authority of said firm as experts in fy auditing and accounting.
4; ,
,m f s The statements as to matters oflaw and legal conclusions included in the Company's Prospectus dated December 9,1980 under ArrLICATION OF PROCEEDS AND CONSTRUCTION PROGRAM, BUSINESS AND PROPERTY and DESCRIPTION OF COMMON SToCx, incorporated by reference in this Prospectus,' and such
[b .
statements included in this Prospectus under ArrLICATION OF PROCEEDS AND CONSVtUCTION PROGRAM Lv Q and DESCRWTION OF NEw BONDS have been prepared under the supervision of, and reviewed by Schlafly, Griesedieck, Ferrell & Toft, St. Louis, Missouri, and such statements are made and incorporated or f: 9 F included herein in reliance on the authority of that firm as experts. .
b
, t.
4x
) .
m i} g .
. LEGAL OPINIONS Certain legal matters in connection with the New Bonds will be passed upon for the Company by l' Schlafly, Griesedieck, Ferrell & Toft, St. Louis, Missouri, and for the Underwriters by Cahill Gorde a
<y
' Rein. del, New York, New York. Cahill Gordon & Reindel are not passing upon the incorporation of tha O -
Company or its subsidiaries, franchise matiers, questions of title or the lien of the Mor+ gage. In giving their
.j ~
<. opinion as to any matter governed by Missouri or Illinois law, Cahill Gordon & Reindel will rely upon the ~
y opinion of Schlafly, Griesedieck, Ferrell & Toft and in giving their oninions as to any matter governed by Iowa law those two firms will rely upon the opinion of J. A. Concannon, Esq., Keokuk, Iowa. William H.
'L
,I Ferrell, Esq., a member of the firm of Schlafly, Griesedieck, Ferrell & To't, owns 1,231 shares of th-
,~ Company's Common Stock and $10,000 principal amount of First Mortgage Bonds,10%% Series due 2001 of the Company, other members and associates of th.at firm own an aggregate of 775 shares of Common Stock,100 shares of Preferred Stock, $3.50 Series, and the firm holds as fiducia y 227 shares of Common f Stock. A partner in that linu also reports that his wife owns 220 shares of the Company's Common Stock but he disclaims any interest in such shares. J. A. Concannon, Esq. owns 700 shares of the Company's 1- - Common Stock and $5,000 principal amount of First Mortgage Bonds, 8%% Series due.2004, of the I' - Company. ,
e 'l ;
e 8
i L
13
- q p
4
.w...,-mw..,.,_,,_,,_,_,m.__. __
1 I
i UNDERWRITING The Underwriters named below have severally agreed, subject to the terms and conditions of th Underwriting Agreement, to purchase from the Company the following respective principal amo the New Bonds, subject to reduction as described under del.AYED DEMVERY ARRANGEMENTS
- Principal Underwriters Annovat Principal Underwriters Annount Merrill Lynch, Pierce, Fenner & Smith Incorporated The Robinson.Humphrey Company,Inc $ 1,000,000
$ 11,150,000 Stifel, Nicolaus & Company, Incorporated 1,000,000 Bache Halsey Stuart Shields Incorporated
, Goldman, Sachs & Co. i1,150,000 Tucker, Anthony & R. L Day,Inc.- 1,000,000 II,150,000 Wheat, First Securities Inc.. 1,000,000 Shearson Loeb Rhoades Inc. I1,150,000 Yamaichi International ( America ). Inc.
Morgan Stanley & Co. Incorporated 1,000,000 3,750,000 Advest, Inc. 600,000 The First Boston Corporation 3,750,000 American Securities Corporatiou 600,000 Blyth Eastman Paine WebberIncorporated 3,750,000 Bacon, Whipple & Co.
V Salomon Brothers 3,750,000 Sanford C. Bernstein & Co., Inc.
. 600,000 600,000 Bear, Stearns & Co. 3,000,000 Blui.t Ellis & Loew Incorporated 600,000 Dalon. Read & Co. Inc. 3,000,000 yBoe er & m y W
- r 9n, Lufkin & Jenrette 3ecurities , {o en 3,000,000 Bruns, Nordeman, Rea & Co. 600,000 l L Burnham Lamben Incorporated 3,000,000 Butcher & SingerInc. 600,000 A. O. Edwards & Sons, Inc. 3,000,000 The Chicago Corporation 600,000
- y E. F, Hutton & Company Inc. First ofMichigan Corporation 600,000 Kidder, Peabody & Co. Inmrporated 3,000,000 J. J. B. Hilliard, W. L Lyons, Inc. - 600,000 3,000,000 Edward D. Jones & Co.
Lazard Freres & Co 600,000 3,000,000 Cyrus J. Lawrence Incorporated 600,000 L F. Rothschild, Unterberg, Towbin 3,000,000 Legg Mason Wood Walker, incorporated 600,000 Smith Barney Harris Upham & Co. The Ohio Company Incorporated 600,000 3,000,000 Parker / Hunter Incorporated 600,000
' Warburg Paribas BeckerIncorporated 3,000,000 Wm. E. Pollock & Co.,Inc.
Wertheim & Co.,Inc. 600,000
_ _ 3,000,000 Rauscher Piere* " h., a.c. 600,000 Dean Witter Reynolds Inc. 3,000,000 Stern Brothers A Co. 600,000
^ Alex. Brown & Sons 1,800,000 Stix & Co. Inc. 600,000 Thomson McKinnon Securities Inc. 1,800,000 8" Co d ABD Securities Corporation 1,000,000 G g K Ba m mp I orpormd
- Arnhold and S. Bleichroeder,Inc.
1,000,000 B. C. Christopher & Co. 300,000 Atlantic Capital Corporation Craigie Incorporated 300,000 I,000,000 Robert W. Baird & Co. Incorporated . F rst Albany Corporation - 300,000 Basle Securities Corporation 1,000,000 Freeman Securities Company, Inc. 300,000 f4 1,000,000 J. A. Glynn & Co. 300,000 4 Bateman Eichler, Hill Richards Incorporated _ 1,000,000 Gruntal& Co.
'i William Blair & Company 300,000 I,000,000 The Heitner Corporation 300,000
' Dain Bosworth Incorporated I,000,000 Herzfeld & Stern 300,000 Daiwa Securities America Inc. 1,000,000 Howard, Weil, Labouisse, Friedrichs Eppler, Guerin & Turner. Inc. I,000,000 "
EuroPartners Securities Corpor2aon yo pg, & . Incorporated 1,000,000 300 000 Robert F.eming Incorporated 1,000,000 Laidlaw Adams & Peck Inc. 300,000 Kleinwurt, Benson Incorporated - 1,000,000 McCourtney.Breckenridge & Company 300,000
-; Laden' urg, Thalmann & Co. Inc. 1,000,000 The Milwaukee Company 300,000 McDo ,ald & Company Moore & Schley, Cameron & Co. 300,000 Moseli r, Hallgarten, Estabrook & Weeden Inc. .,
1,000,000 Philips, Appel& Walden,Inc. _ 300,000 1,000,000 R asensperger, Hughes & Co.,Inc. 300,000 New Ca urt Securitb Corporation 1,000,000 Rodman & Renshaw,Inc.
Newharci. Cook J. Co. Incorporated 300,000 1,000,000 Scherck, Stein & Franc,Inc. 300,000 The Nikko Securities Co. International,Inc. 1,000,000 I. M. Simon & Co.
Nomura Securities International, Inc. 300,000 I,000,000 Smith, Moore & Co. 300,000 Oppenheimer & Co., Inc. I,000,000 Thomas & Company,Inc. 300,000 Piper, Jarray & Horwood Incorporated 1,000,000 Prescott, Ball & Turben Total 5150,000,000 1,000,000 14 e
f
/
)
{l '
l i
2 The Underwriting Agreement provides that the Underwriters are committed to purchase or arrange contracts for purchase as described under DELAYED DEUVERY ARRANGEMENTS all of the New Bonds if any j
- are purchased. Under certain circumstances the commitments of non-defaultirg Underwriters may be ,
, increased. The purchase of New Bonds by the Underwriters, by an institution signing a Delayed Delivery ll Contract or by any other purchaser is not contingent upon the carrying out of any or all of the Delayed Delivery Contracts.
The Company has been advised by Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bache Halsey Stuart Shields Incorporated, Goldman, Sachs & Co. and Shearson Loeb Rhoades Inc., as
,g Representatives of the Underwriters, that the Urderwriters propose to offer the New Bonds to the public initially at the offering price set hrth on the cover page of this Prospectus and to certain dealers at such price less a concession of.40% or the principal amount, and that the Underwriters and such dealers may
- s reallow a discount of.25% of tl.e principal amount on sales to other dealers. The public offering price and 4 concession and discount to dealers may be changed by the Representatives.
t b The Company has agreed to indemnify the several Underwriters against certain civil liabilities,
/ mcluding liabilities under the Securities Act of 1933.
4 4
? DELAYED DEI; 'tY ARRANMMENTS The Company has authorized the Underwritu ~ sdicitoffers by certain institutions to purchase New i ,.
Bonds from the Company at the initial public offering price set forth on the cover page hereof plus accrued
- )I interest from February 1,1981, pursuant to contrac*
- ,,wviding for payment and delivery on July 15,1981.
g Each such contract must k % ? rninimum of $250,000 principal amount of New Bonds, each purchaser must be approved by the Company, and tne ggregi: c principal amount of New Bonds covered by such I,
e4 contracts may not exceed $30,000,000, except as the Company shall otherwise approve in writing.
E Institutions with whom such contracts may be made include commercial and savings banks, insurance i companies, pension funds, investment' companies, educational and charitable institutions, and such others as may be approved by the Company. To the extent that such contracts are entered into, the Company will compensate the Underwriters therefor by paying them the underwriting commission set forth on the cover
! page hereof. Such contracts will not be subject to any conditions except that (1) the sale of the balance of l
the New Bonds to the Underwriters shall have been consummated and (2) the purchase af the New Bonds 7 shall not at the time of delivery be prohibited under the laws of tne jurisdiction to which such institution is j~
subject. The Underwriters will not have any liability in respect of the validity or performance of st ch
- cc r tracts.
i .
The principal amount of New Bonds to be purchased by each Underwriter will be reduced by the amount of New Bonds covered by such contracts attributed to such Underwriter by reason of such contracts having been arranged by or for such Underwriter or directed and allocated to such Underw' iter by a purchaser. The Underwriters may allo v a commission of.40% of the principal amount to dealers in respect of New Bonds for which conto.ts directed and allocated to such dealers by purchasers are arranged through the Representatives of the Underwriters.
15 F g o 0 m
\,
f No dealer, salesman, or any other person has
,- been authorized to gise any information or to
, make any representations other than those con-i tained in this Prospectus in connection with the $150,000,000 offer contained in this Prospectus ar d,if gisen or l
made, such information or represes tations must not be relied upon as hasing been authorized by the Company or by any of the Unde rwriters. This bla On Electric Company Prospectus does not constitute an oJer to sell the b securities in any jurisdiction to any one to whom it is unlawful to make such offer in such jurisdic-Firc; Mortgage Bonds tion.
15%% Series due 1991 ,
. t' d
PROSPECTUS CONTENTS Merrill Lynch White Weld r4a i- .- 1icorporation of Certain Documents by Ref.
erence and AdditionalInformation.. . 2 P; g g,g, g P
- The Issue in Brief=- 3 Merrill Lynch, P3- ce, Fenner & Smith Incorporated 56 The Company 4 Application of Pr acceds and Construction t
Bache Halsey Stuart Shields Incorporated Certain Financial Information-- 7 Recent Developments.. 8 Goldman, Sachs & Co.
-2 Description of New Bonds.- . 9 Experts - 13 Shearson Loeh Rhoades Inc.
Legal Opinions. 13 Underwriting - 14 February 11,1981 Delayed Delivery Arrangements. ....... .. 15 i
t O
t 0
s
- ,- SECURITIES AND EXCHAL'GE CO'fiiSSION i
Woshingtm , D. C. 20'b9 Q & Vrub FORM 10-K ANNUAL REPORT PURSUANT f0 SECTION 13 OR 15(d) 0F THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1980. Commission file number 1-2967.
UNION ELECTRIC COMPANY (Exact name of registrant as specified in its charter)
Missouri 43-0559760 (State or other jurisdicti2n of (I.R.S. Employer Identification No.)
incorporation or organization) 1901 Gratiot Street, St. I,ouis, Missouri 63103 (Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (314) 621-3222 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) 0F THE ACT:
Name of each exchange Title of each class on which registered First h.agage Bonds:
8-5/8% Series due 2007 - due December 1, 2007 New York Stock Exchange 8-7/8% Series due 2006 - due September 1, 2006 New York Stock Exchange 10-1/2% Series due 2005 - due March 1, 2005 New York Stock Exchange 3-1/4% Series due 1982 - due May 1, 1982 New York Stock Exchange Common Stock, $5 par value New York Stock Exchange Preferred Stock, without par value (entitled to cumulative dividends):
Stated value $100 per share -
$7.44 Series New York Stock Exchange
$6.40 Series New York Stock Exchange
$4.56 Series New York Stock Exchange
$4.50 Series New York Stock Exchange
$4.00 Series New York Stock Exchange
$3.50 Series New York Stock Exchange Stated value $97.50 per share -
$8.00 Series of 1971 New York Stock Exchange Stated value $92.25 per share -
$8.00 Series (of 1969) New York Stock Exchange Stated value $25 per share -
$2.72 Series New York Stock Exchange l $2.125 Series New York Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(g) 0F THE ACT:
None.
Indicate by chect sack whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .
Aggregate market value of voting stock held by non-affiliates as of March 9,1981, based on closing prices most recently available as reported in the Wall Street Jour.:al (excluding Preferred Stock, $3.70 Series and $4.60 Series for which there is no market): $858,614,546.
Shares of Common Stock, $5 par value, outstanding as of March 9, 1981: - 66,205,332 shares (excluding 42,990 treasury shares).
DOCUMF.NT INCORPORATED BY
REFERENCE:
Part of Ff u 10-K Definitive proxy statement for 1981 annual meeting I (Item 4) and III l
l
,4 N t
TABLE OF CONTENTS Part I Page Item 1 - Business General .................................................. I-l Industry and Company Problems ............................ I-l Construction Program ...................................... I-2 Fuel Supply ..............................................
I-5 Rates ....................................................
I-8 Regulation ............................................... I-9 Environmental Matters .................................... I-10 Employees ................................................
1-13 Statistical Information .................................. I-13 Financial Position ....................................... I-15 Item 2 - Properties .................................................. I-16 Item 3 - Legal Proceedings ............................................ I-18 Item 4 - Security ownership of Certain Beneficial Owners and Management (*) ............................................. I-20 Executive Officers of the Registrant (Item 3 of Regulation S-K) ....... I-20 Part II Item 5 - Market for the Registrant's Common Stock and Related Security Holder Matters ..................................
II-l II-2 Item 6 - Selected Financial Data .....................................
Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations ......................
11-3
- Supplementary Information on Inflation and Changing Prices .. II-6 Item. 8 - Financial Statements and Supplementary Data II-8 Supplementa ry Selected Quarterly Info rmation . . . . . . . . . . . . . . . . . . . . . . . . .
Report of Independent Accountants ....................................
11-9 II-10 Index to Financial Statements ........................................
II-ll Financial Statements .................................................
Part III Item 9 - Directors and Executive Officers of the Registrant (*) ........ III-l III-l Item 10 - Management Remuneration and Transactions (*) ..................
Part IV Item 11 - Exhibits, Financial Statement Schedules, and Reports on IV-1 Form 8-K .................................................
V-1 Signatures ................................................... ........ V-2 Consent ........................................................... .
Exhibits .................... ......................................... V-3
(*) Incorporated by reference, i
, _ _ , - ~ _ , , ,_ , _. - . _ - . . _ -
e .
PART I ITEM- 1. BUSINESS.
GENERAL The registrant, Union Electric Company (the " Company"), incorporated in Missouri in 1922, is successor to a number of companies, the oldest of which was organized in 1881. The Company owns all of the common stock of Mis-souri Power & Light Company (" Missouri Power"), Missouri Edison Company
(" Missouri Edison"), Missouri Utilities Company (" Missouri Utilities") and Union Colliery Company.
The Company and its utility subsidiaries, Missouri Power, Missouri Edison, and Missouri Utilities, supply electric service in territories in Missouri, Illinois and Iowa having an estimated population of 2,700,000 within an area of approximately 24,000 square miles, including the Metropolitan St. Louis Area. The Company also furnishes steam heating service in the down-town business section of St. Louis, and natural gas purchased from non-affiliated pipeline companies is distributed in the City of Alton, Illinois and vicinity by the Company and in territories in Missouri by the Company's utility subsidiaries. In addition, Missouri Utilities pcovides water service in the City of Cape Girardeau, Missouri and Missouri Power supplies steam ser-vice to the state government in Jefferson City, Missouri.
Electric operating revenues as a percentage of total operating reve-nues for the years 1976, 1977, 1978, and 1979 were 93.0%, 93.2%, 93.4%, and 92.4% respectively. For the year 1980, 92.5% of consolidated total operating revenues was derived from the sale of electric energy, 6.2% from the sale of natural gas and the remainder from other services. During the same period, Missouri Power's, Missouri Edison's and Missouri Utilities' operating revenues were 20% of consolidated total operating revenues. At December 31, 1980, the
- subsidiaries' total plant was 8.7% of consolidated total plant.
l INDUSTRY AND COMPANY PROBLEMS The Company is experiencing, in varying degrees, problems common to the electric utility industry during recent years. These include high cost of capital; increases in operating expenses and construction costs due to infla-tion and environmental regulations; the effects of energy conservation on sales growth; uncertain economic conditions; continually developing environ-mental regulations; difficulty in obtaining adequate and timely rate in-creases; uncertainties in connection with the construction of nuclear generat-ing facilities and the nuclear fuel cycle; public concern over nuclear energy; difficulty in maintaining a level of earnings adequate to meet indenture and charter requirements for issuance of bonds and preferred stock; and uncertain-ties in future actions of regulatory authorities and the concern of such authorities with nuclear power, rate structure, projected load growth, and energy costs. In 1977, Missouri law was changed to prohibit the inclusion of construction work in progress in rate base. As a result of this change (i) the amount of cash the Company generates internally is declining and (ii) the quality of the Company's earnings is being adversely affected inasmuch as the percent. age of earnings represented by allowance for funds used during con-struction ("AFC"), a non-cash item, is increasing (f.n 1981 and 1982 AFC is ex-pected to account for a substantial portion of such earnings). Fuel adjust-ment clauses covering virtually all kilowatt hour sales in Missouri were 1-1 l
I ___ _ __ _ _ _ ,, _, . - , , . _ . _ _ _ _ _ . _ . _ _ _ _ _ _ _. _ _ _ _ _.
terminated in 1979 as a result of a decision by the Missouri Supreme Court holding such clauses to be unlawful, t
CONSTRUCTION PROGRAM During the five-year period 1976-1980 gross additions to the property of the Company and its subsidiaries, excluding nuclear fuel, were
$1,550,000,000 and property retirements were $102,000,000. Construction ex-penditures for the year 1980 amounted to $421,000,000.
The following table sets forth the Company's actual and estimated construction expenditures, excluding nuclear fuel, for the periods indicated:
Estimated Actual Completed 1976-1980 1981 1982 1983 1984 1985 1981-1985 Cost (Millions of Dollars)
Callaway Unit No. 1 . ..... S 936 $301 $258 $ 69 $ -
S 628 S1,586 Callaway Unit No. 2 . . . . . . 41 7 18 107 185 276 593 S2,276 Generation-Other(1) . . . . . . 179 94 65 60 22 53 294 Transmission and Distribution . 325 76 78 79 79 82 394 Other . . . .'. . . . . .. 69 30 28 24 23 21 126 Total .. . .. $1,550 $508 $447 $339 $309 S432 S2,035 Less AFC:
Callaway Unit No. 1 . .. 111 145 33 - -
289 Callaway Unit No. 2 . . .. 5 6 13 27 50 101 Other . . .... . ... 11 11 9 5 5 41 Net Cash Requirements . .... S381 $285 S284 $277 $377 S1.604 (1) Primarily environental control expenditures. See " Environmental Matters."
The Company is constructing two units at the Callaway Nuclear Plant, each to have a net capacity of 1,150,000 kilowatts. The Company has expended
$958 million through 1980 on Unit No. 1, which is scheduled to be placed in service in April 1983 at an estimated total cost of $1,379 per kilowatt and has expended $51 million through 1980 on Unit No. 2, which is now scheduled to be placed in service in 1990 at an estimated cost of $1,979 per kilowatt.
These construction estimates, which are approximately $400 million lower dur-ing the 1981-1985 period than the previous estimate, reflect the Company's April 1981 decision to defer the scheduled in-service date of Unit No. 2 for two years, as well as several prior deferrals of both units.
When plans for the Callaway Plant were announced in 1973 the two units were scheduled to be completed in 1981 and 1983 at an approximate cost of $550 million each. By 1975 changes in assumptions which recognized higher inflation rates, higher interest costs and actual and projected costs of other nuclear facilities, raised the estimated cost of the units to about $900 mil-lion each. In 1977 the in-service dates of the units were deferred until 1982 I-2
and 1987, which, combinsd with still high2r escalatica and interest rate as-rumptions, added approximately $193 million to the cost of the first unit and
$434 million to the cost of the second unit. The 1977 deferrals resulted pri-marily from a change in Missouri public utility law which prohibited the in-clusion of construction work in progress in rate base and also because projected load growth was less than previo0sPf anticipated. As a result of this change in Missouri public utility law, (1) the amount of cash generated internally is declining and (2) the amount of AFC included in the Company's earnings is increasing (in 1981 and 1982 AFC is expected to account for a sub-stantial portion of such earnings) which has adversely affected the quality of such earnings and the Company's ability to issue first mortgage bonds. Early in 1980 the expected in-service date of the second unit was deferred to 1988 because of further revisions of projected load growth. Such change, together with design and specification improvements since the last revision of esti-mates, increased estimated costs by $229 million for the first unit and $373 million for the second unit. Later, in October 1980, the Company announced a six-month deferral to April 1983 in the expected completion of the first unit.
Such deferral was primarily due to labor strikes and lower than expected pro-ductivity due to increasingly stringent regulations and, combined with the ef-fects of continuing inflation, added an estimated $269 million to the cost of the first unit and $89 million to the cost of the second unit. In April 1981 the expected in-service date of the second unit was deferred to 1990 because of the reluctance to commit substantial sums of money to the second unit until the first unit is licensed by the Nuclear Regulatory Commission ("NRC") and the Company is permitted to earn a reasonable return on its investment in that unit. Such deferral increased the estimated cost of the second unit by $500 million.
Plans for all projects under construction undergo periodic review, and actual expenditures will vary, and completion dates may vary, from present estimates, as they have in the past, for the above reasons and others, includ-ing continuing inflstion (a rate of 7 3/4% on major projects has been assumed), legislative, regulatory and other legal actica (including the extent to which adequate and timely rate relief is received), difficulties in finan-cing the construction program, public interference and other difficulties with construction and licensing of nuclear facilities, changes in load and sales growth, and changes in business conditions. Various approvals are required from several federal and state agencies (proceedings before the NRC, the Mis-souri Public Service Commission and others are currently in progress) which could adversely affect the construction and operation of the units or result in the terminatioc of construction of the second unit. See " Legal Proceedings."
The Company presently anticipates that i.pproximately 10% of the cash required for construction in each of the years 1981 and 1982 will be obtained from internally generated funds, assuming that the Company receives a major portion of the rate relief being requested. See " Rates." External funds will be obtained frco the sale of equity securities, long-term debt securities, in-terim short-term borrowings and other forms of financing, including the sale of $150,000,000 principal amount of First Mortgage Bonds in February 1981
($30,000,000 of which will be delivered in July 1981), the proposed tale in May 1981 of up to $75,000,000 of Preferred Stock, proposed sales of environ-mental bonds and Common Stock later in 1981, and sales of Common Stock pur-suant to the Company's Dividend Reinvestment and Stock Purchase Plan and Tax Reduction Act Stoch Ownership Plan. In addition to funds required for con-struction in 1981 and 1982, approximately $37,000,000 will be required to retire long-term debt and Preferred Stock.
I-3
\
l .
In addition to the funds required for construction during the 1981-1985 period, $123,523,000 will be require 1 to retire currently outstand-ing long-term debt maturing during the period and for sinking fund payments on First Mortgage Bonds. In addition, approximat.ely $13,880,000 of Preferred Stock will be required to be retired during sach period. The types, amounts and timing of financings will depend upon ma.ket conditions, regulatory ac-tions, rate levels, and other factors, including the Company's ability to com-ply with the various financing restrictions discussed below. Adequate and timely rate relief will be required to finance the Company's construction program. Major rate relief, currently estimated at 25% to 30%, will be required when Callaway Unit No. 1 is placed in service to improve the internal generation of cash by offsetting the discontinuance of recording AFC on the unit as a noa-cash item of income, as well as to meet the expenses associated with its operation. No assurance can be given that the Company will obtain the timelv : ate relief which will be required.
The Company has entered into a nuclear fuel lease providing for finaucing up to $200,000,000 of nuclear fuel at any one time. The timing and amounts of payments made under the leasing arrangement are based ou actual use
- of nuclear fuel and are therefore not currently determinable and are not in-cluded in the previous paragraphs.
I In addition, the Company, on March 23, 1981 entered into a four year revolving credit loan agreement with certain commercial banks which permits the Company to borrow up to $100,000,000 at any one time.
Financing Restrictions. Under the most restrictive earnings test contained in the Company's Indenture of Mortgage and Deed of Trust
(" Mortgage") relating to its First Mortgage Bonds (" Bonds"), no Bonds may be I
issued (except in certain refunding operations) unless the Company's net earn-
, ings available for interest after depreciation (the amount of AFC and other i net non-operating income which may be included in such net earnings being lim-ited to an amount not in excess of 10% of the portion of such net earnings which does not constitute net non-operating income) for 12 consecutive months within the 15 months preceding such issuance are at least two times annual in-terest charges on all Bonds then outstanding and to be issued (all calculated as provided in the Mortgage). Such ratio for the 12 months ended December 31, 1980 (based on Bonds outstanding on that date adjusted to reflect the sale in February 1981 of $150,000,000 principal amount of First Mortgage Bonds, 15 3/8% Series due 1991), was 2.56, which would permit the Company to issue an additional $210,000,000 of Bonds (15% annual interest rate assumed). The earnings test referred to above may restrict the issuance of Bonds in 1981 and beyond unless substantial rate relief is received in 1981. The Company's Ar-l ticles of Incorporation restrict the Company from selling Preferred Stock un-less its net earnings for a period of 12 consecutive months within 15 months preceding such sale are at least two and one-half times the annual dividend requirements on its Preferred Stock then outstanding and to be issued. Such ratio for the 12 months ended December 31, 1980 was 5.05, which would permit the Company to issue an additional $200,000,000 stated value of Preferred Stock (15% annual dividend rate assumed). Certain loan agreements pursuant to which bank loans or bank loan commitments have been obtained require the Com-pany to obtain the prior consent of the banks to various actions by the Com-pany and its subsidiaries, including any future borrowing by the Company and its subsidiaries, except for permitted financings such as unsecured short-term borrowings (subject to certain conditions) and the issuance of additional Bonds.
I-4
Securitiss Ratings. Early in 1981 Standard and Poor's Corporation and Moody's Investors Service lowered the ratings on certain of the Company's securities as discussed under " Management's Discussion and Antlysis of Finan-l cial Condition and Results of Operations - Liquidity and Capital Resources,"
Page II-3.
FUEL SUPPLY Coal. Set forth below is certain information relating to the util-ization of coal by the Company in the generation of electricity:
Estimated Coal Estimated Requirements Expiration Percentage Over Dates of of Coal Remaining Long-term kequirements Useful Life Coal Under Plant and Location (Tons) Contracts Contract Missouri Labadie 135,000,000 1982 2 1986 13 1994(1) 6 1999 21 Sioux 39,000,000 1990 13 1999 71 Meramec 22,000,000 1988 44 Rush Island 70,000,000 1994(1) 28 Totals 266,000,000 44%
(1) Low sulphur coal supplied pursuant to the contract expiring in 1994 is scheduled to be delivered to the Rush Island Plant through 1988. Thereaf-ter such coal is expected to have a higher sulphur content and is sched-uled to be used at the Labadie Plant.
In addition to the coal supplied pursuant to the long-term con-tracts, as set forth in the table above, the Company burns coal supplied pur-suant to short-term contracts and by spot purchases. During the year 1980, such purchases accounted for approximately 26% of the Company's total coal requirements, at an average price of $33.25 per ton. Because of uncertainties of supply due to potential work stoppages, equipment breakdowns and the possi-bility of another oil embargo disrupting the supply and price of coal, the Company has a policy of maintaining a coal inventory of 90 days, based on normal annual burn practices. On March 31, 1981 the Company's coal inventory was approximately 120 days, based on normal annual burn practices. Additional contracts will be required to meet the Company's continuing coal requirements at prices which may be higher and with terms which cannot now be predicted, and the Company is currently negotiating for additional supplies of coal.
Oil and Gas. The Company anticipates that generation attributable to oil-fir ' peaking units, including units proposed to be constructed, will be less than 1.8% of total annual generation in each of the next ten years.
I-5
In addition, oil and propane gas are used in relativaly small trounts for cosl ignition and flame stabilization. Since the actual and prospective use of such fuels is minimal, the Company has not experienced and does not' expect to experience difficulty in obtaining adequate supplies. At December 31, 1980, the Company had 11,933,209 gallons of oil in storage. During the year 1980, the price of oil purchased averaged 610 per gallon. See " Regulation" for a discussion of exemptions or exceptions required to utilize petroleum in power plants.
Cost of Fuels. The cost of coal and other fuels used by the Company has increased substantially during the five year period 1976-1980. The Com-pany experienced substantial increases in the cost of coal as a result of the settlement in March 1978 of a United Mineworkers of America strike and due to increased purchases of low sulphur coal required for compliance with environ-mental regulations. At the present time, the 1981 strike by the United Mine-workers of America is not expected to have a significant impact on the opera-tion of the Company's coal-fired generating facilities. However, the settle-ment of such strip- could materially increase the Company's fuel costs. Set forth in the tab'.e below is information concerning the cost of the Company's fuel:
Month Of Year February 1976 1977 1978 1979 1980 1981 Per Ton of Coal Burned $15.04 $17.86 $24.15 $26.02 $26.85 $28.85 l
l Per Million BTU 71.2470 85.858C 115.865C 123.741C 124.914C 127.374C l
Per kWh of Steam Generation .7400 .8860 1.200C 1.273C 1.2910 1.3980 Nuclear. The components of the nuclear fuel cycle required for nu-clear generating units are as follows: (1) uranium (U3 0s); (2) conversion of uranium (U3 0s) into uranium hexafluoride; (3) enrichment of uranium hexa-fluoride; and (4) conversion of enriched uranium hexafluoride into uranium di-oxide and the fabrication thereof into nuclear fuel assemblies. In addition, a portion of the nuclear fuel assemblies is expended and requires replacement periodically. The spent naclear fuel is removed from the reactor and stored.
Spent fuel may be reprocessed to extract reusable materials should future fed-eral policy so allow.
The Company has contracts for a substantial portion of the various components of the nuclear fuel cycle for the two units at its Callaway Plant except for the reprocessing of spent nuclear fuel and the ultimate disposal of either spent fuel or nuclear waste material. The Company has contracts with Westinghouse Electric Corporation (" Westinghouse") for conversion services for each Callaway unit through 1994 and for fabrication services covering approxi-mately 21 years of operation for each unit. The fabrication .=ervice contracts provide for the initial core plus 20 replacement regions. (Each core consists of 3 regions, with one region being replaced approximately every 12 months.)
The Company also has contracts with the Department of Energy for enrichment services covering approximately 30 years of operation for each unit.
Under the terms of settlement of litigation concerning a supply of uranium hexafluoride, Westinghouse paid the Company $55,000,000 in cash on February 29, 1980 and additional payments are scheduled to be made on various dates tied to the commercial operation of Callaway Unit No. 2. In addition, I-6
Westinghouse will provide certain new equipment, fuel fabrication services, conversion services, technical services, and engineering at discounted prices; deliver 4,200,000 pounds of uranium (U3 0a) during the 1990 - 1999 period at discounted prices; and deliver 2,007,000 pounds of uranium (U3 0s) in the form of uranium hexafluoride at contract prices during the period 1980 - 1985. The price to be paid for the 4,200,000 pounds of uranium (U3 0s) will be discounted from market prices in effect during the time of delivery and the price to be paid for the 2,007,000 pounds of nuclear fuel is based on an established base price adjusted to each year of delivery for changes in labor and commodities indices and, therefore, these prices cannot be currently determined. Further, the settlement provides for additional cash payments out of any proceeds West-inghouse may receive in its current litigation with an alleged uranium cartel, and grants the Company certain rights to purchase future uncommitted uranium (U3 0s) Production, if any, from Westinghouse at market prices for delivery during the 1997 - 2006 period.
In addition to the 6,207,000 pounds of uranium (U 0s) 3 to be obtained from Westinghouse, the Company purchased 500,000 pounds of uranium (U 3 0s) in October 1976 at $41.50 per pound, and in February 1979 contracted for 6,000,000 pounds of uranium (U 3 0s) to be delivered during the period 1984-1995. Tha price to be paid for the 6,000,000 pounds of uranium (U 0s) 3 is based on a formula that includes market price limitations and production costs plus an element of profit that is subject to escalation. Therefore, the price cannot currently be determined.
The Company's contracts for enrichment services, for conversion services during the 1982-1988 period and for the purchase of 2,007,000 pounds of uranium (U3 0s equivalent) in the form of uranium hexaflouride and 500,000 pounds of uranium (U3 0s) have been assigned or sold to a non-affiliated cor-poration established for the purpose of financing such fuel under the Company's nuclear fuel lease.
The 6,207,000 pounds of uranium (U3 0s) to be provided by West-inghouse pursuant to the settlement discussed above, together with the 6,500,000 pounds of uranium (U 3 0s) Purchased from other sources, are suffi-cient, based on current assumptions, to supply fuel for Callaway Unit No. I through the end of this century. Additional contracts will have to be entered into in order to supply nuclear fuel during the estimated life of the nuclear units. The Company believes that the required supplies of the various compo-nents of the nuclear fuel cycle can be obtained.
Eventually, it will be necessary for the Company to provide for re-processing or off-site disposal ,f rpent fuel, but to date no arrangements have been made. It is expected th spent nuclear fuel will be removed from the nuclear units commencing in 1514, but since each unit will have the capa-city to store spent fuel for 'o : canty years, reprocessing or off-site disposal will not be requ'.ed - ' -iter the turn of the century. No re-processing facilities art presently licensed by the NRC. Although the Depart-ment of Energy has annoanced plans to provide off-site storage for spent nu-clear fuel from domestic reactors, the availability of reprocessing or off-site storage facilities and the extent of any increases in the cost of and demand for nuclear fuel due to such ! actors is not predictable.
I-7
I i
9 RATES For the twelve months ended December 31, 1980, approximately 82.5%,
10.9% and 3.0% of the Company's electric operating revenues were derived from sales in Missouri, Illinois, and Iowa, respectively, and 3.6% were derived from wholesale sales subject to the jurisdiction of the Federal Energy Regula-tory Commission ("FERC") of the Department of Energy.
, The Company presently has fuel adjustment riders in all jurisdic-tions other than Missouri which permit recovery of substantially all fuel costs applicable to those jurisdictions.
Missouri i
The Company filed proposed new schedules of electric rates with the Missouri Public Service Commission (" Missouri Commission") on November 26, 1980. The new rates are designed to produce an increase in annual revenues or approximately $91,000,000, exclusive of gross receipts taxes, based on a test year ending September 30, 1981. The Missouri Commission has suspended the ef-4 fectiveness of the proposed new rates, and hearings are expected to be held j during the summer of 1981. Under Missouri law the Missouri Commission must i render a decision on the proposed new rates by October 25, 1981.
Fuel. adjustment clauses covering virtually. all kilowatt hour sales in Missouri were cerninated by order of the Missouri Commission effective October 1, 1979, as a result of a decision by the Missouri Supreme Court hold-ing such clauses to be unlawful. To minimize the impact of the termination of fuel adjustment clauses and to recover other costs, the Company, on July 6, i 1979, filed proposed new schedules of electric rates with the Missouri Commis-sion which were designed to produce an increase in annual revenues of approxi-mately $81,600,000. The Missouri Commission issued an order effective October 1, 1979 which, in addition to eliminating fuel adjustment clauses, al-lowed the Company to include its June 1979 level of fuel costs in its basic rates. As a result of such order the Company's request for rate relief was reduced to $55,600,000. Subsequently, by order effective May 30, 1980, the Missouri Commission approved a rate settlement which increased the Company's annual revenues by $21,700,000.
The tenmination of the fuel adjustment clauses resulted in a write-off in 1979 of 210 per common share. The elimination of fuel adjustment clauses in Missouri will adversely affect the Company's earnings and cash flow. The extent of such effect will be dependent upon how much and how quickly fuel costs increase and the ability of the Company to obtain timely 4
increases in basic rates sufficient to cover such fuel cost increases. l A restructured rate design which increases the Company's revenues !
during the June through October billing periods and decreases revenues by an equivalent amount during the November through May billing periods was approved by the Missouri Commission and put into effect with the May 30, 1980 rate increase. Until rates based on the new rate design have been in effect for a )
i full year, revenue comparisons with prior periods will be affected. I An order of the' Missouri Commission effective February 2, 1978, authorizing an annual increase L electric rates of approximately $33,000,000, as a result of a request for $65,000,000, was appealed by an intervenor. The J
sole issue in the appeal is the extent to which the Company can continue to normalize certain tax benefits as authorized by the Missouri Commission. The l
l I-8
.1 rate decision was upheld by the Missouri Court of Appeals in Kansas City. The Missouri Supreme Court denied the intervenor's request for review on November 12, 1980. The intervenor has applied for review by the U.S. Su'preme l Court. In the opinion of Schlafly, Griesedieck, Ferrell & Toft, counsel for I the Company, any final decision will not result in retroactive rate reductions.
On March 3, 1981, the Company filed with the Missouri Commission a request for an increase in steam rates in the amount of $5.681,000, exclusive of gross receipts taxes, of which $2,865,000 was requested on an emergency basis. The Missouri Commission has suspended the effectiveness of the proposed new rates to July 31, 1981, and hearings are expected to be held later in 1981.
Illinois, Iowa and FERC The Company filed proposed new schedules of electric rates with the Illinois Commerce Commission (" Illinois Commission") on May 22, 1980. The new schedules are designed to produce an increase in annual revenues of approxi-mately $15,200,000, based on an adjusted test year ending December 31, 1979.
A hearing on the matter commenced in October, 1980. Under Illinois law, the Illinois Commission must render its decision by April 18, 1981.
The Company has a request for increased electric rates in the amount of $3,600,000 annually pending in Iowa.
On September 2, 1980, the FERC granted the Company an increase in wholesale electric rates of approximately $8,800,000 annually, as a result of a request for $15,000,000. The Company had put the requested rates into ef-feet subject to refund. At January 31, 1981, the Company had collected
$45,184,000 subject to refund, and at that date had accrued an estimated lia-bility of $16,082,000 for probable refund. The Company and intervenors have appealed the FERC decision to the United States Court of Appeals for the Eighth Circuit.
KEGULATION The Company and its utility subsidiaries are subject to regulation by the Missouri Commission as to rates, service, accounts, issuance of equity securities and debt having a maturity of more than twelve months and various other matters, and the Company is similarly subject to regulation by the Illinois Commission and, except for issuance of securities, by the Iowa State Commerce Commission. The Company and its utility subsidiaries are also sub-
- jecc to regulation by the FERC as to rates and charges in connection with the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce, accounting and depreciation poli-cies and certain other matters. Authorization to issue debt having a maturity of twelve months or less is obtained from the FERC.
The Company's Osage hydroelectric plant and its Taum Sauk pumped-storage hydro plant, as licensed projects under the Federal Power Act, are subject to certain federal regulations affecting, among other things, the 3eneral operation and maintenance of the projects. The Company's 50-year license for the Osage Plant expired on February 24, 1976, and its 50-year license for the Taum Sauk Plant will expire on June 30, 2010. An application for relicensing the Osage Plant was filed on February 20, 1973 and the Company is currently operating the Plant under .a annual license, which will be I-9
\.
renewed annually without further notice until a final order is entered. The Company can make no prediction as to when any final order may be, entered by the FERC or the nature thereof.
The Company's Keokuk Plant and dam located in the Mississippi River between Hamilton, Illinois, and Keokuk, Iowa, are operated under authority, unlimited in time, granted by an Act of Congress in 1905.
The Company is exempt from the provisions of the Public Utility l Holding Company Act of 1935, except Section 9(a)(2) thereof relating to the l acquisition of securities of other public utility companies and Section 11(b)(2) thereof with respect to concluding matters relating to the acquisition of Missouri Utilities common stock. When the Securities and j Exchange Commission approved such acquisition it reserved jurisdiction to pass upor che right of the Company and its utility subsidiaries to retain their gas ptoperties.
l The Powerplant and Industrial Fuel Use Act of 1978 ("Act") classi-fies all electric power plasts, for which construction or acquisition began on or after November 9,1978, as "new." The Act prohibits the use of natural gas or petroleum aa a primary energy source in any "new" electric power plant un-less an exemption from this prohibition is obtained. The Company's only l
foreseeable need for new petroleum burning power facilities would be for peak-ing capacity to be added as needed to meet the Company's peak load demands. A specific exemption for the use of petroleum in peak load power plants is authorized by the Act, and the Company will seek an exemption to burn petroleum in such peaking facilities when needed.
The Act also provides that the Secretary of Energy shall by rule -
require that any existing electric power plant which, during calendar year 1977, used coal as a primary energy source may not use petroleum as a primary energy source except in emergencies unless the Secretary of Energy issues a permit. The Company has 210 mW of oil fired capacity at its Venice Plant that is subject to this prohibition.
ENVIRONMENTAL MATTERS l The Company is subject to regulation with regard to air and water l quality and other environmental matters, by various federal, state and local authorities. Compliance with such regulations may have an adverse effect on l
the Company's construction program.
- AIR QUALITY. The States of Missouri and Illinois have received the l approval of the Environmental Protection Agency (" EPA") for their respective plans for implementation of primary and secondary ambient air quality stan-I dards under the Federal Clean Air Act of 1970.
The Clean Air Amendments of 1977, which became law on August 8, 1977, among other things, require states to revise their existing implementa-tion plans to prevent significant deterioration of air quality in areas where air quality is better than national standards and permits imposition of a i "non-compliance penalty" on the operation of generating units not in com-pliance after June 30, 1979 with federally approved state emission regulations adopted to achieve compliance with federal ambient air quality standards. The amounts of such penalties are to be determined in accordance with EPA
, regulations.
I I-10 l
The Company is presently in compliance with all sulphur dioxide air quality regulations and, except as discussed below, with all particulate gnd opacity regulations. Compliance with sulphur dioxide regulations is being achieved at the Company's coal-fired plants by burning low sulphur coal or by blending low and high sulphur coal. As discussed below, variances have been received to temporarily operate the Labadie and Meramec Plants while they are being brought into compliance with particulate and opacity regulations.
Missouri--Visible Emission Regulations and Particulate Regulations.
The Missouri Air Conservation Commission (" Air Commission") and St. Louis County have revised their opacity regulations applicable to major sources in the St. Louis Metropolitan Area, lowering the standard from 40% to 20% equiva-lent opacity. Compliance with the more stringent requirement was required as of July 1, 1978. On February 11, 1979, the Air Commission revised its partic-ulate emission regulations from .18 of a pound of particulates per million BTU of heat input to .12 of a pound. Sources are to be in compliance as expedi-tiously as possible but no later than February 11, 1982. The more stringent opacity and particulate standards have been approved by the EPA and have become a part of the federally-enforceable state implementation program.
Major Leprovements are being made in the existing particulate con-trol equipment at the Company's Meramec and Labadie Plants to meet the more stringent opacity and particulate standards.
The Company has received a variance from St. Louis County, approved by the Air Commission, allowing a delay in meeting such standards at the Meramec Plant while the Company installs particulate control equipment. This variance was approved by the EPA on October 23, 1980. In requesting such variance the Company proposed to demonstrate compliance with the more stringent opacity and particulate standards no later than May 15, 1981 (Units 1 and 2) and November 30, 1981 (Units 3 and 4). Because of delays caused by a strike the Company, on February 25, 1981, filed with St. Louis County for a schedule change to demonstrate compliance no later than July 26, 1981 (Units 1 and 2), November 27, 1981 (Unit 3) and December 31, 1981 (Unit 4). A hearing on the schedule changes has been scheduled for April 10, 1981. Generating capacity at the Meramec Plant has been temporarily reduced while additional control equipment is installed, and when installation has been completed and tests indicate compliance with the revised standards, the Meramec units will resume operation at full capacity. The cost of improve-ments at the Meramec Plant to meet the revised standards is currently esti-mated at $54,000,000.
The Air Commission h s granted the Company a variance for the Laba-die Plaat allowing a delay in aceting more stringent opacity and particulate standards while the Company 1 alls control equipment, and on June 16, 1980 the EPA approved such variance. The Company proposes to demonstrate com-pliance with the more stringent opacity and particulate standards no later than March 1, 1983 (Unit 2), April 1, 1983 (Unit 3), October 1, 1983 (Unit 1),
and March 1, 1984 (Unit 4). The cost of the improvements at the Labadie Plant to meet the more stringent standards is currently estimated at $75,000,000.
WATER QUALITY. The Administrator of the EPA and state agencies authorized by the Administrator have authority over the issuance of discharge permits under the Clean Water Act as amended December 27, 1977 (" CWA"). The Company has filed applications in Missouri, Illinois and Iowa for renewal of its National Pollution Discharge Elimination System (" NPDES") permits under requirements of the CWA and has received a permit from the Illinois I-11
Environmental Protection Agency for all discharges from its Venice Plant. The existing permits for the Company's other plants remain in effect pending review of the applications.
The Company could be required to submit additional information on pending applications to comply with new consolidated permit regulations adopted May 19, 1980. The new NPDES permits will supersede the existing NPDES permits and will last for a period of five vears. The requirements to meet "best conventional pollutant control technology" for con;entional pollutants and "best available technology economically achievable" for tor!c pollutants by July 1,1984 will be reflected in the new permits. Although the amount of the expenditures that may be required cannet be determined at this time, the Company does not anticipate that they will be substantial. Proposed new ef-fluent limitations for steam electric power generating plants were published by the EPA on October 14, 1980. The proposals, if finally adopted, are not expected to result in substantial expenditures to bring facilities into compliance.
On August 8, 1980, the Director of the Missouri Department of Nat-ural Resources issued a NPDES permit for the Callaway Plant. A number of in-dividuals have appealed to the Missouri Clean Water Commission requesting that a hearing be held, principally on the alleged effects of low level radiologi-cal discharges on downstream water supplies. Public hearings have been held and the matter is pending.
, GENERAL. While the Company cannot accurately estimate the total ef-tact of existing and future environmental regulations and standards upon ex-isting and proposed facilities and operations of the Company, its commitment to improve the environment required expenditures (exclusive of those relatinc to nuclear facilities) of approximately $113,000,000 during the five-year period 1976 through 1980 (of which $20,000,000 was expended in 1979 and
$33,000,000 in 1980). Estimated construction expenditures for the period 1981-1985 include expenditures relating to environmental matters (.xclusive of l those relating to nuclear facilities) in the amount of $200,000,000, consist-l ing of $168,000,000 for air quality control, $4,000,000 for water quality con-trol, $23,000,000 for the undergrounding of transmission and distribution lines, $4,000,000 for improving tb- functional and aesthetic characteristics of transmission and distribution facilities, and $1,000,000 for noise abatement. Approximately $73,000,000 is expected to be expended in 1981 and
$59,000,000 in 1982.
In addition, $610,000,000 for environmental control matters is in-l cluded in the Callaway Plant construction expenditures discussed under
! " Construction Program," including $495,000,000 for radiological control and l $115,000,000 for water and miscellaneous environmental control matters. Ap-l proximately $90,000,000 is expected to be expended during the 1981-1985 l period, including $36,000,000 in 1981 and $3,000,000 in 1982.
l l
l t
l l
l l
I I-12 e---a---trm + y y -.-e-- .-y g -
m-y9 e -w --
+-ry9- +* my--y--a--ye y y
l EMPLOYEES I
The Company and its subsidiaries employed 6,914 persons at i December 31, 1980, of whom 5,727 were employed by Union Electric Company. Ap-proximately 75% of the employees of Union Electric Company are represented by local unions affiliated with the AFL-CIO. Agreements with these local unions expire on June 30, 1981, and negotiations for new labor agreements began in March 1981.
STATISTICAL INFORMATION (Consolidated)
- ~
1980 1979 1978 1977 1976 Percentage of earninga on Common Stock attribu:able to AFC* 55.9 49.5 24.7 18.3 12.8 Common Stock dividends declared as a percentage of earnings. . . . . . . . . . . 70.5 82.9 69.8 81.6 72.2
- Net after the income tax effect applicable to the borrowed funds portion of AFC.
KILOWATT HOUR OUTPUT (in millions)
Fuel generation. . . . .. . . . 25,153 25,573 25,527 25,907 23,914 Hydro generation . . . . . . . . 1,192 1,336 1,363 1,196 1,015 Purchased from Electric Energy, Inc. . . . . . . . . . 1,696 1,431 332 811 802 Net Interchange and other purchases. . . . ... . (1,147) (2,600) (1,675) (2.845) (2,426)
Total output . . . . . . . . 26,894 25,740 25,547 25,069 23,305 Less line losses and system 'Ise. 2,099 2,051 2,030 1,988 1,946 Kilowact Hour Sal;s. .. . . 24,795 23,689 23,517 23,081 21.359 CONTINUED ON NEXT PAGE I-13
O t
1980 1979 1978 1977 1976 Electric Operating Revenues a000):
Residential - S402.160 5333.251 5331.128 5283.124 5248.784 Commercial . 306.486 265.278 253.279 219.806 195.568 Industrial. 233.854 221.617 209.440 169.834 154.539 Other electric utilities . 35.619 34.185 31.565 24.040 21.432 Miscellaneous . 18.774 20J88 19.061 16.232 14.677 Total s996.893 5874.719 5844.473 5713.036 5635.000 l
K!!owatt Hour Sales (000.000):
Residential . 8.446 7.546 7.670 7.389 6.625 Commercial . 6.913 6,463 6.332 6.331 5.823 Industrial . 7.616 7,858 7,738 7.656 7.221 Other electric utilities . 1.435 1.341 1.317 1.263 1.171 Miscellaneous . 385 481 460 442 519 Total 24.795 23,689 23.517 23.081 21.359 Electric Customers (End of year):
Residential . 862.406 853.908 845.074 832.251 821.5M Commercial . 106.428 101.355 99.751 99.105 95.2 4 Industrial . 5.128 5.334 5.348 5.225 5.459 Electric utilities . 24 24 24 24 24 Other . 2.950 2.917 2.753 2.312 1.472
. Total 977.136 963.538 952.950 938.917 923.767 Residential Customer Da'a (Average):
Kilowatt hours used . 9.848 8.893 9.167 8.956 8.114 Annual electric bill S468.92 5392.74 5395.74 5343.16 5304.71 Revenue / kilowatt hour. 4.76c 4.42c 4.32c 3.83e 3.76c l
System Gross Instantaneous Peak Demand (Kilowatts) . 6,404.000 5.846.000 5.813.000 5.837.000 5.582.000 System Capability at Time of Peak, Including Net of Firm Purchase and Sale of Capadty (Kilowatts) . 7.471.000 7.739.000 6.873.000 6.891.000 6.913.000 Generating Capability at Time of Peak (Kilowatts) . 6.824.000 6.947.000 6.718.000 6.607,000 6.439.000 System Net Integrated Hoy Peak Demand (Kilowatts) . 6.107.000 5.609.000 5.528.000 5.525.000 5.284.000 Load Faetor (Net Integrated Hour) 50.1% 52.4% 52.7% 51.8% 50.2 %
i 1
i I-14
Financial Positir3(Thousands of Dollsrs)
O Union Electric and Subsidiaries December 31.
1980 1979 1978 1977 1976 Assats Property, net of accumulated depreciation . 33.202.298 52.363.581 52.541.074 52.291.329 52.121.482 Receivables, net . 126.075 148.482 116.938 94.312 84.190 Fuel supplies . 109.908 85.107 69,198 59.426 43.699
_ Other assets . 113.323 71.823 72.999 76.114 66.668 Total Assets 83.552.104 53.168.998 52.800.209 52.521.181 52.316.039 Capital and Liabilities Capitalization:
Common stock and retained earnings-Common stock . S 330.627 5 293.984 5 259.546 5 234.059 5 205.172 Other paid-in capital . 414.020 374.189 328.573 280.187 222.038 Retained earnings . 298.902 262.202 247.901 218.865 207.190 Common equity . 1.tM3.549 930.375 836.020 733.111 634.400 Preferred stock not subject to mandatory redemption . 231.355 231.355 231.355 281.355 241.355 Preferred stock ubject to mandatory redemption. 112.040 114.066 41.092 41.118 41.144 Long-term debt . 1.479.229 1.307.990 1.238.860 1.189.080 1.118.418 Total capitalization 2.916.173 2.633.736 ,_
2.397.327 2.244.664 2.035.317 Accumulated deferred taxes on income . 166.167 123.291 95.507 69.410 39.724 Accumulated deferred investment tax credits. 113.474 87.556 55.647 33.612 9.647 Accounts and wages payable . 98.224 100.310 92.321 57.745 60.488 Short-term debt including current maturities. 141.395 122.909 34.692 23.155 67.162 Other liabilities . 116.171 101.146 124.715 92.595 103.701' Total Capitaland L! abilities S3.552.104 53.168.998 52.800.209 52.521.181 52.316.039 Common Stock Data Number of shares outstanding . 66.125.317 58.796.909 51.909.2~0 46.311.305 41.034.349 Book value per share . S15.78 515.82 516.11 515.66 515.46 Ccpitalization Ratios Common equity. 35.3*. 35.3*. 34.9*. 32.7*. 31.2 *.
Preferred stock not subject to mandatory redemption 9.7 10.7 11.7 12.5 11.9 Preferred stock subject to mandatory redemption 3.3 4.3 1.7 1.3 2.0 Long-term debt . 50.7 49.7 51.7 53.0 54.9 Total 100.0 % 100.0*. 100.0*. 100.0 *. 100.0 *.
I-1.5
ITEM 2. PROPERTIES. l The following table sets forth information with respect 'to the ex-isting generating facilities of the Company and its subsidiaries.
Percent Gross Kilowatt of 1980 Energy Generating Net Source Plant Location Capability (1) Generation Coal Labadie Franklin County, Mo. 2,320,000 Sioux St. Charles County, Mo. 960,000 i Meramec St. Louis County, Mo. 835,000(2)
Rush Island Jefferson County, Mo. 1,200,000 Total Coal 5,315,000 95.1 Hydro Osage (3) Lakeside, Mo. 212,000 119,000 l Keokuk Keokuk, Ia.
Total Hydro 331,000 (4) 4.4 Oil and Venice Venice, Ill. 471,000 Natural Ashley St. Louis, Mo. 73,000 Gas (3) Other Various 389,000 Total Oil and Natural Gas 933,000 .4 Pumped-storage (3) Taum Sauk Reynolds County, Mo. 300,000 .1 6,879,000 100.0 i
(1) At time of the expected maximum gross instantaneous demand on the Company's system in 1981.
(2) Reflects a temporary reduction of 88,000 kW in order to comply with environmental regulations. See "Ecvironmental Matters."
(3) Used primarily for peaking and emergency generation.
(4) Based on normal river flow.
l The maximum gross instantaneous demand en the Company's system oc-curred on July 14, 1980 and amounted to 6,404,000 kW. Generating capability existing at that time totaled 6,824,000 kW which, together with power avail-able from firm interchange and purchase contracts, provided a reserve of ap-l proximately 17%. In planning its construction program, the Company is presen-tly utilizing a forecast of load growth approximating 2.5% compounded annually and is providing for a minimum reserve margin of approximately 15% above its
! anticipated peak load requirements.
! The Company is a member of one of the nine regional electric relia-bility councils organized for coordinating the planning and operation of the nation's bulk power supply - MAIN (Mid-America Interpool Network) operating primarily in Wisconsin, Illinois and Missouri. The Company has interconnec-tions for the exchange of power, directly and through the facilities of others, with seventeen utilities, and with Associated Electric Cooperative, I-16
- - - - . . . - . , ~ . = - - . - . - . ..- . - - .
Inc., the Southwestern Power Administration and the Tennessee Valley Authority.
The Company owns 40% of the capital stock of Electric Energy, Inc.
("EEI"), the balance of which is held by three other " sponsoring companies."
EEI owns and operates a generating plant with a capacity of 1,000,000 kW, of which 735,000 kW is committed to the Paducah Project of the Department of Energy. The sponsoring companies are entitled to surplus power from EEI's generating plant in the ratio of their participation in the Common Stock of EEI, and accordingly, the Company is entitled to 40% of such surplus power, up to 106,000 kW. Because of reduced Department of Energy requirements, the Com-pany has agreed to purchase additional power ranging from 240,000 kW to 350,000 kW from EEI during the period October 1, 1980 through September 30, 1981.
As of December 31, 1980, the Company owned approximately 3,335 cir-cuit miles of electric transmission lines, 13,891 pole miles of overhead dis-tribution lines, 6,420 miles of underground cable, and 329 substations with a transformer capacity of approximately 32,466,000 kVA. The Company owns a propane-air gas plant in Alton, Illinois with a daily natural gas equivalent capacity of 12,000 Mcf and 257 miles of gas mains in the City of Alton, Illi-nois and vicinity. Other properties of the Company include a steam distribu-tion system in downtown St. Louis and office buildings, warehouses, garages end repair shops at various locations throughout the territory served.
As of December 31, 1980, Missouri Power owned approximately 1,698 circuit miles of electric transmission lines, 257 substations with a transfor-mer capacity of approximately 2,229,000 kVA, and related distribution systems; and a propane-air gas plant at Jefferson City, Missouri with a daily natural gas equivalent capacity of 7,500 Mcf and 690 miles of gas mains. As of the same date, Missouri Edison owned approximately 352 circuit miles of electric transmission lines, 83 substations with a transformer capacity of approxi-mately 664,000 kVA, and related distribution systems; and 299 miles of gas mains. Missouri Utilities owned approximately 601 circuit miles of electric transmission lines, 106 substation: with a transformer capacity of approxi-mately 1,231,000 kVA, and related distribution systems; and three propane-air plants with an aggregate daily natural gas equivalent capaefty of 10,440 Mcf and 1,022 miles of gas mains. Missouri Utilities also owns and operates ap-proximately 185 miles of water mains and a pumping, purification and treating plant with a capacity of 5.9 million gallons of water per oay.
The Company and its subsidiaries have fee title to all of theii principal plants and other importan" units of property, or to the real property on which such facilities are located (subject to the liens of the respective mortgages securing outstanding indebtedness of the companies and to permitted liens and judgment liens as defined therein), except that (i) a por-tion of the Osage reservoir, certain facilities at the Sioux Plant, certain of the companies' substations and most of their transmission and distribution lines and gas mmins are situated on lands occupied under leases, easements, franchises, liceases or permits; (ii) the United States and/or the State of Missouri own, or have or may have, paramount rights to certain lands lying in the bed of the Osage River or located between the inner and outer harbor lines of the Mississippi River, on which certain generating and other properties of the Company are located; and (iii) the United States and/or State of Illinois and/or State of Iowa and/or City of Keokuk, Iowa own, or have or may have, paramount rights wita respect to, certain lands lying in the bed of the Mis-sissippi River on which a portion of the Company's Keokuk Plant is located.
I-17
ITEM 3. LEGAL PROCEEDINGS.
The Compan applied to the NRC for construction permits and the operating licenses for the nuclear units at its Callaway Plant in April 1974.
In April 1976, the NRC issued construction permits for the two nuclear units as authorized by an Initial Decision rendered by the NRC Atomic Safety and Licensing Board. In decisions rendered in September 1976 and August 1977, the NRC Atomic Safety and Licensing Appeal Board rejected exceptions to the Ini-tial Decision filed by intervenors and affirmed the Initial De;'.si:n in all respects. The August 1977 appeal toard decision has been appealed by inter-venors to the United States Court of Appeals for the District of Columbia. At the request of the intervenors the Court is holding its review in abeyance pending the issuance of decisions in two related actions to which the Company is not a party. The construction permits provide that construction of the first and second units must be completed by February 28, 1982 and February 28, 1984, respectively. In view of the deferrals of the expected in-service dates of the Callaway units discussed under " Construction Program", it will be necessary for the Company to request a modification of its construction per-mits with respect to the completion dates. By letter dated October 19, 1979, the Company transmitted its amended application to the NRC for an operating license for the first unit at the Callaway Plant. The Missouri Commission, certain anti-nuclear groups and others have requested permission to partici-pate in plant licensing procedures. The Company must obtain an operating license by October 1982 to achieve scheduled commercial operation of Unit No. 1 in April 1983. Other companies have been experiencing delays in obtcin-ing operating licenses from the NRC and, consequently, the Company can give no assurance that the operating license for Unit No. I will be received in a timely manner.
The Company cannot predict what ultimate effect the accident ex-perienced at the Three Mile Island Plant and the investigations or any tilated regulations or legislation resulting therefrom may have on the construction schedule and costs or on future operation of the Callaway units. However, changes identified to date have not resulted in significant increases-in the l
costs of the units.
An order was issued by the Missouri Commission, effective April 1, 1975, authorizing the con-truction,. operation and maintenance of the nuclear units. On August 14, 1979, the Missouri Commission issued an Order of In-vestigation requiring its Staff to commence an investigation into the genera-tion expansion program of tha Company to examine such matters as the electric need forecasting methods of the Company, the cost of alternative facilities to the Company's present construction program and the need for additional genera-tion facilities. Hearings were held in May and June 1980. The Missouri Com-mission also filed a request with the NRC seeking the institution of a proceeding to suspend the construction permit granted by the NRC for the con-struction of the second unit of the Callaway Plant to allow both the Missouri Commission and the NRC an opportunity to reassess the need for the unit. On March 10, 1980, the NRC issued an interim decision deferring the matter, pend-ing a final decision in the Missouri Commission's investigation case. At December 31, 1980, the Company had expended approximately $51,000,000 on the second unit of Callaway Plant, consisting primarily of developmental, licens-ing, engineering and similar costs. If construction of the second unit was terminated, the Company would incur contract termination charges which could approximate the same amount.
t l I-18 l
1 On May 9, 1978, a holder of the Company's First Mortgsga Bonds, l 10 1/2% Series due 2005 (" Bonds"), individually and as representative of a !
class composed of such holders, instituted suit in the Circuit Court of' l St. Louis County against the Company, the Trustee under the Indenture pursuant l to which the Bonds were issued, and the managers of the underwriting group l purchasing and marketing the Bonds. Thereafter two additional holders of the j Bonds joined as plaintiffs, and the case was certified as a class action inso- i far as it seeks declaratory relief. In the first four counts of the petition, from which the underwriters have been dismissed, plaintiffs and such class seek a declaratory judgment that the Company and Trustee do not have the right to effect a special redemption of the Bonds out of monies deposited in the Maintenance Fund or the Improvement Fund relating to them. The Trustee has filed a crosselaim seeking instructions, and the Company has filed a counter-claim seeking a declaration of its rights in the matter. The remaining counts of the petition, which have been stayed pending resolution of the declaratory judgment counts, seek actual damages of $22,225,000, punitive damages of
$10,000,000 against the Company and $50,000,000 against the remaining defen- !
dants, and attorneys' fees and costs. The Company and defendant underwrite s filed motions requesting a separate trial of the Company's contractual right to effect the proposed special redemption, and the Company filed a motion for a partial summary judgment declaring that it has such right. Also, the plain-tiffs filed a motion for summary judgment respecting all their claims for de-claratory relief. Before such motion was filed, plaintiffs dismissed one of the four managing underwriters as a defendant in the suit.
On December 28, 1979, the Circuit Court entered an order sustaining the plaintiffs' motion for a summary judgment on three of the first four counts in which it sought a declaratory judgment and in effect denied all other motions pending at the time. The order prohibits a special redemption of the Bonds out of monies deposited in the Maintenance Fund or the Improve-ment Fund and contains a number of other findings concerning characteristics of the Indenture, including, particularly, the Maintenance and Improvement Funds.
On February 5,1980 and February 14, 1980, the Company.and the Trustee, respectively, filed separate appeals from the Order of the Circuit Court to the Missouri Court of Appeals. Thereafter, the case was briefed and orally argued before said Court, which now has the appeal under submission.
On February 11, 1980, the plaintiffs, individually and as represen-tatives of a class composed of all holders of the Bonds, instituted a separate suit in the Federal Court for the Eastern District of Missouri against the Comptny, the Trustee, and three of the four managers of the underwriting group. The allegations and prayers in the complaint are similar to those con-tained in the petition filed in the Circuit Court of St. Louis County. In Counts I and II of their complaint, plaintiffs seek declarations and
$17,000,000 actual damages, puaitive damages of $10,000,000 against the Com-pany and $50,000,000 against the remaining defendants, and attorneys' fees and costs for alleged violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 of the Securities and Exchange Commission, and Section 323(a) of the Trust Indenture Act of 1939 in failing to adequately disclose the Company's right to specially redeem the Bonds and also injunctive relief prohibiting such redemption prior to March 1, 1985. Count III of the complaint seeks damages against defendant managers only for the alleged interference with the bond contract. On June 6, 1980, the Federal Court entered an order staying this suit pending a resolu-tion of the collateral suit before the state courts.
I-19
I See " Fuel Supply-Nuclear", " Rates", and "tavironmental Matters", for a discussion of legal proceedings with respect to such matters.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Security ownership of management.
Information required by this item is reported on pages 7 and 8 in the Company's 1981 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
Information regarding executive officers required by Item 3 of Regulation S-K:
Date First Elected or Appointed to Age At Present Name 12/31/80 Present Position Position Charles J. Doughc:ty 61 Chairman of the Board 4/22/80 Director and 1/14/66 Chief Executive Officer 4/23/68 William E. Cornelius 49 President 4/22/80 and Director 11/8/68 Earl K. Dille 53 Executive Vice President 1/1/71 and Director 4/25/72 Stewart W. Smith, Jr. 48 Executive Vice President 4/22/80 and Director 4/22/75 H. Clyde Allen 52 Vice President 4/22/75 John K. Bryan 63 Vice President 4/25/72 J. T. Friel 62 Vice President and 4/22/75 Controller 7/1/72 M. E. Gatewood 63 Vice President 10/6/78 G. J. Haven 53 Vice President 11/18/69 William A. Sanford 47 Vice President 10/6/78 Edgcr J. Telthorst 53 Vice President 4/22/80 Merle T. Welshans 62 Vice President 10/1/70 H. E. Wuertenbaecher, Jr. 54 Vice President 11/13/64 William E. Jandes 43 General Counsel 4/22/80 G. R. Murray 65 Secretary 11/10/67 C. W. Mueller 42 Treasurer 12/1/78 I-20
All officers arc ciscred or appointed annually by th Boerd of Directors following the election of such Board at the annual meeting of, stock-holders held in April. There are no family relationships between the forego-ing officers of the Company.
Each of the above-named executive officers has been employed by the Company for more than five years in executive or management positions. Those officers elected or appointed to their present position within the past five years held previous positions as follows:
Name Previous Position Term Charles J. Dougherty President 1966-1980 William E. Cornelius Executive Vice President 1968-1980 Stewart W. Smith, Jr. Vice President and 1969-1980 General Counsel 1966-1980 M. E. Gatewood Purchasing Agent 1968-1976 Director, Supply Service 1976-1978 C. W. Mueller Supervising Engineer, Interconnection Arrangements 1975-1977 Assistant Director, Corporate Plaaning 1977-1978 William A. Sanford Director, Industrial Relations 1974-1978 Edgar J. Telthorst Assistant General Manager, Power Plants 1975-1978 General Manager, Power Plants 1978-1979 Director - Power Operations 1979-1980 William E. Jaudes General Attorney 1973-1980 Security ownership of outside counsel (as of March 31, 1981).
The Company's outside counsel for legal matters in Missouri and Il-linois, Sch)afly, Griesedieck, Ferrell & Toft, reports that William H. Fer-rell, Esq.. s member of the firm, owns 1,231 shares of the Company's Common Stock and $' ' 000 principal amount of First Mortgage Bonds, 10 1/2% Series due 2005 of the company, other members and associates of that firm own an aggre-gate of 760 shares of Common Stock, 25 shares of Preferred Stock, $3.50 Series, and the firm holds as fiduciary 327 shares of Common Stock. Partners and associates in that firm also report that their wives own 320 shares of the Company's Common Stock but they disclaim any interest in such shares. J. A.
Concannon, Esq., the Company's outside counsel for legal matters in Iowa, reports ownership of 700 shares of the Company's Common Stock and $5,000 prin-cipal amount of First Mortgage Bonds, 8 3/8% Series due 2004, of the Company.
I-21 y , - - - , - - , , , , - - , , - - - e ,,-
PART II t
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND REIATED SECURITY HOLDER MATTERS.
Quarterly Common Stock Data m Union Electric Company 1980 Price Range <21 1980 1979 Price Range (2) 1979 High Low Dividends (3) High Low Dividends Quarter Ended:
$12% $ 9% 36c March 31. 514 % 513 % 36c 12M 10 36 June 30 14 13 % 36 12M 11H 38 September 30 14 % 13 % 36 12 10 % 38 December 31. 13 % 11 36 (1) At December 31.1980. Union Electric Company common stock shareholders totalled 168.582.
(2) Based on transactions recorded on the New York Stock Exchange.
(3) Restriction on the payment of common stock dividends at December 31.1980: Consolidated Retained Earnings amounted to 5298.902.000 as of December 31,1980: however, under the mortgage indenture of Union Electric Company, as amended. 553,797.000 of such retained earnings was restncted against payment of common dividends-except those payable in common stock.
t 1
i l
l II-1
ITEM 6. SELECTED FINANCIAL DATA.
Union Electric and Subsidiaries Year Ended December 31, 1980 1979 1978 1977 1976 (Thousands of dollars except share and per share amounts and ratios)
Operating revenues . 31,077.876 5946,797 5903,988 5765.102 5682,456 Operating expenses . 886,720 780,331 727,756 605,963 518,342 Operating income . 191,156 166,466 176.232 159,139 164,114 Allowance for funds used during construction (All funds prior to January 1,1977 and equity funds after December 31,1976) . 45,357 31,245 15,980 8,301 12.379 Other income-miscellaneous . 3.638 879 2,896 1,389 (2.554)
Interest on debt and other items . 132,112 107,383 90.699 84,015 78,529 Allowance for borrowed funds used during construction after December 31,1976. 46.698 26,848 15,489 10,721 -
Net income . 154.737 118.055 119,898 95,535 95.410 Preferred dividend requirements of Company . . 29.695 26,948 23,040 20.367 19,640 Earnings on common stock . 125.042 91.107 96,858 75,168 75,770 Earnings per share of common stock (based on average shares outstanding) . 32.10 51.73 52.01 51.67 51.86 Cash dividends declared per share of common stock. S1.48 51.44 51.40 ,
51.36 51.34 Average numoer of common shares outstanding . 59.675,995 52.577,432 48,260,596 45.110,245 40,795,152 Return on average common stock equity . 13.11 % 10.71 % 12.61% 10.68 % 12.19 %
Ratio of earnings to fixed charges (a) . 2.85 2 3.18 2.81 2.79 Total assets . 83.552.104 53,168,998 52,800,209 52,521,181 52,316,039 Long-term debt obligations . 1.479.229 1.307,990 1,238.860 1,189,080 1,118.418 Redeemable preferred stock . 112.040 114.066 41,092 41,118 41,144 (a) Earnings used in computing the ratio of earnings to fixed charges consist of net income plus fixed charges (interest on debt, preferred dividends of subsidiaries and an appropriate amount of rentals charged to operating cxpenses) and income taxes.
l l
l l
l II-2 i _ _ _
i ID 7. MANAGE'fENT'S DTSCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RT.WLTS OF OPERATIONS.
Liquidity and C h tal i Resources i Consolidated capital expenditu.es for the construction The Company plans to continue to utilize short-term program totalled 51.6 billion during the five years ended debt as interim support between long-term financing.
December 31,1980. including 5421 million and 5395 Consolidated average daily short term borrowings out-million in 1980 and 1979. respectively, of which approx- standing during 1980 aggregated 590.425.000 with a imately 30% was generated internally. Such expenditures weighted composite interest rate of 13.4%. At December are estimated to aggregates 2.0 oillion over the next five 31,1980, the Company and its subsidiaries had bank lines years.1981 through 1985, including S508 million in 1981 of credit and credit commitments fror 3 banks aggregating and S447 million la 1982. The estimated cash requirements 5205.820.000, not including the revolving credit agree-i for this construction program. excluding amounts for ment mentioned above. (See Note 8 under Notes to allowance for funds used during constructica and nuclear Financial Statements). The Company is authorized by the fuel which is being leased, are 3381 million for 1981 and Federal Energy Regulatory Commission to incur up to
$285 million for 1982. The Company presently anticipates 5300 million of short term unsecured indebtedness.
that approximately 10% of such cash requirements in The Company has entered into a nuclear fuel lease each of the years 1981 and 1982 will be obtained from providing for the financing of up to $200 million of internally generated funds, assuming reasonable rate relief nuclear fuel.
!, in 1981. In 1983 and thereafter, the internal generation in January,1981. Standard and Poor's Corporation of cash is expected to improve dramatically when lowered its ratings on the Compar.y's fir:t mortgage Callaway Unit No.1 is completed at a cost of approx- bonds and collateralized pollution control revenue bonds imately 51.6 billion and is included in rate base. (*) to BBB- from A preferred Etock to BBB- from BBB In addition to the funds required for construction and commercial paper to A3 from A2. M:ody's Investors l during the 1981 1985 period 5137.4 million will be required Service also lowered its ratings on the Company's first
, to retire long-term debt maturin;; during the period and mortgage bonds, secured indebtedness. and preferred for sinking fund payments on first mortgage bonds and stock to Baa from A commercial paper to P3 from M.
preferred stock. (See Notes 5 and 6 under Notes to and continued its rating on the Company's unsecured i Financial Statements.) indebtedness at Baa.
At December 31,1980 there was more than 540 million Such lowered ratings will increase the cost of any such of unused proceeds on deposit with a Trustee under a 1980 securities issued. and a .2y impair the Company's ability 560 million Environmental Improvement Bond issue, to ssue its securities. and may restrict its access tc the which will be utihzed to finance new pollution control commercial paper market. . .
facilities. The mortgage indenture of the Company requires a The Ccmpanyhas entered into a four-year muumum level of earnings for the issuance of additional revolving credit agreement with certain commercial banks bonds. Such requirement may restrict the issuance of early in 1981 which would permit the Company to borrow additional mortgage bonds in 1981 and beyond, unless up to $100 million at any one time. (**) substantial rate relief is received in 1981.
In February,1981, the Company sold 5150 million of For data Wative to Supplementary Information on 15% per cent ten-year maturity first mertgage bonds. Inflation anc Changing Prices. see pages II-6 and l The types amounts and timing of future financings will II 7.
I depend upon market conditions. regulatory actions, rate levels, and other factors. The Company's objective is to maintain, approximately, the consolidated capitalization ratios, as presently established (see Capitalization Ratios l
under Financial Position on page I-15).
(*) On April 2, 1981 the Company revised its construction program to reflect a delay in the second unit of its Callaway nuclear plant from 1988 to 1990; and accord-ingly the projected construction expenditures and cash requirements included above represent the updated estimates included in such revised program. For a discussion of such delay see " Construction Program," in Part I hereof.
(**) Entered into March 23, .981.
l II-3
ITEM 7. (con:.;.t.urd) .
Results of Operations Consolidated earnings amounted to 5125 million in Fuel adjustment clauses contributed about 570 million 1980 an increase of $34 million over 1979 and 523 mi115.n to the increased revenues in 1978. However. in 1979 and ov r 1973. Earnings per share of $2.10 in 1980 were 30 1980 respectively, following a Missouri Supreme Court gr:st;r than 1979 asi 9c over 1978. decisit. in 1979 declaring electric fuel clauses unlawful.
Conditions which contributed to these increases are revenues from the Missouri fttel clause were discontinued explaired below. While earnings are expected to remain but were offset about evenly by .T simultaneous increase reasonably stable during the immediately following years. in basic tariffs. At that time a 57 m/ lion fuel clause carnings per share, because of the dilutive effect of new surcharge collected earlier was refunded to Missouri shares issued. are expected to decline until substantial customers. No furth r mate. .al decrease in revenues rata increases are realized, has been experie% ed to date as a result of the loss of the Missouri fr.el clam. however. unless the fuel clause re nstated. any futum increases in i e ses will have to Electric Operating Revenues be recover.-d through formal rate proceedings.
Growth in total kilowatt-hour sales since 1977 has been A discussion of the variations in electric operating relatively minor, as evidenced by a 2.4*. compound annual revenues which represent over 90% of total operating rate of growth, despite substar.tial 1980 sales to residential rev;nues follows: and commercial customers because of near record Variation from summer temperatures. Residential and commercial Prior Year customers recorded annual growth rates of 4.6% and 3.0*.. respectively, while industrial sales have declined 1980 1979 1978 to a level below 1977. The unusual 1980 weather added m an a of Dou
- about 533 million to revenues.
Tariffs and fuel clauses . S 70.3 526.9 5111.1 Kilows tt-hour sales . 47.3 2.2 13.0 4.6 7.3 Operating Expenses f.icense/ franchise taxes . 1.1 S122.2 530.2 5131.4 The changes in operating expenses were as follows:
Increases in each of the past three years were the result of combinations of general rate increases for Union Futi and Purchased Power Variation from Electric Company and each of the subsidiaries at various Prior Yegt times during the periods, changes in fuel adjustment 1980 1979 978 cituses, weather. growth and economic conditions, manons of C m Significant electric rate increases were granted by the Fuel:
Missouri Public Service Commission early in 1978 Variation in generation (approximately 533 million annually) and in mid 1980 of electricity. 316.0) 5 .9 544.9)
(approximately 522 million annually). In addition. Price increases 20.7 25.3 73.7 i effectiva May 30.1930 the Missouri Commission Deferred fuel termination . I14.01 14.0 -
restructured rates applicable to all classifications of Generation and fuel custom:rs to increase rates June through October and efficiencies . 17.5) # 1J.8) 2.4 decrease rates November through May. Approximately Purchased and interchange 520 million was added to 1980 revenues as a result of that power . 39.0 15.9 ( 1.3) restructuring. S32.2 545.3 569.9 l Purchased and interchange power in 1979 and 1980 l reflects lower interchange net sales transactions with l other power systems.
l The Company has been a net seller of interchange I energy since 1975 and expects to continue to export such power in the foreseeable future. The market for energy sales to neighboring utilities was somewhat unfavorable during the past two years but this condition is no' expected to continue.
II 4 w - - , - n.. - , - , , - , ----g - . , . . - , . - -, , . , - . , . ,
l .
ITEM 7. (continued) l I
Operating Expenses (continued > Other Items Other changes were as follows:
Followiag the Slissouri Supreme Court decision in V"'I"'I " If
- 1979 declaring fuel adjustment clauses unlawful in Prior Year 51issouri. the Company discontinued deferring such fuel 1980 1979 1978 costs collectible under the clause.
(Millions of Dollars)
Other Operations Variation from Interest on debt . 324.7 516.7 56.7 Prior Year Preferred dividends . 2.7 3.9 2.7 1980 1979 1978 Allowance for funds used during construction ( AFC) . 34.0 26.6 12.4 iMillions of Dollarsi hiiscellaneous other income, Normal increases due to net . 21 (2.0) 1.5 growth, inflation and w:ge increases . $12.7 58.8 57.0 Setti: ment of a lawsuit ag inst Westinghouse The increases in interest and preferred dividends were Elictric Corporation due to the issuance of securities to finance the construction based on generator failures at Program and higher interest and preferred dividend rates tha Company's Labadie Plant on certain of such securities. AFC increased due to an s 3.8 (3.8) increased amount of Construction Work in Progress in 1971 and 1972. -
incr:ases due primarily to and to increased AFC rates.
higher cost of purchased gas . 6.9 9.4 5.1 Interest on debt of the Company ar.d its subsidiaries will n re se substantiaily in 1981. refheting a significant
$19.6 522.0 58.3 portion of the 523 million annualinterev requirement n the recent $150 million sale of Union Eiceric Company Slaintenance . es irst m ngage bonds tsee note (g> under The variations in maintenance reflected normal the Long-Tenn Deot statement on pages II.l o & II17, increases principally due to higher costs of repair parts The amoimt cf AFC will continue to 4.erease and wage increases. .
significantly and constitute a substsatial portion of earnings. until such time as Unit 1 of the Callaway nuclear Depreciation Pl ant goes into commercial operation and is included in The variations in depreciation resulted from increases ,
in d:preciable property. No changes were made in '*'.e base and its costs reflected m electric rates. This unit is presently scheduled for 1983.
depreciation rates during the periods.
Income Taxes Income taxes fluctuated in response to pretax income and were further reduced in 1979 when the federal income tax rate was reduced from 48% to 46*'.. For additional d:trils see the Notes to Financial Str.iements.
Other Taxes These increases generally reflect higher real estate taxes due to property additions. and increased gross rec ipts taxes on greater revenues.
II-5
Imt i. (condnuud; l .
S:ppi:m:nt:ry Inf:rm ti:n cn Infl:ti:n cnd Chrnging Pric:s (unaudited) .
Union Electric and S1bsidiaries Estimates of the effects of inflation and changing prices Accumulated Depreciation en the operations of the Company for the year ending The accumulated provision for depreciation for both December 3!.1980. are presented in accordance sith the constant dollar and current cost wu u.c mined by requirements of Financial Accounting Standards Board applying to the adjusted amounts of each major class of IFASB) Statement No. 33, " Financial Reporting and plant the same percentage relationship that existed Changing Prices." Statement No.33 requires that historical between gross plant and accumulated provision for costs be adjusted to reflect the effects that general depreciation on an historical basis.
inflation (constant dollar) and changes in specific prices Depreciation Expense (current cost) have had on the Company's operations. Depreciation expense for the year 1980 applicable to The adjusted data is not intended as a substitute for constant dollar and current cost property was 5173.121.000 carnings reported on an historical cost basis. but rather and 519'/.486.000, respectively. The actual 1980 to give some perspective as to the approximate effects of depreciation expense was $78.819.000.
changes in the purchasing power of the dollar. The adjusted amounts were determined by applying to Property, Plant and Equipment the indexed property and plant values the same straight-The estimated value in average 1980 dollars of property. line book rates used for historical purposes.
plant and equipment. including construction work in Reduction of Property, Plant and Equipment to progress, was determined by applying the Consumer Price Net Recoverable Cost Index for All Urban Consumers to the historical cost of The regulatory process limits the Company to the plint. The current cost estimates were measured by recovery of the historical cost of property and plant applying the Handy Whitman Index of Public Utility through depreciation. Therefore, any excess of property Construction Cost to each major class of plant. Current and plant in constant dollars or current cost must be cost approximates the cost of currently replacing existing reduced to the net recoverable cost. which is historical plant. The adjusted plant data under eitner the constant cost. The amount of this excess occurring in 1980 is dollar or current cost methods does not indicate the reported on the Consolidated Statement of Income Company's future capital requirements because actual Adjusted for Changing Prices.
replacement of existing plant will occur over many years Gain from Decline of Purchasing Power of Net and will not identically replace existing plant. Amounts Owed At December 31.1980, the constant dollar and current The Company, by having assets such as receivables.
cost of property, plant and equipment, net of accumulated inventory and deferred charges. suffers a loss of purchasing depreciation were 56.061.706.000 and 57.134.876.000, power during periods of inflation because after conversion.
respectively, while historical or net recoverable cost was the cash received for these items will purchase less.
53.202.298.000. The current cost and constant dollar Conversely, the Company has significant amounts of long-values differ because specific prices of plant have term debt (and some refundable preferred stock) increased at a rate different from that of generalinflation. outstanding which will be paid back with cheaper ~ dollars.
Consolidated Statement of Income Adjusted for Changing Prices For the Year Ended December 31.1980 Constant Dollar Current Cost tThousands of average 1980 dollars) l Earnings on common stock. as reported . 5 125.042 5 125.042 Additional depreciation expense . 194.302) (118.667)
Earnings on common stock, as adjusted (excluding reduction to l net recoverable costt 30.740' 6.375 l Reduction to net recoverable cost . (259.958) (121,790)
Relative price chcnges" -
(113.803)
Gain from decline in purchasing power of net amounts owed 194.661 194.661 Net erosion of common shareholders equity 5 i34.557) 5 (34.557)
- Earnings on common stock on a constant dollar basis would have been a loss of 5229.218.000 if it reflected the reduction to net recoverable cost of 5259.958.000.
" Represents the excess of general price changes (5779.661.000) in 1960 over the increase for 1980 in specific prices of property and plant 15665.858.000).
II-6
ITEM 7. (cmcludad) t For the year 1980. the Company experienced a net " gain" oeduction of inflation-adjusted depreciation expnse for of $194.661.0LA,5m having an excess of monetary income taxes. the Company's 1980 effective income tax liabilities over monetary assets. rate was 58*. for constant dollar and 70*'. under current General cost, each of which is greater than the Federal statutory As allowed by Statement No. 33. other than depreciation rate of 46%. Failure of regulatory and taxing authorities to recognize in allowable depreciation the current cos of expense, none of the other income statement items were adjusted.
plant, has serious implications. It severely limits the For rate making purposes, the amount of depreciation amount of funds that are generated internally for use in replacing or modernizing aging and obsolete assets.
expense included in the Company's allowed revenues is based on historical or original cost. The Company's Rates authorized by regulatory agencies must be inaoility to reflect the effects of inflation and changing sufficient to permit the replacing of plant and equipment prices resulted in 1980 reported earnings of $125.042.000 when necessary as well as preserve the purchasing power or 52.10 per share rather than the more realistic earnings of common equity c.tpital. As shown on the Five Year of 530.740.000 or 52c per share on a constant dollar Comparison of Selected (Supplementar) Finance.i Data.
basis, or 56.375.000 or 11C per share on a current cost to have retained the same purchasing power as they had basis reported on the Five Year Compe:ison of in 1976, the Company's common shareholders should have Selected 6upplementary) Financial Data. The total effect received 1%0commor dividendsof 51.94perstareandthe on common shareholders' equity, in 1980. from changing realized returns on common equity should have been prices, amounted to a loss of $34.557.000 or 58c per share. sufficient to permit the common stock to sell at about Also, because Federal income tax policy prohibits the 523.00 per share or about twice the year-end price.
Five Year Comparison of Selected Supplementary Financial Data Year Ended December 31.
Adjusted for Effects of Changing Prices 1980 1979 1978 1977 1976 (Thousands except per share amounts)
Operating revenues:
As reported . 51.077.876 5 946.797 5 903.988 5 765.102 5682.456 Adjusted for general inflation . 1.077.876 ' 1.075.000 1.142.000 1.040.000 988.000 Earnings (loss) on common stock (excluding reduction to net recoverable cost):
As reported . 5125.042 591.107 Adjusted for general inflation . 30.740 16.733 Current cost basis . 6.375 (14.679)
Earnings (loss) per share of common stock (excluding reduction to net recoverable cost):
As reported . 52.10 $1.73 Adjusted for general inflation . .52 .32 Current cost basis . .11 (.28)
Shareholders equity (net assets), at year end:
Historical cost . 51.324.904 51.211.730 Adjusted for general inflation . 1.265.426 1.300.805 Excess of general price changes over lacrease in the specific level of prices . 5113.803 5 86.981 Gain from decline in purchasing power of net amounts owed . 5194.661 5208.087 Cash dividends declared per common share:
Actual . 51.48 51.4' 51.40 51.36 51.34 Adjusted for general inflation . 1.48 1.63 1.77 1.85 1.94 Market price per share at year end:
Actual . 510 % 512 513 % 515 515 4 Adjusted for general inflation . 10 4 135s 16 % 201s 22 %
Average consumer price index . 246.8 217.4 195.4 181.5 170.5 Note: Adjusted amounts are in average 1980 dollars.
88-7
r i ITEM 8. NNANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
1 Supplementary Selected Quanerly Information Union Electric and Subsidiaries Earnings Per Average Earnings Share of on Common Operating Operating Net Common Stock Revenues Income Income Stock Outstanding (Thousands of Dollars) (Dollars)
Quarter Ended:
March 31,1980. 3249,892 S37,758 S27,825 S20,394 S0.35 March 31,1979. 240,256 41,950 29,581 23,821 0.46 June 30,1980. 244,501 46,753 37,338 29,908 0.50 l June 30,1979. 218,142 37,470 24,383 18,137 0.35 September 30,1980 . 353,434 78,447 69,300 61,869 1.04 l September 30,1979. 261,903 49,993 38,760 31,275 0.60 l
Decemher 31,1980 . 230/A9 28,198 20,274 12,871 0,21 December 31,1979. 2'.o,4% 37,053 25,331 17,874 0.33 II-8
P. bb t ONE MEMQRIAL DRVE
- 2.==-~ ~-
tateraouse a.co.
February 14, 1981 To the Stockholders and Board of Directors of Union Electric Company In our opinion, the consolidated financial statements listed in the accompanying index present fairly the financial position of Union Electric Company and its subsidiaries at December 31, 1980 and 1979, and the results of their operations and the changes in their financial position for each of the three years in the period ended December 31, 1980, in conformity with gen-erally accepted accounting principles consistently applied. Our examinations of these statements were made in accordance with generally accepted auditing standards and accordingly included l
such tests of the accounting records and such other auditing pro-cedures as we considered necessary in the circumstances.
u S-PRICE WATERHOUSE CO.
1 II-9
INDEX TO FINANCIAL STATEMENTS Page No.
Consolidated Statement of Income - Years 1980, 1979 and 1978 ...... II-11 Consolidated Balance Sheet - December 31, 1980 and 1979 ........... II-12 Preferred Stock - December 31, 1980 and 1979 ...................... II-14 Long-Term Debt - December 31, 1980 and 1979 ....................... II-16 Consolidated Statement of Retained Earnings - Years 1980, 1979 and 1978 ................................................... II-18 Consolidated Statement of other Paid-in Capital - Years 1980, 1979 and 1978 ................................................... Il-18 Consolidated Statement of Changes in Financial Position - Years 1980, 1979 and 1978 ............................................. II-19 Notes to Financial Statements ..................................... II-20 Schedules The following schedules, for the years ended December 31, 1980, 1979 and 1978, should be read in conjunction with the aforemen-tioned financial statements (schedules not included have been omitted because they are not applicable or the required data is shown in the aforementioned financial statements).
Property, Plant and Equipment (Schedule V) ..................,.... II-24 Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment (Schedule VI) .................... II-30 Valuation and Qualifying Accounts (Schedule VIII) ................ II-33 The individual financial statements of the Company have been omitted since its total assets, exclusive of investments in and advances to its consolidated subsidiaries, constitute 75% or more
.! of the total assets as shown by the most recent year-end consoli-I dated balance sheet; and the Company's total revenues for the year then ended, exclusive of interest and dividends received from or its equity in the income of the consolidated subsidi-aries, constitute 75% or more of the total revenues shown by the consolidated statement of income for such year.
II-10
Ccnsolidrt:d Str.t:m:nt Of Incem"3 tThousandsof Dollrrs) t Union Electric and Subsidiaries Year 1980 Year 1979 Year 1978 Operating Revenues (*): Electric - S 996.893 5874.719 5844.473 Oas . 67.577 60.537 50.150 Steam . 11,486 10.172 8.149 Water . l920 1.369 1.216 l Total operating revenues 1.077.876 946.797 903.988 0perating Expenses: Operations l Fuel and purchased power. 334,428 302.182 256.894 l Other. 185.071 165.493 143.482 519,499 467.675 400.376 ,
Maintenance . 80.632 71.184 68.012 Depreciation . 78.819 76.300 73,477 j Income taxes. 91,925 56.181 80.366 Other taxes . 115.845 108.991 105.525 Total operating expenses 886.720 780.331 727.756 Operating income 191.156 166.466 176.232 t Other income: Allowance for equity funds used during I construction . 45.357 31.245 15,980 l
Miscellancous, net . 3.638 879 2.896 Total other income 48.995 32.124 18.876 l Income Before Interest
! rnd Other items 240.151 198.590 195.108 litzrest and Other items: Interest on debt . 131.725 106.995 90.309 Allowance for borrowed funds used during construction . (46.698) (26.848) t 15.489)
Preferred dividends of subsidiaries . 387 388 390 Total interest and other items 85.414 80.535 75.210 N:t Income 154.737 118.055 119.898 Prefirred Dividend Requirements of Company 29.695 26.948 23.040 Errnings on Common Stock S 125.042 5 91.107 5 96.858 l
e9 Includes license and franchise taxes of $54.068.000. 549.467.000 and 548.367.000 for the years 1980.1979 and 1978 respectively.
1 Errnings per Share of l Common Stock l tbased on average shares outstanding) $2.10 51.73 52.01 l
Dividends Declared per Share of Common Stock St.48 51.44 $1.40 Avs age Number of Common Shares Outstanding 99,675.995 52.577.432 48.260,596 See Notes to FinancialStatements II ll - - - - _ - -
Consolid t:d Balanca Sh::t (Thousandsof Dollars) -
t December 31. December 31.
Union Electric and Subsidiaries 1980 1979 Assets Property and Plant, at original cost: Electric $2.813.585 52.727.017 Gas 66.446 63.647 Steam 9.653 9.875 Water 7.533 7.153 Other. 19.621 18.949 2.916.838 2.826.641 Less accumulated depreciation 848.826 786.147 2.068.012 2.040,494 Construction work in progress:
Callaway nuclear plant . 1.008.909 719.523 Nuclear fuel . 99.085 40.213 Settlement of uranium litigation . 162.624) -
Other . 88.916 63.351 Total property and plant. net 3.202.298 2.863.581 livestments, at cost 4.263 3.976 D:lerred Charges: Generating station construction abandonment . 3.557 5.336 Unamortized bond defeasance cost 4.347 5.042 Unamortized debt expense 3.226 3.035 Other 2.339 357 Total defer ed charges 13.969 13,770 Current Assets: Cash 4.196 5.841 Deposits for payment of interest, and other deposits 49.620 10.503 Accounts receivable-trade tiess allowance for doubtf ul accounts of 51.080 and 5884, at respective dates) 79.224 83.648 Unbilled te aue . 42.942 41.552 Other accounts and notes receivable 3.909 23.282 Materials and supplies, at average cost-Fuel 109.908 85.107 Construction and maintenance 35.486 32.039 P_ repayments and other assets 0.239 5.699 Total current assets 331.574 287.671 S3.552.104 53.168.998 II-1?
I December 31. December 31.
Union Electric and Subsidiaries 1980 1979 Ccpital and Liabilities Capitalization:
Common stock and Common stock. 55 par value, authorized retained earnings 100.000.000 and 75.000.000 shares, at respective dates: outstanding 66.125.317 and 58.796.909 shares, at l respective dates (excluding 42.990 shares at par value in treasury) S 330.627 5 293.984 l
Other paid in capital principally premium on common stock (see accompanying statement) 414.020 374,189 l Retained earnings (see accompanying
! statement) 298.902 262.202 t
l Total common stock and retained i earnings 1.043.549 930.375 Preference stock Preference stock 51 par value (entitled to cumu'arive dividends), authorized
- 7.500.000 shares-none outstanding l Preferred stock Preferred stock not subject to mandatory redemption. including premium of 51.571 (see accompanying statement) 281.355 281.355 Preferred stock subject to mandatory rede.nption (see accompanying l statementi l12.040 114.066 l Long-term debt Long-term debt (see acco
- npanying statement) 1.479.746 1.306.860 Unamortized premium and discount on debt (517) 1.130 Total capital; tion 2.916.173 2.633.786 Accumulated Deferred Taxes on Income 166.167 123.291 Accumulated Deferred Investment Tcx Credits 113.474 87.556 Current Liabilitiest Current maturity oflong-term debt 1.010 26.009 Accounts payable 83.459 85.502 Wages payable . 14.765 14.808 Bank loans . 41.425 36.600 Commercial paper . 99.460 60.300 Income taxes accrued 32.199 24.075 Other taxes accrued . 12.566 12.036 Interest accrued. 32.825 28.866 Dividends declared 7.376 7,443 Other current liabilities 31.205 28.726 i
I Total current liabilities 356.290 324.365 Construction Commitments (Note 9)
S3.552.104 53.168.998 See Notes to FinancialStatements II-13
Pref:rred Stock (Thousands of Doli:rsi 1
December 31. December 21.
Union Electric and Subsidiaries 1980 1979 Pref;rred Stock not sub{ect to mandatory redemption:
Union E!cetric Company Pr:ferred stock. without par Stated value of shares outstanding.
value (entitled to cumulative 5100 per share-dividendsi-note (a) 57.44 Series-550.000 shares . S 55.0tN) 5 55.000 56.40 Series-300.000 shares . 30.0tM) 30.000 54.56 Series-200.000 shares . 20,000 20.000 54.50 Series-213.595 shares . 21,359 21.359 54.00 Series-l'O.000 shares . 15.000 15.000 53.70 Series- 40.000 shares . 4.0tM) 4.000
$3.50 Series-130.000 shares . I3.(MN) 13.000 Stated value of shares outstanding.
597.50 per share-58.00 Series of 1971-425.000 shares 41,437 41,437 Stated value of shares outstanding.
$92.25 per share-58.00 Series i1969)-350.000 shares 32.288 32.288 Stated value of shares outstanding.
525.00 per share-52.125 Series-1.600.000 shares . 40.01H) 40.000 Total Union Electric Company 272.084 272.084 Slissouri Power & Light Company Preferred stock. 5100 par value 4.30*. Series-20,000 shares . 2.000 2.000 ientitled to cumulative 3.90*. Series-40.000 shares . 4.000 4.000 dividends), authorized 75.000 shares-outstanding Preferred stock. 525 par value tentitled to cumulative dividends), authorized 400.000 shares-none outstanding Total Slissouri Power & Light Company S 6.0tN) 5 6.000 10 Authonzed finion Electne Company rotal preferred stock-15.000.000 shares.
abt Authonzed Missouri Utdities Company total preferred stock-50.000 shares.
sci To be renred by sinkmg fund.
tdi The Company is required to retire 80.000 shares and has an option to redeem an additional 80.000 shares.
at 525 per share on November 15 of each year.
See Notes to FinancialStatements II-14
I December 31. December 31.
Udon Electric and Subsidiaries 1980 1979 Preferred Stock not subject to mandatory redemption (continued):
Missouri Utilities Company Preferred stock,5100 par value 5% Series-14,000 shares . . . S 1.400 5 1,400 (entitled to cumulative 5% Series of June 1950 - 1.500 shares . 150 150 dividends)-note (b)-outstanding 5% Series of Septeiaber 1950-l 1.500 shares 150 150 i
l Total Missouri Utilities Company 1.700 1.700 l
Missouri Edison Company i
Preferred stock,5100 par value
! (entitled to cumulative dividends), authorized 5.000 shares-none outstanding l Totd preferred stock not subject to mandatory redemption S279.784 5279.784 l
Preferred Stock subject to mandatory redemption:
Union Electric Company Preferred stock, without par Stated value of shares outstanuing, va!ue (entitled to cumulative 525.00 per share-dividends)-note (a) 52,72 Series-1,440,000 and 1.520,000 l
shares at respective dates, due to 1998-notes (cland(d) . S 36. TMH) $ 38,000 I
Stated value of shares outstanding, i
550.00 per share-54.60 Series-1,500,000 shares due 1985 to 2004-note (c) 75,000 75.000 I Total Union Electric Company 111.000 113.000 Missouri Utilities Company Preferred stock,5100 par value 5,70% Series-10,400 and 10,660 l (entitled to cumulative shares at respective dates.
dividends)-note (b)-outstanding due to 2020-note (c) 1.040 1,066 l
Total preferred stock subject to mandatory redemption S112.040 5114,066 l
l l
. _ . _ _. ._ _ _ _ . II _15_ _ __ __. _ _ _ _ . . - - . _ . . . _ . _ u._.
Lorig-T rm D:ht iThousands of Doll:rsi i
December 31. December 31.
Union Electric and Subsidiaries 1980 1979 Union Electric Company First mortgage bonds-note (a) 34*. Series due 1982 5 30.tMM) $ 30.000 3%*. Series due 1986 40.0dM) 40.000 41s*. Series due 1988 35. TEM) 35.000 44% Series due 1990 50.tWM) 50,000 44*. Series due 1991 30.tNN) 30.000 4%*. Series due 1993 30.otN) 30.000 4%% Series due 1995 35.0aN) 35.000 5%% Series due 1996 30.tNM) 30.000 Sh% Series due 1997 40.000 40.000 7 *. Series due 1998 50.000 50.000 71s*. Series due 1999 35.000 35.000 8h*. Series due 1999 40.000 40.000 9.95*. Series due 1999-note (b) . 100.000 50,000 9 *. Series due 2000 60.tHN) 60.000 77s*. Series due 2001 50.tMM) 50.000 75s*. Series due 2001 50.0tM) 50.000 81's". Series due 2001 60.000 60.000 81s*. SetMs due 2004 70.000 70.000 10%*. Series due 2005 . .. 70.0iMI 70.000 5.80*. Series due 1992 to 2005-note tel . 27.085 27.085 87s*. Seri?s due 2006 70.tHM) 70.000 85s*. Series due 2007 60.tMN) 60.000 9.35% Series due 2008-note ab6 55.000 55.000 9.25-9.625% Series due 2000 to 2010-note ie1 60.000 -
Unsecured bank notes-note td) Due 1985. 75.(HN) 75.000 Missouri environmental Series 1974. interest rates averaging improvement revenue bonds 6.21% due 1989 to 20tM , 16.500 16.500 Nuclear fuel lease 99.035 40.139 Total Union Electric Company $1.367.620 51.198.724 to At December 31.19NO. substantiady all of the property and plant was mortgaged under, and subject to tiens of. the respect:ve indentures pursuant to which the bonds were issued.
t bl To be retired by sinnung it.nd-Union Electnc Company 9.95*. Senes from 1986 to 1998: 9.35*. Senes from 1989 to 20lI7: Ntissouri Power & Light Company,104*. Senes to 1993; 94*. Senes from 1982 to 2000:
10*. Senes from 1985 to 2003: Ntissoun Utdities Company. 9i4 *. Series from 1982 to 2000; and Niissour!
Edtson Company.1I t4 *. Senes to 1989: 94*. Senes to 2000: si:*. Senes from 1943 to 2001.
<cs Environmental Improvement Series.
(d) Interest rate was 20.75*. on December 31.1980 based on I/4*. above the current bank prime interest rate, and the rate wd! vary based on the pnme rate through 1985.
- 11) Notes due in equal annual ins:."ments.
If) Note due in equal monthly installments.
ist 12 February 1981. Union Electne Compary sold sl50.000.000.152s*. Series.10-year. First Ntortgage Bonds. with the issuance of 520.000.000 of these bonds to be delayed untd July 1981.
t h) In January 1981. Stissouri Edison Company contracted to sell 54.0in000.14%*. Senes. 5-year. First Ntortgsge Bonds, with the tssuance of these bonds to be delayed untd February 1981.
See Notes to FinancialStatements II-16
- .s 1
i December 31. December 31.
Uclon Electric and Subsidiaries 1980 1979 Slissouri Power & Light Company First mortgage bonds-note (a) 314*. Series due 1984 S 7.54H) 5 7.500 4t 2?. Series due 1992 . 6.(HH) 6.000 104*. Series due 1994-note (b) 6.160 6.580 54*4 Series due 1996 5.(HN) 5.000 54*. Series due 1997 5.(HNI 5.000 8?. Series due 1999 .. 5.tH N) 5.000 94*. Series due 2001-note ib) 12.0tH) 12.000 7%*. Series due 2003 .. 7.(HM) 7.000 10?. Series due 2004-note (b) 10.000 5.000 Total hiissouri Power & Light Company 63.660 59.080 Slissouri Utilities Company First mortgage bonds-note (a) 5%*. Series due 1984 1.0tH1 1.000 412*4 Series due 1988 3.tHH) 3.000 54's Series due 1991 3.500 3.500 814*. Series due 1996 10.000 10.000 7.95*. Series due 1998 4.000 4.000 9I *. Series due 2001-note (bl 6.tH H1 6.000 Unsecured notes-note tel st. Due 1992. 2.240 2.345 Totalhiissouri Utilities Company 29.740 29.845 Siissouri Edisor Con.pany First mortgage bonds-note tal 1114*. Series due 1990-note (bi 4.100 4.400 5 *. Series due 1991 2.000 2.000 4%*. SerL's due 1995 .. 3.000 3.000 94*. Seri'es due 2001-note (b) 3.478 3.652 812*. Series due 2002-note ib) 6.IN N) 6.000 Unsecured notes--note (el 7-712' *. Due 1981. -
7 TotalhiissouriEdison Company 18.578 19.059 Union Colliery Company Secured note-note (0 9*. Due 1999 - 148 152 Long. term debt S t.479.746 51.306.860 II-17
Consolidst:d Strt:m:nt Of Retrin:d Errnings(Thousandsof Doilars) l l
Union Electric and Sulnidiaries Year 1980 Year 1979 Year 1978 Balance at Beginning of Period S262.202 5247.901 5218.865 Add: Net ineome 154.737 118.055 119.898 416.939 365.956 338.763 Deduct: Preferred stock dividends . 29.668 27.783* 23.040 Common stock dividends-51.48,51.44 and $1.40 per share, respectively . 88,105 75.507 67.576 Write-off of capital stock expense 264 464 246 118.037 103.754 90.862 Balance at Close of Period (Under the mortgage indenture of Union Electric Company as amended, free and unrestricted retained earnings at December 31.1980 amounted to 5245.105) ** $298,902 5262.202 5247.901
- Includes dividends declared, applicable to subsequent periods.
- Under the mortgage indentures of the consolidated subsidiaries, free and unrestricted retained earnings of such subsidiaries at December 31.1980 amounted to $14.930.000.
Ccnsolidated Statement Of Other Paid-In Capital (Thousands of Dollarst Ution Electric and Subsidiaries Year 1980 Year 1979 Year 1978 Balance at Beginning of Period $374.189 5328,573 5280.187
. Add: Excess of sa'.es price over par value of 5.500.000. 5.500.000, and 4.000.000 shares of common stock issued in 1980.
l
- 1979 and 1978, tespectively 28.243 34.017 38.080 Excess of sales price over par value of 1.522.384.1.014.971 and 808.379 l shares of common stock issued during l 1980,1979 and 1978. respectively, for dividend reinvestment and stock purchase plan . 9.520 8.441 7.446 Excess of sales price over par value of 306.024. 372.668 and 289.086 shares of common stock issued for tax reduction act stock ownership plan in 1980,1979 and 1978. respectively . 2.016 3.158 2.860 Excess of stated value over purchase price of 80.000 shares of preferred stock redeemed during 1980. 52
- Balance at Close of Period $414.020 5374.189 5328.573 See Notes to Finas.:ialStatements L
- Rh]L&1
Ccasolidated St:t:m:nt Of Chang:s In Financial Positirn(Thousandsof Dollars)
Union Electric and Subsidiaries Year 1980 Year 1979 Year 1978 Source of Fsnds: From operations-Net income . 3154.737 5118.055 5119.898 Provision for depreciation . 78.819 76.300 73.477 Provision for deferred taxes on income (net) . 42.876 27.784 26.097 Provision for deferred investment tax credits (net) . 25.918 31.909 22.035 Allowance for all funds used during construction . t92.055) (58.093) (31.469) 210.295 195.955 210.038 Dividend reinvestment and stock purchase plans . 20.678 18.537 15,793 Issue of mortgage bonds. 115.000 55.000 55.000 Issue of preferred stock. -
75.000 -
Iscue of common stock. 55.743 61.517 58.080 Issue of long-term unsecured notes . 75.000 -
7: 000 Settlement of uranium litigation. 62.624 - -
Nuclear fuel lease . 58.896 40.139 -
Net change in deferred charges. (1991 1815 9.068 Additional short-term bank loans and commercial paper. 43.985 67.300 6.550 Total funds provided $642.022 5515.263 5429.529 Apolication of Funds: Gross piant expenditures. S421.275 5394,984 5320.397 Nucles - fuel . 58.872 4.998 2.895 Allowa ice for all funds used during construction 192.055) (58.093) (31,469)
Union Electric dividends on preferred stock and common stock . 117.773 103.290 90.616 Maturity of mo-tgage bonds. 25.894 4.974 -
Redemption of preferred stock . 2.026 2.026 26 Restructured long-term unsecured notes . 75.000 -
75.000 Net change in working capital (excluding short-term loans and current maturity of long-term debt) . 30.964 63.380 (28.494)
Net change in other funds . 2.273 (296) 558 Total funds applied $642.022 5515.263 5429.529 Changes la Components of Working Capital : Cash and deposits . S 37.472 5 3.814 5 (1.767)
Receivables. net . 122.407) 31.544 22.626 Fuel. 24.801 15.909 9.772 Other materials and supplies . 3.447 6.151 2.347 Accounts and wages payable . 2.086 (7.989) (34.576)
Taxes accrued . (8.6541 31,172 (23,338)
Interest and dividends accrued or declared . t 3.892) (3,740) I2.137)
Other . I1.889) (13.481) _ t1.421)
S 30.964 5 63.320 5(28.494)
See Notes to FinancialStatements II-19
Notes Tc, Finrncid St:t:m:nts -
Union Electric and Srbsidiaries i
Note 1-Summary of Accounting Policies With respect to all property additions after 1974. and The Company and its utility subsidiaries are subject to pner dditions in Illinois, the reductions in taxes regulation by the Missoun Public Service Commission. applicable to the liberalized depreciation methods lilinois Commerce Commission. Iowa State commerce described above are accounted for as deferred income Commission and the Federal Energy Regulatory taxes and amortized over the estimated usefullives of Commission. The accounting policies of the companies the related properties. In addition, the Company ar2 in accordance with the rate-making practices of the normalizes the income tax effects of the above-mentioned regulatory authorities having jurisdiction and, as such, repair allowance, the debt component of the allowance conform to generally accepted accounting principles as for funds used during construction. and taxes capitalized.
applied to regulated public utilities. A description of the The Company normalizes the additional investment tax Company's significant accounting policies fellows. credit benefits resulting from the Tax Reduction Act of 1975 with respect to properties in all states. The Principles of Consolidation The consolidated financial statements include the % mPany is continuing to flow-through to income the 4%
accounts of the Company and its subsidiaries, all of which investment tax credit on Missouri and Iowa properties which are not qualified progress expenditures under the ara wholly-owned. In the process of consolidation, all Tax Reduction Act of 1975.
int:rcompany investments and accounts and all inter-company sales and profits are eliminated. Allower-e for Funds Used During Construction Property and Plant The re3eral Energy Regulatory Commission Uniform System of Accounts defines allowance for funds used The cost of additions to and betterments of units of during construction ( AFC), which is a non-cash item, as property and plant is capitalized. Cost includes labor.
the net cost for the period of construction of borrowed material, applicable taxes. pensions and certain other funds used for construction purposes and a reasonable items, plus an allowance for funds used during construc-tion. Maintenance expenditures and renewals of items not r te n ther funds when so used.
During the three years ended December 31.1980, the considered .a be units of property are charged to income Company reccrded AFC at various rates. compounded as incurreu. When units of Apreciable property are semi-annu lly. The net rates reflect the Company's policy retired. the original cost and removal cost, less salvage.
f deferring the income tax effect applicable to the are charged to accumulated depreciation.
borrowed funds portion of the AFC rate. The ave age Depreciation annual AFC rates were 9.75% 67.05% neo in 1980. 9.45%
For financial statement purposes, depreciation is pro- 17.38% net) in 1979. and 8.65% (6.55% nett in 1978.
vided over the estimated lives of the various classes of Unbilled Revenue depreciable property by applying composite rates on a straight-line basis. The'provis' ions for cepreciation in The Company records on its books tre estimated am unt f accrued. but unbilled, revenue and also the 1980,1979 and 1978 were equivalent to approximately accrued liability for the related taxes.
2.87. of the average depreciable cost.
Income Taxes For income tax purposes the Company computes Note 2-Pro Forma Earnings on Common Stock d:preciation using the most liberalized methods allowed in December 1980. the Company sold 5.500.000 shares by the Internal Revenue Code. Net depreciable property of common stock. Earnings on common stock on a pro and plant used in this computation excludes costs forma basis for the year 1980 would have been 52.02 per l (primarily repair allowance. the allowance for funds used share after giving effect to the application of the net during construction, and certain taxes) which are charged proceeds to the Company from the aforementioned sale to property and plant for financial statement purposes of common stock to retire short-term borrowings but are treated as expenses when incurred for income outstanding at the date of the sale.
tax purpo:es.
II-20
. \
t Note 3-Income Taxes Note 4-Ca; !tsi Stock Totalincome tax expense was less than the amount During the ihree years ended December 31.1980.
computed by multiplying the income-before-tax by the common stock. 55 par value, was issued as follows:
statutory Federal income tax rate. The reasons for this 5.500.000. 5.500.000 and 4.000.000 shares were issued in diffirence for the years in which shown are as follows 1980.1979 and 1978. respectively. In addition. of the (in thousands): 6.000.000 shares reserved for the Union Electric Coq m 1980 1979 1978 Dividend Reinvestment and Stock Purchase Plan.
1.522.384.1.014.971 and 808.379 shares were issued in Tax computed at statutory 1980.1979 and 1978 respectively; and of the 2.500.000 rate cn 'oook mcome- shares reserved for the Union Electric Company Tax ~
before-tax . SI13.024 580.221 595.788 Reduction Act Stock Ownership Plan. 306.024. 372.668 Incrrases (Decreases) in . and 289.086 sha. s were issued in 1980,1979 and 1978.
t x from: respectively.
Additional depreciation 1.901 100 (1.560) During the same period, preferred stock without par Allowance for equity salue, was issued and redeemed as follows: Union funds used during Electric C'mpany issued 1.500.000 shares 54.60 Series construction . (21.668) (14.570) (7.940) in 1979: Union Electric Company redeemed 80.000 lavestment tax credits . I1.940) (2.410) (2.231) shares. 52.72 Series in each of the years 1980 and 1979:
Niiscellaneous. net . 1350) (7.002) (4.398) and. Slissouri Utilities Company redeemed 260 shares.
Total. S 90.967 556.339 579.659 5.70% Series in each of the years 1980,1979 and 1978.
Preferre.1 Stock Eventual Income tax expense components (in thousands):
Redemption Prices Current Niinimum 1980 1979 1978 t Per Share)
Included .m operatmg .
ni n Electric Company expenses-Taxes currently payable: 56.40 Series 5101.50 5101.50 Federal . S 14.0tl8 5(12.406) 524.026 54.56 Series . 102.47 102.47 State. 4.841 3.691 4.445 54.50 Series 110.00 110.00t ai 54.00 Series . 105.625 105.625 Deferred taxes 53.70 Series . 104.75 104.75 tprincipally FederaD:
53.50 Series . ' 110.00 110.00 1.iberalized 12.178 58.00 Series i1969) . 99.25 93.25 depreciation . 13.307 10.988 6.742 2.913 6.792 58.00 Series of 1971. 104.50 98.50 Repair allowance .
57.44 Series . 105.00 101.00 Allowance for 52.72 Series tc) . 27.75q b) 25.25 borrowed funds used during $2.125 Series . 27.15 bl 2c.25 22.160 7.595 54.60 Seriestd) 54.604 b1 50.50 construction . 12.997 Other (principally Niissouri Power & Light Company capitalized costs) . 4.838 1.598 3.666 4.30% Series . 102.176 102.176 Provisions deferred 3.90% Series .05.00 105.00 in prior years . 13.120) (3.031) (2.944) Niissouri Utuities Company D:ferred investment tax 5.00% Series . I10.00 110.00 credits, net . 30.278 37.112 25.798 i03.50 5.00% Series of June 1950. ,
103.50 91.925 56.181 80.366 5.00% Series of Current provision included September 1950. 103.50 103.50 in other income . 1958) 158 1707) 5.70% Series tel . 103.001b) 100.00 Total . S 90.967 556.339 579.659 u, in the event of voiun ary liquidation. s t05.50.
(b> Redempoon subject to ertain restrictions regarding refunding operanons.
- ct The Campany is required to redre 80.000 shares, and has an optien to redeem an additional 80.000 nares. at 525 per share on November 15 cf each year.
- The Company is required to redeem 75.000 shares at $50 per share an August 15 of each year. commencing in 1995.
f er Missoun (Julines Company is required to redeem 260 shares at $100 per share. plus accrued dividends. on June 1 of each year.
II-21
Notes To Fin:nci:1 St:t m:nts < continued) -
Union Electric and S hsidiaries i
Note 5-Preferred Stock Subject to Mandatory Note 8-Compensating Balances and R demption Short-Term Borrowings During the five years from December 31.19d0. the Short-term borrowings of the Company and its amounts of preferred stock to be redeemed at par or subsidiaries consist of bank loans (maturities not in stat:d value are: 52.026.000 in each year 1981 through excess of . 'O days) and commercial paper (maturities 1984. and 55.776.000 in 1985. generally within 30-45 days). Information regarding such consolidated short-term borrowings is as follows Note 6-Debt Retirement Provisions (in thousands):
During the five years from December 31,1980 the 1980 1979 1978 amounts of debt maturities are: 51.010.000 in 1981:
531.903.000 in 1982: 52.203,000 in 1983: 510.703.000 in Amounts outstanding at year end-1984: and 577.704.000 in 1985. ( Amounts do not include Bank loans . 341.425 536.600 514.400 nuclear fuel lease payments since the timmg and the Commercial amounts of such payments are not currently paper. S99,460 560.300 515.200 d:t:rminable-see Note 101.
Composite interest Debt retirement provisions contained .m the mortgage tes at year end-bond indentures of the Company and its subsidiaries Bank loans. 21.0% 15.0?. 11.5 %
r: quire. subject to certain alternatives, the redemption Commercial annually of 1% of the principal amount las defmed) of paper. 19.4 % 14.0 % 10.8 %
each series of bonds. In heu of such redemptions, except g
in one instance, the Company and its subsidiaries have g be:n following the practice of utihzmg property additions at any month end as permitted by the mdentures. ~
during the year $140.885 5148.555 5101.540 Average daily short-Note 7--Retirement Plans '
term borrowings The retirement plans covering employees of the outstanding during Company and its subsidiaries are financed through the year-irrevocable pension trusts and group annuity contracts. Aggregate The policy is to fund pension costs accrued. Such plans S90,425 amount . 593.545 542.321 were amended during 1980 and 1979 to provide increased Weighted com-benefits. Costs of the retirement plans for the years 1980, pos te interest 1979 and 1978 were 511.417.000,59.490.000, and rate. 13.4*- 11.7*. 7.6%
$9.166.000, respectively, of which approximately 20% was charged to construction accounts. The aforeme.ntioned The above weighted composite interest rates were amounts include prior service costs which are beir3 calculated by dividing the applicable interest expense amortized aver twenty years.
for the year by the average daily short-term borrowings l
A comparison of estimated actuarial pre:..;nt value of shown above.
,ccumulated plan benefits and plan net assets follows At December 31,1980. the Company and its subsid-l (in millions): iaries had bank lines of credit aggregating $120.820.000 At December 31. which make available interim financing at the prime I
1980 1979 1978 rate of interest. In support of such lines of credit, the Company ha*. unwritten agreements with the majority
~
Vested . S225 5203 5169 of its 'ending banks to maintain average compensating Nonvested . 3 3 3 balances equival nt to 8% of the line of credit as
$228 5206 5172 determined from the bank records. In addition, at l December 31,1980. trie Company had commitments from Nrt assets available for banks aggregating 585.000.0001550.000.000 to expire benefits . S172 5152 5140 August 31,1961: 510.000.000 to expire September 12.
1983: 515.000.000 to expire Sept :mber 30.1981: and The weighted average assumed rue of return used in $10,000.000 to expire October 31.1981). For these d;t:rmining the act.iarial present value of accumulated commitments the Company pays annual fees which range plan benefits was W for the years 1980,1979 and 1978. from 0.25% to 0.375% on the unused portions of the commitments.
II-22
t Note 9-Construction Commitments Note 11-Supplementary Income Statement The Company and its subsidiaries are engaged in a Information construction program under which expenditures of approximately $2.5 billion are anticipated during the next 1980 1979 1978 five years, of which expenditures of $509,000,000 and
$461,000,000 are estimated to be made in 1981 and 1982, (Thousandsof Dollars) respectively. Maintenance and repairs, charged Note 10-Nuclear Fuel Lease-Capitalized directly to:
Operating expenses S80.632 571,184 568,012 On November 27,1979, the Company entered into a Otheraccounts(a). 4.80s 4,074 4,075 lease agreement which provides for the financing of the costs of up to 5100,000,000 of the Company's nuclear fuel. S85.437 575.258 572.087 Pursuant to the terms of the lease, the Company has Depreciation, depletion assigned to the lessor certain contracts for purchase of and amortization of nuclear fuel. The lessor will obtain through the issuance fixed and intangible of commercial paper backed by letters of credit from assets, charged commercial banks, or from direct loans from commercial directly to-benks, the necessary funds to purchase the fuel and make $78.819 576,300 573,477 Operatitig expenses interest payments when due. 2.208 2.054 1,741
,. Other accounts (a).
The Company is unconditionally obligated to reimburse S81.027 578,354 575,218 the lessor for all expenditures for nuclear fuel, interest and related costs. Obligations under this lease will become Taxes, other than current at such time as the nuclear fuel is engaged in payroll and income heat production at the Company's Callaway nuclear taxes, charged plant, the first unit of which is scheduled for completion directly to:
in early 1983. Operating expenses-h accordance with state regulatory commissions' Real estate and policies, the Company is capitalizing the cest, including personal property S 53.128 5 50,654 5 50,336 l interest costs, of the leased nuclear fuel and is recording License and l the related lease obligation. During the year 1960, the franchise . 54.068 49,467 48,367 Company capitalized related interest costs of 59,518,000 Other. 1.389 1.137 1.110 based on an averare interest rate of 14.7*.. Related interest 99'813 108.58~4 101'258 l costs capitalized during the year ended December 31,1979 .
Other accounts . s442 3.584 2.350 w:re immaterial.
S114.027 5104,842 5102.163
=
(a) A substantial portion of amounts charged to other accounts is allocated to operating expenses through clearing accounts.
(b) The an.ounts of pmoll taxes for the years 1980, 1979 and 1978 were $7.260,000,57,733.000 and 55,712.000, respectively.
(c) The amounts of royalties, rents, advertising, and I research and development costs were not material.
NOTE 12 - EVENT (t"MUDITED) SUBSEQUENT TO THE DATE OF THE REPORT OF THE INDEPENDENT ACCOUNTANTS: On April 2, 1981 the Company revised its construction program. Pursuant to such revision, expenditures of approximately $2.0 billion are enticipated during the five year period 1981-1985, of which expenditures of $508 and $447 I million are estimated to be made in 1981 and 1982, respectively.
For a discussion c! the revision in the construction program see
" Construction Program" in Part I hereof.
II-23
a llN10N ELECTRIC COMPANY AND SUS $1DI Af,lES SEHEDUI.E V - PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 3s,1980 Col. A Col. 8 Col. C Col. 9 Col. E Col. F Salance at Salence beginning Additions at end Classification of period at cost Retirements Other changes of period Utllity properties (Note)
Electric Tangible Plant In service Steam production $1,172,914.324 $ 22,594,572 $ 3,642,313 $(868,794) $1,190.997,789 leydraulle production 59,675,258 553,553 16.064 60,212,747 Pumped storage proJuction 45,854,445 2e7 45,854,742 Internal coeustion production 42,299,l56 9,905 5,974 42,303,087 Transmission 404,503,969 15,742,227 869,623 249,601 419,626,174 Distribution 898,271,985 58,348,978 9,382,516 3,333 947,241,773 Gener t 89.154,940 5,567,057 1,57tl 809 276,082 93,419,270.
H construction work in progress i 782,740,7eS 314,875,965 (2) l.097.616,671 7 Nuclear fuel settlement of uranisme Iltigation 40,212,67h 58,872,709 99,085,385 to (62,624,ll2) (62,624 l12)
P Plant held for future use 1 982 (605 787) 1 376 666 Total T TD ,,657,500
,%T TIT.)E,,lD IS,495,299 ~ U W,fe?)
- 80) 7 3 B ,,ll3,T91 4
8ntangtble 161 386 Total 861 316 T,51T,771,,277 N T,33r.357 77,T 97,799 7 15,827) T 3r,271,,508 Steam heating Tangible Plant in stevice Production 783,339 487 648 784,467 Distribution 4,814,829 (71,234) 4,743,595 General 178.408 178.401 Cnnstruction work in progress 30 1,567 1,$22 Total 5,776,599 (69,185) 641 5,7dl.060 Gas l Tangible Plant in service Production 2,683.158 54,857 2 " 8,301 Transmission 6,873,405 94,689 42,065 6,926,029 Distribution 51,189,043 2,833,881 362,539 29,108 53.688,723 Ceneral 2,971,373 432,260 149,505 19,543 3,273,671 Construction work In p'rogress 52,827 104,864 2 Total 15 3 6 63.699,50b 3,464.924 60s,966 88,653 66, ,417 IntanglSte 16 183 16 II)
Total 63,71M3 3,464,924 605,966 45,653 66,673,530 (Continued on following page)
Unl01; ELECTRIC COMPMY AND SUS $1DI ARIES SCHEDULE V - PROPER,1, PLANT AND EQUIPMENT (Continued)
FOR THE YEAR ENDED DECEMBER 31, 19LO Col. A Col. B Col. C Col. B Col. E Col. F Balance at Balance beginning Additions at end Classification of period at cost Retirements Other changes of period (Note)
Utility properties (Continued)
- Water Tangible Plant in service Source of supply $ 191,677 $ 708 $ $ $ 192,385 Pumping 200,037 24,862 8eR 3 224,416 Water treatment I,988.141 21,504 f,009,645 Distribution 4,628,962 36 ,974 9,263 4,925,673 General 139,353 37,843 363 176,833 Construction work in progress 73,912 (42,605) 31.307 Plant held for future use 4,579 4.579 Total 7,226,661 345,256 10,109 7,564,5%
Comenon
[ Tangible
- I Plant in service y stears production Construction work la progress 16.459,473 6,509 50,562 11,545 12,017 16,498,018 18.054 Total 16, % 5,952 62,807 12.017 16,516,072 Total utility properties 3,630.956.435 417,141,494 W Ji (290,533) 4.031,651,005 Non-utility properties Coal rlgbts 805,681 805,681 Kiscellaneous real estate and equipment 4,328,4tl 660,872 290,533 5,279,816 solid waste utilization system 12,239,590 (278,996) 11,960,594 Total non-utility properties 17,373,6E2 384,876 290,533 15.0 % ,095 Prem,um on securities of subsidlarles 1,397,520 1,397.520
~
Total property, plant and equipment SRimlFRC Mll SjM HMHSEl -
14.05l.124.6l9 Note: Represents transfers between classifications.
4 UN1000 ELECTRIC COMPANY AS SUBSIDIARIES SDfiDULE V - PROPERTY. PLANT AIG EQUlPMElff FOR THE YEAR ENDED DECEM8ER 31.1979 Col. A Col. O Col. C Col. O Col. E Col. F .
Salance at Balance beginning Additions at end Classification of period at cost Retirements Other changes of period (Note)
Utility propertles Electric
, T angible Plant in service 5tema prodtetton $ 1.169,434.255 $ 8.437,384 $ 4.95e.315 8
$ $1.812,914.324 4 Hydraulic production 59.613.122 114.551 53,015 59,675.258 Pumped storage production 45.856,MI 3.306 5.502 45,854.445 Internal coneustion production 42.286,712 32,721 20.271 8e2.299,156 T ransmi ssion 395.605.040 9,362.8e94 461.649 (1.916) 404,503,969 Distribution 843.343,529 64.551.982 7,630,392 6,866 . 898.271.985 General 83.344.806 8,671,221 2.691.990 (169,097) 8 9,154,9'+0 Construction work in progress le82.269.675 300.471,033 782,740,708 m Nuclear fuel 35.214.666 4.998,010 40.212.676 4
H Plant held for future use 1,848 606 13 (894 1,982.500 h
m Total I ntangible 3.156,5 5 191,824 396,776,59E 15.887.I40 30,508
'{IE3DU) 3.537.609.96T 161 LI6 Total 3.157.006.U5 396.776.596 15,847.6J (164.147) 3,537.7T1.271 Steam heating Tangible Plant in service Production 78),339 783,339 Distribution 4.917.559 (26.406) 76.324 4,814,829 j General 178.321 80 178.401 Construction work in progress 30 30 Total 5.879.249 (26.326) 76.324 5.716.599 Gas Tangible Plant in service .
Production 2,612.295 1,601 738 2.683,158 Transmissica 6.866,033 7.372 6.873.405 Distribution 8e9.8e31,144 2.18*5.323 393.824 51.189,043 General 2.693.619 423.226 145.472 2.971.373 Construction work in progress 105,686 (52,819) 52,8J2 Total 61.714.737 2.524,703 539,634 63.699,806 Intengible 16 lij 16,113 Total 61.730,s50 2.524,703 539.634 63,715.919 (Continued on following page) e
a UNION ELECTRIC COMPANY AND $US$1DI AAIES SCHELULE V - PROPERTY, PLANT AND EQUlPMENT (Continued)
FOR THE YEAR ENDED DEEEMBER 31, 1979 Col. A Col. B Col. C Col. D - Col. E Col. F Balance at Balance beginning Additions at end Classification of period at cost Retirements other changes of period (Note)
Utility properties (Continued)
Cater Tangible Plant in service so,rce of supply $ 191,677 $ $ $ $ 191,677 Pu f i ng 160,543 43,639 4,145 200,037 a We.er treatment I,828,469 159,672 1,988,14l 4 DI
- 4butIon 4,374,827 257,099 2,964 4,628, % 2 cenere' 122,952 21.770 5,369 139,353 Constructs n work in progress 83,797 (9,885) 73,912 4,579 4 Plant lield ,'or future use To.at 6,766,8EE 472,295 12,47s 7.22f,$m M
7 N
Common Tangible N Plant In service steam production 16,430,949 39.113 10,589 16,459,473 .
Construction work in progress 2,746 6,509
, 1763 16.465,WI Total 16,433,I@95 42,875 10.559 1
! Total utility properties 3,247,887,114 399,790,144 16,486,673 N) "3,630,956,438 Non-utility properties Coal rights 805,581 100 805,681 Hiscellaneous real estate and equipment 4,294,968 155,347 255,918 134,014 4,328,411 Solid waste utillration system 12,206,348 33,242 12,239,590 Total non-utility properties 17.306,897 188,689 255,938 134,014 17,313,682 Premium on securttles of subsidiaries I,397,520 1,397,520 Total property, plant and equipment $3,266,521,531 })99J@] 6 M) M Note: Represents transfers between classifications.
1
--m _ - __
UNION ELECTRIC COMPANY Ale SUBSIDI ARIES SCHEDULE V - PROPERTY, PLANT A89 EQUIPMENT FOR THE YEAP E8 SED DECEMBER 31, 1978 Col. A Col. 8 Col. C Col, D Col. E Col. F Balancs at Balance boo'.nni ng Add i t t or.. at and Classi ficat ion _cf period at cost Retirements Other changes of perlM i (Note)
Utility prcperties Electric
> Tangible Plant la service Steam productlon $1,165,399,895 $ 4,761,328 $ 521,262 $ (208,699) $ 1.169,438,255 Hydraulle production 59,402,08 7 347,572 136,647 110 59,613,722
?,suped storage productlon 45,853,731 2,935 25 45,856,641 3
Internal combustion production 22,248,734 20.062,505 (24,527) 42,286,782 Transmission 390,184,101 5,885,s.06 399,228 4,754 395,605,040 848,343,529 alstribution 791,823,628 56,635,689 7,082.919 (32,869)
General 18,8e47,580 7,202,542 I,839,821 (465,495) 83,344,806 Construction work la progress 260,667,804 228,601.869 2 482,269,675
[
e Nuclear fuel 32,389,9e4 2,895,122 35,214,666 N Plant held for future use 180854 1 .752 I,848 M N }76,,$35 9,979,895 (726,724) 3,8$6Bif,606 Eif Total 319.34 3 Intangible 19t u824 19 3,157,00(1824,yg Total 2,848.370,38f 319,342,713 9,979,895 WT.)
Steam heating Tangible
< Plant la service Production 781,887 I,453 (I) 783,339 platributton 4,832,105 85,656 206 fe,917,559 4
General 185,670 7.349 178,328 1
Construction work In preyess 22.119 (22,089) 30 Total 5.821,785 65,0f0 7,555 (1) 5,879,2T9 Gas Tangible 4 Plant in service Production 2,682,295 2,612,295 Trans=Ission 6,837,635 8*0,088 II,690 6,866,033 Distribution 47,644,382 2,271,577 478,815 49.437,144 General 2,516,272 278,089 106.574 5,832 2,693,619 Construction work in progress 103 845 1,802 (I) 105 u646 Total 59,7M,T*T9 2,591,55E 597,079 5,83I 61,714,13)
Intangible 16,113 16.11]
Total 59.730,542
- ' 2,591 5E 597,079 5,III 61,730,850 (Continued on following page) 4 i
e G
+
G
.y UNION ELECTRIC COMPANY AND SUB5IDI ARIES SCHEDULE V - PROPERTY, PLANT AND EQUlfMNI (Continued)
FOR THE YEAR ENDED OfrEreER 31, 1978 l Col. A Col. O rnt. C Col. O Col. E Col. F Balance at Balance beginning AddltIons at end Classification of period at cost pettrenants Other changes of period (Note)
Utility properties (Continued) water Tangible Plant in service source of supply $ 188,223 $ 3,454 $ $ $ 191,677 Pumping 160,543 160,543 Water treatment 424,516 1,403,953 1,828,469 Distribution 4.158,688 226,804 10,664 (I) 4,374,827 General 80,6v, 43,210 3,644 2,691 122,952 Construction work in progress 717,137 (633,341) 1 83,797 Plant held for future use 4,579 4.5Q 2,691 6,766,B%
Total 5,734,351 1.044,050 14.305 H
Connon N Tangible
- Plant in service Steam production 16,384,956 61,315 15,322 16,430,949 Corstruction work in progress 12 00 (9,754) 2,Z46 Total 16,397,,5 51,561 15.321 16.433,695 Total utility propertle. 2.936,054,546 323,094,930 10,614,159 WM) 3,247,517.114 1 CDn-utlilty properties d
Coal rights 805.681 (100) 805,581 Miscellaneous real estate and equipment 3,828,587 1,057 467,438 4,294,968 Solid waste utlltration system 11,758,509 447,839 12,206,348 Total noreutility properties 16,392,777 447,739 I,057 467,435 17,3063M Premlun on securities of subsidiaries 1,397,520 1,397,520 Total property, plant and equipment M IMM M 6 $3.266.521.5H Note: Represents transfers between classifications.
-n_-.
UNION ELECTRIC COMPANY ANO sutsl0BARIES SCHEDULE VI - ACCUMULATED DEPRECit. TION, DEPLETION, AND AMORTIZATION OF PROPERTY, PLANT Ale EQUIPMElfT FOR THE YEAR E';DED DECEM8ER 31,1980 Col. A Col. B Col. C Col. O Col, E Col. F lalance Additions 8alance et beginning charged to costs at end Classification of period and expenses Retirements Other changes of period (Note A) (Note B)
Utllity properiles Electric Plant la service steam production $103,987,970 $29,853,004 $ 3,832,606 $(837,867) $329,170,501 Hydraulle production 27,697,348 740,368 74,709 683 28,363,690 t Pumped storage production 9,669,624 599,760 10,269,384 Internal cond>ustion production 8,892,92: 1,6 9 ,784 5,974 10,545,732 Transmission 108,l43,3 % 8.128,237 837,092 237,292 185,671,833 Olstribution 251,8 % ,751 33,792,824 12,305.902 14,390 273,398,063 ceneral 32,838,475 4,483,687 I,369,710 546,302 36,498,754 Plant held for future use 2,820 610 3,430 4
Total 743,129,306 79,257,274 18,425,993 (39,200) 803,921.387 steam heating 2,429,877 167,309 9,458 2,587,728 w Cas 18,297,810 1,875,348 677,643 20,716 19,516.231 O water 1.105,048 123,481 9,625 1,218,904 Comenon 12,902.472 409,377 12.087 21 13.299,853 Total utility properties 777,864,583 81,832,789 19,l34,736 (18,463) 840,544,103 Non-utility properties Miscellaneous real estate and equlpenent 8,282,262 52,762 53,858 433 8,288,599 Intangible I (I) -
Total non-utility propertlas 8,282,263 52,761 53,858 433 8,281,599 Total D50IaiCTR gg.23Kg M g) 6 Notes: (A) Includes $3,066.435 In addition to the provision for depreciation as shown on the statement of Income under Operating Expenses, such additional enount principally reflects depreciation of transportation and related teork equipment charged to clearing accounts, and amounts collected for relocation of facilltles; offset by the amortization of loss on property abandonment (aggregating $1,7 M ,5181 (B) Represents t r ansfers between classiflutions.
__ - _ _ _ _ _ _ . _ _ ____Q__ _
UNION ELICTRIC COMPANY APS SUB510l ARIE$
SCHEDULE VI - ACCHMULATED DEPRECI ATION, DEPLETION,. AND AMORillATION OF PROPERTY, PLANr A8B EQUlPMENT FOR THE YEAR ENDED DECEMBER 31, 1979 Col. A Cf 5 Col. C Col. D Col. E Col. F Balance Additions Balance at beginning charged to costs at end Classification of period and expensas Retirements Other changes , of period (Note A) (Note 8)
Etllity properties Electric Plant in service
$ team production $278,471,902 $29,647,338 $ 4,132,976 $ 1,706 $303,987,970 Hydraulle production 26,987,930 736,351 26,933 27,697,348 Pesaped storage production 9,074,561 599,858 4,795 9,669,624 Inters,al cc=6ustion production 7,267,097 1,660,471 20,277 (14,369) 8,892,922 T raa*mi s sion 100,225,652 8,335,356 438,988 14,369 108,143,3 %
Distribution 231,018,115 31,064,/87 10,185,783 (438 ) 251,8 % ,751 General 31,044,370 4,235,908 2,393,l.96 (48,300) 32,838,8e75 Plant held for future use 2,210 610 2,820 Total 684,091,837 76,280,672 17,136,171 (47,032) 743,829,306 m
7 t.a Steam heating Gas 2,344,762 17,001,198 156.144 I,860,265 71,029 579,102 15.456 2,f 629,877 88,297,810 P* Water I,003,345 114,562 12.859 1.105.0'e8 Comon 12.499,354 407,851 10.rdij 5,856 12,902,472 Total utility properties 716,98 0,489 78,819,494 17,869,750 (25,720) 777,864,f l3 Cm-utility properties Miscellaneous real estate and .wlpment f,8e87,356 Su,823 255,917 8,282 262 Intangible 20,000 19.999 j Total non-utility properties 8,507,356 50,823 275,916 8,282,263 Total H25A4]A45 T7ENGT7 MR RM) M Notes: (A) includes $2,570,436 In addition to the prnvision for depreciation as shown on the Statement of income under Operating Expenses, such additional amount principall.-
reflects depreciation of transportation a.ed related work ec'alpment charged to cleas ing accounts, and amounts collected for relocation of facilltles; of fset b, the amortization of loss on property abandonment (aggregating $s,778,518). ,
(8) Represents transfers between classifications.
UNION ELEC1Ric COMPANY A4D Sial 5lDI ARIES SCHEDULE VI - ACCUMULATED DEPRECI Afl0N, OEPLETl0N, AJS AMORTIZATION OF PROPERTV, PLANT AND EQ4t PMENT FOR THE YEAR ENDED DECDSER 31, 1978 Col. A Col. 8 Col. C Col. O Col. E Col. F L
galance Additions B elar.co at beginning charged to costs at end Classification Reti reeent s D of period and expenses Other changes _ of period (Note A) (Note B) utility properties Electric Plant in service steam production $249,712,476 $29,553,637 $ 794.684 $ 473 $279,478,902 Hydraulle production 26,320,875 733,145 66.107 17 26,J87,930 Pumped storage production 8,474,847 599,817 25 (78) 9,074,561 a I s ernal coneustion production 6,128,963 1,138,137 7.267,097 j Trans=Ission 92,706,866 7,980,469 461,683 100,225,652 Distribution 211,456,5N 29,143.596 9.552,012 (30,059) 231.018,Il5 ceneral 28,259,506 3,709,916 974,413 49,359 31,044,370 Plant held for future use 1.600 610 2,250 Total f.23,n62,120 72,859,327 11,849,322 19,712 fi84,091,8 37 H
H Steam heating 2,228.053 126,250 9,544 2,344,762 l,, Cas 15,948,246 1,758,916 698,902 (69) 17,001,191 ro water 930,058 83,362 12,199 2,124 1,003,345 Conanon 12.108.157 406.633 15.747 _ Li l _12.8,99.354 Total utility properties 654,269,634 75,234,488 12,585,711 22,078 716,940,489 Non-utIllty propertles Miscellaneous real estate and equipment 8.226.675 260,681 8,487,356 Intaglble 20.000 20,000 Total non-utility properties 8,246,675 260,681 8,507,356 Totai F673W.16 tsfts a ts im%1HI EE TH5T M Notes: (A) includes $2,017,779 in addition to the prowlslon for d'epreciation as shown on the Statement of incamme under Operating Expenses, such additional amount principally reflects depreclation of transportation and related work equipment charged to clearing accounts, and amounts collected for relocation of facilities; of fset by the amortiration of loss on prorsrty abandonment (aggregating $1,778,588). ,
(8) Represents transfers between classifications.
e r
9 4
UNION ELECTRIC COMPANY AND SueslDI ARIES SQiEDULE Vl:1 - VALUATION AND QUAllFYING ACCOUNTS FOR THE YETAS ENDED DECtHBER 31, 1980, 1979 AND 1978 Col. A Col. O Col. C Col. D Cal. E Addlt1ons (I) (2) galance at Balance at Charged to beginning costs and Charged to end of Description of period expenses other accounts Dedcctions g erlod (Note)
Year ended Decad er 31, 1980 Reserves deducted in the balance sheet frcun essets tr which they apply:
l MM Allowanc* for doubtful accouhes $3.605.1S0 $1.408.8 72 $1.000.211 l
H H
e W
W Year ended Decad er 31, 1979 Reserves deducted in the belance sheet frcun essets to which they apply-l
$3.016.990 $$$3.Z))
Allowance for doubtful acc.ounts M $2.968.%$
Year ended Deceaeer 31, 1978 Reserves deducted in the belance sheet fran assets to which they apply:
Allcmeance for doubtful accounts 132L212 32.,ig$,]96 $2.498.878 M
~
Note: Unce lle tible accounts charged of f, less recoverles.
PART III t
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information concerning directors required by this item is reported on pages 2 through 5 in the Cornpany's 1981 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
Iaformation concerning executive officers required by this item is rr. port o in Part I of this Form 10-K.
1 TEM 10. MANAGEMENT REMUNERATION AND TRANSACTIONS.
Information required by this item is reported on pages 5 and 6 in the Company's 1981 definitive proxy statement filed pursuant tt Regulation 14A cad is incorporated herein by reference.
l III-1
PART IV i
ITEM 11. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
Financial Statements and related schedules. See Index to Financial Statements, Page II-10.
Exhibits See Exhibits, page V-3.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the last quarter of 1980.
l l
l i
IV-1
_ _ . _ __ ___. . - . _ . . _ - ~ . - - , . _ . _ . - - - _ _ _ - _ _ . _ . . _
~
. SIGNATJRES 4
t Pursuant to the requirements of Section 13 or 15(d) of the Securi-ties Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
UNION ELECTRIC COMPANY (Registrant)
Date April 9, 1981 By -
Charles J. Dougherty Chairman of the Boarl -
of Directors and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant at.d in the capacities and on the dates indicate .
I /
By Charles J. Dougherty, Chairman of the Board of Directors, Chief Executive Officer and Director (Ptincipal Executive Officer)
. . , /-
By ,// /,o y j: ,
/,,/_ /
., ,::-, J .ec -u V' M. T. Welshans, M e President (P 1 inancial Officer)
By l jr J. T. Triel, Vice President and Controller .
Wrincipal Accounting Officer)
- O * " ' - ; ~~
Date April 9. 1981 By W. . Corr lius, Director By / M' Earl K. Dille, Direi. tor By . ' -
Edwin S. Jones, Director By , ., ' -
Richard A. Meyer, Director . ,
By u 1. ' /. -
Stewart W. Smith, Jr., Director By 7 ' N"' k ' "-~1 /
Director j HowardL. Young,j *
- )
V-1
. i CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospec-tus constituting part of the Registration Statement en Form S-16 (No. 2-63936) of Union Electric Company and in the Prospectus constituting part of the Registration Statement on Form S-8 (No. 2-64291) of Union Electric Company of our report dated February 14, 1981 appearing on page 11-9 of this Form 10-K.
Price Waterhouse & Co.
One Memorial Drive St. Louis , Missouri March 27, 1981 l
1 V-2 I
EXHIBITS Exhibits Filed Herewith '
Exhibit No. Description 10.8 - Revolving credit loan agreement dated as of March 23, 1981.
10.17 - Coal Supply Agreement, dated as of October 1, 1980, between the Company and Atlantic Richfield Company.
10.18 - Coal Supply Agreement, dated February 6, 1981, between the Company and Old Ben Coal Company.
10.20 - Fuel Lease dated as of February 24, 1981 between the Company, as lessee, and Gateway Fuel Company, as lessor, covering nuclear fuel.
12 - Statement re computation of ratios of earnings to fixed changes.
22 - Subsidiaries of the Company.
23 - Consent of Counsel.
Exhibits Incorporated By Reference The following exhibits heretofore have been filed with the Securities and Exchange Commission pursuant to requirements of the Acts administered by the Commission. Such exhibits are identified by the references following the listing of each such exhibit, and they are hereby incorporated herein by reference under Rule 24 of the Commission's Rules of Practice.
3.1 - Articles of Incorporation of the Company and all amendments thereto filed with the Secretary of State of the State of Missouri on or prior to November 30, 1963. (Registration No. 2-24089, Exhibit 3-A-1.)
V-3
. 1 Exhibits Incorporated By Reference (Cont'd.)
Exhibit No. Description i l
3.2 - Certificates of Amendment to Articles of Incorporation ;
I Dated as of File Reference Exhibit No.
1 November 9, 1967 Form 8-K, November 1967 2 j January 10, 1969 Form 8-K, January 1969 )
November 19, 1969 Form 8-K, November 1969 2 i August 10, 1970 2-38212 2-G l April 22, 1971 Form 8-K, April 1971 3 December 14, 1972 Form 8-K, December 1972 3 April 1, 1974 ) 2-52218 2.10 l October 22, 1974) l November 21, 1974 2-52218 2.11 :
October 16, 1975 2-54869 2.3 l October 6, 1977 Form 10-K, 1977 6.2 '
July 10, 1978 2-62348 2.3 April 11, 1979 2-64291 2.3-A November 27, 1979 2-65874 2.2A June 2, 1980 ) )
2-69821 3.3 June 18, 1980)
November 19, 1980 2-69821 3.4
- l 3.3 - By-Laws of the Company as amended to April 22, 1980. l (March 31, 1980 Form 10-Q, Exhibit 5.) l l 4.1 - Order of the Securitie: and Er. change Commission dated October 16, 1945 in File No. 70-1154 permitting the issue of Preferred Stock, $3.70 Series. (Registration No.
2-27474, Exhibit 3-E.)
I 4.2. - Order of the Securities and Exchange Commission dated
( April 30, 1946 in File No. 70-1259 permitting the issue of Preferred Stock, $3.50 Series. (Registration No. 2-27474, Exhibit 3-F.)
4.3 - Order of the Securities and Exchange Commission dated October 20, 1959 in File No. 70-2227 permitting the issue of Preferred Stock, $4.00 Series. (Registration No.
2-27474, Exhibit 3-G.)
4.4 - Indenture of Mortgage and Deed of Trust of the Company dated June 15, 1937, as amended May 1, 1941, and Second l Supplemental Indenture dated May 1, 1941. (Registration No. 2-4940, Exhibit B-1.)
l V4 i
- - - . , _ . - . - _ m - ~ , _ , - - - ~ . . . - _ _ , _ _ . _ - , _ _ . , ___ __ _
Exhibits Incorporated By Refercnce (Cont'd.)
Exhibit No. Description 1 4.5 - Supplemental Indentures to dortgage Dated as of File Reference Exhibit No.
December 1, 1950 Form 8-A, File No. 1-2967 I-1 1-C May 1, 1952 Form 8-A, File No. 2967 J-1 1-D July 1, 1956 Form 8-K, July 1956 2 March 1, 1958 Form 8-K, March 1958 2 September 1, 1960 Form 8-K, September 1960 3 July 1, 1961 Form 8-K, August 1961 3 November 1, 1963 Forn 8-K, November 1963 3 April 1, 1965 Form 8-K, April 1965 3 May-1, 1966 2-56062 2.33 March 1, 1967 2-58274 2.9 March 15,1968 Form 8-K, April 1968 2 May 1, 1969 Form 8-K, May 1969 2 October 1, 1969 Form 8-K, October 1969 2 April 1, 1970 Form 8-K, April 1970 2 January 1, 1971 Form 8-K, January 1971 2 April 1, 1971 Form 8-K, April 1971 6 7eptember 15, 1971 Form 8-K, October 1971 3 February 1, 1974 Form 8-K, February 1974 3 March 1, 1975 Form 8-K, March 1975 4 August 16, 1976 Form 8-K, September 1976 4 October 15, 1977 2-60235 2.5 December 1, 1977 Form 10-K, 1977 6.5 August 1, 1978 2-62348 2.9 November 1, 1979 Form 10-K, 1979 6.1 July 7, 1980 2-69821 4.6-August 1, 1980 2-69821 4.7 February 1, 1981 2-70655 4.5 4.6 - Agreement of Sale dated as of March 1, 1974 between the State Environmental Improvement Authority of the State of Missouri and the Company, together with Trust Indenture dated as of March 1,1974 between the Authority and The Boatmen's National Bank of St. Louis, as trustee. (April 1974 Form 8-K of the Company, Exhibits 1 and 2.)
4.7 - Reaffirmation Agreement dated as of April 9, 1975 between the State Environmental Improvement Authority of the State of Missouri and the Company, together with First Supplemen-tal Trust Indenture dated as of June 1, 1975 between the Authority and The Boatmen's National Bank of St. Louis, as trustee. (June 1975 Form 8-K of the Company, Exhibits 3 and 4.)
4.8 - Agreement dated as of November 1, 1977 between the State Environmental Improvement Authority of the State of Mis-souri and the Company, together with Trust Indenture dated as of November 1, 1977 between the Authority and the Chase Manhattan Bank, N. A. , as trustee and Mercantile Trust V-5
Exhibits Incorporated By Reference (Cont'd.)
Exhibit No. Description i Company National Association, as co-trustee. (Registration No. 2-60235, Exhibit 2.10.)
4.9 - Agreement of Sale dated as of August 1, 1980 between the State Environmental Improvement Authority of the State of Missouri and the Company, together with Trust Indenture dated as of August 1, 1980 between the Authority and The l
Poatmen's National Bank of St. Louis, as trustee.
(Registration No. 2-69821, Exhibit 4.11.)
l 10.1 - Amended Intercompany Agreement dated July 10, 1953 between l Electric Energy, Inc., Central Illinois Public Service Com-pany, Illinois Power Company, Kentucky Utilities Company, Middle South Utilities, Inc., the Company, and St. Louis Union Trust Company, as Trustes under Mortgage and Deed of l Trust of Electric Energy, Inc. dated June 1, 1951, as amended. (Registration No. 2-58274, Exhibit 5.1.)
l 10.2 - Agreement dated May 1, 1957 between hiddle South Utilities, Inc., Kentucky Utilities Company, Electric Energy, Inc.,
Central Illinois Public Service Company, Illinois Power Company, the Company, and St. Louis Union Trust Company, as Trustee under Mortgage and Deed of Trust of Electric Energy, Inc. dated June 1, 1951, as amended. (Registration No. 2-38212, Exhibit 5-B.)
l l 10.3 - Amendment dated July 23, 1970, to the Amended Intercompany Agreement dated July 10, 1953, between Electric Energy, Inc., Central Illinois Public Service Company, Illinois Power Company, Kentucky Utilities Company, the Company, and St. Louis Union Trust Company, as Trustee under Mortgage and Deed of Trust of Electric Energy, Inc. dated June 1, 1951, as amended. (Registration No. 2-38212, Exhibit 5-D.)
10.4 - Amendment dated June 1, 1977 to the Amended Intercompany Agreement dated July 10, 1953, between Electric Energy, j
Inc., Central Illinois Public Service Company, Illinois l
Power Company, Kentucky Utilities Company, the Company, and l
St. Louis Union Trust Company, as Trustee under Mortgage
' and Deed of Trust of Electric Energy, Inc. dated June 1, 1951, as amended. (Registration No. 2-60235, Exhibit 5.4.)
10.5 - Bank loan agreement dated December 20, 1972. (Registration No. 2-49829, Exhibit 7.)
10.6 - Amendment dated as of August 22, 1978 to the bank loan agreement dated December 20, 1972. (Registration No. 2-62348, Exhibit 5.5A.)
10.7 - Second Amendment dated as of January 30, 1980 to the bank loan agreement dated December 20, 1972. (Registration No. 2-69821, Exhibit 10.7.)
V-6
.. -- -...- -., - - - , - .- . - , - - ~ - -.
Exhibits Incorporated By Reference (Cont'd.)
Exhibit No. Description i 10.9 - Coal Contract, dated as of June 18, 1973, between the Com-pany and Consolidation Coal Company. (Registration No. 2-52833, Exhibit 5.6.)
10.10 - Coal Contract, dated as of December 20, 1972, between the Company and Freeman Coal Mining Corporation. (Registration No. 2-52833, Exhibit 5.7.)
10.11 - Coal Contract, dated as of September 15, 1968, between the Company and Ayrshire Collieries Corporation and Republic Coal & Coke Co. (succeeded in interest by American Metal Climax Corporation), as supplemented, and Coal Contract, dated as of July 1, 1970, between the Company and American Metal Climax Corporation, as supplemented. (Registration No. 2-52833, Exhibit 5.8.)
10.12 - Third Supplemental Amendment dated October 26, 1978 and Fourth Supplemental Amendment dated June 10, 1980 to the Coal Contract dated as of September 15, 1968 between the Company and Ayrshire Collieries Corporation and Republic Coal & Coke Co. (succeeded in interest by American Metal Climax Corporation), as previously supplemented.
(Registration No. 2-69821, Exhibit 10.11.)
10.13 - Second Supplamental Acendment dated October 26, 1978 and Thi d Supplemental Amendment dated June 10, 1980 to the Coal Contract dated as of July 1, 1970 between the Company and American Metal Climax Corporation, as previously supplemented. (Registration No. 2-69821, Exhibit 10.12.)
10.14 - Coal Contract, dated as of December 30, 1966, between the Company and Consolidation Coal Company. (Registration No. 2-52833, Exhibit 5.9.)
10.15 - Coal Contract, dated as of June 1, 1966, between the Com-pany and Old Ben Coal Corporation. (Registration No. 2-52833, Exhibit 5.10.)
10.16 - Coal Contract, dated as of October 5,1962, between the Company and Old Ben Coal Corporation. (Registration No. 2-52833, Exhibit 5.11.)
10.19 - Uranium Purchase Contract between Western Nuclear, Inc. and the Company dated as of January 15, 1979. (1978 Form 10-K, Exhibit 9.)
Note: Reports of the Company on Forms 8-K,10-Q and 10-K are on file with the SEC under file number 1-2967.
V-7
0& E%
s SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) 0F THE SECURITIES EXCRANGE ACT OF 1934 For Quarter Ended March 31, 1981. Commission file number 1-2967.
UNION ELECTRIC COMPANY (Exact name of registrant as specified in its charter)
Missouri 43-0559760 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
1901 Gratiot Street, St. Louis, Missouri 63103 (Address of principal exccutive offices and Zip Code)
Registrant's telephone number, ineJuding area code: (314) 621-3222 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) '
l has been subject to such filing rsquirements for the past 90 days.
Yes X . No .
Shares outstanding of each of registrant's classes of common stock as of April 30, 1981:
Common Stock, $5 par value - 66,587,586 (excl. 42,990 treasury shares)
. . PIga 1 UNION ELECTRI C COMPANY AND S'JBSIDI ARI ES I ND EX Page No.
Part i Financial Information (Unaudited)
Consolidated Balance Sheet --
March 31,1981 and December 31, 1980 2 Consolidated Statement of income --
Three Months Ended March 31, 1981 and 1980 3 Consolidated Statement of Changes in Financial Position --
Three Months Ended March 31, 1981 a,d 1980 4 Notes to Financial Statements 5 Management's Discussion and Analysis of the Results of Operations 6&7 Part 11 Other Information -
l l
1 l
t l'
INIl0N ELECTRIC CEMPANY AIS SUB$lDI ARIES 6
CONS 0t.' DATED BALANCE SHEET (UIIAUDliED)
(thousands of Dollars)
CAPITAL AND LI ABILITIES ASSETS March 31 Decad er 31, March 31 Decaneer 31, 1980 1989 1981 1980 .
Capitalization:
Property and plant Common stock, $5 per value.
Original cost of plant la service authorized 100,000,000 shares; Electric $2,834,772 $7,8 3 3,585 103,979 outstanding 66,548,726 end Other 103 2$_3 2,935,753 MW 66,125,317 shares, et respective dates (excluding 42,990 shares et per value in treasury) $ 332,709 $ 330,627 Other peld-in capital 486,477 414,020 Less accummalated deprocletion 864,946 848,826 285,649 298,902 Retained earnings Preferred stock not seject to man & tory redemption 281,355 21,355 2,07),565 2,055,011 Preferred stock subject to Constructlen esork In progress: mandatory redeeptlen 112.040 142,040 Cellowey nuclear plant I,083,639 I,008,909 34 22 103,955 99,085 Long-term debt I 606 E2 lluclear fuel Total capitellantion ,o ,002 . ,
settlement of urenlun litigetton (65,885) (62,624)
Other 100,274 88,916 Total property and plant, not 3,295,755 3,202,295 180,228 166,l67 l Accumulated deferred temos on income I
115,002 113,474 Accumulated deferred Investment ten. credits investments 4,302 4,263 Current liabilities: 99,867 98,224 Accounts and veges payable 90,910 141,895 Short-term debt l
Current assets and deferred charges: Texas eccrued 41,940 44,765 Cash and speclet deposits 52,015 53,816 75,095 83,133 lat* rest and dividends accrued or Accounts receivable-trade declared 44,199 40,204 Unbilled revenus 28,463 42,942 30,340 31,20$
Other Heterials and supplles et everage cost - Total current Ilebilities 307,256 356,290 Fuel 119,572 109,908 Construction and maintenance 36,218 35,486 Other 26,035 20.258
.otel current essets acJ deferred charges 337,398 345,543 kMtaE II.TIDiB5 13.M2.104 iT.TITJiB5
=
(D N
.Eg3 3 UNION ELECTRI C COMPANY AND SUBSIDI ARI ES
_ CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Thousands of Dollars)
Three Months Ended March 31, 1981 1980 Operating revenues (*):
Electric $206,034 $216,393 Gas 29,344 27,317 Steam 4,611 5,738 Water 461 444 Total operating revenues 240,450 249,892 Operating expenses:
Operations Fuel and purchased power 84,162 78,615 Other 55,709 51,850 Maintenance 21,475 20,908 Depreciation 20,191 19,448 I neome Taxes 2,530 13,305 Other Taxes (*) 28,185 28,008 Total operating expenses 212,252 212,134 Operating income 28,198 37,758 Other income:
Allowance for equity funds used during constr ation 14,907 10,457 Miscellaneous, net 1,694 892 Totsi other income 16,601 11,349 income before interest and other items --44,799. 49,107 Interest and other items:
Interest on debt 41,832 31,46 A '.r ance for borrowed funds used during construction (16,561) (10,264)
Preferred <"vidends of sJbsidiaries 96 85 Total interest and other items 2'),367 21,282 Net i ncome 19 432 27,825 Preferred dividend requirements of Company 7,376 7,431 Earnings on common stock $ 12.056 1 20.394 Earnings per share of common stock (based on average chares outstanding) $ 0.18 $ 0.35 Dividends declared per share of common stock $ 0.38 $ 0.36 Averye number of comon shares outstanding (in thousands) 66.171 58.842
(*)lncludes IIcense and franchise taxes of $11,711,000 and
$12,400,000 for the three-month periods ending March 31, 1981 and 1980, respectively.
Pag 3 4 UNION ELECTRIC COMPANY AND SUBSIDI ARIES CONSOLIDATED STATEMENT OF CHANGES IN FINANCI AL POSITION (UNAUDI TED, (Thousands of Dollars)
Three Months Ended March 31, 1981 1980 SOURCE OF FI;NDS:
From operations -
Net income $ 19,432 $ 27,825 Provision for depreciation 20,191 19,448 Provision for deferred taxes on income (net) 14,061 10,120 Provision for deferred Ir. vestment tax credits (net) 1,528 5,669 Allowance for all funds used during construction (31,468) (20,721) 23,744 42,341 Dividend reinvestment and stock pu; chase plan 4,539 3,941 Issue of mortgage bonds 124,000 55,000 issua of long-term unc uured notes -
75,000 Settlement of uranium litigation 3,261 55,448 Nuclear fuel lease 4,902 10,327 Total funds provided $160.446 $242.057 APPLI CATIOil 0F FUNDS:
Gross plant expenditures $112,471 $100,339 Nuclear fuel 4,869 10,427 Allowance for all funds used' during construction (31,468) (20,721)
Union Electric dividends on g eferred stock and common stock 32,535 28,630 Restructured long-term unsecured notes -
75,000 Reduced short-term bank loans and commercial paper 50,985 58,450 Net change in working capital (excluding short-term loans and current c.aturity of long-term debt) (10,096) (9,936)
Net change in other funds 1,150 (132) l Total funds applied $160.446 $242,057 l CHANGES IN COMPONENTS OF WORKl NG CAPITAL:
l Cash and deposits ! (1,801) $ (716) l Receivables, net (18,893) (9,631)
Fuel 9,664 7,554 Other materials and supplies 732 325 Accounts and wages payable (1,643) 5,326 l
Taxes accrued 2,825 (14,964)
Interest and dividends accrued or declared (3,998) (1,064) l Other 3,018 2,634
$(l0.096) MSjLl!2) l l
1
. . PIga 5 l
UNION ELECTRI C COMPANY AND SUBSIDI ARI ES NOTES TO FlNANCI AL STATEMENTS (UNAUDITED)
Note 1 - Financial statement note disclosures, normally included in financial statements prepared in conformity with generally accepted accounting principles, have been omitted in this Form 10-q pursuant to the Rules and Regulations of the Securities and Exchange Commission. However, in the opinion of the Company, the disclosures contained in this Form 10-q are adequate to make the information presented not misleading.
See Notes to Financial Statements included in the 1980 Annual Report on Form 10-K for information relevant to the financial statements contained in this Form 10-q, including information as to the significant accounting policies of the Company.
1 Note 2 - In the opinion of the Company the financial statements filed :
as part of this Form 10-q reflect a!! adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the periods. ,
f Note 3 - Due to the effect of weather on sales, summer-winter rate differentials put into effect in May 1980 and other factors which are characteristic of electric utility operations, financial results for the periods ended March 31, 1981 and 1980 are not necessarily indicative of trends for any twelve-month peri od.
4 r- , ,, -,n~,-,-- --r wr r , . . , , w~<n n., .,_-.n,rmen-m-,,,- . - - ,w e n c e-- o - . .n,- -
a----., .---.,,,---,----,--.m--.,---~, e--
- .._ - _ _ _ _ ~_ .
p
. . UNION ELECTRIC COMPANY AND SUBSIDI ARI ES MANAGEMENT'0 tiSCUSSION A'D ANALYSIS OF THE RESULTS OF OPERATIONS Consolidated earnings amounted to $12.1 million in the first quarter of 1981, a decrease of $8.3 millinn from the first quarter of 1980. Earnings per share of 18e in the first quarter were 17c less than the corresponding period of 1980.
Conditions which contributed to the decrease are explained below.
ELECTRI C OPWTlNG REVENUES 1
1La principal factars causing variatior e in ettetric revenues, which represented over 85% of total operating revenues, were as follows:
Comparison of Three Month Periods Ended March 31,1981 and 1980 (Millions of Dollars)
Tarlffs and fuel recoveries (*)
Rate restructuring in May 1980 $(10.014.1)
Kilowatt-hour sales (5.6)
License /frcichise taxes (.7)
S(10.4)
(*) includes the recording in 1980 of an estimated refund to t owa customers of $1,095,000 appilcabia to the period June 1,1978 through March 31, 1980.
The reductio.1 attributed to kilowatt-hou; sales in the first quarter of 1981, as compared with the first quarter of 1980, included $4.2 million due to the effect of mild rather and also reflected reduced sales to firm powe indus -
trial customers. _
OPERATING EXPENSES ,
The changes in operating expenses were as follows: Comptrison of Three Month Periods Ended Fuel and Purchased Power March 31,1981 and 1980 (Millions of Dollars) l Variation in generation of electricity $(2.4)
Price increases 5.6 Generation end fuel efficiencies 2.8
- Purchased and interchange power (.5) l 15.d 1
Other Operations Normal increases due to growth, inflation, wage increases a al higher cost of purchased gas.
l
. - . . ~ .. . _ , . - . - - _ . _ _ , - _ _ - . _ , __-. -_ .- - - , .
'9 UNION ELECTRI C COMPANY AND SUBSIDI ARI ES MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued)
OPERATING EXPENSES (Continued)
Maintenance The variation in maintenance expense reflects normal increases prin-cipally due to higher costs of repair parts and wage increases.
Depreciati on The v:;riation in depreciation expense resulted from increases in depre.iable property.
I ncome Taxes lacome taxes decreased principally due to lower pre-tax income.
Other Taxes The incresse in taxes other than income taxes generally reflects higher real estate taxes due to property additions and increased payroll taxes substantially offset by decreased gross receipts taxes due to the effect of mild weather.
,0ther items The ine ease in interest on deot reflected greater indebtelness and higher interest raf.es. Allowance for Funds Used During Construction (AFC) increased due to an i1 creased amount of Construction Work in Progress and to an increased AFC rate.
I i
The above should be considered in conjunction witt, the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Forn 10-K.
l l
PART II. OTHFR INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A V3TE OF SECURITY HOLDERS l l At tPe annual meeting of stockholders of the registrant held on !
April 28, 1981, :he following proposals, which are more fully described l in Exhibit 23 hereto, were presented to the meeting for a vote and the l result of such voting was as follows l
FOR AGAINST Consent of holders of Common Stock to offering of up to 4,000,000 addir.ional shares of Common Stock l under the dividend reinvestment and stock purchase plan. (Common .
Stock vote only) 45,380,172 2,341,034 Amendment to Articles of Incorporation 49,757,759 2,551,920 Stockholder Proposal re summaries of Board of Directors' meetings 7,785,692 41,981,197 Stockholder Proposal re nuclear power 6,546,330 43,171,347 ITEM 5. t/THER IN/0RMATION By order dated April 15, 1981, the Illinois Commerce Commission authorized an annual increase in the registrant's electric rates of
$10,700,000 as the result of a request for an annual increase.of approxi-mately $15,200,000. The increased rates were placed in effect April 18, 1981. The registrant has applied for a rehearing of the Commission's order.
lates designed to increase annual electric revenues in Iowa by i 73,600,000 were put in effect on April 22, 1981, subject to refund pend-ing a final decision on the Company's request for increased rates.
On May 8, 1981, the registrant filed proposed new schedules of wholesale electric rates with the Federal Energy Regulatory Commission
~
("FERC") which are designed to increase annual revenues by approximately i
$19,100,000.
l A new license for the registrant's Osage hydroelectric plant, l expiring February 28, 2006, has been issued by the FERC and is subject to l formal acceptance by the registrant.
I On April 10, 1981, St. Louis County approved a schedule cSange in the variance allowing a delay in meeting opacity and particulate stan-dards at the registrant's Meramec Plant. Under the revised schedule the j registrant proposes to demonst ate compliance with such standsrds no later than July 26,1981 (Unito 1 and 2), November 27,1981 (Unit 3) and December 31,1981 (Unit 4),
i i
- .- ,- - n -. . , . . . . , . - . . . ,-. - -, -
On April 30, 1981, the registrant announced that the sale of 3,000,000 shares of Preferred Stock scheduled for May 5,1981 had been postponed indefinitely due to unsettled conditions in the financial mar-kats and a temporary reduction in registrant's cash requirements.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Ex aibits Exhibit 23* - Proxy Statement dated March 27, 1981, containing a description of the proposals referred to under Item 4.
- This exhibit heretofnre has been filed with the Securities and Exchange Comm'3sion pursuant to requirements of the Acts administered by the Commission and is hereby incorporated herein by reference.
(b) Reports on Form 8-K. During the quarter ended March 31, 1981, the registrant filed a Form 8-K dated February 5,1981 reporting that a proposed $150,000 000 bond issue would have a 10 year 5
maturity and that ratings on certain of the registrant's securi-ties had been lowered by two rating agencies.
i SIGNATURES l
Pureuant to the requirements of the Securities Exchange Act of l 1934, the registrant has duly caused this report to be signed on its i
behalf by the undersigned thereunto duly authorized.
UNION ELECTRIC COMPANY l
(Registrant) l May 14, 1981 By P
.b l /' J. T. Friel l Vice President and Controller (Chief Accounting Officer) l May 14, 1981 By N
G. R. Murray
/
Secretary l
l l
I _ . . _ _ _ , . _. - , ,. _ , _ . _ _ _ , _ _, __ _
tus h kg h MER
,"%ay5 PRELIMINARY PROSPECTUS DATED APRIL 14,1981 But PROSPECTUS
$.2$.
h.5 3,000,000 Shares 5
hj Union Electric Company
$j[ Cumulative Preferred Stock, $ Series is:g-y; (Stated Value $25 Per Share)
- s jQ fg ga Redeemable at the option of the Compa,y at $
per share thereafter and prior to May 15,1991, at $
per share prior to May 15,1986, at $
per share thereafter and prior to May 15,
$33 1996 and at $25 per share thereafter, plus accrued dividends. See DESCRIPTION OF NEW
, ] yj PREFERRED STOCK-Redemption P4ovisions for the terms of a limitation on the right of the 3 d i2, Company to redeem the New Preferred Stock prior to May 15,1986.
Y: 2
- Pa yj3 The New Preferred Stock will be entitled i a cumulative sinking fund sufficient to retire 150,000
$E3 shares at $25 per share, plus accrued dividends, on each May 15, beginning in 1987. The Company will CM have the non-cumulative option to redum through the sinking fund up to an addtional 150,0M share, Mj on the same terms and dates. See DESCRIPTION OF NEw PREFERRED STOCK-Sinking Fund ff Provis: ns.
~m, 2%R 3 E ", Application will be made to list da New Preferred Stock on the New York Stock Exchange.
$N3 Ti = 3 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SN5 SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
- ,lij PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
jf {Q ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- 3 *5 Underwriting aaa Price to Discounts and Proceeds to y*j Public Commissions (l) Company (2) h Per Share.. $ $ $
Total. $ $ $
n58 -
$N,e (1) See UNDERWRITING for indemnificati on arrangements.
U .s (2f Before deducting expenses payable by the Company estimated at $255,000.
"On 2"E The New Preferred Stock is offered by the several Underwriters when, as and if issued by the 3E5 Company and accepted by the Underwriters and subject to their right to reject orders in whole or in jf5 part. It is expected that delivery of the New Preferred Stock will be made in New York City on or
's 05 about May ,1981.
MS -
233 Merrill Lynch White Weld Capital Markets Group S3p Merrill Lynch, Pierce, Fenner & Smith Incorporated 2e n et: Bache Halsey Stuart Shields Incorporated i35 Goldman, Sachs & Co.
ri!"
35s Shearson Loeb Rhoades Inc.
- a w
.Sf # **-
EEaD The date of this Prospectus is May ,1981
.E Do O E :t
IN CONNECTION WITII Tills OFFERING, Tile UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WillCII STABILIZE OR MAINTAIN Tile MARKET PRICE OF Tile SECURITIES OFFERED IIEREHY AT A LEVEL AHOVE TIIAT WillCII MIGIIT OTilERWISE PREVAIL IN TIIE OPEN MARKET. SUCil TRANSACTIONS MAY BE EFFECTED IN Tile OVER-TIIE-COUNTER MARKET OR OTIIERWISE. SUCII STAHILIZING, IF COMMENCED, Mt.Y HE DISCONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS HY REFERENCE AND ADDITIONAL INFORMATION The Company is subject to the information requirements of the Securities Exchange Act of 1934 (the
" Exchange Act") and,in accardance therewith, files reports and other information with the Securities and Exchange Commission. Information as of particular dates concerning directors and officers, their remuneration, the principal holders of securities of the Company and any material interest of such persons in tnnsactions with the Company is disclosed in reports of the Company filed with the Commission.
The following documents, which have been filed by the Company with the Commission, are incorporated by reference in this Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,1980 (the
" Form 10-K Annual Report"), filed pursuant to the Exchange Act (File No.1-2967);
(2) The Company's definitive Proxy Statement dated March 27,1981 for its Annual Meeting of Stockholders to be held on April 28,1981, filed pursuant to the Exchange Act (File No.1-2967); and (3) The Company's Report on Form 8-K dated Feh<uary 5,1981 filed pursuant to the Exchange Act ( File No.1-2967).
All documents filed by the Company with the Cor .nission pursuant to Section 13,14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made by this Prospectus shall be deemed to be incorporated by reference and to be a part hereof.
Such reports, proxy statements and other information can be inspected and copied at the oflices of the Commission at Room 6101, 1100 L Street, N.W., Washington, D.C.; Room 1228, Everett McKinley Dirksen Building,219 South
Dearborn Street,
Chicago, Illinois; Room i100, Federal Building,26 Federal Plaza, New York, New York; and Suite 1710. Tishman Building,10960 Wilshire Boulevard, Los Angeles, California. Copies of such material can also be obtained from the Public Reference Section of the Commission in Washington, D.C. 20549 at prescribed rates. Such material can also be inspected at the office of the New York Stock Exchange,20 Broad Street, New York, N.Y.10006.
The Company hereby undertakes to proside without charge to each person to whom a copy of this Prospectus has been deligered on the written request of any such person, a copy of any or all of the documents referred to abose which haie been or may be incorporated in this Prospectus by reference, other than exhibits to such documents. Written requests for such copies should be directed to Mr. G. R.
Murray, Secretary, Union Electric Company, P.O. Box 149, St. leuis, Missouri 63166, or telephone (314) 621-3222.
Except as otherwise indicated by the context, this Prospectus speaks as of the date hereof and does not purport to reflect any changes which may have occurred in the affairs of the Company or its subsidiaries thereafter. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Company or its subsidiaries since the date hereof.
2
TIIE ISSUE IN llRIEF s Thefolloning materialis quahfied in its entirety by, and shou!d be read in conjunction with, information and financial statements appearing chen here in this Prmpectus and in the documents and information incorporated in this Prmpectus by reference.
TurOrnasw Issuer . Union Elairic Company Sece ities Otfered . 3,000,000 shares of Cumulative Preferred Stock-stated value $25 per share ( the "New Preferred Stock")
Dividend Payment Dates.. February 15, May 15, August 15 and November 15-tirst payment August 15,1981 Redemption and Cumulative Sinking Fund. See Di.scRIPTION OF Ns.w PRE FIRRt D stock ~
Use of Proceeds.. To repay short-term borrowings incurred to finance construction Listing.. Application will be made to list the New Preferred Stock on the New York Stock Exchange Tur CostrtNy -
Ilusiness . Primarily an electric utility Service Area Electric service to an approximately 24,000 square mile area, primarily covering the eastern and central por: ions of Missouri, portions of .
Illinois adjacent to St. Louis, Missouri, and the southeastern portion of Iowa; and gas service to Altan, Illinois, and vicinity and 90 Missouri communities Service Area Population (estimated ) . Electric-2,700,000; Gas-359,000 '
Customers.. Electric-977,000; Gas- 107,000 I Revenue Distribution (12 Months Ended December 31,1980).. Electric-92.5%; Gas-6.29 ; Other- 1.3%
Sources of kWh Genc ation (12 e i Months Ended December 31.1980). Coal-95.19; Hydro-4.4%; Other .5%
Co esoupu rn FsN4scus. Isroast4 Tion (lhousands of dollars escept ratios) 12 Months Fnded December 3 a. December 31, February 28, 1979 1980 1988 Operating Revenues. $946,797 $ 1,077,876 $ 1,071,427 Operating income. $166,466 $ 191,156 $ 184,767 Net income . $ 118,055 $ 154,737 $ 148,879 Ratio of Earnings to Fixed Charges and Preferred Dividend Regtdrements Actual . l.92 2.11 2.01 Pro Forma.. l.62 1.59 Capitalization as of December 31,1980 --
Actual Ratie. As Adjusted' Ratio' .
Long-term Dent (excluding current maturity).. $ 1,479,229 50.7% $1,627,542 51.8%
Preferred Stock Subject to Mandatory Redemption . I12,040 3.8 187,040 6.0 Preferred Stock Not Subject to Mandatory Redemp-Cor. 281,355 9.7 28 t,355 9.0 Common Equity. 1,043,549 35.8 1,043,549 33.2 Total Capitalization.. $2,916,l 73 100.0 % $3.139,486 100.0 %
Short-term Debt and Current Maturity of Long-term De nt . $ 141,895
- Adjasted to give etTect to the sa'e of the New Preferred Stock offered hereby and the net proceeds from the sale of $150.000,000 principal amount of First Mortgage Bonds in February 1981, $30,000,000 of which is subject to delayed delivery in July.
3
Tile CON 1PANY Union Electric Company, incorporated in Niissouri in 1922,is successor to a number of companies, the oldest of which was organized in 1881. The Company owns all of the common stock of Missouri Power &
Light Company, Missouri EJison Company, Niissouri Utilities Company and Union Colliery Company.
As med hereafter in this Pro: pectus the term Company means Union Electric Company and its consolidated subsidiaries unless the context requires otherwise. The Company's principal office is at 1901 Gratic: Staet St. leuis, Missouri 63103 and its telephone number is (314) 621-3222.
APPLICATION OF PROCEEDS AND CONSTRUCTION PROGRAM The net proceeds to be received by the Company from the sale of the New Preferred Stock, estimated at $ . will be used to repay in part short-term debt (expected to aggregate approximately
$i50,000,000 at the time of issuan. of the New Preferred Stock) incarred to finance the construction progra n, the lar,,est single project of which is *Se Callaway Nuclear Plant.
Expenditures for the construction program, including amounts for allowance for funds used dusig c- uruction ("AFC") and excluding nuclear fuel, amounted to $421,000,000 in 1980. The following ta51e sets forth the Company's actual and estimated construction expenditures, excluding nuclear fuel, for .he 1 periods indicated:
Actual htimated 1976- 1981- Completed 19NO 1981 1982 1983 1934 1985 1985 Cost (Millions of Dollars)
Callaway Unit No. t . $ 936 $3C - $258 $ 6(, $- $- $ 628 $ 1,586 Callaway Urut No. 2.. 41 7 18 107 185 276 593 $2.276 Generation-Othe 1 ) .. 179 94 65 60 22 53 294 Transmission and Distnbution .. 325 76 78 79 79 82 394 Other.. 69 30 28 24 23 21 126 Total .. $1.550 $508 $447 $3D $309 $432 $2.035 Less AFC:
Callaway Unit No. l.. IIi 145 33 - -
289 Callaway Unit No 2.. 5 6 13 27 50 101 Other. 11 11 9 5 5 41 Net Cash Requirements.. $381 $285 $284 $277 $377 $ 1.604 (I) Primarily environmental control expenditures. See ENVIRONMLNTAL M ATTERs in the Form 10-K Annual Report.
The Company is constructing two units at the Callaway Nuclear Plant, each to have a net capacity of 1,150,000 kilowatts. The Company has expended $958 million through 1980 on Unit No. I, whi:h is scheduled to be placed in service in April 1983 at an estimated total cost of $1,379 per kilowatt, and has expended $51 million through 1980 on Unit No. 2, which is now scheduled to be placed in sersice in 1990 at an estimated cost of $1,979 per kilowatt. Construction expenditure estimates in the table above (which are approxima:ely $400 million less than the previous estimates for the 1981-1985 period) reflect the April 1981 decision to defer the scheduled in-service date of Unit No. 2 for two years, as well as several prior deferrals of both units. See CONSTRUCTION PROGRAM in the Form 10-K Annual Report. The Company's decision in April 1981 to defer Unit No. 2, which increased its estimated completed cost by approximately
$500 million, was made because of the reluctance to commit substantial sums of money to Unit No. 2 until Unit No. : is licemed by trie Nuclear Regulatory Commission ("NRC") and the Company is permitted to earn a reasonable return on its investment in that unit. Other companies have been experiencing delays in obtaining operating licenses from the NRC and, consequently, no assurance can be given that the NRC 4
will issue the operating license for Unit No. I by late 1982, which is necessary if the unit is to be placed in service in Apnl !"83 as scheduled.
Plans for construction projects are under constant review and actual expenditures will, and comp'etion dates may, vary significantly from present estimates as they have in the past because of, among other reasons, centinuing increases in the cost of construction (an inflation rate of 7%% has been assumed on major projects) and financing, public interference and other ditliculties with the construction and licensing of nuclear facilities, the inability to obtain adequate and timely rate relief, difficulties in obtaining the funds required for the construction program, changes in load and sales growth, and changes in business conditions. Various approvals are required from several Federal and State agencies (proceedings before the NRC, the hiissouri Public Service Commission and others are currently in progress) which could adversely atrect the construction or operation of the Callaway units and result in the cancellation of the second nnit (see LtGAt. PROCEIDINGS in the Form 10-K Annual Report).
The Company anticipates that approximately 10% ofits net cash requirements for construction in each j of the years 1981 and 1982 will be generated internally if the Company receives a major portion of the rate relief which it has requested-requests for annual increases in electric rates of $91 million, $15.2 million, l
and 93.6 million are pending in hiissouri, Illinois and Iowa, respectively, and a $5.7 million annual increase in steam rates has been requested in hiissouri (see RATES in the Form 10-K Annual Repos:).
Such rate relief will also be necessary for the Company to obtain the external funds required to finance its construction program (see CONSTRUCTION PROGRAM-Financing Restrictions in the Form 10-K Annual Report). In addition to the funds required for construction during the 1981-1985 period, $137,403,000 will be required to retire carrently outstanding long-term debt and Preferred Stock.
The ability of the Company to generate a larger portion ofits construction funds internally has been adversely affected by a 1977 change in hiissourilaw prohibiting inclusion of construction work in progress in rate base. Conuquently, the percentage of the Company's earnings represented by AFC (a non-cash item) is increasing and is expected to account for substantially all of the Company's earnings in 1981 and 1982. Further . ate relicf will be necessary, including an estimate 125% to 30% in 1983 at the time that Callaway Unit No. I is placed in service, to otTset the discontinuance of recording AFC on the unit and to meet the expenses associated with its operation. There is no assurance that needed external funds or rate relief can be obtained. The ratings on the Company's Preferred Stock have recently been lowered from BBB to EBB- by Standard & Poor's Corporation and from "a" to "baa" by N1oody's Investors Service, and the ratHgs have also been lowered on the Compasy's first mortgage bonds (from A- to BBB+ .nd A to Baa by such respective agencies) and commercial papei (from 2 to 3 by both agencies) !argely as a result of the Company's substantial capital requirements and need for rate relief, which willincrease the cost of and may impair the Company's abi!ity to is a securities.
5
prw a.y-n _ e n. _ _ . . .t CER FAIN FINANCIAL,INFORMNIlON Set forth b; low is a summary of cenain information concerning the results of operations of the Ccmpany, Except for the ratios of carnings to fixed charges and preferred dividend requirements the information, insofar as it relates to the five years ended December 31, 1980, was derived from the Company's audited financial statemems, the last three years of which are contained in the Form 10-K Annual Report. The Form 10-K Annual Report also contains the report of Price Waterhouse & Co.,
independent accountants, on the financial statements for the three years ended December 31,1980,an?
management's discussion and analysis of financial condition and results of operations. See IN-CORPORATION OF CIRTAIN DOCUMLNTS BY RI H RI NCE AND ADD!rlON AI. INIORMATION. In the opinios of the Company all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the unaudited 12-month period ended February 28,1981 have been included.
l weise monihs ended li ear Fnded December 31, February 28, 1981 1976 1977 1978 1979 1980 ( Unaudited )
( Ihousand, of dollars escept share and per share amounts and ratios )
Operatmg Revenues.. 5 682,456 5 765,102 5 m3,988 5 946,797 $ 1,077,876 51.071,427 Opera.ng Expenses... 518,342 605,963 727,756 780,331 886.720 886,660 Oferating Income... 164.114 159,139 176,232 166,466 I sl.156 184.767 Allowance for Funds Used During Construction (all funds pnor to January I.1977 and equity funds after December 31,1976 L. 12.379 8.101 15,980 31,245 45,357 48.424 Other income - Miscellaneous .. (2,554) I,3R9 2.896 879 3,638 3,201 Interest on Debt and Other Items . 78,529 h 4.015 40,699 107,383 132,112 139,159 Allowance for Borrowed Funds Used Dunng Construction after December 31,1976.. - 10,721 15.489 26.848 46,698 50,768 Net Income.. 95,410 95,535 119.898 118,055 154.737 148,879 Preferred Dmdend Rcquiicments of Compan).. 19,640 20,367 23 M 26,948 29,695 29,659 Earnmgs on Common Stod .. 75,770 75,168 96,858 91,107 125.042 119,220 Average Number of Common Shares Out-standmg .. 40,795,152 45,110,245 48,260,596 52.577.432 59 675,995 60,682,910 Earmngs Per Share of Common Stock ( based on aserage shares outstandmg ) .. 51.86 51.67 52 01 51.73 52.10 $ 1.96 Dividends Declared Per Sh, ire of Common Stock 51 34 51.36 51 40 51 44 51 48 51.50 Ratio of Earnmgs to Fixed Charges and Pre-rerred Dividend Requirements ( A)
Actual.. 2.05 2.04 2 26 1 92 2. l i 2 01 Pro Forma ( F. 1.62 1.59
( A) Earnings used in computing the Ratio of Earnings to Fixed Charges and Preferred Dividend Requirements consist of net income plus fixed charges (interest on debt, related amortization, preferred dividends of subsidiaries and an appropriate amount of rentals charged to operating expenses) and income taxes. " Preferred Dividend Requirements" as used above represents the dividend requirement on the outstanding Preferred Stock of the Company increased by multiplying the etrect of preferred dividends not deductible in determining taxable income by the ratio that pre-tax income bears to net income.
(B) After giving etrect to (I) annual interest requirements on a'l long-term debt utstanding at December 31, 1980; (2) annual interest on $150,000,000 of Union Electric Company Bonds sold in February 1981 (interest rate of 15%); (3) annual interest on $37,000,(X)0 proceeds ' projected for the next twelve months) from Union Electric Company $75,000,000 environmental improvemer financing (assumed interest rate of 10%) proposed later in 1981; (4) annual interest on $i0,000,000 of Bonds of Missouri Utilities Company (assumed interest rate of 15%) to be sold later in 1981; ( 5) annual interest on
$4,000,000 of Bonds of Misscxi Edison Company (interest rate of 14%%) sold in February 1981; (6) additional interest on the actual average short-term borrowings of $90,000,000 assumed to be outstanding during the next twelve months at an assumed weighted average interest rate of 16% versus the acto" interest expense on short-term borrowings as recorded during the current swelve-month period; I 4(7) 6
annual preferred dividend requirments on the New Preferred Stock assuming receipt of $25 per share and an annual dividend of S3.75 (egmvalent to 15%) per share. A dil5rence of %% in the actual rate from the assumed rate o the New Preferred Stock would change the Pro Forma Ra:io of Earnings to Fixed Charges and Preferred Dividend Requirements by approximately .001.
A restructured rare design which increases the Company's revenues during the June through October billing periods and deaeases revenues by an equivalent amount during the November through May billing periods was put into etrect May 30,1980 Until rates based on the restructured rate design have been in elTect for a full year, comparisons of financial results with prior pef vis will be atTected.
The Company expects that its operating revenues will decline in 1981 se compared to ;"80 because of decreased kilowatt-hour sales due to projected normal temperatures in 1981 as compared to the hot weather experienced in the summer of 1980. This decline in operating revenues, combined with anticipated increases in interest and other costs, is expected to cause t!.e Company's caraings, earnings per common share, the ratio of earnings to fixed charges and preferred dividend requirements and indenture coverage ratios to decline significantly until the Company receives a major portion of the rate reliefit is currently seeking (see RAns in the Form 10 K Annual Report).
DESCRIPTION OF NEW PREFERRED STOCK The following wmmaries of certain provisions affecting the capital stock contained in the Articles of Incorporation, as amended, and in other documents referred to below, all of which are filed as exhibits to the Registration Statement and to which reference is hereby made, do not purport to be complete and are qualified in their entirety by such reference.
Disidends. Before any dividends on the Common Stock shall be paid or declared or set apart for payment, the Preferred Stock,is entitled to cumulative cash dividends when and as declared out of funds legally available therefc., at the dividend rate fixed for the particular aries as expressed in the respective desintions thereof, payable quartefy on the fifteenth days o. 'ebruary, May, August, and November.
Dividends on shares of the New Preferred Stock will be cumulative from the date of original issuance of such shares and the initial dividend is payable on August 15, 1981.
Divideia on the Common Stock may be declared and paid at the discretion of the Board <
Directors, provide? all dividends for past perioA and the dividend for the current quarter c the outstanding Preferred Stock and Preference Stock have been paid or provided for, and presid '. that any sinking fund obligations on the outstar. ding Preferred Stock and Preference Stock have beer. met. At the present time there is no Preference Stock outstanding. Subject to a limitation imposed by orders of the Securities and Exchange Commission permitting the issuance of certain outstanding series of the Company's Preferred Stock, the amount of dividends payable on the Common Stock (other than ,
i dividends payable in Common Stock) is restricted to 50% of net income applicable to the Con. mon Stock if the ratio of Common Stock plus surplus is less than 20% of total capital (including funded debt) and to 75% cf such net income if such ratio is 20% or more but less than 25%. At December 31,1980, such ratio was 36.5%.
Sinking Fund Protisions. The New Preferred Stock will be entitled to a cumulative Sinking Fund sutlicient to retire 150,000 shares at $25 per share on May 15 in each year beginning in 191 L At its ootion, the Company may r: deem through the Sinking Fund on May 15 in each such year not more than 150,000 additional shares. The right to redeem such addhional shares shall not be cumulative and , hall not reduce any subsequent required Sinking Fund payment. Required Sinking Fund payments may be satisfied in whole or in part by crediting shares of the New Preferred Stock purchased by the Company in the open market, by redemption (otherwise than through the operation of the Sinking Fund) or otherwise. Shares of the New Preferred Stock shall Se selected for redemption pursuant to the Sinking Fund by lot er in such I other impartial manner as the Company shall determine. No dividends may be paid on the bmmon Stock or any class of stock over which the Preferred Stock has preference as to payment of dividend > unless 1
7
~
all amounts required to be paid or set aside for any required Sinking Fund payments shall have been paid or set aside.
Redemption Proilsions. The Preferred Stock, including the New Preferred Stock, is redeemable at any time at the option of the Company (subject, in the case of outstanding series, to restrictions regarding certain refunding operations and, in the case of the New Preferred Stock, as set forth in the following i
paragraph), in whole or in part (by lot or in such other impartial manner as the Board of Directors may determine), on not less than 30 days' and not mwe than 60 days' prior notice, at the amount per share fixed by the Board of Directors for each series, plus an amount equal to accrued and unpaid dividends.
The New Preferred Stock is to be edeemable (other than for redemptions refeired to above under SinAing Fund Provisions) a whole or in part, from time to time, at the election of th: Company at S per share prior to Niay 15,1986; at $ per share on or after hlay 15,1986 and prior to hiay 15,1991; at
$ per share on or after Af ay 15,1991 ar.; prior to Niay 15,1996; and at $25 par share if redeemed en or after h1ay 15,1996, in each case plus accrued dividends; provided, however, that prior to hiay 15,1986 none of the shares of New Preferred Stock may be redetmed if such redemption is for the purpose or .
anticipation of refunding such shares through the use, directiv or indirectly, of borrowed funds or through the use, directly or indirectly, of fonds derived through the issuance or sale of Preferred Stock or stock of any other class ranking on a parity with or having any preference over the Pieferred Stock as to assets or dividends, if such borrowed funds have an interest rate or annual cost of money to the Company (computed in accordance with generally accepted financial practice without any adjustmct for commis-sions, underwriting discount and expenses) or such stock has a dividend rate or an annual cost of money to the Compaay, so computed, of % or less.
Voting Rights. Each stockholder has one vote for each share of Common Stock, Preference Stock, and Preferred Stock, held by him; provided that whenever four quarterly dividends on the Preferred Stock and Preference Stock shall be in default. in whole or in part, and during the continuance of such default, the Coinmon Stock, as a class, shall be entitled to elect the same number of directors as was authorized by the Articles ofIncorporation immediately prior to such default, and the Preferred Stock, as a class, and the Preference Stock, as a class, shall each be entitled to elect two additional directors; and provided further, that whenever four quarterly dividends on the Preference Stock only shall be in default, in whoh or in part, and during the con 6 nuance of sucs default, the Common Stoch and the Preferred Stock, uting tog :ther as a single class, shall be entitled to elect the same number of directors as was authorized by ,%
Articles of Incorporation immediately prior to such der,sult, and the Preference Stock, as a class, shall n e entitled to elect two additional d; rectors. Each stockholder is entitled to cumulative voting at all electicas of directors, such right, ir case of class voting during a default, being applicable to the number of di,ectors to be elected by the particular class.
No amendment to the Atticles ofIncorporation which would change the provisions thereof relating to cumulative voting, quorum or preemptive rights, in any manner substantiak*y prehdicial to the holders of ar.y clau of stock shall be inade without the consent of at least two-thirds c/ all of the capital stock.
No amendment to the Articles of Incorpora ion creating or increasing shares of Preferred Stock or Preference Stcck shall be made without the consent of a majority of the Common Stock.
No amendment to the Articles of Incorpo.ation which would change the express terms of the Preferred Stock in any manner substantially prejudicial to the holders thereof, shall be made, except as referred to below and e apt for any -hange in the number of the Board of Directors, without the consent of at leaa three-fourths of the Preferred Stock.
The Company shall not, without the consent of at least two-thirds of the Preferred Stock (1) sell any shares of Preferred Stock or any senior or parity stock, unless nct earnings for a period of twelve consecutive calendar months within the fifteen calendar months immediately preceding such action are at least two tid one-half times the annual dividend requirements on the Preferred Stock and senior or parity stock to be outstanding immcdiately after such action; ( 2 ) create any class of senior stock; ( 3 ) increase the auihorized number of shares of Preferred Stock; (4) reclassify outstanding shares of junior stock into shares of parity or senior stock; (5) make any distribution out of capita' or capital surplus (other than 8
dividends payable in junior stock ) to holders of junior stock; or (6) issue any shares of Preferred Stock or parity or senior stock, if the stated capital to be represented by the Preferred Stock and such other stock outstanding immediately after such issue would exceed the stated capital to be represented by shares of junior stock, increased by the amoum of any capital surplus or reduced by the amount of any deficit.
Liquidation Hights. Before any distribution may be made to the holde.s of the Common Stock and the Preference Stock, in the event of any voluntary liquidation the holders of the Preferred Stock shall be entitled to be paid in cash the amount per share fixed by the Board of Directors for each series and,in the case of the New Preferred Stock, the voluntary liquidation price is the same as the applicable redemption price fixed by the Board of Directors. In the event of any involuntary ligt.:Jation the holders of the outstanding Preferred Stock shall be entitled to be paid in cash the amount per share fixed for the respective series, and the holders of the New Preferred Stock shall be entitled to be paid in cash $25 per share, the stated value thereof, plus, in each case, an amount equal to accrued and unpaid dividends.
i Comersion Prmisions. The outstanding Preferred Stock and the New Prehrred Stoca have no I conversion rights. The Board of Directors may fix the terms and conditions upon which shares of a particular series of authorized but tinissued Preferred Stock shall be convertible into, or exchangeable for, shares of any other class or classes of capital stock, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment thereof, if any.
Other Prmisions. The Preferred Stock has no preemptive rights. The New Preferred Stock, when issued, will be validly issued, fully paid a id non-assessable. The Articles of Incorporation at thorize the Company to purchase its capita, stock and contain no restriction on the purchase of its Preferred Stock when dividends are in arrears.
Transfer Agents and Registrars. The Transfer Agents for the New Preferred Stock will be
- Nianufacturers Hanover Trust Company, New York, New York, and Niercantile Trust Comp ny National i Association St. Louis, Niissouri. The Registrars for the New Preferred Stock will be The Chase Nianhattan Bank ( National Association), New York, New York, and The Boatmen's National Bank of St. Louis.
EXPERTS The audited consolidated financial statements included in the Company's Form 10-K Annual Report incorporated by reference in this Prospectus have been so incorpora+ed in reliance on the report of Price Waterhouse & Co., independent accountants, given on the authority of said firm as experts in auditing and accounting.
The statements as to matters of law and legal conclusions included in the Company's Form 10-K Annual Report under Item 1-BUSINESS, Item 2-PROPIRTIES and Item 3-LEGAL PROCEEDINGS in-corporated by reference in his Prospectus, and such statements included in this Prospectus under APPLICATION OF PrWCEEDS AND CONSTRUCTION PROGRAM and DESCRIPTION OF NEw PREFERRED STOCK have been prepared under the supervision of, and revievad by, Schlafly, Griesedieck, Ferrell & Toft, St.
Louis, Niissouri, and such statements are made and incorporated or included herein in reliance on the authority of that firm as experts.
LEGAL OPINIONS Certain legal matters in connection with the New Preferred Stock will be passed upon fer the Company by Schlatly, Griesedieck. Ferrell & Toft, St. Louis, Niissouri, and for the Underwriters by Cahili Gordon & Reindel, New York, New York. Cahill Gordon & Reindel are not passing upon the incorporation of the Company or its subsidiaries cr franchise matters. In giving their opinion as to any matter governed by Niissouri or Illinois law, Cahill Gordon & Reindel will rely upon the opinion of Schlatly, Griesedieck, Ferrell & Toft and in giving their opinions as to any matter governed by lowa law those two firms will rely upon the opinion of J. A. Concannon, Esq., Keokuk, Iowa. Counsel to the Company own ce;:ain securities of the Company as set forth under SECURITY OwsERsuiP or CERTAIN BrstrICIAL OWNERS AND NI ANAGEMENT in the Form 10-K Annual Report.
- 9
i UNDERWRITING The Underwriters na.ned below hav.. severally agreed, subject to the terms and conditions of the Underwriting Agreement, to purchase from the Company the following respective number of shares of the New Preferred Stock:
Number Number l'nderwr. ers of Shares l'nderwriters of .% hares Merrill L>nch. Pierce. Fenner & Tmith Incorporated ..
Bamhe !?al ey Stuart Shicids Incorporated ..
Goldman, Sachs & Co.. -
Shearwn Inch Rhoade Inc..
Total 3,000,000 10 s GE.n% /x
Y The Underwriting Agreement provides that the Underwi .rs are committed to purchase all shares of the New Preferred Stock if any are purchaed. Under certain circumstances the commitments of non-defaulting Underwriters may be increased.
The Cor..pany has been advised by Merrill Lynch, Pierce, Fenner & Smith incorporated Bache Halsey Stua.t Shields Incorporated, Goldman, Sachs & Co., and Shearson Loeb Rhoades Inc., as ..
, Representative, of the Underwriters, that the Underwri ers t propose to offer the New Preferred Stock to the t.
public initially at the otTering price set farth on the cover page of this Prospectus and to certain dealers at such prict .ss a concession of $. per share and that the Underwriters and such dealers may r--%w a discount of S. per share on sales to other dealers. The public otrering price and concession and dn _ur.t to dealers may be changed by the Representatives.
The Company has agreed to indemnify the several Underwriters against certain civil liabilities, including liabilities under the Secu.ities Act of 1933.
L t
k o
b o
4 11
1
'It.
3,000,000 Shares No dealer, salesman, or any other person has been authorized to gisc any information or to make any representations other than those con. Union Electric Company tained in this Prospectus in connection with the offer contained in this Prospectus and, if gisen or made, sur! information or representations must Cumulative Preferred Stock, not be reli, ' at en as hasing been authorized b) .
the Company or by any of the Underwriters. This $ Series Prospectus does not constitute an offer to sell the (Stated Value $25 Per Share) securities la any jurisdiction to any one to whom it is unlawful to make such offer in such jurisdic-tion.
PROSPECTUS CONTENTS P4GF Incorporation of Certain Documents by Ref-erence and AdditionalInfbrmation. 2 The Issue in Brief... 3 The Company. 4 Application of Proceeds and Construction Program . 4 Merrill Lynch White WeH
, Certain Financial Infbrmation.. 5 Capital Markets Graup Description of New Preferred Stock.. 6 Mernal Lynch, Pierce, Fenner & Smith Incorporated Experts.. 9 Bache Halsey Stuart Shields Legal Opinions . 9 Incorporated Underwriting.. 10 Goldrnan, Sachs & Co.
Shearson Loeb Rhoades Inc.
May ,1981
_ _ ~ _ _ . - . . . _ _ . _ _ - - - - _ . . _ . _ . - _ _ _ _ _ _ _ _ . _ _
.. gM 7, N/
[ ,
BEFORE THE PUBL70 SERVICE COMMISSION OF THE STATE OF MISSOURI In the matter of Union Electric ) s Company of St. Louis, Missouri )
for authority to file tariffs )
increasing rates for electric ) Case No. ER-81-180 service provided to c'ustomers in )
the Missouri service area of the )
Company )
AFFIDAVIT OF W. E. CORNELIUS State of Missouri )
) SS City of St. Louis )
() states:
W. E. Cornelius, being first duly sworn on his oath
- 1. My name is W. E. Cornelius. I reside in St.
Louis County, Missouri and I am President of Union Electric Company.
- 2. Attached heteto and made a part hereof for all purpose s is my testimony consisting of 30 pages inclusive, and Fxhibit (WEC-1) to Exhibit (WEC-13), -
inclusive, all of which testimony and exhibits have been prepared in written form for introduction into evidence in Missouri Public Service Commission. Case No. ER-81-180 on behalf of Union Electric Company.
- 3. I hereby swear and affirm that my answers
(') contained in the attached testimony to the questions therein propounded are true and correct; that the attached exhibits were prepared under my supervision and iirection and truly and correctly show the matters and things they purpgrt to show. ,
, n) / '
( -
M 2 L.'._ (. w /
Subscribed and sworn to before me this 6'# dcy of February, 1981.
A
/5t2NtV MARGARET S. HEIDA NOTARY PUBUC-STATE OF fMSCURI ST. LO'JIS COUNTY MY COMMISS;GN D. PRES JMUA3Y 2,1932 u