ML20009D153
| ML20009D153 | |
| Person / Time | |
|---|---|
| Site: | Grand Gulf  |
| Issue date: | 07/17/1981 |
| From: | MIDDLE SOUTH UTILITIES, INC. |
| To: | |
| Shared Package | |
| ML20009D152 | List: |
| References | |
| NUDOCS 8107230231 | |
| Download: ML20009D153 (59) | |
Text
,
l MIDDLE SOUTH UTILITIES, INC.
1980 ANNUAL REPORT I
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8107230231 810717 PDR ADOCK 05000416 I
PERFO'RMANCE HIGHLIGHTS Percent Change 1980 1979 1978
'80
'79 Total Operating Revenues (millions)
$2.342
$1.823
$1.622 28.5 12.4 Total Operating Expenses (millions) 52.044
$1.605
$1,394 27.4 15.1 Fuel. Purchased Fower & Purchased Gas Costs (millbns)
$1,317
$1,045
$ 826 26.0 26.5 Operating Income (millions)
$ 298
$ 218
$ 228 36.7 (4.4)
Net income (millions)
$ 196
$ '82
$ 18 5 7.7 (1.6)
Allowance for Funds Used During Construction (millions)
's 240
$ 213
$ 148 12.7 43.9 Rate of Return on Average Common Equity (percent) 10.98%.-
11.82 %
14.19 %
Earnings Por Share (dollars)
$ 2.01
$ 2.13
$ 2.46 (5.6) (13.4)
- Dividends Pa.'d per Share (dollars) 5 1.58
$ 1.52
$ 1.44 3.9 5.6 Customers (Electrie-Year-end) 1,548,733 ' l.520.142 1,489.188 1.7 2d Total Electric Energy Sales (billion kwh) 55 53 52 3.8 1.9 System Peak I.oad (kilowatts) 11,769.000 10.687.000 10.698.000 10.1 0.4 Gross Utility Plant at Year-end (billions)
$ 7.9
$ 7.0
$ 6.1 12.9 14.8 Construction Expenditures (millions)
$ 910
$1.025
$ 901 (11.2) 13.8_
Commen Stock (Number of shares, in thousands)
Average 97,469 85.445 75.522 14.1 13.1 At' year-end 107,350 90,433 76.098 18.7 18.8 ABBREVIATIONS: In this report, references to compamos in thaMiddle South Utilities System are as follows:
MS' e the Company.
. Mdd!e South Uttht:es. Inc.
MSS..
. %ddle South Services. Inc.
MSE..
...... Mddle South Energy. Inc.
AP&L.
. Arkansas Power & Light Company Ark-Mo
.. Arkansas-Missouri Power Company LP&L..
.. Louisaana Power & Light Company MP&L..
. Essiss:ppi Power & Light Company NOPSI..
. New Orleans Public Service Inc.
SFI.
..... System Fue!s. Inc.
Associated.
. Associated Natural Gas Company
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r;sults for our Middle M
accasiens m 1980 Tne Ve iJJ :
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ti ber of chores thus out-N ' ", WWT.O[d.
South Utiht es Syste n. I 5.
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- i ihink it would be fair to 4
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m dw characia nze the year as standmg m 1980 causea.
a qpa u ont of ' turning the earnings per share to
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share m 1979 to $2.01 It
? hj@ q*dN e r rDsponsive regulatory 14&
is the considered :ude L
'fC, ment of your manaw
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ment team and board %4@%hswn.
i proved abihty to serve
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Syst c m1 1.5 milhon customers.
!ang-run best mterests consHenng the +:e-9; We made substantial progress toward mendous changes which have nceurred m %hnd y
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our goal of diversifymg the System s fuel base worid fuel mmkets m the.ast decade Je-
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MW to 1:.ssen our dependence on fuel nii and mand that the System's c >2.
2nd nuclea:
natural gas as fuels for electnc generation.
p:ngram be car ned th: agh to successful i Qs. "* %
This progr. 's was marked by completion and completion y _ (EW i & ~1 commaroal operation of our second Dunng 1980. construcun expenditures DhfTEM hjkDN M ~ W k /J; % %j nuclear. fueled generatmg unit and our hrst totaled $910 milhon compared * : $ hC25 hi modtrn coal-fueled umt. both m Ark asas.
hon m 1979. We expect that ~2 pita expendi-1 These two umts added 1.673 megawatts tn tures f or 'nstruction !cr 1981 vn:1 be app:cx.
3,,i pled p%g%jf%
+hr System's generatmg canacity and. at muely $897 mahon.
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normal operatmg load factors. can displace The System s reta. cu,torners requued N
h 16 milhon barrels of very expensive fuel od five percent mme electnc eneray m 1980 th 2n g
per yxar. As the System's remaming six m 1979 apm heav ly mt;uenced ty the ex-g;'- g g q g g ganeratmg units now under construction -
treme temperatures of the summer of 1980. p ggh d=w three coal, three nuclear - are completed Our tmecasts based on norma! veather m g~e> W K 4 4 ~
W. 49 r h,My cino go mto commercial operation. the heavy dicate that cu. comer requmments for e:ec l '.
C, N hdYN M construction fmancmg load which the Sys-tncity w:1! grw at a s s ver 2te m *he 1980s kc t im has bea carrymg in recent years can ho than e 2s expenenced m the 1970s but we
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- xpected to bear fruit mth renewed fman-beheve that m our Middle South servme area b:
F~ p'%@d%<@YhTU cial ui;ror for the System, much-tmproved
- m the Sunbelt with the nmien s nF f;f abihty to serve ou r customers' elect. ic energy deep-water cd part smn to apen and nany p
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u,m... e requirnments at the lowest practicable cost other irmustri" aav,nt :ges - ustomer 4;2 through displacement of ever-more-costly od e:ectnc ener Jy requmments wF g:,w f,ste: % D $,
, M(, " l f@7 h, (gy@g and gas. and adequate capacity for area than those.- f the n ern as, vhie. Thus, ou:
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f growth.
constr eten _t new generatmg triaties is Our conschdated net mcome, which not only fm tr.e purpose of fuel diversificatrn [/['(tM,qiMM dipped shghtly from 1978 to 1979. mcreased but also t, ensure that the System wi have (( ' K.N44m,,Mi "
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almost eight percent m 1980. Thw improve-the obthty tc meet those future needs vhen i
m a nt was mainly attnbutable to three f actor s.
they anse v
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w en 0Nw s a p
rat; increases placed m effec dunng the The busmess m 'viuch y^ u trave mvested kgp _j<.8,, ME %
year by several of the System operatmg m basically the cerv'ng rf essentia: 0:ect:
kg byg companies. heavy electnc energy requue-energy needs of the pm pie ana mstautnns >
m;nis by our customers dunnc; a wide some 92 000 squ'ne mues And in this ve ore 544fjkdyp spread. sustomed record-setting penod i deep!y demmted nut weh the dem quim
(.. y f g M g r G M$pWWG hot weather last summer and contir ed
- mmn thm the System must r e acco:ded the [ MHHMPO tight control of axpenses.
rMistic opportunay to em n a f : :eturn +
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em P mj p y W 7 u.y
,As a nuessary part cf hnancmg the dys-om stmnaders rmpensate ym ace-
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a eAws*%;ew tim s essentiai Construction program. the quotely te r 'he se,fycu: IpS E l..
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operating companies have baan diligent in seeking continue to recognize the importan.e of nuclear needed rate increases while striving to minimize power and support its contmued use. just as they did operating expenses. As reported to you in last year's prior to the Three Mile Island accident.
annual report, we began to see progress in the rate We are encouraged by the nuclear positions area in the second hclf of 1979, and this trend con-which have been enunciated by the Reagan ad-tinued in 1980. Unquestionably one of the keys to minictration, and will coeperate fully in efferts to as-sustained financial health !or the electric utihty indus-sure nuclear power's role in meeting America's try is the overcoming of regulatory agencies' practice energy goals.
2 of treatinoinvestment capitolos of nointerest or ben.
Dunng 1980. we inaugurated a new strategic efit to customers until a project goes into commercial planning process to formahze. coordmate, and bnng service. As an investor you certainly put your capital into sharper focus the manner in which the System into the total Company and its programs for service to considers its future environment, weighs its alterna-customers now and in the future: and you are entitled tives, and plans apptcpriate actions in furtherance of to a fair return from the business without having to try its basic goals. We beheve that this more structured to trace the facihties where each dollar of your m-strategic planning program will help us to cope well vestment is actually spent. We believe that some with the increasingly difficult economic, energy, and progress is being made in getting regulators to rec-regulatory cha!!enges of the future. See page 38 of ognize that if customers' needs (whether for added this annual report for a hst of the corporate objectives energy or to offset sky-rocketing oil ccats) are served which form the basis of ttus strategic plonning pro-by construction of facilities, the customers' interest in cess.
the facihties does not come into existence only at the The consolidation of operations of Arkansas instant of initial commercial operanon of the facihty.
Power & Light Company and Arkansas-hhssouri All dollars of investment to support needed construe.
Power Company Lecame offective Ionuary 1.1981.
tion should be included in the base on which the Ark-Mo is now a division of AP&L. and Associated business is permitted to earn when the investment is Natural Gas Company, formerly an Ark-Mo sub-made: and extensive studies have shown that over sidiary, is now a subsidiary of AP&L the life of the facility, customers would actually pay After almost 25 years with hhddle South Utihties, less under such procedure. For a detailed discussion Donald J. Winfield, senior vice president, who for of the System's current rate situation, see page 7 of many years was the chief fmancial officer for the this annual report.
System, will reach normal retirement on March 31.
Last year, I reported to you on the electne utihty 1981. Following a successful career with a promment industry's efforts :o respond appropriately to the mvestment counsehng firm, he joined Middle South March 1979 accident at the Three Mile Island nuclear in MS. Mr. Winfield has served Middle South with plant in Pennsylvania. Further progress was made ln unusual skill and professionahsm in its fmancial af-1980 in the industry's rubstantial effort to apply the fairs. Inasmuch as his successor. Edwm Lupberger, lessons learned at Three Mile Island. One sigmficant is located in our New Orleans headquarters the New milestone was the establishment in September 1980 York office is being closed.
of Nuclear ElectricInsurance Limited (NEIL). a mutual As you were informed by letter m January 1981, a insurance organization funded by the industry.
large portion of your 1980 dividends represented, for Coverage by NEIL will greatly allevmte the fmancial federalincome tax purposes, a return of capital and, burden placed upon an insured utihty experiencing for that reason, were nontaxable as mcome. See an extended outage of a nuclear generating plant page 39 of this report for more details concerning this due to an accident by paying a portion of the re.
determmation.
placement power costs incurred. Middle South has Your board of directors, m declanng the div-secured this added insurance coverage for its nu-idend payable January 2.1981 raised the quarterly clear units.
dividend rate to 404c per share. This is equal to an Probably one of the most important accomphsh-annual rate of $1.62. Since its fctmation, the Com-ments of 1980 was the institution of the Significant pony has been able to increase the dividend every Event Evaluation and Information Network (SEE-IN).
year except one 1956.
By means of this p;ogram every non normal event at A new discount feature initiated at mid-year any U.S. nuclear generating plant is carefully made the Company's Dividend Remvestment and analyzed by the Nuclear Safety Analysis Center and Stock Purchase Plan an even more attractive cption.
the Institute of Nuur Power Operations for its Beginrung with the July 1,1980, dividend payment, generic significance. Where the analysis indicates reinvested dividends were applied toward the the need for corrective action, this is immediately purchase of Middle South common stock at a f. fe-communicated to every nuclear plant in a manner percent discount. Such purchases are made without calculated to secure such action. I do not believe it is brokerage fees or commissions. If you are not doing overstating the case to say that if SEE-IN had been in so already, and you would like to avail yourself of the operation at the time of a precursor event at another savings and convemence of this plan, please write to nuclear plant similar to the happening at Three Mile Dan E. Stapp, secretary of the Company.
Island, most of us and certainly the national public On behalf of the board of directors and my 12.000 would never have heard of TMI.
fellow employees in the Middle South Utihties System.
The continued work of the Nuclear Safety I thank you for your contmued support of our efforts.
i Analysis Center, the Institute of Nuclear Power Op-Sincerely.,,.
erotions, theCommitteefor Energy Awareness.and NDL has been important in the effort to restore the American public's confidence in nuclear power.
Floyd W. Lewis Opinion polls indicate that the majonty of Amencans Chairman & Pre 4&nt
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combustion.
cember. AP&L went to the fmcncial market NOPSI received $15 ru! hon through a again - this time with the sale of 16 8 sale m March of 150.000 shares of $100 par percent, six-year first mortgage bends. Pro-value. 15.44-percent preferred stock.
ceeds from that sale totaled $70 mdhon.
MSE received $98.5 mdhon from the sale bnngmg AP kL's average cost of money for of 12%-percent 20-year first mortgage bonds.
new senior ca utal to 14.9 percent for 1980. In These bonds were issued m January. Apnl.
coordination w th Pope and Jefferson coun-and July m amounts of $15 mdhon $31.5 md-ties m Arkansa. an additional $16.6 mdhon hon. and $52 muhon respectively.
of pollution con rol bcnds were sold m De-Equity mvestments by the Company in l
cember 1980.
the common stocks of AP&L. LP&L and MSE LP&L c.lso made two tnps to fmancial totaled $157.9 mdhon m 1980. F nds for these j markets m 1980. resultmg m an average cost mvestments were raised throuah bank loans for new senior capita! of some 16.0 per vh2ch have been or wd! be repaid from pro-I cent. In November LP&L received $28 mdhon ceeds of MSU common stock sales to the pub-I from a sale of 1.2 rmlhon shares of $25 par he through underwnters.
value,15.20-percent preferred stock. In De-MSU successfully negotiated a $230 md-cember LP&L raised $49 mdhen from the hon revolvmg credit ;me mth a group of SELECTED FINANCIAL DATA v 5WLG2 1989 1979 1978 19?7 1976
~. s
..,,,.. ~
( Not Operating Revenues *............
$2,342,228 $1,823,059
$ 1,622.177
$1,443,057 $1,144,411 l Net foodme N.,.... '........
$ 195,907 $ A2,058
$ 185,438 $ 144,969 $ 106.047
' Earnings' Per Share ;....
$2.01
$2.13
$2.46
$2.18
$1.82
[0Mdends Dedared Per Share.
$1.59
$1.535
$1.46
$1.395
$1.335 i Total Ass 5ts'.h ;.............
[Ung.Terrn Dibt (exduding i:urrent maturities)*......
. $7,334,879 $6,503,068
$5,501,027
$4,736,707 $4,136.235
$3,392,309 $3,017,816
$2,629,711
$2.175,471
$1.965,985
' Preferred Stock with Sinking Fund * ' '...,
$ 283,165 $ 193,507
$ 60,063 $ 60,063 $ 60,063
.r: >.
...~
p(in Thousands) 3
money center and regional banks which will J
cover the Company's sliort-term needs C. -.
through 1984. The line will contract as pro-jected needs are reduced, dropping to 75 percent of the original amount in 1983 and 50 4
percent in 1984. The credit agreement be-w.-
came effective June 27, 1980.
.g 7
s 1981 FmANCmo. System construcuon
\\
i MNANCIAL
$897 million, excluding nuclear fuel costs. SFI
, ',m REVIEW expenditures for 1981 are estimated to be b
expects to increase its investment in fuels-related programs other than nuclear by $8 Construction million. Nuclear fuel costs in excess of those engineers give x
previously provided for in existing lease M
Arkansas Nuclear agreements are expected to be $107 million.
One, Unit 2, a Retirement of bonds approaching maturity thorough checkout and other capital requirements call for some pri r t its initial
$125 million, bringing to $1.137 bilhon the c mmercial System's total capital needs anticipated for i
operation in March 1981.
1980.
The System expects to raise approxi.
maid.y $837 million of the required funds from external sources, including the sale of first mortgage bonds and preferred stock, long-ATE ACTIVITIES.The financial condition and short-term bank loans, sale and lease-of the Middle South System is closely back of properties, leasing of nuclear fuel, relatedtotheadequacyof raterelief received pollution control bond financing, and sale of from the various regulatory bodies with MSU common stock.
jurisdiction over its operations. During 1980 The balan:e of projected capital re-all of the operating companies filed for rate i
quirements, a estimated $292 million, will increases. At year-end 1980, System com-be met by the System with internally gener-panies had pending or on appeal electric ated funds.
and gas rate increase applications totaling The Company expects to raise approxi-approximately $465 million on an annual rnately $206 million in 1981 through the is-basis.
suance and sale of additional shares of common stock. A portion of these funds will AP&L. On May 29,1980, AP&L filed with the be raised through an underwritten public of-Arkansas Public Service Commission ( APSC) i fering tentatively set for late April 1981.
a request for a two-step retail rate increase Total investments by MSU in the com-totaling some $130 million, with $86.7 million mon stocks of System companies in 1981 ora to be placed in effect immediately and the estimated at $123 million. Funds for these in-remainder to be placed in effect June 1,1981.
vestments are expected to be raised through The first step, $86.7 million, was put in effeet, bank borrowing - repaid through the sale of subject to possible refund, on October 28. On additional shares of MSU common stock. The November 26, AP&L and the APSC staff en-remaining proceeds from the sale of MSU tered into a stipulation agreement whereby common stock, approximately $83 million, the staff recommended an increase of ap-will be used to reduce bank loans outstand-proximately $90 million and, in return, AP&L ing.
agreed not to contest certain staff adjust-ments which would have the effect of reduc-ing AP&L's request to approximately $117 APITALIZAT!GN Capitalization ratios million, as opposed to the $130 million origi-at year-end were as follows: long-term nally sought. Hearings have been con-debt, 57.5 percent: preferred stock,10.4 per-cluded, and AP&L was awaiting a final order cent; and common equity, 32.1 percent. The as this report went to press.
capital structure reflects the wea; med fi-On August 28, 1980, AP&L asked the noncial position of the Company, which has Federal Energy Regulatory Commission developed as our construction investment (FERC) for an increase of almost $ 10 million in accelerated in recent years. Management its wholesale rates, pursuant to a pre-filing recognizes the need to strenghten the ratios settlement agreement with AP&L's whole-and is developing plans to increase the sale customers. AP&L began collecting the common equity portion of the ratio.
first phase of the increased rates, amountmg i
LP&L also serves one word of the City of New Orleans, where the New Orleans City Council holds regulatory authority. On July 3, 1980 LP&L asked the City Council for an in-1 rease of coproximately $4.4 n Jhon per year
.n v: der to ahgn its New Orleans rates with 8
those being sought for customers outside the i
city. On October 24, LP&L asked for some FINANCIAL
$704.000 on an mterim emergency basis.
Heanngs on the onginal $4.4 mi"'on r quest REVIEW 6"
and the $704,000 interim fihng haa -
3en
,{-
.l, held at yect's end.
Dispatchers who
- y MP&L. A request for a $68.8-million annual l
specialize in
/N increase in retail rates was filed by MP&L on computerized power
~#
May 28,1980. with the Mississippi Public Ser-dispatch constantly qb ee Commission (MPSC). MP&L placed the N
monitor the ro.,.:s in effect, under bond and subject to System's energy 4
possible refund. on July 1. On November 24, load at the MSU
/ / g' the MPSC rendered a decision granting System Operations
/-[N/ 4/
MP&L ci rate increase of $48.3 milhon per ye r. This decision has been appealed to the Center in Pine BlufT, Arkansas. One of state murts by MP&L and ny two mtervenors to some $7 milhon on an annual basis, on in the case, the state attorney general's ofhee the. jobs is t ir November 2,1980, subject to possible refund.
and the hhssissippi Legal Services Coalition.
ensure that Ark-Mo, now a division of AP&L. filed MP&L in appealing, is askmg for the full electdcity is with the APSC on July 23, 1980, for a retail amount originally requested and is seeking generated using the increase of some $7.5 million. The full amount inclusion in the rate base of Construction most economical was placed in effect on December 21, 1980, Work in Progress. Pendmg a fmal decision, facilities available.
subject to possible refund. Heanngs had not the full amount of the rate increase ongmally begun when the year ended ana Ark-Mo be-sought vall contmue to be collected.
l came a part of AP&L.
NOPSI.On April 14,1990. NOPSIfiled with the LP&L. On May 30,1980, LP&L requested the City Council of New Orleans a request for Louisiana Public Service Commission (LPSC) increases in its electnc and gas rates totchng to increase its ret:nl rates by $203.6 million
$32.5 millicri per year ($23.3 milhon for elec-l annually. On October 8, LP&L was allowed tne,59.2 mihion for gas). At year's end, hear-to place in effect on an interi n basis an in-ings in the case had been concluded and crease of $32.4 million, while the LPSC con-NOPSI was awaitmg the Council's decision.
i side, the original request. A decision of the LPSC is expected in May 1981.
I I
COMMON STOCK DATA PENDING RATE INCREASE APPLICATIONS l
let December 31,1980) y ms
- mm,.pm myym 77p >y l
i Quaner
<d Date Annual
.a
{1900l-Phat ' Second. TMed l Fourth Filed Tg
' Arnount Where Pending
,, t y (In MAons).
[ Price Range :
.,, ' 14 % ; ; 13 %; ;.12 % j
~ ' High ' -
- 13 % '
iAP&L 5'29/80 Retail
. $130.10.
APSCL 4
f10 % i, ' ti @ 11 % 1 10%j 8!28/80 Wholesale
$9 97 FERC Low-e
- Dividend Declared.
1 $0.3951 J S0.395 -/ $0.395 ~ 2 S0.405 )
ARK-MO 7/23/80 -
Retail
$7.48 APSC L
f4 LP&L 7/29/77 ' Wholesale
$8.54 FERC 1979>
m.
El 5/30/80.
Retail
$203.60 LPSC-
- Price Range. ~
V.
d
. 7/ 3/80 Retail
$4.44 City Counal(NO)
, Migh '
4h 16 %y ' ~ "l
- 15 % i 110 %
Low.
' 14 % - _ 13 % > -13 %:
14.%1
- MP&L 12/23/80. Retaif-
. $68.77 Chancery Court 4
' 12 % >
. /ppealed (Hinds Co., Mississippi)
,DMdend Declared '
.$0I.8; - $0.30 ; 7 S0.38 t l 80 395ll
.NOPSI 4/14/80 Retail
$23.28 '. City Council (NO) "
%g Qggg
- conomywucens
' - gg 4
14/14/80 Retail (gas)
$9.18 City Council (NO) a
- TOTAL
$465.36 wL.L w M.&waw.xza Ls. A-A J
+
4.
m
- s.,m,..
N "
w'
).'y A.
r
![
9 s.
W
\\
CUSTOMER N.
j INFORMATION l
'm i -
Qf During 1980 v
System companies 1
g q
began training personnel who l.
y will conduct
- s(/.. '
s computer-assisted energy audits T..,r4 -
for homes and w.~-
businesses.
C operatmg companies serve some 1.5 USTOMERS. The System's f our mercial, industrial. und governmental cus-tomers used 5.4 percent more electne energy milhon electric customers m parts of Arkan-in 1980 than m 1979. Usaae m 1930 was 50.1 sas. Louisiana hhssissippi, and southeast bilhen b!cwatt-hours.
Missoun. Approximately 87 percent are resi-Residential customers requaed 16. i bil-dent:al customers. During 1980, the number hon iclowatt-hours during the year an m-cf retail customers (resident:al, comme:cial.
crease cf 10.0 perceat. Commercial usage industrial, and governmental) w:thm the rose 6.0 percent to 9.3 bilhon Iclowatt-hours, Middle South System grev at a rate of 2.1 and industnal customers used 22.9 b:llion
- percent, blowatt-hours. 2.4 percent more than m 1979.
Governmental customers mcreased their l
electnc energy requuements to 1.8 b:! hon ELECTRIC ENERGY REQUIREMENTS. The lclowatt-hours up 2.6 percent from a year summer of 1980 brought record-ago.
breabng hat weather conditions v htch had a Energy sales to mun:cipahties. : ural sign:f: cant impact en increasmg customers' cooperat:ves, and other :tthty systems to-electne energy requuements. From earlf taled 5.1 b1E:en blowatt-hours in 1930, 6.7 July through August the area served E'fS4fs-percent less than m 1979. This decrease is tem companics expenenced weather cchich due m part to the fact that several customers vas marked by sustamed and Idespread m thm category are nov* part owners m the high temperatures unrelieved by s:gnif: cant White B:uff generatmg station m Arkansas rainfall or cool intervals.
and becan receivmg part cf the:r energy m However, slou -down of the U.S.
1980 frorn this nev station. These customers economy was reflected throuylrut the cer-vill also own part of the Independence vice area and tended to reduce energy re-generatmg stat:cn when it :s completed. The quirements.
partic:pation of these customere m these nev Among the hardest hit indusines ccere stations has decreased their need to pur-forest and albed products (lumber 'vood, chase energy frem the System.
and paper). The economic slump. in concert In 1950. the System's peak demand - the with record high interest rates. caused nov one hour m the year in vh:ch customers' home constructicn to be down. hence the de-greatest requuements for electnc energy creased demand for wood and other buildmg occur - was 11.769 C00 blovratts. This peak, products. In addit:on. there were greater cur cchich occuned on July 16 at 4:00 p. m..
cas tailments than anticipawd m the product:on dunna the hottest part of the extended penod of chlerme and refmed petroleum products of intense sum:ner veatha. This vcas a nev which requae large amounts of energy.
record for the System samo 10 percent over Largely as a restit of the extreme sum-the prev:ous year's record peak of 10 687.000 mer weather. the System's residential. ccm-blowatts.
l
\\
f NDUSTRIAL GROWyH. The System service ONSERVATION & EFFICIENT ENERGY A crea has been the beneficiary cf a portion USE. Energy conservation and in-1 of the industrial growth known as the " Sun-creased efficiencf n the use of energy are i
belt ehlft," which desenbes the movement of impertant factors in America's energy pic-business and population from the North to the ture. Avoidance of energy waste has for an
- South, increasmg segment of our populatien be-10 An important source of regional come a pragmatic as well as an ethical economic growth is an inciease in manufac-imperative.
CUSTOMER tunng in the region. This increase produces Too great a dependence on foreign increased employment and higher wages.
sources of oil poses perhaps the greatest se-INFORMATION which attract workers vho in turn increase cunty threat to the United States. Studies.
the demand for locally provided gooas and both by the System and by objective outside services.
sources, firmly establish that greatly in-This employment growth leads not orJy creased use of coal and uranium as fuels for to higher incomes, but more importantly to generatmg electricity will be required in higher overage income per person. The in-order for America to move in the direction of creases in incomes and employment create energy self-sufficiency. Extensive efforts to economic opportumties within the service improve the efficiency of the use of energy area. rms has reversed the outward migra-resources will also be vital to the success of tion which was expenenced m the 1950s and realistic energy independence efforts.
early 1960s as pecple sought employment in The htddle South Utihties System has other parts of the country.
long been a leader in the field of mnovative The System companies actively prcmote load management and practical customer the eccnomic and industnal developmerit of conservation techniques. Programs de-their service areas. Although the national signed for the construction of energy-efficient economy was characterized as being in re-homes and commercial buildings. com-cession during a substantial part of 1980, the puter-assisted home energy audits, other System service crea's Sunbelt location ex-consumer-oriented conservation promo-perienced continued, if slower, develop.
t;cns, solar water heaters, and heat-recovery ment.
water heaters are among the imaginative.
During 1980 new industrial facilities or progressive load management ideas that expansions numbered some 217 in the htd-have been conceived and implemented by die South servica crea, creating 8,876 nev, System companies. These techniques have jobs and boosting the crea's annual payroll positive benefits for customers - reduemg by approximately $107 million. Of particular their energy costs by mmimizmg the System's importance to the System companies is the use of older " peaking" units which generally fact that these ner or expai.ded industrial have lower efficiencies and require higher-customers will require energy that should priced fuels.
produce some *38 million per year in addi.
One way for utihties to achieve this be-tional System revenues. For the three years nefit is by improvmq daily load factor - the prior to 1980, new or expanded industnes degree to which racihths are used relative to averaged 237 per year, with an average of their capacity - while minimizing peak load 7.681 new jobs and a $72.3 million average requirements. Customer energy require yearly addition to the area's payroll.
ments come in " peaks" and " valleys.' The customem are best served by utihty pursuit of CUSTOMERS' ENERGY REQUIREMENTS programs that hmit the daily peak dmnands On 84cns of Knowatt. Hours) and transfer this energy requirement to O Total El Retail periods below the peak daily requirements.
_vhere incremental costs of power are nor-l 18 h a;u,;a. a m m h ;a mel wmmmvnm.m.w matly lower.
agy7 f n ^ 7 An innovative technique utilized by Sys-tem compames is the radio-contro!!ed switch y - - y m -
n dR2 %,
for air-conditionmg compressors. With the O,]j FP t ym y.
6.iCamhh gj
+
incentive of special reduced rates. customers allow their electric utthty to remotely turn off
_ hN r m e.-m77 w.wmmm dM their air conditioners for brief intervals dur-n
- ~ c u m w._ce,s.m lyf U ve:37x.. E..
ing periods of high den.and. This reduces peak electrical load requirements vithout I 78 "ww y--ym
-m
,.g"
- = " ^ - -
">1"e " "" " 41= - ' ' ' ' - " = ' - = -
g Pwnf.N.
AP&L has introduced time-of-day rates
~m mewm~,w
.~w.-
W for residential customers aimed at causmg a 1980 r4W m.y yu mes.a mm 7
shift in some cf their use of electricity to ey.
M periods cf lower demand.
'-< h + t
['
.' F
.?
CONSTRUCTION, FUEL AND h ' OPERATIONS ~b s4.- l j l _y^ ~ ~. w m, -~ \\ I -s (I t ' y1,^ % i 90!.' W e. t t'.' t i 4 5 {(!'i 'It1E i
- i e.n 2h ' ;(
h +omN, Ihi [ y, +,s C 'N t.) s 4 s a , O(( j 'l] t[ f) *- j I tern _ OX' ~ qt d;' e
- ',C.
2 m - a y 3Orl?e. ' r '. J : s- ., y, ay:y: -r w lg a '. ; t '+2:~ 7, 7 3 r th:-, 8
- ea 1
v ? hbb [F 'l i 1 3h. '."' cm m.. ~ 'r
- 1977, r
3 'l !9 3 * ?t:: "./ + tc n.E ' j: M' d~ ~][ pi ~' X. d5* w.,. H A s One r
- ~ ~
Ope: bbb 000 K;.' ' Thr o. + Ft: * +
and the cites of Jonesbcro, Conway, and West Memph:s. Arkansas. N ?nt6 m. The plant's second umt cf :dentcal de-s E'MfM&S Q;abQ df[ Q -,N${9?%, s:gn. vas 64 percent complete at the end of 1980 and is expected te enter ccmmere:al p serv:ce dunng the surnmer of 1981. The Sys- ._ 4 W.a N$' tem's ownership cf this urut :s also 57 percent. 3 g k_iU&M %dNNb YMUI S Thecostof AP&L'sportien cf thesetwouruts:s expected t tctal seme 2426 mdhon. CONSTRUCTION, fi g[h',q.nw 7 Two ciner coasfueled umts under con-f"'EQ' -7TMN " struction at the Independence Steam Electric FUEL AND .7 - 4 5 Station are essentially duplicates of the .j, 3 OPERATIONS .O Wh:te Bluff umts. Cons? uction cf the two a 4., units. vhich began in 2te 1978 vas 29 per- ~ i J2* cent and e:ght perceni complete, respec-At the Grand Gulf tively, at the c!cse of 1930. They are expected ~ nuclear generating to be rean, for commere:al cperaton in 1983 plant near Port and 1985 and together aill cost approx: ~ Gibson. Mississippi. mately 5509 rndhen icr the System's 56.5-Unit I reached 85 percent share cf the:r av.e ship. percent of S:x dd:t:Onal coal cr hgmte-fueled amis { OAL liMTS. In August, a new fuel of standard des:gn are planned f c: operat:en c mplet. ab7 .# era for the Middle South Utilities System m the late 1980s a i ectly 1990s. Two umts year-end 1980. Umt was ushered in when AP&L placed m com- -ill burn harme. two will burn icv -sulfur 1 is scheduled for mere:al operation the System's hrst coal-coal and the fuel for the remaimng two will commercial fueled generating unit in modern times. The be determmed o' t: later dete. Each umt will operation in 1982. fust unit of AP&L's White Bluff plant has a have c nommal capacity of 800.000 kilowatts. . capac:ty of 815.000 kilowatts, of which the The f:rst umt is expected to be built by LP&L in System has 57 percent ownership. The re-south Louis:ana en a M:ss:ssippi R:ver s:te. It maining 43 ercent ownership is held by the is presently slated for commerc:al cpe-sn Arkansas Plectr'ic Ceeperative Ccrporaton in 1958. []MJUOR GENERATING UNITS CONSTRUCTION PROGRAM: sm. b1 unn e a 1 [ . Unit Conipany-Fuel Capacity ' Openedon i WNte 81uff #2. 'AP&L,
- Coal '
1465%' 1981 2 (Grand Gulf #1 - MSE Nudear 1,094"A.
- 1982-1
~ { 7 aterford #3 i....... LP&L- ~. Nudeer. 1,104 1963: W [. Jindependence p1 p.. ~.s. JAP &L^ Coal,. 461'5 1963 l ~ _ independence # 2 '.......... -AP&L. Coal '461" '1985 L ; Grand Gulf #2. 1MSE' Nudear 1,094 "
- 1986-H mensees me srstem s 5:s mtvest m uns ass uw on '.
~+ewnents me s vem s a: s %. nent e sese 12so uw unes. u hme'-a ae seP8 5w='nais'89 Y"w - __ J. GROSS PI. ANT on mens cf cows) CONSTRUCTION EXPENDITURES D Total O Electne hn V cm of Dom) O Total O Electnc [d l 4432.4 584.6 bM,MdislJ.J.4549) kI kid.MW.w h. 58M,} __m I"$ . 5073 s ' I ('7 689.1 pxL~ *n,,.crmmmrmT Mau ,tj'
n
n.u m a L"a u. m %":."an m" ~692 4 i ? ' ' n a i [, '5935.5 h 893 6 1 j p m m _ w _ v_.,s,g y. . y -w m.__,o,a.o. _ _ a _2 I] 6879 9 1014 6-k& M.A auk i m w m h 251 . J 1) v::.wA,.LJ L 62 Qwh102411 m aa 180 m-f: 7746 4 905 6 c.,'>" nam;.- n , igg gk%g. ' (i n' - - - 's;g _;w,.gcaa m s,909_8 c a n
[TNf}!I. . DIE !' Qh:aM:, < #Nf'if i $$2e1 i $T A i ijj@ t:th 13 1%tr I * ' ' CONSTRUCTION, j , e- - FUEL AND 7 r ru 431 ' T OPERATIONS ~ +. s g ..'kt W 'M. 'I-i M ~ .M Wsicaf. ^- m : ie. 5:# ue ^- y{ffl i gg sy. kg4 .. ;,1 > ~ h Fcf 'he Sys e-UELS T h " n -~ m - 2 w u h..s
- c derv:.
ec -e-r .e e-
- e:
v'.e: t
- e
.x : u, .2 :.e c. "4, d 2!11 I s'} Q 3 +> e: .m
- tt.
,'y' r l l e,, [ .:r-1 . ATUPAL GAS AND FLEl OI' '. 9 ' a a + + t t
- t 7
e
- a ; pp, t
e .:,u I fF i ^^
NATURAL GAS USAGE dnousand ^ ;tsc Feet) OAL. Cca. became a pcut of the M, SU i fuel mix in 1980 accountmg for two per-19,J U$_,' - ~ ~ cent of electric generation. The System transports low-sulfur coal from mines near Gillette. Wyoming. to the 19,I,I own fleet of leased rail cars. White Bluff plant site in Arkansas, using its N jj The System has a contract with Ken-CONSTRUCTION, 7 FUEL AND I McGee Corporraun for the supply of coal to s the two White Bluff units vhich calls for 150 million tons over a projeciad 30-year hie cf OPERATIONS .I the units. The two units at AP&L's Indepen-I ) dence Station will also use low-sulfur Wyom- ~s ing coal under another long-term contract Ig *. nnn with North Antelope Coal Company, which is a joint venture between Powder Paver Coal Company, a subsidiary of Peabody Coal - Companf, and Pan Eastern Coal Company. The System expecta to uoe about 3.3 mil. a subsidiary of Panhandle Eastern Pipe Line lion barrels of fuel oilin 1981. It has contracts Ccmpany. for more than this quantity and."ill market to The fust of the standard-design coal other users that which is excess to System plants, now planned for construction in requirements. Additional natural gas, as Louis 2ana, will burn a low-sulfur Wyoming available and when economical, ' vill be coal similar to that used at the White Bluff used to lessen the System's use cf fuel oil, and, later, Independence stations. Lignite a low. heat-content form cf coal availablein Arkansas w1!!beusedasfuelfor NUCLEAR FUEL. With commercial opera-two future standard. design generatmg units tion of the System's second nuclear in Arkansas. unit, the nuclear portion of System e!ectric generation climbed from 10 percent in 1979 to 17 percent in 1980. h URCHASED POWER. Through inter-The System has under contract sufficient A connecting ties with other utthties. the Mid-uranium to meet all cf its nuclear fuel needs die South System has access to electne through the year 1985. energy other than that generated en cur sys-Seeking supplementary supplies of tem. The System from time to time can pur-uranium for future needs, SFI has been con-ducting a uranium exploration program. FUELS FOR ELECTRIC GENERATION (Actual and Estimated Percent of Net Generation t>y Fuel Source) 3 Od & Gas D Nuclear O coat 1970 19,;5 w _-m 1980-OEb 198 m,m/e%[%' _ 30! 17 m ,s. 2, mm.m o.s.o y I B Mgw?wwwmew, mm
- h D
- n..
Lyh. Au.h;w AhlsaA4J ' Wre Hycko mp<esents f t or est a
4 3 Y, W 4 ~ h h fy -l[ 'c. }; g 'f Ib i 3 }. 3 CONSTRUCTION, u i ~ - i EE. -.T - I ,p. p* -. r
- m
. 9. FUEL AND ? Y '.' ;. OPERATIONS ' '2 m v ,.,N / .A n + f j ;b,]f,. 4 j I N 1
- e. -
k h 7 4 h t. ( Q[.. g : 3, [ '.' LP&L's Waterford 3, },-
- j.
m - which is scheduled N . y g "y ' t- ',? for commercial 6.7 ~ P..y y 4.f ; {.. '..{ ~ operation in the first muer half of 1983, will have a capacity of 1,104,000 kilowatts. __7., +, .c .,..,4, y ..,n n.~ .. -- e c_. ~. chase limited amounts of such power more several decades. This extraction experiment economically than it can be generated. In still is in the early stages of planning. Its even-1980, 22 percent of the System's total energy tual feasibility is not yet proven. Because SFI was purchased frem other utihties. Middle operates on an at-cest, not-for profit basis, South continues to utilize x11 its resources to any benefits realized would accrue to the cus-serve its customers with the most economical tomet s if this expenmental project is success-energy available. ful. The major part of the hLdd!e South Sys-tem's research and development effort con-FVELOPMENT. SFI has the respunsibihty UEL EXPLORATION, RESEAPCH & DE-tinues to be through the industry-funded Electric Power Research Institute (EPRD, of t for findmg. purchasing, and deliverire fuel which MSU Chairman and President Floyd i for System generating plants. W. Lewis is cu rrently chairman. The System's SFl is involved in gas and oil explora tion. 1980 contribution $6.8 million, vas used to Dunng 1980, SFI had varymg degrees of par-help fund EPRI's comprehensive research ticipation in the drilling of 21 wells. Of these program. wells, SFI held a major worlang interest and acted as operator of eight wells, four of which In its recently publisbed five-year Over-became commercial producers. Of the re-view and Strategy, EPRI stated .at coal, maining 13 wells drilled with other parties as coal-denved synthetic fuels, and ur~nium operator, five proved commercially opera-must supply the nmjor portion of eleuricity tional. Nine successful wells out of 21 is a high generated for at leest the next two to three percentage by industry standaru. decades. Even wi+h a rapid increase in coal-Work continued in 1980 on SFI's effort to fuec generation. according to EPRI.10 to 25 acquire leases of land in southern Louisiana cercent of America's electricity needs could on which to implement its experm. ental proj. be unfilled in +be d.ar 2000 unless nuckar ect to extract natural gar ' om hydro-power fills the gap, makmg nuclear power p'ssured salt water formations underlying "not a question of preference, but a matter of the Lcausiana-Texas coast. Estimates indi-necessity ' cate that the gas dissolved in this water may, if commercially recoverable, providea major new source for domestic gas production for
m ._ u_ Y \\ l,. y.- a,. W ,yy.- ~ n. REPORT OF MANAGEMENT > x% _SM J y ~M%, .t- ~ e, A + ff4 +f, m,.Am.1 W $gyb qm w ay~ n..Jv G [6 -. W"P _%(W P JM) The management of Middle South Utihtiem The board of directors pursues its re-5 gggj;} Inc.. has prepared and is responsible im the spensibiht'f or reported financial mformation f financial statements and relatea fmann r! m through its audit committee. composed of d_ % U formation included m this,nnual reper t. The outside directors. The audit committee meets "(( 6 4 y g e ih financial statements ore based on aenera.!y penodically with management. the mternal b Nd accepted accounting prmciples. consistontly auditors and the mdependent pubhc ac-dfMD apphed. Financial mformation meluded countants to discuss auditmg. mter na! can. 0, sA mame%g elsewhere m this report is consisten* wah the trol and hnancial reportmg matters. The m 7beM fmancial statements. dependent pubhc accountants have free ac
- d MfM P %
To meet its responsibihtier vith rospect to cess to the audit comnnttee at any time. ' Mi Emd fmancial mformation. manaaement ram n-The independent pubhc accountants MMj!h.d tains and ersforces a system hf mternal ac provide an objective assessment of the de- %4 jy countmg controls which is designed to pro-gree to which management meets its respon-Ud vide reasonable wsurance on a cost effec-sibihty for fairness of financial reportmg. MM@QM{ s, Q tive basis, as to the mtegnty, ob!ectivity and They regulmly evaluate the system of mter igiR d rehability of the fmancial records and as to nal accountmg control and pertoim such /M*hW 2 $g] %+ the protecticn of assets. This system mcludes tests and other procedures as they deern commumcation through wntten pohcies and necessary to reach and express an opinion sMi procedures, and an orgaruzational snucture on the fmrness of the imancial statemens ] 69C
- that provides for appropnate division of re We beheve that these policies and pro-sponsibihty and the trammg at personne!
cedures provide reasonable assurance that %y [ y
- pjyg This system is also tested by a comprehensivo our operattons are carned out mth, high
$hMM.W internal audit program. standard of busmess cunduct. -7 %ma r4 m rQ.? w 3% m e sk a ^- @lw;Eh&vmg; g =i Q MC$ AUDITORS' OPINION
- ew f%%M[
$vk?w$ WA[N zr . h % E5
- 4. f%s. q'A n, g um,.~
s k. 'X'; n e E. , W h$ 3 + .s<, W .i nn L ,? $N$.$M M i 95I M;Qf$n W' ee a f.W ^ cm sw'a ,+ 7 f.f.s@ -fp j tii ym ma n ex; h. Sb? .%~ y ~ ".>cyl + l.,, 9 'h Y d.[e [%"SR '_,4 W;4' Nf .7,W i> "'] y. ' T~EMIN wuq Q;> y ' ' ; f
- h
[Ih y #A ? vv. 53 34 c.
- agya y
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V g y i.,, r. llp' - STATEMENTS OF CONSOUDMED INCOME For the Years Ended December 31,1980,1979 and 1978 ['. w 1930 1979 1978 f ~ Un Thousands) -b t o Operating Revenues (Note 2): I .Yi/M Electric. 52.181 X0 $1,669,451 $1,489,915 g~ee.cM w pq'WUW[4 in ~ Natural gas..... 11rM 116,612 95,863 f*#}c ' Transit u,112 36,996 36,399 bu:I E f1 NN3Nb 'm] Total.. 2.342,228 1,823.059 1,622,177 Mgyghg% 'fj Operating Expenses: Operation: b=mm Fu 1 for electric generation S16.145 697,606 623.402 ($$jyjyh Purchased power 231,951 258,377 133,929 p-py p Gas purchased for resale. 38.M 4 88,801 68,657 p: N Oth. r...... 2e3,905 200.264 199,406 e m M 'i Mair t : n,nce I11,831 111,394 99,941 (3 4 Depreciation. 141,9s7 119,304 112,805 f.: Taxes other than income taxes 84 s90 77,849 69,771 L,. .3 -Incon.o taxes (Note 3). Ic5R3 51,266 86,004 g '? Total 2.014.40s 1,604,861 1,393,915 t: . a; o Operating Inume 297R2 218,198 228.262 b ~ n k f. t r v ~ Other Income: b "h, All wance for equity funds ured U,' f' 122.277 124,086 93,573 [^- ej)y [ during construction (Note IG) Miscellaneous income and deductions - net.
- /,019 7,940 6,239 E i ' '?
Income taxes - cr. (Note 3) .). 100,2?4 76,232 50,105 L> ?- u w~ Total....... 235.500 208,258 149,917 L; m i~ ~ Interest and Other Charges: E Interest on long-term debt 327.4cs 255,242 ~ 199,212 [( ~ '( M Other interest - net.. 72RS 42,139 22,769 F ~,. +* Allowance for borrowed funds used during if T ' / [K s construction - cr. (Note IG). n 17,M3; (89,247) (54,717) Preferred dividend requirements of z 9) subsidiaries (NA 6).. 55,02; 36.264 25,477 ( x Total 307,e 244,398 192,741 [~ _ ~ Net Income (Note. '. I 195.r7 $ 182,058 $ 185,438 k v ht Earnings Per Common Share. 12.01 $2.13 $2.46 [ Dividends Declared Per Common Share. t1.59 $1.535 W $1.46 [N, Average Numbu of Common Shares s' Outstanding...... 97 ;s91S3 85,444,691 75,522,179 p 3 ^
- Q VW J. p B
~ r; G L "'o [* '~,j [ @c@ g u ;; a :. ?? tp V I See Notes to Censchdcted rmancial Statements. p L, t
.w xm.;u s, ..m. 2 n~ yk. bY -W , y3 %g;T, idgQ M CONSOLIDATED BAL ANCE SHEETS . w& ~ < +:w ; a m V;t cwh,~%;! -4 4%, m :. ,s
- ,.... _ g r. y w ~ Qdfi m
Y .x,, n x-tRM& + L. .,', a;n e -7i.- ) > # -n[s. e q i2 n Ti ;~ n, v, -}. p.;;;;- av Iy,L Lr- -m 'Y.jpwrAivMih%kE.Q) w
- m 7-3;
.%,3 m ,a7a - w.m '.A dem.gg -'r x n a %.w"fl@dM:g@ Utility Plant (Notes 9 and 10h 1 p / NrI$ 3 : M Electne $3 597.923 , 4: @i,d w a E W-V kE2* g Natural gas 102 878 Transit. 19 049 Construction work in progress 1 282 20_2 . r?22%= e#.7yR, hM;E T It e ' ^wewnd Total 7.002 052 -M, e n n ma..i@ c n Less - Accumulated depreciation i 139 le4 ~ MO. w ,Kg+ W; M F.M E Utility plant - net 5 862.888
- h anw; n, <. (. m-s.f,%
- m, s u "c
$ - Afl., ,.: s. a ::n s.. ,wwy., w , e,r L. y. n 4 A s
- q fti.hh wD Other Property and Investments 91 606 2p e
a*x ,os m; r..,p ' a,3.% g f .r >p: .eag m#.A? S sta o 4- ,r .m w @ g % i y*M c pf %a:e ?. s i s ,1r ",2 <s a :; igg M'w+ 5..'w.m' ? Current Assets: t 7 .w %p,,W %@gg:q Cash (Note 4) 52 038 AQs R:me WM Special deposits. 13 341 iM RiYf Temporary investments - at cost. which $ %2C@ M' approx 1rnates market 69 839 D-V, 99%.smR.,q@ Notes receivable 17.706 y, ^ ' w gp % Accounts receivable: i J Ay e njA Customer (less allowance for M $ M ;$f?M doubtful accounts of (m thousands) _ ' 87[M @a ?M 9 WW W $2.253 in 1980 and $1,800 in 1979) 101,148 - W Otner. 22.197 PE J&., fMR, A w-Deferred fuel cost. 28,929 Fuel inventory - at average cost (Note 4) 137.058 M %Wf @0 Matenals and supriles - at average cost 36 488 %& $@$,j$i ig Other. 21 744 Aj g%NHM 1MM Total 500 488 7
- w 4%p m..n
_ ;w : w n. ~.~_.m a a,l my u, s am o r e --- ~. g: M, Q, $ m,ll ,+
- m C
Deferred Debits 47 886 -w. %, v-[n.<4 ..m 3 iMN(wd d b u g, n - wme ,.m y' b .y-q,n m m
- 0,A(
4
- n.., A w $
TOTAL e 1' at ha 3+j$ _ye n am. ,.ty + ' - - - id ev. V'n a s ^'W: n..u *
- l14 )h~ F l[)
Qh 7 s +)d "; x. s L; Q;s . M f 'u 'i 'YM t,. - ?@f* i;& a p ~iKs ?_7G. ;; .,,a,.o".o, m.- w J.) g.,, 3 y ;. (* 4 T,.
- 4[4]
q.x. 'fK 7q l 4'. q f4 -J'RffM,pjW.,l_ y~,,JcJ J O' s>- 94 ~ '; M j~pf. d f Q j i ,y.j@nMM;A M
- c3 Y's w @f L v.. rug.g 'f@$? EYN of'y SPe NOWS 10,:nS2 3. W1 ?.: '^, 'i r
- 'N&-f
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- A.. g e
<w 'fL .: p* y a L..t r -- W CAPITALIZATION AND LIABILITIES au ]4-g"' g _ l980 _ 1979 Cn Thousands) 9 b M.jf
- Capitalization:
Common stock, $5 par value, authorized a$1kk$$8k-- w 150,000,000 shares: issued and outstanding -107,349,943 shares in 1980 and 90,432,998 7MURO $ 452,165 ehN2fy shares in 1979 (Note 5)... $ 536,750 630,450 N - Paid 4n capital....... 749,206 Retained earnings (Note 8). _ 619.572 581,445
- nNrer t Total common sharel.olders' equity....
1,905.528 1,664,060 Subsidiaries' preferred stock, without sinking p fund (Note 6).. 330,967 330,967 ~ Subsidiaries' preferred stock, with sinking f'a T' fund (Note 6).... 283.165 193,507 Long-term debt (Note 7), _3,392.309 3.017.816 6 7 Total 5.911,9,69 5,206,350 %,q Cunant Liabilities: (* pf ~2 Notes payable (Notes 4 and 9): 04My Banks... 187.494 264,275 16,750 20,630 Commercial paper. Other.. 91,378 '+ Currently maturing long-term debt 121.473 149,830 276,991 210,123 . Accounts payable Customer deposits... 37,870 33,289 R 67,401 55,435 Taxes accrued Accumulated deferred income tcxes (Note 3) 14,602 14,950 Interest accrued. 81,984 75,737 ~ Dividends declared... 58,372 47,594 'l Other...... _ 43.555 25,679 '.A --.-997,870 897,542 g 'lotal.... p gg s Ng Deferred Credits: r Accumulated deferred income taxa (Note 3) 255.572 257,599 ,7 p*.. Accumulated deferred investment tax credits (Note 3) 101,137 104,835 g _ 40,67_9 17,282 p- . C ther........ Total... 400,388 379.716 L L - Reserves 24.652 19,460 2 t g - Crunmitments and Contingencies (Notes 2, 9 and 101 .I ^ ~ $7.334,879 $6,503,068 .?~~ TOTAL p . y,. k... ry, ;; f-l. ^ ' <, b-Ve s. p r f'lGy 4. s R t
- 3 r
.; w ,I
s .v,; ~~Y n- .g Ik ? STATEMENTS OF CONSOLIDATED RETAINED EARNINGS .: ;r.m - AND PAID-IN CAPITAL For the Years Ended December 31,1980,1979 and 1978 Y 3 hag 1980 1979 1978 gggyggy i'E'IAINED EARNINGS -- an mumnde u_nw (("7 Retained Earnings, January 1 $581,445 $534,893 $460,608 es Add - Net income 195.907 182.058 185,438 .=b, b$ N Total. 777,352 716,951 646,04v hh[ Deduct: et -:Ne Dividends declared on common stock - $1.59, weA*. i - 1 $1.535 and $1.46 per share for 1980,1979 and gNPIi 1978, respectively 156,968 132,585 110,849 af 1% Capital stock expenses, etc. 812 2,921 304 10 3. ;z%,...~ q'j 157,780 135,50,6 111,153 Total..... < ' -- Retained Earnings, December 31 (Note 8).. $_619.572 $581.445 $534.893 x .) KU" *ye'G, ; - PAID-IN CAPITAL 7g$$f6 ye } Paid.in Capital, January 1. $630,450 $499,855 $401,156 i e. o Add: kD@h Excess of proceeds over par value: iVS-Public sales of common stock: Q4--W 8,000.000 shares in October 1980 54,023 u M ^ '.,(- 7,000,000 shares in May 1980. 50,819 [7%; 5,000.000 shares in November 1979. 38,099 ' J 4 X. 8,500,000 shares in January 1979 84,490 M 3. 2 8,500,000 shares in January 1978. 94,460 Ey Common stock issued in connection with .,{'re"Qi dividend reinvestment and stock purchase SMh plan 11,029 5,865 4,053 3.@fg) Common stork issued in connection with W employee stock ownership plan.. 74 126 54 D " ?O-i Common stock issued in connection with N.%g$ employee savings plan. 9.202 2,021 132 Other. 609 (6) _x C k3 y Paid.in Capital, December 31 $749,206 $630,450 $499.855 L,; 5' y 9s; e 65g
- k$ 8 gjf;f l
l . N ', n $t&% N,,' ' sjk .n~ i h,E M . [ 4-b h,, p")-g - @j See Notes to Consohdated hnanaal Statements. x v. h n ,~ kW&il)
- 7. f,.
b y-STATEMENTS OF CH ANGES IN W NM n ~ l S FINANCI AL POSITION For the Years Ended December 31.1980,1979 and 1978 e w s 1. s e v v 1979 1978 'In Thcusanas; Funds Provided By:
- I
- 'l@. I Operations: .M Net income t $ 182.058 $ 185,438 ' ??r" ~M - s Depreciation.
- 4:
119.304 112.805 g yg;$ Amortization of prm ty loss. 4,101 4.101 gyg@r Deferred ince.e taxes and mvestment tax hwSNL-@M. m-- credit qustments - net. L* (24,856) 36.427 Allovmace for funds used dunng construction (Note 1G). nn (213.333) (148.290) #SSM wwe=nnw Total funds provided by operations. M.N 67.274 190.481 mggmg. Other: iMwa4% Allowance for funds used dunng construction (Note IG). 3m 213,333 148.290 (W W/T r Advance for non-utility property. 14,737 L~ ,/r Decrease in working capital * - Q@yce.: Miscellaneous - net. 3 7 573 p y1 t Total funds provided by operations and other .,:880 295.344 346.344 Ngh, , ' M Financing and c'her transactions: bl M' ,m Common stock. o a 202,269 143,147 h(y
- C 9 Of M
Preferred stock. % 4a 183,699 g
- h First mortgage bonds.
1 R 500 160,000 242.000 Book value of utility plant sold
- 4 9.547
- (J[ 1 'ce Fromissory notes and other long-term debt. 2N 6M 378.863 235.623 "xh 'l'+ Short-term secunties - net. 4 135.575 h q,? ,, J _ Sale and leaseback transactions 4i u4 24,652 - L ' _1, Total funds provided by financing and other p pf M ; 7C i " p w~ a;.;, G; (E - transactions -54 m 959,030 756,345 m Total funds provided. ~ nm $ 1,254.374 $ 1.102.689 U ~w g; 'y es Fundo Applied To: P~ M p e ' j @G & Utility piant additions: Construction expenditures for utility p: 4 3m $ 1,024.743 $ 900,907 - ge 1 f R Expenditures for nuclear fuel. JN (17.229) 701 6cMs (18,103 S ~. J, %pp-Other - net 4< (1.718) 4 .n;u ~ Total gross additions (includes allowance for funds bWW 'xc used during construction of (in thousands) A Yi k $239.940 in 1980. $213,333 m 197 and $148.290 $'[-(% in 1978) L, 1,005,796 883 505 };g ~ Q i' c~ Dividends declared on common stock. nw 132.585 110.849 @~Nw m C Retirement of promissory notes and other long-term debt.
- P,
3.313 2.177 Q . C, pg ', Retirement of first mortgage bonds 19.802 27.854 ^
- >$3 Retirement of preferred stock.
3'O - #1, 7%' Repayment of short-term securities - net 43.849 - WA > ~ Increase in working capital
- 12,637 52.754 Ws M
s, Deferred costs on coal plant standardization study. 6,776 1.781 9 ^1 3 Deferred costs relating to SFls fuel acquisition program for: P e, cUf n Oil and gas. 9.163 3,962 ^;i Uraruum 8.487 2.232 O! i~ Coal 4.085 2.838 %f Advance for non-utila property. 14 737 7 J Y Miscellaneous - net. 7.881 Total funds applied. $ 1.254. 374 51 102 689 ?,, yo
- Wothng cap tai does not mciude shortderm se:ur:tas cur:ent r.atu:: tie, e ng term.'ett at ie! erred taxos v u ded ir v ien'
!? ~ habihtJes The 1980 net decrease m wctbng capita. s firman y due rc me: eases m rcounts ;nyat.e na : e: :u:ren' ab.; nes M 1 n reduced by an mcrease m customer rec,unrs receivab e whi:e the l9'3 r.et m:: ease is p: :r. ri.y J ue t m::ea.ses. u n 's ,? receJvab.' and ' el oil wentary reduced by an :ncrease m accounts payab,e 2nd the l9'8 net ; :rease.s ; u r.y aue a r inc' ease m c 1sh and sp c;ul deposits and a decrease m nxes a: :uei
- ~
See Notes te, Conschdated FmancW Statements ~d s u_ _.
W p R, M 5{% w m s sbQ,N% S g$ % P M 1 'N ' ~ 4 NOTh m COEm trym:p t,N n1 " v F NN ygg n $gg L ' q; n d y L z : Qp",: s~ W.g) %,d. J A + W c?s . d: we %sq u@@y +Mus?3
- G y f*WQ l1Ea NOTE 1
SUMMARY
OF 5!GNWIGT MCOUNTING NLIGES nm w MOhEm } A. PRINCIPLES OF CONSOLIDATION ,i g g The accompanying consohdated fmancial statements include the accounts of Middle South Utihties. Inc. fig @r Q*A=M (the Company) and its direct and mdirect subsidianes Arkansas Power & Light Company ( AP&L), % Wa'm M3 Witpd Arkansas-Missoun Power Company (Ark-Mo). Louisiana Power & Light Company (LP8 .4ssissippi Dgf d Power & Light Company (MP&L), New Orleans Pubhc Service Inc. (NOPSI). Midd!e South Services. Inc. gdiwgAdsj (MSS), Middle South Energy, Inc. (MSZ) and System Fuels. Inc. (SFI) which are collectively referred to as ggg[FFhTRy the System Companies or the Middle South System. All sigruficant mtercompany transactions have been mquauw-sd 1 eliminated' ge]Q{d B. SYSTEMS OF ACCOUNTS -7% "$v%W %q W { $ 7@f %q The accounts of the Company and its service subsidia VGROM Utihty Holdmg Company Act of 1935, as administered by the Secunties & Exchange Commission, which "Q' .l has adopted the rystems of accounts presenbed by the Federal Energy Regulatory Commission (FERC). 6( i ' b[w$M) dance with the systems >f accounts presenbed by the app
- sg The accounts of the operatmg subsidianes and the generatmg suasidiary are maintamed in accor-C' 2
$$NM d$3iME j$% accounts substantially conform to those presenbed by the FERC. NOPSI opera d and orders of the Council of the City of New Orleans relatmg to regulation. supervision and control. Under MM TM these ordinances the City ha m. option to purchase that company's properties and operations. M % g [~4] h@kh@ y% Q production method m the penod m which revenue is recognized SFI capitchzes all ccsts related to its exploration activities. These costs are amcrtized by the unit-of-pf - n&sIf flLQ QJ = 8 sold' -~mm EO _g%.M WM9 C. REVENUES AND FUEL COSTS wm a E@6@Uhh The operatmg subsidiaries record electnc and gas revenues as billed to their customers on a cycle bilhng gy N basis. Revenue is not accrued for energy dehvered but not billed at the end of the fiscal penod. Substan-tially all of the rate schedules of the opc atmg subsidianes include adjustment clauses under which the cost T + -Q$@MM of fuel used for generation and gas pu.Mased for resale above or below spect' ed base levels is permitted _hg&7k to be billed or required to be credited to customers. 3{g$ (Wg MQ ' > 3[ Pnc. to 1978 two others had adopted a deferral method of accountmg for those fuel c Two operatmg subsidianes have fuel adjustment clauses which allow current recovery of f uel costs. f i ', fuel adjustment clauses. Under this method such costs are deferred until the related revenues are b'!!ed. - M kN Mh I ]A@ subsidiary commenced defernng fuel costs recover Effective January 1.1979, pursuant to an order by its regulatory commission, the remammg operatmg ya gr t, =MgM h n @ which was to increase net mcome (net of deferred income taxes) by $1.033.000 and $7.765.000 m 1980 and MM ~ NM 1979. respectively. - W M {M @' q e The fuel adjustment clause for AP&L contams a pro.ision for a nuclear reserve fund to cover the $$jY fa estimated costs of replacement energy when the nuclear plant is down for scheduled mamtenance and $h $pM[d ! ; %j refuehng. The fund bears interest and is credited to the fuel and purchased power expenses dunng th i $M shutdown penod. .. f N
- M 2j jh D. UTILITY PLANT AND DEPRECIATION h@1n@f%g[g M Unhty plant is stated at ongmal cost. The cost of additions to wd m
_yWQhQ labor and matenals. allocable overheads and an allowance for the cornposite cos' of funds used dunng MR $, j construction. The costs of units cf property retued are terr d from unhty piant and such costs plus MMJdMS[i! property and replacement of items determmed to be !ess than umts cf property < re charged removal costs, less salvage, are charged to accumulated. preciation. Mmntenance md repairs cf WMT $$, &u hWNaf.sp expenses. %M Si A Depreciation is computed on the straight-hne oasis at rates based on the esim.ated semce hver of the Nbhj v n us classes of property. Depreciation rates for AP&L s nuclear plant include a provision for nuclear @ yd plant decommissionmg costs. Dep.eciation provisions on average depreciable propmty approximated g@RpJ @$%@g?@Qp 3.4%. 3.5% and 3.4% m 1980.1979 and 1978. respectively. T ,,y V W. Substantially allof the utthty plant of the Company s operaung sui mdwrim ard gener :tmg sabsidury Q is sugect to the hens cf their respeenve first mortgage Hnd mdentares. +g ~ w w ,?h' f? 4lmll k.f 2 h " 'YW- - - !
j f jy * %fM" -nye MU b wn: M E. PENSION PLANS Mb'N 5.* 1-> 3 s. s ) d f4$ The Company and its subsidianes have vanous pension plans oven.ig substantially all of ' heir p@h M@p WR i employees. The pohey of the Company and e asidianes is to fur.d pension costs accrued. 1
- ., m' wam -,
vs F. INCOME TAXES EM iEM ~ cmQ w: c l The Company and its subsidianes file a consohaated Federal mcome tax return. Income taxes are NGW5gj e allocated to all subsidianes based on their contnbutions to the conschdated tax habihty. Deferred mcome Odh26hd taxes are provided for differences between book ai d taxable mcome to the extent permitted by the %5NT ' ragulatory bodies for ratemakmg purposes. Investment tax credits u I a based upon the average useful hfe of the related proper ty. [- u NMMM M_- G. ' LOWANCE FOR FUNDS USED DURING CONSTRUCTION w To the extent that the Company's operating subsidianes are not permitted by their regulatory bodies to QML recover in current rates the carrymg cost of funds used for construction. tney capitahze. as an appropnate kep%3gv.7 cost of utihty plant, an allowance for funds used dunng construction (AFDC) which is calculated and [JMA4 - i recordad as provided by the regulatory system of accounts. Under this utthty mdustry practice, construc- { f tion work m progress on the balance sheet is charged and the mcome statement is credited for the @ }l i l approximate net compositeinterest cost of borrowed funds md for a reasonable return on the equity P N@MCj gj% of financmg the construction program and results ir treatmg the AFDC charges m the same manner as Id@pW used for construction. This procedure is mtended to remove from the mcome statement the effect of the ecs: 1 n construction labor and matenal costs. As non-cash items. these credits to the income statement have no k%M M cffect on current cash earnmgs. Aber the property is placed m service the AFDC charged to construction MNM costs is recoverable from customos through depreciation provisions included m rates charged for e%gJM service. The effective composite AFDC rate for the Company's operating subsidianes was 7.5% and 7.2% P. for 1979and 1978 respectively. Dunng 1980 one of the operatmg subsidianes used an accrualrate of 5% on fhG ?pn cordance with a December 1979 rate order from its regulatory dp' @l; Z $736.2 milhon of constructi_, costs e commission. The ef fective composite of thecperating subsidianes for the balance of AFDC was8.0% ih M, f v W @u for 1980. H3 n-MSE has determmed its accrual rate for allowance for funds used dunng construction based on a pay %g return on average common equity of 11.6% through October 1980 and 13.75% thereafter. plus actual p J8M' ' 'g nterest costs. net of related mcome taxes. MW The Company's subsidianes contmue to capitchze allowance for funds ured dunng constuction on hf l pr aects dunng penods of mterrupted construction when such mterruption is ternporary and the cordmua-pg gW Mip M%@- t an can be justified as bemg reasonable under the circumstances. p%n. m ;y. s Jr. / 0, PMG-Q ',- H. RESERVES 1 m km x g t It is the pohey of the Company s operatmg subsidianes to provide reserves for unmsured property nsks and p jf4Nn&cg for c!atras for injunes and damages through charges to operating expense on an accrual bcsis. Accruals gQaQg for these reserves have been allowed for ratemaieng purposes. p % gg g;, n3 - m av4 .m. h. ( f &%Dn O w 3g = ; ". 4 ' f%; ~ 3:g W -:x q'MF l %yd r \\ WL %A Eg WQwm h m e Mm j In May 1980 AP&L filed with the Arkansas Pubhc Service Commission ( APSC) an apphcation to mcma m [%YY [{.l N g [th OWS through a two-stage process. its retmi rates approximately $ 130 milhon on an annual basis. On October z8. l 1980. AP&L placed into effect. sub ect to refund, approximately $86.7 milhon of the increase: operatmg l revenues for 1980 meiude approximately $10.7 milhon from the mcreased rates. The balance of the iM3WM l requested merease. approximately $43.4 milhon is proposed to be implemented on June 1.1981. In a {Q, g g pre-heann; stipulation agreement between AP&L and the APSC statf the APSC staff recommended an Q%.g W merease of approximately $90 rmlhon and m retum, AP&L agreed not to contest certam staff adjustments NYW i ~ M R @I NflMT which would have the effect of reducmg AP&L's request from S130 rmlhon to approximately $1i7 miluon. The matter is pending before the APSC. P In May 1980 M?&L hled with the Mississippi Pubbc Service Commission (MPSC) a notice of intention tc F4
- i,$a change rates m order to produce additional annual revenues of appr oximately $68.8 milhon. The proposed r S $'N rates were put mto effect. under bond. on July 1.1980. On November 24. 1980. the MPSC issued its order Mx i s-authonzmg MP&L to f.le new rates that would produce additional annual revenues of approximately $48.3 Mn*a d milhon. This decisio-was appecied by several parties seekmg modtheations to the MPSC's order. In M C
MP&L's c pmion based on the opmion of lega cour sel. these appeals w1!1 not be successful. MP&L is ' C <N@ requestmg that the fu!! rate merease sought be aEowed appealmg the MPSC's decision on rate of return, ~ Ma 1 <,pn... l n py y a yr i I .s
+i 4 i the disallowance of CWIP in rate base, and the disallowance of a portion of the wor king capital requested. MP&L is contmuing to bill customers using the rates filed in May 1980 pending final determination of these bs appeals. In 1980 these rates produced an additional 533 million in revenue. The portion of this amount that 4 ! would have been billed under the rates approved by the MPSC, $23 million, was included in operating revenues. The remainder, $10 million, was recorded as a liability. As of December 31, 1980, LP&L had pending $216.5 million of proposed annual rate increases. $C
- j including a general rate increase application filed in May 1980 with r.spect to customers under the Louisiana Public Service Commission (LPSC) jurisdiction in the amount of $203.6 nillion. In connection ff..
ggg therewith, m October ' 380 the LPSC permitted LP&L to implement an interim rete increase of approxi-mately $32.4 million under protective bond, subject to refund. Included in operating revenues for the year
==mn }%{j 1980 is approximately $8 million of such raenues subject to refund. WWIGH = - u ti e6 ME ' l, . + e x s-
- 3. 3MMM., NOTE 3. INCOME TAXES
~ .g (j Income tax expense (credit) consists of the following: ~ } 1980 1979 1978 ?j (In Thousands) 4 Current: 1 Federal.. - $ (1.475) $ (3.275) State. $ 4.799 1365 2.747 j Total. 4.799 (110) (528) '. } Deferred - net: 1 Liberchzed depreciaton. 33.994 40.639 34.411 l Deferred fuel coat....... (582) 11,215 (543 i Taxes capitalized in the fmancial statements.. 6.965 8.153 4.02 Difference between book and tax gams and losses _.j en sales and abandonment of prcperty. (5.753) (3.527) (1.794) j Other..... (15.992) 9.483 10.981 Reduction due to tax loss carryforwards. (21.02D (88.253) (6.487) Total. (2.375) (22.290) 40 593 Investment tax cred:t ad;ustments - net. (3 685) (2.566) (4.16e j Totalincome taxes. 5 (1.2til) $(24 960 $35 899 j ' Charged to operations. $ 105.023 $ 51.266 $86.004 Credited to other income. (106 284) (76.233 (50.105) Total income taxes. $ (1.261) $f 24 966) $35 89? d, M'
- i Total income taxes differ from the amounts computed by applying the statutory Federal income tax rate to income before taxes. The reasons for the differences are as follows
DI ~ 1980 1979 1978 'i (In Thousands) 6; a g cf c, og % cf P,e-Tax Pre Tax Pre Tax s ? Amount Income Amou nt In cme Amount Inceme ! Computed ct sta*utory rate. $114 648 46.0 $ 88.944 46.0 $118.471 48.0 i Increases (reductions) in tax - 1 resulung from: Allowance fcr lunds used dunng constructon. (110.372) (44.3 (98.133) (50 8) (71.180) (28.9) [ Difference between book deprectancn and tax W i straight.hne depreciaten 1.170 0.5 (7.593) (3.9) (3.207) ( 1.3) Other - net. (6 907) (2.8) (8.184) (4 2 (8.185) ( 3. 3) Recorded inccme taxes. $ (l.261) (0.5) st24 966) (12. 9) $ 35 899 14.5 j y .R e 1 The tax effects of the consolidated 1980,1979 and 1978 Federal tax losses of $259.674.000 have been recorded as reductions of deferred income taxes. Unused investment tax credits at December 31, 1980, i amounted to $291,276,000 of which $34,939.000 may be carried forward thrc=h 1984, $92 966.000 through 1985, $100,502.000 through 1986, and $62,869,000 through 1987. m g.g w M
s NOs N'T' pt f g y, st s. .t v The Company and MSE have reva n; crei* r;:eem-nts v "h, : sus tants p m:amg i, mo ssuance of r unsecured promisso, notac tota r ec .na c,eu8 m: >n :espec':ve;y. ne cmpany s agree-y ment wdl ter m:nate v, ecember J 1984 md the maximu m pnnapa amcunt ct u.~ vat;e cor:cwmgs 'vu. V
- 7. n~ ' a nd' 3' 0*-
- f trm ongm,i ecmmamerc un Decemte
se reduced ? ' QW' ana "ecemre: ~'3. J.' '. ' e' 'e: 12 s respective,y.,L. cE..s ugreement expues. ma 1. Nes thereunaer matu:e. Decembe:,,..901 unae r cir r, of these agreements comm:tment fees are pa:a on the unused pcrnon of the :: eda ;;nes. In adda c-MSE s - h - n.c s 4 agr ement requires compensat:ng balances. l ' > ? The operatmg subs 11w:es have anangernents. nr :equ mg cornmument tees, th vanous cants + pravidmg for short-term bu v.vmgs through bank loans and ~;th commercia, paper dea.e:s !r the sa:e of m, commercial paper. Of the tot r na:.k imes of cred:t $253 mu.:cn is pr ov;ded by banks ; cated outs de ct 'he Middle South System serv ce at el Any Of the four partic:panng Systen oper rmg compan:es may bc::cv any portion of these hnes subject only to each rampany s ma.rmum ;utt.onzed leve. c: bo cvur.gs. 4 Corr ensatmg txdances are requaed by cenmr. u the lening oanks. '. ' M The snort-term loan agreements for F.ISS (530 mdacn) and MSE SEC md.:cn: requa e comm:+ ment fees c:- a on the unused portions of the lmes of crede ana compensanng ba.ances are rega;:ea tar MSE. tro SFI has a fuel on financmg arrangement al cwmg for borrow;ngs up is : 1,c m:.;cn sue:ect to a.:rm+ .,u equivalent to the lower of the cost or the tan market value of SFis f ae: c:: :nventary. In adit:an SFI may borrow up to $60 milhon th:cugh the sa:e of cornmercia paper for u.se m fmar.cmg es nuc: ear fue; b 1.. inventory. Borrowmgs under these arrangcments are restncted as tc use and are secured respeenve;y by ', ?*' SFI s fuel od and nuclear,ue! :nventones and accounts receivac'e ansme ::Om tne sa.e of tnese mven-v- - ~+- s s n tones. SFI also has a revo!vma bank creit agreement which a.:cws for ccrrcnngs up to S60 mOcn sub:ect - OL, 4 to a hm:t equiv alent to a n af the net beck va,.ue cf certmn assets. a, comm;tment fee is pa d on the unused En + m-go portion of this lme of credit. The hnes of cred:t boucwmgs and cc mpensa+.na ba.ances at *ne System ccmp arues we e as! :.cws: r._ - 4 t [ + .i"I... t. f g d O j J.i ? .4, O mm e. ....;+-: 7s'_
- f I* )
m 4
- l F
_f /$ W f,
- 5 y
1
- 3.. i.
'c s y tJ hu 9.te; r!, ',_'J.' ( y,- 's s--'.; t .r C;,T!41;Jf A ".- .41 MEE c gn p 1 ME .4-Ope: an ; i :.a ~ "- ~ " L:ny ' >r r. } pff ( CC r!.p3 T '/ ~ ^t* Md 14' En -{ t-MS' 4 E. l., l b 't .a / i n~ l f 2. g n ~. - - er,Ine shcrt te:rn bet rov,ngs una the+.te:est
- + = +-- te. ya a re acutt'. syste:
cere as t. vs. ~ r i. y - 'q..... _s~ a E 'v' j l .w g . :7. h '4' s t ,n 44, y N } 1.. ge 4-.- gu 'T i a. U. } )
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E 17.f. 1 4-4
- (-
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wea, Q '.? N. Q ,,,.g M:rg.;.;;. +
- 1. -.%
- n... 4'.
- d. i NOTE 5. COMMON STOCK
.- y: ~ Changas in shares of the common stock of the Company for 1980.1979 and 1"8 were: Type of Transaction Number of Shares ~%M.. '34 .. a.. = p'. f.- 1980 1979 1978 '+ 3l. 15.000.000 13.500.000 8.500.000 /
- ~
$ Sales.... 1.604.174 608.875 372.110 0y'i Dmdend remvestment and stock ;,urchase plan. Y
- Employee stock ownership plan.
11.487 12.45'2 4.825 301.284 214.433 12.687 f.,"~ t'_' Employee sanngs plan.. . J s. < w -X.i - Retirement of uncimmed shares. (994) 16.916,945 14.334.766 8.899.622 . g. '
- ep y t qqt: '
'h;L O In January 1981 the Company issued 589,409 shares of its common stock under the Dividend Reinvest- ,.y g. ment and Stock Purchase Plan. Tne Company is also seeking authorization from the Securities and . g 7.,,,, Exchange Commission to issue and sell up to 10,000,000 shares of its common stock in the second quarter of ' ESM 1981 with the proceeds being used primarily to reduce the Company's outstanding bank borrow 1 ys at that ' +s _ 9 ' ' ',. l time. ..y 3 2 Iy Q .,p, ..~ v . : ggg NOTE 6. PREFERRED STOCK ..,..m[i/Qh Thenumberofsharesof preferredstockof theoperatingsubsidiariesasof theendof thelasttwofiscalyears were as follows: , [g;s 3v. fig". : 7 Shares 5 .-. s, ef;;. .P Authonzed at Shares Outstandmg Call Pnce December 31. 1980 at December 31. Per Share ',.,. 0. %... t N.,,, 1980 1979 . ],Q
- Wp J $
k !.s Cumulanve $100 Par Value ?i
- 2. t ?:c 7 'hout sinbng fund:
, y?. 9/~ 1.16 - 5.56 % 1.070.774 1.070.106 1.070.106 $102.50 to $107.00 + .~,,y'N j.} l, 6.08 - 8.56 % 1.180.000 1.180.000 1.180.000 $102.83 to $107.70 mc.,,. o 9.16 11.48% 795.000 795.000 795.000 $106.35 to $113.98 h 3.045,774 3.045.106 3,045.106 ~ Nk,y\\ ;rj . t \\Vith smbng fund: 1-'i 10.60 - 11.04%. 562,134 562.134 600.000 $109.33 to $109.78 '.I R.f:; '. ^ l l 15.44 %. 150.000 150.000 $115.44
- " ' y s,yg; h..
712.134 712.134 600.000 ~ l.3 h h-Unissued. 5.756.500 . (.f'khe, Total. 9.514.408 j :M -~ Without sinbng fund; Cumulative. $25 Par Value ' ").,;& 9 t.: 8.84%. 400.000 400.000 400.000 $ 28.21 4.. ' 1 10.40%.. 600.000 600.000 600.000 $ 28.60 N w .1 1.000.000 1.000.000 1.000.000 .. %.c;.?-. -; + .x y :. ... f:: y; + kJf@M With sinbng fund: 9.92%. 1.600.000 1.600.000 1.600.000 $ 28.18
- Q *ll
., ".j,., ]Vl Q P1: 10.72%. 2.400.000 2.400.000 2.400.000 $ 27.M w q. 13.12 %. 1.600.000 1.600.000 1.600.000 $ 28.28 P "',j . '. f Qf f 13.28 %. 2.000.000 2.000.000 $ 29.58 .mv.M G 15.20 %. 1.200.000 1.200.000 $ 28.80 .,'g. j y.- [ M.<, 8.800.000 8.800.000 5.600.000 s< ( SS
- , i;gc Y ?;E 9 Total.
22.000.000 fW1 ', d j. J%,,.co...e-g 5 . 3W -'f, nst n. Y ~ j.,_ 4
- 4.. M :.::A i
b W y, a,;,ig%
- 6. pp %,
.;7.l j,g s. s. a :-W. l '[:FL f . s'is, y s v.m x : l M*4 4 p .e
- a Si p w, Changes in the number of shares of preferred stock of the operating subsidiaries during the last two ~ fiscal years (there were no changes in 1978) were as fcallows: b,m 3 i Number of Shares n :.- m 1980 1979 b Sales: E
- --a 1
- g$#
~ M' -j/ AP&L ',t-,h-[~ :; ys).gt 10.40% $25 par, with smbng fur.d. 600.000 9.92% $25 par, w th sinhng fund. 1.600.0J0 13 28% $25 par, with sinbng fund. 2.000.000 Q88 OO 11.48% $100 par, without smbng fund. 350.000 '3 ggg:St 10.72% $25 par, w.th sinbng fund. - 2.400.000 J ,,2 13.12% $25 par, with smbng fund. 1,600.000 @g&_. _- - -Q_: 15.20% $25 par with sinhng funa. 1.200.000 3g f* NOPSI 15.44% $100 par, with smbng fund. 150.000 n Redemptions: Mff(t98M AP&L 11.04% $100 par. with smbng fund. (20.00 0 ',_ y 10.60% $100 par. with smbng fund. (17.866) 3.312 134 6.550.000 j~ f E n c q... Thaamountsof preferredstockof theoperating suboidiariesasof theendof thelasttwofiscalyears gQs were as follows: 'My [ k:sN-digh:/ 7 g q1 N l. e December 31, nj,Q .g 1980 1979 E.' @ " 2 % Y # E I -Mib:.3k. - 'M Thouunds) $13 (f _. & "[, Without sinbng fund-Stated at $100 a share. $304.511 $304.511 .L.E - 5' Stated at $25 a share. 25.000 25.000 Prenuum. 1.456 1.456 ?" C
- Total without sinbng fund.
$330.967 $330.%7 5 With smbng fund: Stated at $100 a shcre. $ 71.213 $ 60.000 7 Stated at $25 a share. 220.000 140.000 Premium. 852 517 Issuance expense. (8.900 (7.010) ( 7 Total v'ith smbng fund. $283.165 $193.507 l h mm yg g . Annual preferred stock dividend requirements. $ 59 SO9 $ 46.703 ( Average annual preferred stock dividend q rate en par value. 9.64 % 8.82% ( L a lt e ', % dl. ' ll$f $ Cash sinking fund requirements for the ensuing five years for the preferred stock outstanding at %d% ~ 89 December 31,1980, are as follows On thou; ands): 1981. $3,000: 1982, $3,000: 1983, $3,000: 1984, $ 10,000: and LI i y 4 O .m* 1985, $14,750. = :C.- 7: k'. 5 l,. l % *_ T ^ .m ::msj g p, ) 't.. -,:y#. c ,a j; ,5 f* I e : 1 j.3 i'l
- ., ; 4:{
ps Ny ,( py s. O 1 Q7
- r.,
fg c ng y' n n; y
d4 d @g i j $ NOTE 7. LONG-TERM DEBT d y \\ @' I 9 Tne long-term debt of the Company and its subsidiaries as I the end of the last two fiscal years was as W i
- g. [
follows: Outstandmg {~,{ .f. ~' at December 31 $; 3 -g u 1980__ 1979 On Thousands) k 'c d1 .7 -M -m_. sew.a _ kd., a,, j~ First Mortgage Bonds. $2.421.451 32.321.632
- bN~ - S$
Debentures - due 1983-1993. 5?'e - 7% 3.840 [ [g Promissory Notes: W:n Due: { } g M M_ 1982, at prime plus % of 1%. 1.023 1.527 e-1982, at pnme., 18.900 $~ qanMm.N, aQ':t -*g 1984, at 105% of pnme plus 4 of 1%.......... 108.150 t L.a 1985. at 110% of the sum d prime and % of 1%. 671.000 547.000 Total Promissory Notes 799.073 548.527 Q # ~m"" $ F ST^ Other-Ns O Capitalized Lease - due senally through 1993. 8%. 41.421 39.473 7.292 7.648 h E,S$ Municipal Revenue Bonds - due senally through 2004.1% - 8%. Pollution Control Revenue Bonds and Installment 'F x i Purchase Contracts: E. k d Due sena!!y through 2009, 6 - 8%. 17.350 17.451 ?. Due 1995 - 2008. 64 - 10%. !!!.425 94.625 d;- e~ .j 9 Less - Funds on deposit with trustee. (8,580 (19.580) [I) Total Other. 168.908 139.617 N i, 0 Unamortized Premium and Discount - Net. 2.977 4.200 s3 ggs _s.[ Total Long Term Debt. 33.392.309 $1017.816 Annual interest requirements on Long-Term Debt... 3 429.903 $ 298.277 fs 4 Average onmalinterest rati on total Long. Term Debt "b h J]3 (excludm; unamortized premium and discount - net). 12.68 % 9.90 % ?~ . 3 M: Matunties Smking Fund Requirements d( " J ~'j December 31. 1980 December 31.1979 Cash Other
- Cash Other*
F 93 i V (In Thousands of Dollars)
- S O
1980. 861 16.992 ' M Nr t;,, ^q 1981 121.473 681 17,912 861 17.912 3 ? 1982. 38.137 32.573 17.162 32.807 16.662 df-'^~ A$Q !f 1983 72.007 40.683 16.946 40.833 16.446 p$,g^c h-QJch *M N ? 1984 142.660 48.753 16.071 48.903 15.571 1985 692.133 54 988 15.831 3 4 Q_qs h. 1
- Sinking fund requirements may be met by cert:hcation of picperty ad+tions at the rate of 167%
f} 3(:;& of the required amount. The outstanding First Mortgage Bonds cf the Company's subsidiaries as of December 31,1980 and 1979 _ qt w ere: g' q Matunty 2?'% to 5?n% 6% to 8?' % 9% to ll?s% IT4 to 164% TOTAL g% s g On Thousands of Dollars) C 51 1980 y,:- _,.x 1981. 8.000 110.000 118.000 Y ;q M. J vy < - ' 1982. 15.464 15.464 7 D isd? ,. ~ t' 1983. 19.172 50.000 69.172 fw*$ rf M 1984. 31.500 31.500 J 4 1985..... I8.000 18.000 Ofp g -. T 1586-1995. 182.955 526.440 120 000 829.395 ,TN, 1996-2005. 166.250 511.120 302.050 98.500 1.077.920 5 h 3 qd] 40.000 285.000 55.000 380.000 g( 2006 - 2010. 1 7 Total First Mortgage Bonds. 2 539.451 {M{ @ ,X 1979 hh i 1980. 23.400 23.400
- 1 "
~ 1981. 8,000 110.000 118.000 @ f 1982. 15.572 15.572 $g7f. .f 1983. 19.202 50,000 69.202 1pg& ' 1984... 31.500 31.500 -jlgi 1985 - 1994. 154.598 528.050 682.648 Mi g* 1995 - 2004. 211.250 511.v60 237.100 959.710 p l', 2005 - 2009. 40.000 350.000 55.000 445.000 q] Total First Mor19a2. Bonds. 2 345.032 ~ i
e NOTE 3. RETAINED EARNINGS s Th: indenture provisions relating to the operating subsidiaries' long-term debt and transfers by such subsidiaries from retained earnings to the stated value of common stock and the provisions of the MSE bank i loan agreement and indenture restrict the amount of consolidated retained earnings available for cash divid nds on common stock. As of Decerrber 31,1980, $214,348,000 of consolidated retained earnings were, ,,M, free from such restrictions. i f' G; M % tiem d. m %)3. g. h.. b NOTE 9. COMMITAIENTS add FINANCING WeiWE l 1t ~ mm, y:. ~~ The Middle South Sytem's construction program contemplates construction expenditures (including ; $ N@ AFDC) of $897 million in 1981, $836 million in 1982 and $704 million in 1983, of which expenditures in the gy estimated amounts of $207 million, $234 million and $228 million are applicable to MSEi,87.52% interest in Pe *p[p* th Grand Gulf Plant, a two-unit nuclear generating station. MSEcurrently projects commercial operation ! dates of 1982 and 1986 for the first and second units of this plant, respectivdy. In connection with this plant, I th: Company has undertaken to furnish or cause to be furnished to MSE, to the extent not obtained by MSE L from other sources, sufficient capital for construction and operation of the plant and related purposes. At r ~ December 31, 1980, MSE had outstanding intermediate-term revolving credit borrowings cmd first [ mortgage bonds in the amount of $1.17 billion and the Company had invested $443.6 million in the common ; stock of MSE. In the event that Unit No. I of the Grand Gulf Plant is not in commercial operation by L December 31,1982, or Unit No. 2 in commercial operation by December 31,1986, the outstanding bonds ? anhnk borrowings would become due and payable unless extensions of time are arranged. In this case, i the Company would be required to provide MSE with suffic2ent funds, to the extent not obtained by MSE ; A from other sources, to meet these obligations, i Th, Middle South System Operating Companies are obligated under agreements with MSE to make ! payments or subordinated advances adequate ;o cover all of the operating expenses and capital costs of { MSE and, in return, are entitled to receive the pcwer available to MSE from the Grand Gulf Plant. During n 1980 th; operating companies agreed in principle to a pamanent allocation of the Grand Gulf Plant's ~ capabihty. Under this arrangement, those companies receiving allocations, LP&L, MP&L and NOPSI, will [ ~ assum7, in proportion to such allocations, all responsibilities and obligations related to the Grand Gulf l Plant and AP&L and Ark-Mo, which did not receive allocations, will relinquish their rights in the plant. Tnese new agreements are subject to receipt of the approval of regulatory agencies and of all other i. necessary approvals. I Tha Federal income tax returns for the years 1971 through 1976 have been examined by the Internal l R v nu; Service (IRS) and adjustments have been proposed. The principal issue is whether customer, deposits are includible in taxable income. A formal written protest has been filed and conferences are
- l IRS would not have a matene! effect on net income. Income taxes on customer deposits wou normalized. Most of the other issues have been settled and adequate provisions have been recorded.
SFI has a long-term oil supply agreement with a major oil company providing for the purchase by i-SFI of 50,000 barrels of oil per day for a twenty year period ending in 1996 with the option, upon two [ years written notice, to reduce theontract quantity to no less than 35,000 barrels. SFI also has an agree ' m nt with another major oil comsny providing for the purchase by SFI of up to 200,000 barrels of oil e per tronth through 1984. SFI has contracted with a joint venture for a supply of coal from a mine to be developed in Wyoming which is crected to prcvide 150 to 210 million tons over a period of twenty-six to forty-two years. AP&L is F curr ntly purchasing coal under an agreement that will provide approximately 100 million tons of coal ! ov r a twen+y year period. Under the terms of their nuclear fuelleases, three subsidiaries are responsible for the disposal of spent nuclear fuel. These companies consider all costs incurred or to be incurred in the use and disposal of i - nuclear fuel to be proper components of nuclear fuel expense and provisions to recover such costs have. been or will be made in applications to regulatory commissions. AP&L, the only System company with an - operating nuclear station, collected approximately $7,382,000 in 1980 for the storage or disposal of spent fu _ l. AP&L is also recovering approximately $61 million for decommissioning costs for its two nuclear units through mereased depreciation charges over the life of the station. hsed on an AP&L study, decommis- ' sioning cos's are projected to be in excess of the amcunts currently being collected. AP&L is requesting and will request recovery of these estimated increased costs in applications to its regulatory commissions. \\ l i
g j
== w n . '. M NOTE 10. LEASES a v
- 1 y
he Company's subsidiaries account for leases on the same basis as that used by their respective -39 T S.j regulatory authorities in the ratemaking process which determines the revenues utilized to recover the W 1 ease costs. -. 3" % Application of criteria used to define a capitallease would permit recording the following assets and liabilities on the balance sheet: bhM 1980 1979 1978 (In Thousands) Assets: o j Unhty plant.. $ 63.304 5 61.319 $ 55.722 Ei%N Accumulated amortaation. (16.893 (16.493) (12.904) d Net. $ 46.412 $ 44.826 $ 42.818 d Other property and investments - net. $ 47.885 5 50.318 3 52.751 gyi Liabihees: 3 wd. - -a, Non-current ebhgatens 5t-under copital leases. $ 104.136 $104.357 $102.293 d Current ebhganens under capital leases. S 4.588 $ 4.565 $ 3.632 B3 The recording of such leases would not materially affect the arounts reported as either expense or net l 3 . income. g At December 31,1980, the companies had noncancellable leases with minimum rental commitments m 1 3 as follows: (In Thousands) Y$ -mh T 1981. $ 36.515 1982.. 34.163 1983. 32.548 1984. 29.74. 1985. 28.366 N Tor years thereafter. 379.787 L $541.121 Rental expense amounted to approximately $34,441,000, $29,453,000 and $26.977,000 in 1980,1979 and ) 1978, respectively. Three subsidiaries have entered into nuclear fuel leases aggregating $270,000,000. The leases, unless terminated sooner by one of the parties, will continue through 2018,2028 and 2029.1.aase payments, which are not included in the tabulations above, are based on nuclear fuel use. Nuclear fuel lease expense of ( $37,300,000, $14.998,000 and $13,279,000 was charged to operations in 1980,1979 and 1978, respectively. .c The unrecovered cost base of the leases was $238,351,000, $170,989.000 and $103.018,000 at December 31,3 0 1980,1979 and 1978, respectively. .$' ' NOTE 11. PENSION PLANS - Total pension expense of the Company and its subsidiaries for 1980,1979 and 1978 was $21,253,000. $18,605,000 and $16,843,000, respectively, which includes amortization cf past service coct over periods of -2._ "Y ten to thirty years. A comparison of accumulated plan benefits and plan net assets for 'he defined benefit j plans is presented below: larwary 1. 1980 1979 1 Actu srial present value of accumulated =q p!an benehts: a'M V ested.... $217.899 $187.230 - g. Nonvested. 14.970 15.189 Total.. $232.869 _$202.419 _-g pv] M1 Net assets available for plan benehts. $254.784 3221.752 ~ l~ mr W The weighted average assumed rate of return used in determining the actuarial present values c. E %qi I -Q)M accumulated plan benefits rar.ged from 6% to 7% for 1980 and 1979. __g._
.} .v. - NOTE 12. QUARTERLY RESULTS (UNAUDITED) Consolidated operating results for the four quarters of 1980 and 1979 were as follows: r ^" [-] e Quarter Operaung Operatmg Net Earn:ngs E i Eried Revenues Income Income Per Share (-.
- d (In Thousands cf Dollars)
( ~, ., $9' s, I%0: ']'~~'" March 502.020 61.392 48.144 $0.53 June 486.177 51.427 20.838 $0.22 Ok p.rMy{gg"Q"Q September. 761.874 111. % 8 83.816 $0.85 December. 592.157 73.035 43.109 $0.41 ._y, e 1979: q g Agy g g March. 401.579 58.899 50.247 $0.60 f P- ]L cip "N[mN@, if a June...... 407.257 43.556 34.131 $0.40 -cA September 528.121 70.764 61.777 $0.73 hi December. 476.102 44.979 35.903 $3.40 y m -m, n.g , ?
- y p-Th business of the Middle South System is subject to seasonal fluctuations with the peak period Wh occurring during the summer months. Accordingly, earnings information for any three month period
- ydp should not be considered as a basis for estimating results of operations for a full year.
- ij
-m 1&s ..m NOTE 13. OIL AND GAS RESERVES (UNAUDITED) L W Q' s Financial Accounting Standards Board (FASB) Statement No.19, as amended by Statement No. 25. f requires' O.sc'esure of certain information pertaining to oil and gas reserves. SFI serves the Middle South 4; j 4 System on a non-profit basis and is limited in its recovery to the cost of such reserves. Billings to System b R ompanies are based upon a unit-of production cost, determined on the basis of proved developed 1 y reserves, as defined by FASB Statement No. 25. The following table s. ;s forth information as to the f estimated net quantities of reserves, all of which are located within the United States, as of the dates d indicated; i @[' J , $b [.,b. l 1980 Natural Oil and ~ .3 P Gas Condensate d (MCF) (Barrels) 4: '? Proved develeped.eserves: As of January 1.1980 73.167.069 1.858.523 ^ j Bevisions of previous estmates. (13.702.714) (362.763) ^ Ex ensions. discoveries. and other aditions. 3.862.680 472.798 Produenon. (5.506.657) (228.672) bX ~ ~ S As of December 31. 1980. 57.820.378 1.731 886 P oved undevelopd reserves as of December '" 1980. 800.722 359.628 i Proved developed and undeveloped reserves as of G December 31. 1980. 58.621.100 2.099.514 N
- +
b( y - 1973 ' ~.x 1$ Natural Oil and {. Gas Condensate (MCF) (Barrels) { t Proved developed reserves: w As of knuary 1.1979 94.887.410 1.224.629 h" 1 Revisions of previous estimates...... (18.023.557) (298.139) Extensions, d:scoveries and other addinons 3.244 252 1.060.453 ( Producnon. (5.069.375) (107.942) le Sale of rninerals in place. (1.871.661) (20.478) F As of December 31. 1979. 73.167.069 1.858.523 p 11 g information with respect to proved undeveloped reserves is only available as of Dec .ber 31,1980. [ by ., ~ - ke >.-y. n-3 . j.. .,3 .,g. ..,,y jy
1 y: 9 q A 1 NOTE 14. EFFECT OF INFLATION ON OPERATIONS (UNAUDITED) ' The follovnng supplementary information about the effects of changing prices on the Companyis povided in accordance with the requirements of Statement of Financial Accountmg Standards No. 33. 'Tinancial , Reportmg and Changing Prices". It should be viewed as an estimate of the effeet of changing prices, rather Ch] than as a precise measure. j Statement of Income from Operatons and Other Fmancial Data mLa h. 4 Ad;usted for Effects of Changmg Pnces for the Year ended December 31. 1980 [g j j (In Thousands) Adjusted for Adjusted for MJ%j=ddb.,..l w-As Reported m General Changes in the Fmancial Inflanon Specific Pnces ' Md@.. =M m= )g Statements (Constant Dollars) (Current Costs) Revenues' $2.342 228 $2.342.228 $2.342.228 ' [M((* Mfg 1,902.409 1.902.409 1.902.409 Qfy] Operatmg expenses (excludmg deprectanon)'. 5(/ ,s 141.997 285.262 320.105 .pg Depreciaton. L- ..m-7, a Total operanng expenses 2.044.406 2.:87.671 2.222.514 Operatng income. 297.822 154.557 119.714 ' b.*y%c, Other income'.... 235.580 235.580 235.580 Interest & other charges'. 337.495 337.495 337.495 - Income from cperanens (excludmg reducten to net AM' ,d recoverable cost)2. $ 195.907 $ 52.642 5 17.799 W 3 "] Increase in spa %c pnces (current costs; of property. plant and ec~pment held during the year'. $1.660.089 Reducton to net recoverable cost...... 3 (571.075) (905.432) W Effect of increase m general pnce level. (1.222.213) Excess of increase m general pace level over merease in (467.55G j spec c pnces after reduction to net recoverable cost..... 225.345 225.345 ] Gam from dechne m purchasmg power of aet amounts owed $ (345.730) $ (242.211) ] Net. 1 ' Assumed to be m " average for the year" dollars and thus are not restated. y h 1 'includmg the reduction to net recoverable cost. the loss from operat:ans c 1 a constant dodar basis would have been $518.433 for 7 '1 1960. } 'At December 31.1980 current cost of picperty. plant and equ:pment. net of accumulated deprectanon. was $11.654.904, while }; h:storical cost or net cost recoverable through deprecianon was $5 E29.111. fj ' ' y' d Five. Year Componson cf Selected Supplementary Fmancial Data jy Adjusted for Eftects of Changmg Prices ^ In Thausands of Average 1980 Dollars + fj 1980 1979 1978 1977 1976 V i ff OPERAENG REVENUES.......................... 22.342.228 $2.069.600 $2.048.891 $ 1.962.239 $1.656.543 og HISTORICAL COST INFORMATION ADIUSTED FOR l3 GENERAL INFLATION W J1 Income from operations (excludmg reducton t; J, to net recoverable cost). $ 52.642 5 74.049 ) M - Income per common sna: Mfter dividend h g{; g . f,r 5 requirements on prefen, ock and excludmg reduenon to ne
- overable cost)
$0.54 $0.86 y Net assts at year.end at ne. coverable cost. $1.819.986 $1,790.279 d' CURRENT COST INFORMABON Income from operatons (excludmg reducton _W] to r.et recoverable cost). $ 17.799 $ 41.503 Inecme per common share (after dividend M requirements on preferred stock and .g excludmg reduction to net recoverable cost) $0.18 $0.49 P g" j) Excess of merease in general pew level over increase m specific pnces af'er y D reducton to net recoverable cost.. ! 467.556 5 590.976 W. 2 'M Net assets at year-end at net recoverable cost $1.819.986 ?'.790.273 d GENERALINFORMADON 3 Gam from dechne in purchasmg power of ^ d.I net amounts owed. $ 2M.345 $ 309.324 Cash dividends declared per common share
- '. 59
$1.74 $2.05 S2.27 $2.46; 1 Market pnee per common share at year-end. 1;h 13 % 18 5 22 23 4; b5, -'j Average consumer pnce index 64E8 217.4 195.4 181.5 170.' "MR >1 ' %T Q NOTE: The St=tement requires that h:stanca! cost mformanon adjusted for generalmflanon and curren' ccst micimat:an be provide -y for 1979 and subsequent years. Comparahle in!ormanon is not reads!y available Ior the years prior to 1979 and thus e no f provided. )j a I A
{ M k q Constant dollar amounts represent historical costs adjusted for the effects of general inflation. The F effects are determined by ccnverting these costs into dollars of equal purchasing power using the H Consumer Price Index for all Urban Consumers (CPI-U). Current cost om cunts reflect the changes in specific prices of property, plant and equipment from the k '~',, S 3 year of acquisition tc the present. The current costs of property, plant and equipment, which represent the D estimated costs of replacing existing plant assets, are determined by applying the Handy-Whitman Index P A of Public Utility Construction Costs (HWI) to the cost of the surviving plant by year of acquisition. Land and b. IQ,' ' certain other plant assets which are not included in the HWI were converted using the CPI-U. The v.shidC l difference between current cost amounts and constant dollar amounts results from specific prices of 27fgy.5,' l property, plant and equipment (as measured by the Handy-Whitman Index) changing at a rate different & 1 l than the rate of general inflation (as measured by the Consumer Price Index). 13 msg . The current year's depreciation expense on the constant dollar and current cost balances of property, f :=Q=i {p.lant and equipment were determined by applying the Company's depreciation rates to the inde g amounts. /.m i Fuel inventories, the cost of fuel used in generation, and gas purchased for resale have not been gas costs through the operation of adjustment clauses or adjus restated from their historical cost in nominal dollars. Reguhtion limits the recovery of fuel and purchased vWd ! costs. For this reason fuelinventories are effectivelv monetary assets. O ) justed.-As prescribed in Statement of Financial Accou'nting Standards No. 33, income taxes we Od p' ' J - Th i ( - lg . The regulatory commissions to which the Company's subsidiaries are subject allow only the historical t f ~, Vp j cost of plant to be recovered in revenues as depreciation. Therefore, the excess cost of plant stated j ' of constant dollars or current cost over the historical cost of plant is not presently recoverable in rates. This ,Jg i excess is reflected as a reduction to net recoverable cost. While the rate-making process gives no h mgj j. recognition to the current cost of replacing property, plant and equipment, the Company believes, based on post experiences, that it will be allowed to earn on the increased cost of its net investment when R ,,b q j l replacement of facilities actually occurs. If m presented above, the reduction of not property, plant and equipment to net recoverable cost is offset d? r s gain from the decline in purchasing power of net amounts owed. During a period of inflation, holders of -j J'T 'M monetary assets suffer a loss of general purchasing power while holders of monetary liabilities experience 2 gain. The gain from the decline in purchasing power of net amounts owed is primarily attributable to the L y]e ( substantial amount of deb: which has been used to finance property, plant and equipment. Since the
- depreciacn on this plant is limited to the recovery of historical costs, the Company does not have
. W,.g gre opportunity to realize a holding gain on debt and is limited to recovery only of the embedded cost of debt 7 capital. i gj,*:f{- ? e ye, ~7 + L p g[ pH v m; ; m ? j&- n ( 4 a h _r l e 1 l U: -Q k ^ ^ ). g gr, p W k s L b, + , T_ p p. _.4 g u U L.",. + h I n a p. p
A MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Il#-,v will nly be alleviated when the utility plant
- 1. FINANCIAI. CONDITION involved is placed in service or the regulatory In recent years the Middle South System has ex-bodies allow a cash return on CWIP.
34-perienced financial problems reaulting primarily from the System's massive cor.struction program II. LIQUIDITY AND CAPITAL RESOURCES MIDDLE made necessary by customer requirements and the need to diversify tne System's fuel base. The During the period 1978 to 1980 the Middle South gg" increasing cost of construction and the ever. System had construction expenditures of $2.8 bil-UTILITIES, lengthening construction periods havo further ag-hon, including AFDC, of which over 80 percent gravated this situation. At the end of 1980, the was funded by external financing. Projected con-INC. and amount invested in construction work-in-progress struction expenditures for 1981 through 1983 are CWIP) was $3.2 bilhon, an increase of $2.0 bil- $2.4 buhon which is estimated to be funded in Subsidiaries (hon over the amount invested at the end of 1976. large part through external sources but to a 1:sser Financing this investment has becn a significant extent than in recent years. task in itself, but the reluctance of regulatory Due to the earnings coverage ratio constreints bodies to provide adequate rate rehef and to allow on the System operating companies during tho last the System operating companies current recovery three years, conventional sources of financ'ng for of the carrying cost of CWIP has made the task construction had to be supplemented with non-even more difficult. conventional sources, primarily sale and Reported earnings rosw approximately $10 leaseback arrangements. Although $80.6 million . million from 1978 to 1980, while earnings exclusive was maised from these sources during that period, of the effect of capitalizing the carrying cost of they ore expected to contribute a lesser amount in CWIP, ~ Allowance for Funds Used During Con-the future. During 1980 one operating company struction (AFDC), dechned $81 million. This de-exercised its option and temporarily ceased sup-cline resulted primarily from the increase in the plying its portion of funds for the construction of amount and cost of debt ano preferred stock that three jointly-owned coal units. Construction was the System has outstanding, the major portion of not interrupted, however, as one of the co-owners which was issued to finance CWIP, and the effect agreed, as provided in the related ownership 'of inflation on the System's_ operating expenses. agreement, to advance the operating company's Generally, fuel cost increases are recovered cur-share of construction funds. This advance, rently through fuel adjustment clauses. Increases amounting to approximately $69 milhon through in other operating expenses, however, can only be 1980, is scheduled for repayment in 1981. recovered through the regulatory process during Given improved earnings levels in late 1980 which costs continue to rise and earnings decline and assuming the receipt of timely and adequate further. rate rehef in response to pending rate increase The delay in recovering these costs reduced oppheations, the System operating companies' internally generated funds available for construc-mortgage bond and preferred stock earnings tion and at the same time reduced the System covernge ratios should permit greater use of con-operating companies' mortgare bond and pre-ventional financing methods for their construction ferred stock earnings coverage ratios to the point requirements. In addition, AP&L, LP&L, MP&L where conventional sources of external financing, and NOPSI are currently authcrized to make mortgage bonds and preferred stock, were se-short-term borrowings in an aggregate amount verely limited. To keep the System financially via-outstanding at any one time of up to the lesser of ble, a program was instituted to conserve cash $427 million or 10 percent of capitalization. At De-flow, This program was implemented through de-cember 31.1980, only $81 milhon of short-term lays in constructicn programs and the initiation of borrowings were outstanding compared to $113 an austerity pohey throughout the System. In addi. million at December 31, 1979. These companies tion, in order to continue construction, the System had available unused lJnes of credit of $296 mil-continued to use non-conventional financings lion. 'such as sale ar.d leaseback arrangements and Middle Sout-Inergy (MSE), the only non-sales of plant under construction to third parties. In operating compo..f with a significant construr' ion one case, as discussed further below, on operat-program, contemplates construction expenditures ing company temporarily ceased supplying funds for 1981 through 1983 of $669 million, including for the construction of certain generating umu AFDC, for its portion of the costs of building the At the end of 1980, however, based on in-Grand Gulf Plant, a two-unit nuclear generating creased rates approved in 1979, pending rate in-station. The first unit is scheduled for commercial crease apphcotions and rates implemented in 1980 operation in 1982 c.ad the second in 1986. In con-but suoject to refund, the Company hopes thet nection with this Plant, the Company has under-I increcsed funds will be available for the System's taken to provide or cause to be provided to MSE scheduled construction prograrn. The detrimental sufficient capital to complete the Plant. To this end, effect that the large CWIP balance has on cash through 1980 the Compcny had invested $443.6
w I million in MSE's common stock. In addition, MSE appe:.aed as offsetting increases to or rating ex-had sold an aggregate of $498.5 million of its first penses, resulting in no contribution to net income. mortgage bonds and had arrangements with a Although approximately $200 milhon of rate in-gr'.,up of banks under an intermediate-term re-creases were granted to the System operating 35 volving credit agreement to borrow up to $808 mil-companies by their regulatory bodies over the last lion. At year-end 1980, $137 milhon of MSE's re-three ye.2rs, this rehef was neither timely nor suffi. MIDDLE volving credit une remained unused. In order to cient to cover the rising costs of operations as-SOUTH obtain additional funds required to complete Unit sociated with the double-digit inflauon that our No.'1, MSE is negotiating for an increase in its nation has experienced. At) mr-end 1980, the Sys-UTILITIES, revolving credit line up to $1.3 bilhon. MSE has tem had outstanding rate merease opphections ' ' covenanted to complete Unit No. I by the end of totalling approximately $465 milhon, of which $19 INC. and 1982 and to complete Unit No. 2 by the end of 1986. million was collected subject to refund during the Subsidiaries If either of these covenants were not fulfilled, the year Increases in energy sales contributed less to outstanding bonds and bank borrowings would. net income than in earlier years averaging less then become due and payable, unless extensions than 6 percent per year during these three years. . could be arrang.d, and the Company would be The small increase in gos operating revenues required to provide MSE with sufficient funds to resulted from a lower volume of sales, a trend meet these obligations to the extent not provided caused by conservation efforts of gas customers, from other sources. MSE is also negotiating for offset by increased gas cost recoveries. ' changes in these covenants to extend the dates by Carrying charges associated with construc-
- which Unit Nos. I and 2 must be completed to not tien, AFDC, were capitahzed. Since these charges later than December 31,1984, and December 31,. were not expensed during the current period, net 1988, respectively..
income during this period was substantially in-In order to maintain an acceptable capital creased. The amount reported as AFDC repre-structure and to provide the System operating sents the costs of funds invested by common and companies and MSE with additional funds to con-preferred stockholders plus the after-tax cost of _ tinue their construction programs, the Company borrowed funds that were used to finance the con-must maintain its ability to market its common struction program. These credits to the income stock. During the period 1978 to 1980, the Company statement are intended to remove the effect of the -issued an aggregate of 40,141,333 shares of com-costs of financing the construction of new facihties mon stock, providing the Company with net cash from net income; they do not provide any current proceeds of approximately $548 million. These cash to the System. AFDC was 80 percent,117 funds were utihzed to repay revolving credit bor-percent and 122 percent of net income for 1978, rowings incurred to purchase additional wmmon 1979 and 1980, respectively. stocks of the Company's subsidiaries. The Com-The substantialincreases in interest and pre-pony's existing revolving credit agreement pro-ferred dividend requirements during the last three vides for borrowings of up to $230 milhon, of which years reflected additional issuances of debt and approximately $121 million remained unused at preferred stock, the proceeds of which were . yecuend 1980. opplied to finance construction, and the very sig-In addition to obtaining funds for its construc-nificant increases in prevaihng interest and pre-tion program, the Middle South System will need ferred dividend rates. - to raise during the period of 1981 through 1983 $315 milhon to meet debt maturities and cash sinking IV, EFFECT OF INFI.ATION . funds and to make preferred stock sinking fund redemptions. It is anticipated that a substantial Inflation has had a significant impact on the Com-portion of these requirements will be funded pony's operations in recent years. (See Note 14 to through external sources, including the sales of the Consolidated Financial Statements "Effect of , similar securitfes, and that the balance will be Inflation on Operations:') provided by internally generated funds. V.
SUMMARY
III. RESUI.TS OF OPERATIONS The ability of the Middle South System to reach After a decline in 1979, net income increased and maintain a sound financial position while slightly in 1980. While net income is the result of providing the generating capacity necessary to many factors, there are several that had a signifi-serve the present and future energy demands of its cant effect on the System's results of operations for customers at reasonable costs depends primarily these years. on timely, fair and sufficient rate rehef from the Increased electric operating revenues each Systom's regulatory bodies. year.were largely due to increased fuel-related costs which were bill 3d to customers, as allowed by the fuel adjustment clauses, but which also I
1970-1980 FINANCIAL RECORD CONSOLIDATED SUMMAltY OF OPEMTIONS 1930 1979 1978 Operating Revenuest El ectric....................................... 52,10130 $1,669,451 $1,489,915 36 Natural ga s............................................... 116.796 116.612 95,863 Tra nsit............................................ 44.112 36.996 36,399 MIDDLE Total............................................. 2.342.223 1,823,059 1,622,177 SOUTH Operating Expenses: Operation: UTILITIES, Fuel for electric generation................................ 916.145 697,606 623,402 INC* C'nd Purchased power......................................... 281.951 258,377 133,029 Gas purchased fer resale.................................... 68.854 88,801 68,657 Subsidiaries Other..................................................... 283,905 200,264 199.406 Mainte na nce............................................... 111.631 111.394 99,941 Depreciation.............................................. 141.997 119,304 112,805 Taxes other than income taxes.............................. 84.690 77,849 69,771 Income taxes.......................... 105.023 51,266 86.004 Total.................................... 2,044.400 1.604,861 1,393,915 Operating Income............................................ 297.822 218,198 228,262 Other Income: Allomnce for equity funds used during construction........... 1.2.277 124.086 93,573 Miscellaneous income and deouctions - net............... 7,019 7,940 6,239 Inco me taxes - cr........................................... 106.2B1 76,232 50,105 Total.............................................. 235.590 208,258 149,917 Interest and Other Charges: Interest on long-term debt.................................. 327.463 255,242 199,212 Other interest-net....... 72.E6G 42,139 22,769 Allowance for borrowed funds used during construction - (cr.)............................... (117.663) (89,247) (54,717) Preferred dividend requirements of subsidiaries....... 55.024 36,264 25,477 Minority interest in subsidiary's net income..................... To'ol......................... 337.495 244,398 192,741 Net Inco me.................................................... s 195.907 $ 182.058 $ 185,438 Earnings Per Share (based on average number of shares ou' standing)................. 52.01 $2.13 $2.46 - Dividends Declared Per Share............... 51.59 $1.535 $1.46 Average Number of Common Shares Outstanding ($5 Par Value).................................. 97.469.169 85,444,691 75,522.179 UTILITY PLANT AND CAPITALIZAT!, .fA (at December 31) Fixed Assets: Utility Plant............... s 7.893.636 $7,002,052 $6,052,023 Less accumulated depreciation and amortization............ 1,264.525 1,139,164 1.038,256 Utility plant-net.............................. s 6.623,111 $5,862.888 $5,013,767 Capitalisation: Long-ter m d ebt............................................. s 3.392.':09 $3,017,816 $2.629,711 Preferred stock (including prem'ura and issuance expense): Without sinking fu nd................................... 339,967 330,966 280,712 ll With sinking fund............................ 283.1 9 193,508 60,063 Common equity...................... 1,905.S.; 1,664,060 1,415,239 Minority interest in the common equity of Arkansas. Missouri Power Company..................... Total................................ s 5.911.909 $5,206,350 $4.385,725 Capitalisation Ratios: Long. term debt.......... 57.4' 58.0 % 60.0 % Preferred stock (including premium and issuance expense) 10A 10.1 7.8 Common equity....................................... 32.2 31.9 32.2 Certain amount:, have been restated for comparatwo purposes and to reflect ratemabng decisions affecting prior years. \\
1977 .1976 1975 1974 1973 1972 1971 1970 'S t.327,319 $1,063,036 8 868,100 $ 768.297 $ 609,082 5 550,089 5 473 352 5 420,937 83,910 62,502 49,513 38,409 38,362 31.884 21,267 17.885 37 31.828 18,873 13,176 11.091 10,933 11,408 11,646 11,668 1,443,057 '1,144,411 930,789 P d,797 658,377 593.381 506,265 450,49f' 568,990 422,204 294.482 25),435 149,882 120,940 92.409 76,672 > '087 61,439 35,075 43.880 22.458 18,705 12,351 5,315 t 1,577 37,852 30,994 21,807 19,936 18,774 11,747 7,995 1 1,887 145,489 139,708 116,486 107,776 102.968 92,192 84,232 72,708 58,694 50,729 46,662 40,776 36,893 31,540 29,391 106,7 0 .!01,045 92,770 74,635 68,781 64,439 58,132 52,926 67.306 .61,561 56,481 ~ 49,127 49,224 46,068 42,363 39,211 ',091 68,795 55,560 31,632 52,957 52,801 53,582 54,504 1,239,394 957,079 755,799 643,664 511,790 461,588 394,316 350,246 203.663 187,332 174,990 174,133 146,587 131,793 111,949 100,244 65,346 62,169 46,064 49,509 31,948 22,188 14,628 10,080 b 6,910 ? 8,329 4,397 2,885 2,421 913 590 1.485 29,393 18,287 14,175 (1,788) (1,@ (459 (304) (801) -101,649 63,785 64,636 50,606 35.300 22,646 14,914 10,764 .153,005 132,719. 113,486 105,532 72,464 61,110 50.662 40,209 -18,260 '15,571 19,177-8,094 3,723 2,870 1,553 2,726 (34,031) 23,109 21,780 16,660 15,040 13,181 10,642 8,833 7,287 46 18 160,343 170,070 149,323 128,666 89,368 74,668 61,066 50,222 'S ' 144,969- $ 106,04", S 90,303 $ - 96,073 $ 90,519 $ 79,77] $ 65,797 $ 60,786 '82,18 $1.82 81.78 $2.17 $2.09 $1.98 $1.68 $1.61 31.395' $1.335 J1.275 $1.23 $1.15 $1.07 $1.03 $0.975-J,598,876 58,395,628 50,733,782 44,279.481 43,376,255 40,25 ;53 39,213,614 37,687,885 ,183,284 $4.539,891 $3,953,814 $3,470,598 $3,054,867 $2.672,464 $2,386,077 $2,059,387 935,702 831,930 747,612 668 148 608,613 546,378 502,740 436,579 '84,247,582 _ $3,707,961 $3,206,202. $2,802,450 $2.446,254 $2,126,086 $1.883,337 $ 1,622,808 1,175,471 $1,%5,985 $1.751,328 _ $1,529,958 $1,341,637 $1,147,127 $ 983.941 $ 829,053 280,712 250,679. 240,627 240,627 230,611 205,558 160.431 150,359 60,063 60,063 60,063 1,197,807 - 1,010,278 864,035 746,628 705.212 576,262 538,935 494,504 637 d.714.053 ; S't.287,005 $2,916.053 $2,517,213 $2,277,460 $1,928,947 $1,683,944 $1,473,946 58.6 % 59.8 % 60.1% 60.8 % 58.9 % 59.5% 58.5 % 56.3 % 9.2 9.5 10.3 9.5 10.1 10.6 9.5 10.2 32.2 30.7 29.6 29.7 31.0 29.9 32.0 33.5
1 l TOCKHOLDER GROWTH. At the This nontaxable portion of divi-close of 1980 MSU had 175.326 dends is treated, fer income tax pur-stockholders. or 31,208 more than a pocas, as a return of the stockholder's year earlier. The number of shares of capital. When the stockholder ulti-common stock outstandmg increased mately sells or otherwise disposes of from 90,432,998 at the end of 1979 to shares, this return of capital should 38 107,349.943 as of December 31,1980. be deducted from the tax cost of the shares in computing gain or loss for CORPORATE income tax purposes. IVIDEND REINVESTMENT AND The five-percent discount INFORMATION STOCK PURCHASE PLAN. The applicable to the purchase of shares Company's Dividend Reinvestment 'hrough the Dividend Remvestment and Stock Purchase Plan became a and Stock Purchase Plan is consi-CORPORATE OBJECTIVES In ful-more attractive option when, effec-dered, for federal income tax pur-filhng our public trust as a corpo-tive with the July 1,1980, dividend, a poses, to be an additional distribu-rate citizen, Middle South Utilities is five-percent discount feature was tica and is treated the same as div-firmly committed to theae pnmary ob-added Under the plan, dividend idends paid. jectives: payments are used to buy additional The quarterly dividend paid on shares of MSU common stock. Cash January 2,1981, reflected a one-cent
- 1. To furnish reliable utthty services to purch ses of additional shares may merease to 40%c per share. This is customers at the lowest reasonable Iso be made by plan participants.
equivalent to an annual rate of $1.62 cost consistent vnth sound business N c mmission or service charge is per share. With the single exception practices, while continuing to re-p id by participating stockholders in of 1956, the Company has been able spend to their needs in a courteous c nnection with purchases under the to increase the dividend every year and efficient manner. plan. Information about participation since its organization.
- 3. To attain the financial integrity in the plan can be see" red by writing necessary for System compon'es.s Dan E. Stapp, secretary of the Com-provide a fair return to stockholders pony.
RGANIZATIONAL AND MAN-and to continue serymg their cus-AGEMENT CHANGES. The tomers effectively. Emphasis will be previously announced plan to con-on opumizmg capitalization ratios IVIDENDS. Div>dende of $1.58 sohdate Ark-Mo and AP&L became and earning a fair return on capital, per share were paid on Mid-effective January 1,1981. In this con-including that invested in construc-die South common stockin 1980. This solidation of operations. Ark-Mo be-tion,with recultant improved cover-was up from the 1979 rate of $1.52 per came a civision of AP&L Associated ages, internal cash generation, and share. Natural Gas Company, formerly an quahty of earnings. An estimated 98.24 percent of the Ark-Mo subsidiary, be-ame a sub-dividends paid in 1980 are nontaxa-sidiary of AP&L.
- 3. To seek continual improvement of ble as dividend mcome to the stock-Donald J. Winfield, senior vice the work environment within the Sys-holder. This is mainly due to the fact oresident of MSU. will retire on tem to increase produ ctivity, promote that a large portion of reported net
' March 31,1981, after almost 25 years safe and efficient operations, en' income which resulted from capi-with the Company. courage employee growth and de-talizing tha costs of the capital in-On May 16,1980, Frank G. velopment, and minimize employee vested in projects still under construc-Smith, Jr., president of Ark-Mo, be-tumom. tion does not constitute taxable in-came president and chief executive 4'. To be a socially responsible corpo-come. ofhcer of MSS, succeedmg F. E. Au-rate citizen by emphasizing such ac-trey who resigned as president of Uvities as the social and economic MSS and MSU. Floyd W. Lewis, then development of our service crea and chairman and chief executive officer the continuing practice of sound en-of MSU and MSS, assumed the MSU vironmental policies consistent with y presidency vacated by Autrey. sound business practices. .4. S. To encourage the efficient use of .} energy through such practices as j conservation and load managa-ment, and to promote the develop-ment and application of innovative - energy technolocy and renewable Donald J. winfield. resources when it is economic to the senior vice presiden* customer and provides a fair return c.; investment. \\
IDDLE SOUTH UTILITIES. INC., owns the major portionof Grand Gulf The common stock of Middla an investor-owned public util. Nuclear Station, a 2.5-million-kilo-South Utilities. Inc., is hsted on the ity holding company, owns 100 per-watt generating facility now under New York, Midwest, and Pacific c:nt of the common stock of four construction in Mississippi. Stock Exchanges. The stock ex-operating companjos - Arkansas System Fuels, Inc., is a fuels pro-change symbol is MSU. The com-Power & Light Company, Louisiana curement subsidiary of the four monly used abbreviation in stock list-Pow:r & Light Company, Mississippi operating companies. Associated ings is MidSUt. Pow:r & Light Company, and New Natural Gas Company is a gas dis-ANNUAL MEETING: The Annual Orleans Public Service Inc. The two tribution subsidiary of Arkansas Meeting of Stockholdersis scheduled ot%r principal subsidiaries of the Power & Light Company. to he oc n $ Pi t C,ompany are Middle South Ser. With Middle South Utilities, Inc., }0 5 9 h vices, Inc., a service company, and these companies constitute the Mid-Middim South Energy, Inc., which die South Utilities System. $80 Qa e tin ld i" ui,1a y }6 hSALES IN IGLOWATT. HOURS uhmmds) 1980, and 80.3 percent of the shares I then outstanding were represented I L in person or by proxy. Total - Reeldential Comunercial Industrial Other TRANSFER AGENTS: Morgan Guar-1900......... 55,154,237 18,085,382 9,278,714-22.876,339 S,935,822 anty Trust Company of New York, t 1979........ 52,946,799 14,606,178. 8,754,087 72,329,201 7,257.333 New York 10015: The First National 1978f....... 51,973.705 14,781.680 8.635.615 '9,714,164 8,842,246 Bank of Boston, Boston 02102: Conti. I 1977 c....... 48,477.281 lE852.810 7,972.364 18,712.127 7,939,980 nental Illinois National Bank and c1976...... 42,957,761 12,232,611 7,240,843 16,831,622 6,652.685 Trust Company of Chicago, Chicago [1975_....... 38,742,993 11,942,436 6,906.944 13,619,710 6,273.903 60690: Hibernia National Bank in
- 1974 37,779,407 11,012.164 6,370,308 14,965.405 5,431.530 New Orleans, New Orleans 70161
p" 1973........ ~ 37,862,524 11,261,040 - 6,364.193 14,530,792 5,706.499 Bank of America National Trust and 1972...... ~ 37,8C8,576 10.281.403 5,834.029 13,519,543 8,173.601 Savings Association, San Francisco i 1971........ 35,136,681 8,808.078 5.214.614 12.029,426 9.084.563 94120-1970 32.531,614 8,005,340 4.761,833 '!!,267.636 8,496 805 g REGISTRARS: Morgan Guaranty T:ust Company of New York. New LEEVENUE FROM ELECTRIC ENERGY SALES hhmseds) York 10015: State Street Bank and i g Trust Company, Boston 02102: The i- - Total-Reeldential Commer :ial Industrial Other First National Bank of Chicago, Chicago 60670: Whitney National J 1ses........ 'st,13s.327 s73s,073~ $447,see $721,378 stes.las Bank of New Orleans, Naw Orleans 1 1979. 1.659,192 : 553,746 357,064 529,008 219,374 70160: Wells Fargo Bank N. A., San ~1978;....., -1,479,759 505,790 317.412 408,319 248,238 Francisco 94120' IL1977 1,328,983 - 466,299 -291,807 369.405 201,472 "1976
- 1,051,270.
373,631: 243,480 290.558 143,601 ADDITIONAL INFORMATION: For 1975........ 856.009 325,944 199,050. ?,09,506 121,509 persons who desire additional statis- -1974...... 766,541 269.776 174.553 214,327 87,885 tical information, a 1980 Financial j1973.......,- 602,842 237,990 -141,969 157,173 65,710 and Statistical Report is available on <1972......... 543,221 206,086 120.853 131,318 84,964 467.548 174,859 105,795 110,172 76,722 request. 1971 ~....... _1970,.......- 415,543. 158.579 96,169 98,476 62,319 THE 1980 ANNUAL REPORT is pre-pared for the information of stock-j RESIDENTIAL CUSTOMERS AND USE ferested p rsons. '/h ompan 1980 Annual Report to the Securities Average Ellowatt-Revenue Revenue per and Exchange Commission on Form
- number of hours per per kilowatt.
10-K (including hnancial statements
- customere customer customer hour and financial statement schedules)is "I
- C
- "E "
- 1900... 1,341,297 ~ 11.989 s549.87 4.59< ' 1979......... 1,314.028 11.116 421.41 3.79 request without charge. Persons in-1-1978'..... 1,280,694 11,542 394.93 3.42 terested m obtaining a copy should -1977... 1,238.597 11,184. 376.47 3.37 rrite to Don E. Stopp, Secretary, at -1976.... 1,208 '40 10,125 309.26 3.05 the address below: {l975....,g. 1,182.525
- 10. 0 6'
'275.54 2.73 MIDDLE SOUTH UTILITIES. INC. 1974'....... 1,159,536 . 9,497 249.91 2.63 (11973....... 1,124.746 ~ 10,012 211.59 2.11 Box 61005 e1972... -1.077.509 9.542 15!.26 2.00 New Orleans, Louisiana 70161 1971. 1.014,735 8.680 172.32 1.99 (504) 529-5262 1970 ;...... 973.621 8,222 162.88 1.99 /
i OFFICERS DIRECTORS FLOYD W. LEWIS GEORGE F. BENNFTT Chairman and President Pre zient of State Saeet investment . Age r. Joined MSU System in 1949. Corporatu.n and Federal Street Fund. Inc. ? Boston. Massachusetts ompensanus and Naninanng Gunmms n or V e P es den iel financial Officer Age 44. Joined MSU System in 1979. JAMES M. CAIN 40 Sint-n years prior usiuty industry service. Presid.nt and Chier Executive Orricer or New Orleans Pubine Service Inc. CORPORATR Ne*n"o*r Vle{ P,"dNinancial Consultant RICHARD W. FREEMAN . INFORMATION DAN E. STAPP Chairman of the Louisiana Coca Cola Secretary Bottling Company. Ltd.: Chairman Age 46. Joined MSU System in 1958. of the Finance Committee or Delta RODNEY J. ESTRADA Air Lines. Inc. New Orleans. Louisiana Treasurer Executive. Audit (Chairman), and Age 43. Joined MSU System in 1965. Nominating Committees E. EUGENE BROWN Assistant Treasurer FLOYD W. LEWIS Age 47. Joined MSU System in 1956. Chairman and President of the Company New Orleans. Louisiana DOROTHY M. ANTOINE Executive (Chairmord and Nominating Assistant Secretary Committees Age 48. Joined MSU System in 1952. DONALD C. LUTEEN President and Chief Executive Ollicer of 'Reurement: Match 31.1961 Mississippi Power & Light Company Jackson. Mssssssippi JERRY L MAULDEN President and Chief Executive Othcet or Arkansas Power & Light Company Little Rock. Arkansas LeROY P. PERCY Cotton farmer: Chairman of the Boards of Mississippi Chemical Company and F!rst Mississippi Corporation Greenville. Mississippi Executive. Audit, and Nominating (Chairman) Committees ROBERT D. PUGH President of Portland Gin Company (Agricultural and Agth.Bussness) and Chairman of the Board of Directors of Portland Bank Portland. Arkansas Executive. Audit, and Nominating Committees GEORGE K. REEVES Partner cl Ward and Reeves, attorneys Caruthersville Missouri Compensation and Nominating Committees FRANK G. SMITH. JR. President and Chief Executive Officer of Middle South Services. Inc. New Orleans. Louisiana DR. WALTER WASHINGTON President of Alcorn State University Lorman. Mississippi Audit and Nominating Committees R. E. L WILSON Chairman of the Boards of Lee Wilson f & Co. (Agricultural and Agri. Business) \\ and The Bank of Wilson. President of Delta Products Company (Cottonseed Oil Mill) Wilson. Arkansas Co ensation (Chairman) and Nominating ommittees JACK M. WYATT President and Chief Executive Officer of Louisiana Power & Light Company New Orleans. Louisiana Executive Committee \\
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