ML20032A972
| ML20032A972 | |
| Person / Time | |
|---|---|
| Site: | Arkansas Nuclear  |
| Issue date: | 10/30/1981 |
| From: | Langston N ARKANSAS POWER & LIGHT CO. |
| To: | Saltzman J Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8111040154 | |
| Download: ML20032A972 (6) | |
Text
P ARKANSAS POWER & LIGHT COMPANY POST OFFICE BOX 551 UTTLE ROCK. ARKANSAS 72203 (501)371-4000 October 30, 1981
(*s0&&
Mr. Jerome Saltzman, Chief
.s.
N Antitrust & Indennity Group Nuclear Reactor Regulation d
j 9
United States Nuclear Regulatory gOygg Commission g " 8-Washington, D. C.
20555 A-
Subject:
Price-Anderson Act (Public Law 94-197) s
/
File: 0220, 2-0220
Dear Mr. Saltzman:
Arkansas Power & Light Company has chosen to meet its current guarantee requirements relative to the Price-Anderson Act by alternative 5, an annual financial statement and cash flow projection. Accordingly, enclosed are AP&L's:
1)
Certified 1 80 Annual Report providing financial statements for the most recent year preceeding October 30, 1981.
2)
September,1981 year-to-date financial statement for the last three quarters preceeding October 30, 1981.
- 3) A one year internal cash flow projection (Statement of Source of Funds) accompanied by underlying assumptions.
- 4) A narrative statement ensuring that retrospective premiums up to $20 million would be available for payment.
Very truly yours, I'\\ atA.r-~ NWA Nathan E. Langston Controller NEL/kk Enclosures f0 8111040154 811030 PDR ADOCK 05000313 FDR MEMBER MIDDLE SCUTH UTIUTIES SYSTEM
ARKANSAS POWER & LIGHT COMPANY AND SUBSIDIARY BALANCE SHEETS September 30, 1981 (Consolidated) and December 31, 1980 September 30 1980 December 31 (Unaudited) 1980 (In Thousands)
ASSETS Utility Plant.......................................
$2,730,967
$2,423,231 Less accumulated depreciation....................
513,796 417,435 Utility plant - net........................
2,217,171 2,005,796 Other Property and Investments:
Investment in associated companies - at equity...
35,858 31,378 0ther............................................
822 470 Total......................................
36,680 31,848 Current Assets:
Cash and special deposits........................
8,809 10,2',o Temporary investments - at cost, which approximates market...........................
4,040 Accounts and notes receivable (less allowance for doubtful accouncs and notes of (in thousands) $1,495 in 1981 and $1,396 in 1980).
80,384 46,929 Deferred fuel cost...............................
18,039 7,353 Fuel inventc ry - at average cos t.................
26,765 28,$ '2 Materials and supplies - at average cost.........
18,580 6,689 0ther............................................
6,668 5,119 Tota1......................................
163,285 105,818 Deferred Debits.....................................
16,610 4,521 T0TAL...................................
$2,433,746
$2,147,983 LIABILITIES Capitalization:
Common stock, $12.50 par value, authorized 50,000,000 shares; issued and outstanding 43,380,196 shares in 1980 and 36,636,773 in 1980.......................................
$ 542,252
$ 457,960 Paid-in capital..................................
4,742 609 Retained earnings................................
57,820 59,024 Total common shareholder's equity..........
604,814 517,593 Preferred stock without sinking fund.............
126,890 126,890 Preferred s tock with s inking f und................
144,822 147,065 Long-term debt...................................
987,436 848,667 Total capitalization.......................
1,863,962 1,640,215 Current Liabilities:
Notes payab1c....................................
36,400 Currently maturing long-term debt................
84,363 68,000 Accounts payable.................................
80,871 91,189 Taxes accrued....................................
49,697 28,284 Accumulated deferred income taxes on deferred fue1..........................................
25,119 3,867 Interest accrued.................................
32,623 23,194 0ther............................................
53,381 61,251 Total......................................
326,054 312,185 De f e r r e d C r e d i t s....................................
239,138 192,445 Reserves...................................
4,592 3,138 T0 TAI....................................
S2,433,746
$2,147,983 1
ARKANSAS PoliER & LICHT COMPNW STATENENT.0F INCOME For the Three Months and Nine Months Ended September 30,1981-(Consolidated) and 1980 (Unaudited)
D ree Months Ended Nine Months Ended 1981 1980 1981 1980 (In Thousands)
(In Thousands)
Oparating Revenues:
Electric..........................................................
4 314,115
$ 245,852
$ 736,437
$ 555,514 30.764 NaturalCas.......................................................
5.365 767.201 555.514 Total.........................................................
319.480 245.852 Optrating Expenses:
Operation:
Fuel for electric generation....................................
86,949 81,059
-243,209 189,276 Purchase power..................................................
44,731 58.569 116,346 130,142 Deferred fuel cost..............................................
.(6.880)
(13,935)
(9,119)
(14,551)
Gas pu r chas e d f o r r es ale........................................
4,108 23,455 0ther...........................................................
35,991 30,C16 97,993 77,719 Maintenance.......................................................
8,648 6,822 32,021
-18,271 Depreciation.....................................................
19,964 16,315 57,223-42,300 Taxes other than income taxes.....................................
7,276 4,267 21,186 19,295,
Income taxes......................................................
41.752 22.002 51.531 22.387 I Tota1.........................................................
242.539 205.095 633.845 484,839 Opsrating 1acome....................................................
16.941 40.757 133,356 70.675 Other Income:
Allowance for equity funds used during cons truction...............
. 2,334 3,382 8,879_
19,400 Nascellaneous. income and deduct ions - net.........................
12,323 792 18,016 4,124 In c om e t ax es - c r.................................................
(9.434) 1.273 (6.180) 10.405 Tota1.........................................................
5.223 5.447 20.715-33.929 Interest and Other Charges:
In t e res t on l on e-t e rn d eb t........................................
23,358 16,811 65,994-49,970 Othe r int e r es t - n e t..............................................
7.444 3,970-17,809 11,110 Allowance for borrowed funds used during cons t ru c t i on - ( c r)............................................
(2.879)
(2.195)
(9,009)L
'(12.968),
Tota1.........................................................
_, 27.923 18.586 74.794 48,112-l N2t Lucome.'.........................................................
54,241 27,618 79,277 56,492 Prsferred Dividend Requirements.....................................
6.383 6.465 19.185 18.937 Balance for-Common Stock............................................
$ 47.858
$ 21.153
$ 60.092 S 37.555 i
i
.ARKINSAS POWER'& LIGHT COMPANY AND SUBSIDIARY a
STATEMENTS OF CHANGES IN FINANCIAL POSITION For the Nine Months Ended September 30, 1981 (Consolidated) and 1980 (Unaudited)
Nine Months Ended 1981 1980 _
(In Thousands)
Funds Provided By:
Operations:
Net income................................................
$ 79,277
$ 56,492
~ Depreciation...........................................~...
57,223 42,300 o
Deferred income taxes and investment tax cre dit ' adj us tmen t s - n et...............................
43,807 11,980 Allowance for funds used during construction..............
(17,888)
(32,368)
Total funds provided by operations..................
162,419
'78,404 Other:
Allowance for funds used during construction..............
17,888 32,368 Investment in associated company - at equity..............
3,100 Miscellaneous - net.......................................
2,957 Total f unds provided by operations and other........
180,307 116,829 Financing and other transactions:
Common r.cock..............................................
55,000 20,000 Preferred stock...........................................
'50,338 First mortgage bonds......................................
75,000 Promissory notes and other long-term debt.................
54,735 15,929 Book value of utility plant so1d..........................
.105,970 19,599 Short-term securities - net...............................
28,820 Total funds provided by financing and other transactions...............................
290,705 134,686 Total funds provided..........................
$ 471,012
$ 251,515 Funds Applied To:
Utility plant additions:
Construction expenditures for utility plant...............
$ 292,582
$ 159,794 Nuclear fuel..............................................
(1,536) 3,308 Other-net...............................................
2,962 163 Total gross additions (includes allowance for funds used during construction)..................
294,008 163,265 Other:
Dividends declared on preferred stock.....................
19,185 18,937 Dividends declared on common stock........................
61,297 52,143 Investment in associated company..........................
4,480 Inc re as e in wo rkin g ca p ital *..............................
22,679 8,167 Miscellaneous - net.......................................
13,048 Total funds applied to other........................
120,689 79,247 Financing transactions:
Retirement of preferred stock.............................
2,241
(,003 Retirement of first mortgage bonds........................
1,009 6,000 i
Sho rt-t e rm s e cu rit ies - n et...............................
53,065 Total funds applied to financing....................
56,315 9,003 Total funds applied...........................
$ 471,012
$ 251,515
- Working capital does not include short-term securities, current maturities of long-term debt or deferred taxes included in current liabilities.
The 1981 net increase in working capital is primarily due to increases in cash and accounts and notes receivable and decreases in other current liabilities; the 1980 net increase in working capital'is primarily due to increases in accounts and notes receivable and fuel inventory of fset by increases in accounts payable and other current liabilities.
I
ARKANST.S POWER & LIGHT COMPANY STATEMENT OF SOURCE OF FUNDS FOR LAST THREE MONTHS 1981 & FIRST,NINE MONTHS 1982 ITEMS FULL YEAR In Thousands of Dollars FORECAST TOTAL
- Source of Funds:
From Operations:
Net Income
$ 103,885 Depreciation 88,356 Deferred Income Taxes & Investment Tax Credit Adjustments - Net 46,101-Allowance for Funds Used During Construction (19,093)
Total 219,249 Dividends Declared Preferred Stock (25,505)
Common Stock (87,324)
Total (112,829)
Funds Retained in Business 106,420 From (Increase) Decrease in Working Capital (Excluding Short-Term Securities) 480 Investment in Associated Companies (6,720)
Miscellaneous - Net 26,749 Total - Other 20,509 Funos Before Financing 126,929 From Sale of Properties 56,406 From Issuance (Retirement) of Securities:
Common Stock 50,000 Preferred Stock (998)
First Mortgage Bonds (17,462)
Install. Purch. Cont. (Poll. Cont./Ind. Dev.)
12,679 Temporary Cash Investments 138 Municipal Bonds Receivable Short-Term Securities - Net 30,143 Total 74,500 Total Funds S 257,835 Construction Expenditures
$ 215,151 Nuclear Fuel 61,777 Less; Allowance for Funds (19,093)
Net Construction Expenditures S 257,835
NARRATIVE STATEMENT.
In the event of a nuclear incident, Arkansas Power & Light Company will meet its guarantee requirements under the Price-Anderson Act by borrowing short-term on its available line of credit and/or reducing its 1982 construction expenditures of $242 million by twenty million dollars.
Specifically, AP&L would curtail construction of Independence 815 MS S.E.S.
Unit 2 on which 36.8 million (excluding AFUDC) is scheduled to be spent
. in 1982, other production projects on which 64.1 million (excluding AFUDC) is scheduled to be spent in 1982, and transmission projects - lines and substations - on which 61.6 million (excluding AFUDC) is scheduled to be spent in 1982.
N~
Don W. Myers, Director Finance & Accounting Department
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PERFORMANCE HIGHLIGHTS l
1 0/0 1980 1979 Increase Revenues from operations (000)
$ 750,497
$ 583,826 29 l
Operation and maintenance expenses (000)
$ 541,946
$ 438,124 24
[
Allowance for funds used during construction (000) $
37,503 65,903 (76)
Net income (000) 65,230 83,742 (22) l Capitalization (000)
$1,640,215
$1,565,741 5
l Construction expenditures (000)
$ 230,474
$ 291,771 (21) f Total utility plant investment-end of year (000)
$2,423,231
$2,211,886 10 Customers (End of year) 469,013 463,087 1
l Energy sales to ultimate customers l
(Millions of kilowatt hours) 14,540 13,684 6
Employees (End of year) 3,943 3,714 6
Peak demand (Megawatts) 4,179 3,521 19 l
Average use per customer (Kilowatt hours)
Residential 11,112 9,778 14 I
Commercial 54,330 50,041 9
i l
l 11 tis report reflects the operations of Arkansas Power & Light Cornpany for the period ended Decernber 31, 1980, and does not include the effects of the consolidation with Arkansas-Afissouri Power Company which occurred on January 1,1981. (See Note 3 to Financial Staternents ' Business Consolidation.")
A MESSAGE FROM THE PRESIDENT bw L hm The first step was placed into effect, subject to M"*
refund, in late October 1980. In a pre-hearing m
stipulation agreement between the Company
-a and the APSC staff, the Commission staff recommended an increase of approximately i
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590 million and in return, the Company agreed l
0 not to contest certain staff adjustments which j
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request of 5130 million to approximately
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5117 million. We hope to have a final decision
,'b A by hiay 1.
i To gain wholesale rate relief, AP&L filed a two-phase increase of almost 510 million with the Federal Energy Regulatory Commission in late August pursuant to a pre-filing settlement agreement with ocr wholesale customers. The Company began col ecting-subject to possible l'
i refund-interim increased rates totaling almost 57 million on an annual basis in November.
In addition, because Arkansas-Niissouri Power Company was consolidated into the AP&L system on January 1,1981, AP&L has l
assumed responsibility for a retail rate applica-tion filed before the APSC last July for an increase of some 57.5 million. The full amount was placed into effect-subject to possible In 1980 the management of Arkansas Power refund-in Decembe r with hearings to begin
& Light Company was tested to its full measure in N1 arch 1981.
as we sought to regain financial stability, to meet To strengthen our financial posture, the record-breaking electric energy demand, to Company initiated an agreement with N1ississippi move forward with our fuel diversification Power & Light Company, a sister company m program and to complete the consolidation of the hiiddle South Utilities System, to sell a 25 Arkansas-N1issouri Power Company into the percent ownership interest in Independence AP&L system. These challenges were met in Steam Electric Station.This two-unit coal-fueled an operating climate characterized by double-facility is currently under construction near digit inflation, lagging rate adjustments and Newark with the first unit scheduled for opera-fiscal pressures.
tion in 1983 and the second unit scheduled for Throughout the year, we were forced by our service in 1985. Both AP&L and N1P&L have weakened financial position to place a high made filings with regulatory bodies in Arkansas priority on reestablishing our fiscal integrity.
ar.d Niississippi to secure approval of this sale.
This situation led to the implementation of the Approval and implementation of these most stringent cost control measures we have financial steps will hopefully allow us to regain ever instituted at AP&L At the same time, we our financial momentum in 1981 In addition, l
aggressively moved ahead with rate initiatives this financial position will mean that we at both the retail and wholesale levels. In February can continue to finance our construction i
the Arkansas Public Service Commission ( APSC) program.
granted a modest six percent retail increase, There's no doubt that the best interests which was long overdue because of the delay of our customers and investors will be served in the start-up of commercial operation of Unit 2 by completion of generating facilities both of Arkansas Nuclear One and was the first ender sonstruction and planned. Oil-fueled rise in retail rates approved since 1977.
electric generation is an energy option that Immediately following the implementation is neither economical nor reliable when of the new rates approved by the Commission, compared with uranium, coal-or lignite-fueled the Company filed a two-step retail rate applica-generation. Prior to the 1973-74 Arab Oil tion with the APSC totaling $130 million. The Embargo, we were buying oil for about 53 application requested that the first phase of the per barrel.Today that same barrel of oil is l
1 increase in the amount of 586.7 million be placed costing approumately $32 per barrel,an almost into effect immediately with the remainder ten-fold increase over the last eight years, requested for implementation on June 1,1981.
and the future outlook for oil prices indicates 2
f that this upward spiral will continue.
All four coal units are being built in partnership Projections made by nationally-recognized with the Arkansas Electric Cooperative Corpora-economic forecasting institutions show that the tion (AECC) and several municipalities.
1990 per-barrel price of oil may be as high as Another step forward in displacing our
$75-5100. We don't want to have to live with that current oil-fueled generation will be taken at the magnitude of fuel cost increase, m AP&L is Arkansas Lignite Energy Center near Hampan.
moving away from oil as quickly as possible.
Plans for this two-unit facility to be fueled by That's why we a re enthusiastic about the benefits Arkansas lignite were announced in the L that will accrue to all our constituents when by of 1979. We are currently projecting that these 1985, assuming completion of various construc-twe units will come "on line" sometime early tion projects, approximately 80 percent of our in the next decade.
Company's energy sales to its retail and whole-The need for these additions to the AP&L sale customers (excluding System sales) will generating system was dramatically demon-be provided by uranium-and coal-fueled strated by the record electric energy demand generating units.
that we experienced in the summer of 1980.
Progress was made toward that goal in 1980 During that time, one of the hottest ar.d longest when the second unit at Arkansas Nuclear One heat waves ever to strike Arkansas pushed and the first unit at White Bluff Steam Electric customer usage higher and higher. This demand Station began commercial operation. This established a new peak demand on the AP&L second nuclear-fueled unit completes a construc-system of 4,179 megawatts-a 19 percent increase tion effort at this two-unit facility launched in over the previous record peak of 3,521 megawatts.
1968, making Arkansas Nuclear One the first These weather conditions contributed to the fact nuclear-fueled electric generating station that AP&L experienced an overall six percent in the Southwest.
rise in 1980 energy sales to ultimate customers Unit 1 at White Bluff near Redfield is the first when compared with the 1979 total. 'lh:s record modern-day coal-fueled unit on the AP&Lsystem. summer demand also pushed the average This unit will be joined by a second unit at the kilowatt-hour usage levels to new highs for both Station in the summer of 1981. As previously residential and commercial customers. The mentioned, we are also constructing two addi-residential average rose 14 percent to a 1980 tional coal-fueled units at Independence Station. level of 11,112 kilowatt hours while commercial 7...
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customers, on the average, used nine percent develc,pment that will aid us in planning for more energy with a 1980 level of 54,330 the years ahead.
kilowatt hours.
Another major highlight during the year was These usage totals would most probably be the consolidation, effective January 1,1981, of higher if it were not for the energy conservation the electric operations of our sister company and load management programs that we already in the hiiddle South Utilities System, Arkansas-had in place when this extended hot weather hit hiissouri Power Company (Ark-hfo), into those our service area. We're proud of the initiatives of AP&L At the same time, an Ark-hto subsid-that the Company has taken through these iary, Associated Natural Gas Company, became innovative operations and have an even further a subsidiary of AP&L. Ark-hfo becomes our commitment to the future. In February a new sixth geographic division, adding approximately Conservation and Renewable Resources Depart-60,000 electric customers to our system. We're ment was established within our organization.
glad to be serving this new area and appreciate The Department has responsibility for develop-the support and confidence placed in AP&L ing the new business strategies AP& Lwill pursue. by this impor' ant region's leadership.
I Essentially, its function is to match new technol-In order to meet more effectively the ogies and new energy economics to new markets. challenges of the future, the AP&L Board of The benefits of this reorganization arealready Directors broadened the senior management becoming apparent through the Department's team at its December meeting, promoting five current thrusts. hiajor activities include investi-key officers to higher levels and electing six to gation of the development of a joint gasification the officer and assistant officer ranks. Each of and cogeneration network in south Arkansas these executives is an experienced professional j
in concert with the Tosco Corporation and committed to achieving our corporate objectives.
research into a similar gasification' cogeneration This executive leadership coupled with the project in central Arkannas through a $3.4 organizational streamlining we have undertaken million grant from the United States Department assures that AP&L is totally prepared to meet of Energy. We're convinced that these projects today's and tomorrow's management challenges.
plus numerous others will provide us with the In summary, we believe that the Company data base and insights into future energy has established a solid plan for the future keyed to restoring financial integrity, maintaining reliable and economic operation and taking a lead in developing new and creative energy solutions. With timely and adequate rate relief, those goals are attainable. However, as we have
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leamed over the past few years, it is becoming increasingly difficult to accomplish both short-and long-range objectives when confronted by continuing economic dilemma. Ilopefully, the l
steps taken to help alleviate this situation will establish a renewed pattern of success in 1981 and beyond.
As always, we at AP&L appreciate your comments and suggestions about our operations and invite you to let us know anytime we can be of service. We look forward to the coming I
. year with the knowledge that we are prepared
?
to meet the challenges ahead with an outstanding A
staff dedicated to excellence and enthusiastic 7'
about the contribution that we are making in O$ assuring the continued progress of Arkansas
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J4 Jerry L Maulden thn two.umt fachty is the l' '
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4
BOARD OF DIRECTORS y],
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i Lawrence Blackwell Hal E. Hunter, Jr.
Floyd W. Lewis Jerry L hlaulden Attorney Attorney Chairman of the Board President & Chsef Executste Pane Bluff Arkansas Nete AtaJrid, Afassouri
& President Officer of the Company Dected 1958 Dected 1/28l81 AttJJie South Utxhties Inc.
Little Rxk. Arkansas New Orleans Louisiana Dected 1979 Dected 1971 j. w h{;.
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Roy Nfurphy William C. Nolan, Jr.
J. D. Phillips Robert D. Pugh Presudent Attorney Senior Vice President President. Portland Gun AfiJ-Seuth Engineering Co.
D Dorado. Arkansas of the Company Company Hot Springs, hrkamas DectcJ 1971 nne Blu'f Arkansas Portlant Arkansas Dected 1977 Dected 1972 Dected 1971 i
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nn George K. Reeves Reeves E. Ritchie Dr. Ilerman B Smith, Jr.
Gus B. Walton, Jr.
Attorney Rett-ed Chairman of the Board Chancellor of the Unreerssty Attorney Carut zerset!!c. Atissours of the Company
<f Arkansas et Pine Bluff Luttle Rock. Arkansas i
Dected i/28!81 bt!!e Rak. Arkansas Pune Bluff Arkansas Uccted I/28131 Uccted 1962 Dected 1980 l
ADVISORY DIRECTORS All Past Directors of the Company Richard C. Butler L C. Carter Chairman of the Board Past President
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Feoples Savings & loan Assoc.
R'celan1 Foods Ret.
Litt:e Rock, A kansas Stuttgart, Arkansas
,y Flected Advisory Director 12/80 Detted Advssory Durettor 12/80
' ' Eb Dr. hfarshall T. Steel L A. Watkins Past Preside : af Hendrix College. Ret.
Ret red Farmer & Businessman
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bttle Rock, Arkunsas Harrison, Arkansas Uccred Advisory Osrector 12l80 Dected Advisory Director 12/80 4
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(Deteased liSI) l Niichael E. Wilson R. E. L Wilson Pressdent Chairman of the Board & Chnef Liecutive Officer lie Wilson and Company Lee Wnison and Company Wnison. Arkansas Wilson. Arkansas Occted 1930 yectej Ajcigory pures tor iz;go 1
5 i
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AMD RESULTS OF OPERATIONS MEi!EN Fm.ancial Condition Arkansas Power & Light Company has, financing measuies, such as sale-leaseback as have most other electric utilities, exper-arrangements, to meet its cash needs, ienced financial problems over the last three Two factors were primarily at tne heart years. These probleme were either caused of these problems. These factors cre:
or magnified by (a) increasing costs of fuel, (1) large construction costs with construction wages and materials, (b) greater c. pital work in progress (CWIP) excluded from outlays and longer construction periods for the rate base on which the Company wt,
complex new generating unia needed to allowed to earn a cash return, therefore both meet customer demands and accom-expanding the need for external financing plish fuel diversificiion, the latter in the and (2) the lack of rate increases.
best interest of our customers and our The Company believes that certain factors nation, (c) extensive reliance on and high have been set in motion that should improve costs of debt and equity capital, (d) com-the overall financial picture within the next pliance with environmental requirements, twelve months. Actions taken by the (e) controversies and ine eased regulation Company include negotiations for the sale over the use of nuclear power, and (f) rcpla-of a 25 percent interest in one of the tory lag in granting needed rate increases Company's two-unit coal-fueled steam and the inadequacy of such increases electric stations currently under construc-when granted.
tion and the scheduled completion and Specific symptoms of these financial plac.ng into service in mid-1981 of the problems are deteriorating mortgage and second unit of the Company's other two-unit chartercoverage ratios, which declined from coal-fueled steam electric station currently 1978 (2.39 mortgage,1.91 charter) to 1980 under construction. These actions should (1.75 mortgage,1.25 charter). Revenues reduce the Company's need for outside subject to refund were excluded in the capital and provide additional plant-in-calculation of these ratios. To issue addi-service to be included in the Company's rate tional bonds, eligible earnings of the base on which cash dollars can be earned.
Company must be at least two times the Other actions taken by the Company also annualinterest requirements on both the include increased emphasis on conservation, l
outstanding bonds and the proposed new including a proposed customer conservation issue, or a mortgage coverage ratio of 2.00.
financing program which should decrease To issue additional preferred stock, eligible future needs for additional generating i
earnings of the Company must be at least capacity and aggressive pursuit of rate one and one-half times the annual interest increases. The Company currently has both and preferred dividend requirements on retail and wholesale rate increases pending, both outstanding debt and preferred stock which should be acted upon by the appro-and the dividend requirements on the priate regulatory bodies in the first half of proposed new issue, or a charter coverage 1981 and which it hopes will,nrovide ratio of 1.50. These requirements coupled sufficient earnings to allow the Company with depressed earnings levels severely to re-enter the long-term debt market and i
limited the Company's access to the money provide for a more realistic and equitable I
market for long-term capital causing it to rely return on invested capital.
heavily on short-term and nonconventional 6
EMM Liquidity and Capital Resources As indicated previously, the availability earnings expected from rate increase of sufficient capital has continued to be a requests, the Company should be able to problem over the last few years. Cash flow rely acre on long-term and conventional from opcrations, after dividends on common financing measures and internally generated and preferred stock, or funds retained m funds rather than relying on shor+-term the business available primarily for the debt and nonconventional financing to fund construction program, decreased from $39 construction needs in the future. Construc-million in 1978 to a negative $25 million tion expenditures for 1981,1982 and 1983 in 1979 and was only $8 million in 1980.
are expected to be $326 million, $189 This general decline resulted from low million and $166 million, respectively.
earnings due to inadequate rates and Due to earnings coverage limitations, increasing interest cost on debt sustained capitalization restrictions and short-term to finance CWIP on which the Company debt limits, it became apparent in 1980 that was not earning a cash return. The Company, the Company could not continue to fund its in an attempt to consuve cash, has reviewed portion of three jointly-owned coal units all requests for staffing including replace-then under construction. Upon notification ment personnel and requests for materials of this fact, one co owner exercised its option, and equipment through the use of a special as specified in the Ownership Agreement,.
ad hoc committee, approving only those to advance the Company's share of these requests which were essential to the contin-construction funds in order to keep con-ued reliability of service or compliance struction on schedule. Approximately $69 with regulatory directives and, as described million was advanced through December 31, in further detail below ;emporarily ceased 1980, and construction of the projects has supplying funds for the construction of three continued on schedule. The Company plans coal-fired units. CWIP balances for 1978, to repay these funds in 1981 primarily with 1979 and 1980 were $785 million, $980 proceeds from the sale of a 25 percent 1
million and $282 million, respectively. The interest in one of the Company's coal-fueled CWIP balance at the end J 1980 reflects generating stations as discussed above. This the transfer to plant-in-service of two planned repayment has been reflected in generating units during the year. These large the 1981 construction costs quoted above.
asset balances on which no cash earnings The Company is currently authorized were available to offset increasing financing to make short-term borrowings through costs have had a detrimental effect on the June 1982 in an aggregate amount outstand-Company's ability to generate adequate ing at any one time of up to the lesser of cash earnings. However, due to the reduction $170 million or 10 percent of capitalization.
in the 1980 CV<lP balance and the estimated At December 31,1980, only $36.4 million of further reduct.an in the CWIP balance for short-term borrowings were outstanding 1981, CWIP may be expected to have less so that the Company had available unused impact on capital resources in the future.
short-term credit lines on that date of With the anticipated reduction in future
$127.1 million.
construction requirements and increased e
7
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%E E Results of Operations Net income was approximately $88 realized by the Company and less in the million, $84 million and $65 million in 1978, OVIP category on which AFDC was bFng 1979 and 1980, respectiwly. Revenues for recorded.
each of these years were approximately Interest requirements were another item
$556 raillion in 1978.$584 million in 1979 affecting the results of operations. The total and $750 million in 1980. Yearly increases interest charges for 1978,1979 and 1980 have been primarily attributable to the were $61 million, $76 million and $85 recovery of increased fuel related costs, million, respectively. These increases were which contributed nothing to net income.
due to two factors: (1) the increased level Rate increases received during these years, of debt outstanding, both long-term bonds which impact net income, were in relatively and short-term debt and (2) the significant minor amounts. An annual retail rate increas in the interest rates on debt.
increase of $14.7 million was granted on The diects of inflation together with the February 29,1980, with billings beginning high con af capital to finance 'he Company's in June 1980 and annual wholesale rate business incn m d the cca of serving our increases of $4.9 million, $2.2 million customers and have not oeen reflected in and $4.7 million were granted in December rates in a timely manner. The Company 1978, January 1979 and May 1980, respec-currently has pending before the Arkansas tively. Also kilowatt hour sales to ultimate Public Service Commission a request for customers increased each year (4 percent a $130 million retail rate increase. The from 1978 to 1979 and 6 percent from Company also has before the Federal Energy 1979 to 1980). Operating and maintenance Regulatory Commission a proposed $10 expences have continued a climb signi-million rate increase to its wholesale cus-ficantly during this penod,again primarily tomers. A portion of these increased rates, due to increased fuel-related and purchased approximately $94 million, is currently power costs. As inflation continued at a be.ng collected subject to refund pending record pace, other costs such as labor and the final rate orders which are anticipated materials have escalated. Operating by mid-1981. (See Note 2 to Financial expenses have also increased as a result Statements " Rate Matters.")
of increased regulation and in-house expertise needed for both old generating Effects of Inflation facilities and the newer technology nuclear Inflation has had a significant impact on and coal-fueled umts.
the Company's operat. ions m recent years.
Allowance for funds used during ISee Note 15 to Financial Statements-construction (AFDC), a noncash item
,, Effects of Inflatmn on Operations.,)
relating to the capitalization of certain debt and equity carrying cost of construction work in progress, contributed substantially S" * *"'Y to the net income of the Company during Company management believes that this period. Net income less AFDC was beginning in 1981, due to actions it has
$37 million in 1978, $18 million in 1979 and taken to reduce construction funding
$28 million in 1980. While 1979 earnings requirements, to encourage customer (excluding noncash AFDC) relative to 1978 conservation efforts, to streamline Company decreased by $19 million,1980 earnings operations and to aggressively pursue (excluding noncash AFDC) relative to 1979 needed rate increases, the financial position actually increased by $10 million. This of the Company should begin to improve.
increase in 1980 resulted primarily from Such improiement will, Owever, be contin-more dollars being in the plant-in-service gent largely upon the Company's ability category on which cash earnings were being to obtain adequate rate relief.
S
REPORT OF MANAGEMENT
[JM hs0 The management of Arkansas Power committee meets periodically with manage-
& Light Company has prepared and is ment, theinternalauditors and theindepen-responsible for the financial statements and dent public accountants to discuss auditing, related financialinformation included in this internal control and financial reporting annual repert. The fin vial statements are matters. The independent public accountants based on generally accet ed accounting have free access to the audit committee principles, consistently applied. Financial at any time.
information included elsewhere in this The independent public accountants report is consistent with the financial provide an objective assessment of the statements.
degree to which management meets its To meet its responsibilities with respect responsibility for fairness of financial to financial information, management reporting. They regularly evaluate the maintains and enforces a system of internal system of internal accounting control and accounting controls which is designed to perform such tests and other procedures provide reasonable assurance, on a cost they deem necessary to reach and express effective basis, as to the integri r, objectivity an opinion on the fairness of the financial and reliability of the financial records and statements.
as to the protection of assets. This system We believe that these policies and includes communication through written procedures provide reasonable assurance policies and procedures and an organiza-that our operations are carried out with tional structure that provides for appropriate a high standard of business conduct.
division of responsibility and the training of personnel. This system is also tested by a comprehensive internal audit program.
The board of directors pursues its
,7 y responsibility for reported financial information through its audit committee, Jerry L Maulden composed of outside directors. The audit President & Chief Executive Officer I
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9
___-_________L
1 1
a AUDITORF OFDitON
$Ne!SWO Arkansas Power & Light Company:
WeI aed the balance sheets.
considered necessary in the circumstances.
of Arks er & Light Company as of in our opinion, the above-mentioned Decemt J and 1979 and the related financial statements present fairly the statemer..
.me and retained earnings financial position of the Company at and of ch i financial position for each December 31,1980 and 1979 and the results s
of the three years in the period ended of its operations and the changes in its December 31,1980. Our examinations were financial position for each of the three years made in accordance with generally accepted in the period ended December 31,1980, auditing standards and, accordingly, in conformity with generally accepted i
included such tests of the accounting records accounting principles applied on a and such other auditing procedures as we consistent basis,
+$$
New Orleans, louisiana 4
February 13,1981 j
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1980 ARKANSAS POWER & LIGHT COMPANY FINANCIAL REVIEW g
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BALANCE SHEETS AT DECEMBER 31,1980 and 1979 N M ESNU l
1980 1979 in TIwusand.
A r.ETS Utility Plant (Notes 3,5 and 6):
Electric plant.
52,133,704 S1,231,832 Construction work in progress.........
282,376 980,054 Nuclear fuel...
7,151 Total.
2,423,231 2,211,886 Less-accumulated depreciation and amortization.
417,435 364,447 Utility plant-net..
2,005,796 1,847,439 Other Property and Investments:
Investments in associated companies, at equity (Note 5).
31,378 32,002 Othe r, at cost (less accumulated depreciation)..
470 467 Total.
31,848 32,469 Current Assets:
Cash and special dr. posits (Note 8).
10,246 3,863 Notes receivable.
1,425 1,801 Accounts receivable:
Customer and other (less allowance for doubtful accounts-S1,396,000 in 1980 and $924,000 in 1979) 45,428 29,011 i
Associated companies.
76 712 Deferred fuel cost 7,853 13,192 Fuel inventory, at average cost.
28,982 Materials and supplies, at average cost.
6,689 6,930 Prepayments and other.
5,119 2,302 Total.
105,818 57,811 1
l Deferred Debits.
4,521 2,924 Total.
S7.147,983 51,940,643 see Note, os nna.wiat statements 12
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$NM!?sO 1980 1979
!.: Thousands LIABILITIES Capitalization:
Common stock, $12.50 par value, authorized 50,000,000 shares; issued and outstanding, 36,636,773 shares in 1980 and 34,236,773 shares in 1979 (Note 10)..
$ 457,960
$ 427,960 Paid-in capital.
609 Retained earnings (Note 9)..
59,024 _
90,657 Total common shareholder's equity.
517,593 518,617 7
Preferred sted and premium, without sinking fund (Note 10,.
126,890 126,890 Preferred stock and premium, with sinking fund (Note 10).
147,065 100,518 long-term debt (Notes 3 and 11).
848,667 819,716 Total.
1,640,215 1,565,741 Current Liabilities:
Currently maturing long-term debt (Note 11).
68,000 6,000 Notes payable (Note 8) 36,400 80,130 Accounts payable:
Associated companies.
13,338 3,791 Other 77,851 46,839 Customer deposits.
4,668 4,949 Taxes accrued.
28,284 24,327
, g Accumulated deferred income taxes (Note 4).
3,867 6,496 Interest accrued.
23,194 22,730 Dividends declared.
24,462 4,887 Nuclear fuel reserve.
14,822 3,351 Other 17,299 6,675 TotaI.
312,185 210,175 Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 4).
147,334 125,417 Accumulated deferred investment tax credits (Note 4).
30,807 32,211 Other 14,304 6,766 Tota 1.
192,445 164,394 Reserves.
3,138 333 Commitments and Contingencies (Notes 2,3,5 and 6).
Total.
$2,147,983
$1,940,643 sa nues to ri,u,u ut suremnts 13
STATEMENTS OF INCOME AND RETAIMED EARMINGS For the Years Ended December 31,1980,1979 and 1978
$UAE EsN 1980 1979 1978 Statements of Income I" 77'o"S""d8 Operating Revenues (Notes 2, 3 and 13).........
S750,497
$583,826 5556,488 Goerating Expenses:
O, eration:
Fuel.......
237,346 174,667 167,681 Purchased power.....
154,126 171,425 120,804 Oth er................
121,332 61,850 62,136 Maintenance.........
29,142 30,182 28,856 59,574 39,708 38,365 Depreciation...........
Taxes other than income taxes......
25,401 25,032 23,436 Income taxes (Note 4)................
28,632 11,213 33,813 Total......
655,553 514,077 475,091 Operating income...
94,944 69,749 81,397 Other Income and Deductions:
Allowance for equity funds used during construction....
22,482 45,045 36,214 Miscellaneous-net..
5,277 6,874 4,583 12,191 16,753 12,403 Income taxes (Note 4)...
39,950 68,672 53,200 Total.
Interest Charges:
67,036 67,091 56,949 Interest on long-term debt..
Other interest-net of debt premium.......
17,649 8,446 4,076 l
Allowance for borrowed funds used during construction.
(15,021)
(20,858)
(14,048)
Total..
69,664 54,679 46,977 Net Income (Notes 2 and 3).
S 65,230
$ 83,742 S 87,620 Statements of Retained Earnings Retained Earnings-January 1...
S 90,657
$ 81,448 5 55,641 65,230 83,742 87,620 Add-Net income....
155,887 165,190 143,261 Total.
Deduct-Cash dividends:
Preferred stock....
25,400 17,474 14,020 71,463 57,059 47,793 Common stock.
Total.
96,863 74,533 61,813 Retained Earnings-December 31 (Note 9).
S 59,024 S 90,657 S 81,448 See Notes to Fmancta! Statements i
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STATEMENTS OF CHANGES IM FIMANCIAL POSITION For the Years Ended December 31,1980,1979 and 1978 M'00Lt SOu1H UTU45 $YS?tM i
1980 1979 1978 in T1wusands Funds Provided By:
Operations:
Net income.
$ 65,230
$ 83,742 5 87,620 59,574 39,70S 38,365 Depreciation.......
Deferred income taxes and investment tax credit 17,885 14,508 25,197 adjustments-net.......
Allowance for funds used during construction..
(37,503)
(65,903)
(50 262)
Total fands provided from operations.
105,186 72,055 100,920 Other:
Allowance for funds used during construction..
3i,303 65,903 50,262 Decrease in working capital' 38,362 11,659 Miscellaneous-net.
9,943 Total funds provided by operations and other.
190,994 149,617, 151,182 Financing transactions:
Common stock.
30,000 30,000 15,000 Preferred stock.....
50,000 55,000 First mortgage bonds.
70,000 60,000 75,000 Installment purchase transactions..
27,466 16,406 15,317 Sale and leaseback transactions.
18,709 24,652 Book value of utility plant sold.
934 9,547 13,532 Short. term securities-net.
39,930 69,515 Total funds provided from financing.
197,109 235,535 188,364 Total funds provided.
$388,103
$385,152 5339,546 Funds Applied To:
Utility plant additions:
Construction expenditures for utility plant.
$230,474
$291,771
$262,863 Expenditures for nuclear fuel.
7,151 784 Other-net.
98 (3,513)
(43,788)
Total gross additions (includes allowance for (unds used during construction of $37,503 in 1980,
$65,903 in 1979 and $50,262 in 1978) 237,723 288,258 219,859 Other:
Dividends declared on preferred stock..
25,400 17,474 14,020 Dividends declared on common stock.
71,463 57,059 47,793 Increase in working capital
- 48,615 Miscellaneous-net.
13,661 1,759 Total funds applied to other.
96,863 88,194 112,187 Financing transactions:
Redemption of preferred stock....
3,787 Retirement of first mortgage bonds.
6,000 8,700 7,500 Repayment of short. term securities-net.
43,730 _-
Total funds applied to financs.ig.
53,517 8,700 7,500 Total funds applied
$388,103
$385,152
$339,546
- &rlmg capstal esdules sbwrFterm suuntws current matuntus an.t Je* cered taxes mduded m cerent hahhtses. nc 1980 nd Jnreau m uwkng upita as due pnmen;y to mcreaws m accounts pavane, arceunts payaNe tc aswcu*rd compnars Jmdends dedare.t nurlear rewrre and %%te Blu*f coal nJventes Dew were partu!!y c9 set t y increaws m speru! depo <sts accounts rectmaNr. and furt sixL De uvbreg carntal decreast m 1979 and memse m 1979 are pnmanly attr&utaMr > rsu ream m 1979 and decreaus m 1978 sn accounts pyaMr a sJ tairs accrut.L See Notes to Tsnancul Statements 15
I NOTES TO FINANCIAL STATEMENTS woou soum
- 1.
SUMMARY
01 GNIFICANT E. Income Taxes ACCOUNTING POLICIES The Company joins its parent in filing a consolidated Federal income tax return. Income i
A. System of Accounts taxes are allocated to the Companyin proportion The accounts of the Company a e maintained to its contribution to the consolidated tax liability.
in accordance with the system of accounts Deferred income taxes are provided for prescribed by the Federal Energy Regulatory differences between book and taxable income Commission (FERC),
to the extent permitted by the regulatory bodies for ratemaking purposes. Investment tax credits B. Revenues and Fuel Costs allocated to the. ompany are deferred and The Company records re nues as billed to amortized, based upon the average useful life its customers on a cycle bila.g basis. Revenue of the related property, beginning with the is not accrued for energy delivered but not billed year allowed in the consolidated tax return.
at the end of the fiscal period.
Substantially all of the rate schedules of F. Allowance for Funds Used During the Company include adjustment clauses under Construction which fuel costs above or below the levels To the extent that the Company is not allowed in the various rate schedules are Permitted by its regulatory bodies to recover permitted to be billed or required to be credited in current rates the carrying cost of funds used to customers. The Company has adoptcd a for construction, the Company capitalizes as an deferral method of account..,g for these fuel appropriate cost of utility plant, an allowarce costs recoverable under fuel adjustment clauses, for funds used during construction (AFDC)
Under this method, such costs are deferred to the which is calculated and recorded as provided month in which the related revenues are billed. by the regulatory system of accounts. Under this The fuel adjustment factor contains an amount utility industry practice, construction work in for a nuclear reserve fund, estimated to cover Progress on the balance sheet is charged and the cost of replacement energy when the nuclear the income statemer.t is credited for the approxi-plant is down for scheduled maintenance and mate net composite interest ccst of borrowed refueling. The fund bears interest and is credited funds and for a reasonable return on the equity to fuel and purchased power expenses during funds used for construction. This procedure is the shutdown period.
intended to remove from the income statement the effect of the cost of financing the construction C. Utility Plant and Depreciation program and results in treating the AFDC Utility plant is stated at original cost. The charges in the same manner as construction cost of additions to utility plant includes labor and material costss As non-cash items, contracted work, direct labor and materials, these credits to the income statement have allocable overheads and an allowance for the no effect on current cash earnings. After the composite cost of funds used during construction. property is placed in s'rvice the AFDC charged The costs of units of property retired are to construction costs is recoverable from removed from utility plant and such costs, plus customers through depreciation provisions removal costs, less salvage, are charged to included in rates charged for utility service.
accumulated depreciation. Maintenance and The effective composite AFDC rate for the repair of property and replacement of items Company was 8.1%,7.7% and 7.6% for 1980, determined to be less than units of property 1979 and 1978, respectively.
are charged to operating expenses.
The Company's policy is to capitalize Depreciation is computed on the straight-line allowance for funds used during construction on basis at rates based on the estimated service lives projects during periods of interrupted construc-of the various classes of property. Depreciation tion when such interruption is temp.,raiy and provided on average depreciable property in the continuation can be justified as being 1980,1979 and 1978 amounted to approximately reasonable under the circumstances.
3.4% each year. Principally all the Company's G. Reserves utility plant is subject to the lien of its first mortgage bond indenture.
It is the policy of the Company to provide reserves for umnsured property risks and for D. Pension Plan claims for injuries and damages through charges The Company has a pension plan covering to operating expense on an accrual Sasis.
substantially all of its employees. The policy of Accruals for these reserves have been allowed the Company is to fund pension costs accrued.
for.atemaking purposes.
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- 2. RATE MATTERS On May 29,1980 the Company filed with wholesale rates designed to produce approxi-the Arkansas Public Service Commission (APSC) mately $9,800,000 annually. Approximately an application to increase, through a two-suge
$7,000,000 of this increase was placed into effect process, its retail rates a total of approximately subject to refund, on November 2,1980; as of
$130,100,000 on an annual basis. On October 28, December 31,1980 operating revenues include 1980 the Company placed in effect subject to approximately $450,000 from these increased refund, approximately $86,700,000 of the rates. The remainder of the total increase is increase; as of December 31,1980 operating proposed to be placed into effect on June 1,1981.
revenues include approximately $10,600,000 The Company's wholesale customers have from the increased rates. The balance of the agreed to the proposed rates subject to some requested increase, approximately $43,400,000, possible reduction should the APSC not allow is proposed to be implemented on June 1,1981. the full amount of the Company's currently in a pre-hearing stipulation agreement between pending retail rate request discussed above, the Company and the APSC staff, the Commis.
As the result of a complaint filed by the sion staff recommended an increase of approxi-Attorney General of Arkansas during 1979, on mately $90,000,000 and, in return, the Company October 27,1980 the APSC issued an order agreed not to contest certain staff adjustments finding that the Company had over-collected which would have the effect of reducing the from its customers approximately $6,200,000, Company's request from $130,100,000 to plus interest through the erroneous application approximately $117,000,000. The APSC has of the fuel adjustment clause during 1977,1978 completed taking of testimony and final briefs and 1979. On November 3,1980 the Company of all parties are to be filed in March 1981.
appealed the APSC decision and obtained a On August 28,1989 the Company filed with temporary stay of the obligation to repay this the FERC an application for an increase in its amount. This matter is currently ; ending,
- 3. BUSINESS CONSOLIDATION
$21,000,000 principal amount of Ark-Mo's in order to increase economic efficiency and outstanding first mortgage bonds, the Company to censolidate into one corporate entity, the issued to the holders thereof, in exchange for Company acquired, effective January 1,1981, the surrender and cancellation of such bonds, all the outstanding shares of common stock of a like aggregate principal amount of the Arkansas-Missouri Power Company (Ark-Mo)
Company's first mortgage bonds. Upon from Middle South Utilities, Inc. (MSU), the consummation of these transactions, Ark-Mo Company's parent and effected the liquidation became a division of the Company and of Ark-Mo and the distribution of its assets to Associated Natural Gas Company a subsidiary the Company, including the outstanding shares of the Company.
of common stock of Associated Natural Gas if Ark-Mo had been combined with the i
Company. Concurrently with the acquisition by Company for the year ended December 31,1980, the Company of Ark-Mo's assets, the Company operating revenues and net income would have assumed all of Ark-Mo's liabilities and contrac-been approximately $817,962,000 and l
tual commitments With respect to approximately $68,491,000, respectively.
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- 4. INCOME TAXES
- Income tax expense (credi.) consists of the following-1980 1979 1978 in Thous.rn.ls Current Federal.......
5 (1,084) $(20,593) $ (3,248)
Sta te.................
(360) 545 (540)
~
Total.......................................
(1,444)
(20,048)
(3.788)
' Deferred-net uberalized depreciation..............................
18,570 25,134 17,626 Taxes capitalized on books............................
2,181 4,633 4,022 Interest capitalized on nuclear fuel....................
1,520 3,778 3,109 Revenues collected in advance-nuclear fuel reserve...............................
(5,648) 3,041 (34)
Deferred fuel cost....................................
(2.629) 4,052 (208)
Restoration (reduction) due to tax loss carryforward......
10,636 (25,824)
Nuclear fuel disposal costs........................
(4,164)
Other.......................................
(1,177) 446 2.118 Total..................................
19,289 15,260 26.633 Investment tax credit adjustments-net.................
(1,404)
(752)
(1,435)
Total income taxes............
$ 16,441 S (5,540) $ 21,410 Charged to operations..............................
5 28,632 5 11,213. $ 33,813 Credited to other income.....
(12.191)
(16,753)
(12.403)
Total income taxes..........................
,5 16,441 5 (5,540) $ 21,410 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:
1980 1979 1978
% of
%d
%d Pre-Tax Pre. Tax Pre-Tax Amount Income Amount income Amount income Computed at statutory rate..
537,568 46.0% -
5 35,973 46.0 %
552.334 4SM Increases (reductions) in tax resulting from:
Allowance for funds used during construction...
(17,251) (21.1%)
(30,316) (33.6%)
(24,126) (22.1%)
Difference between book depreciation and tax straight.
line depreciation..
(710) (0.9%)
(9.027) (11.5%)
(4.415) (4.1%)
Difference between interest capitalized on nuclear fuel combined with tax deprecia.
tion of nuclear fuel and nuclear fuel expense...
(2,141) (2.6%)
(2.405) (3.1%)
(656) (0.8%) -
Adjustment of consolidated savings due to tax loss...
1.912 2.4%
Other-net......
(1,025) (1.3%)
(1.677) (2.1%)
(1,527) (1.4%)
Recorded income taxes...
516.441 20.1 %
5 (5,540) (7.1%)
521.410 19.6 %
in 1979, the Company incurred a Federal In 1980, the Arkansas Public Sersice tax loss The tax effect or. the portion of the loss Commission approved rates which allowed the which was not realized during 1979 v --
Ccmpany, on a prospective basis beginning recorded as a reduction of deferred inct e June 1980, to normalize the differences between taxes The tax effect on the loss carryforward book and tax straight-line depreciation on certain used in 1980 has been recorded as a restoration power plants, all removal costs, decommission-of deferred income taxes The remaining Federal ing costs and negative salvage on nuclear fuel tax loss carryforward at December 31,1980 Unused investment tax credits at December 31, is $27,150,000.
1980 amounted to 576,566,000 of which 18
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$6,274,000 may be carried fc.rward through company. Effective with 1979 the method of 1984, $33,018,000 through 1983, $21,375,000 ahocating investment tax credit was changed through 1986 and $15,899,000 through 1987.
whereby each company is allocated the credit Prior to 1979 the investment tax credit allowable based on its portion of the consoli.
utilized in the consolidated tax return was dated tax liability. Any additional consolidated allocated to each Middle South System Company credit utilized is allocated on the basis of the on the basis of the credit contributed by each remaining tax credits.
- 5. COMMITMENTS AND CONTINGENCIES shares of ownership of SFrs common stock, that The construction program contemplates they will take any and all action necessary to Company construction expenditures of approxi-keep SFI in a sound financial condition and to mately $326,400,000 in 1981, $188,600,000 in place SFI in a position to discharge, and to cause 1982 and $166,000,000 in 1983.
SFI to discharge its obligatiens under these The Federal income tax returns for the years arrangements. At December 31,1980, the total 1971 through 1976 have been examined by the loan commitment under these arrangements
(
Internal Revenue Service (IRS) and adjustments amounted to $221,196,000 of which 5128,224,000 have been proposed. The principal issue is was outstanding at that date. Also, SFrs parent whether cuo.omer deposits are includable in companies, including the Company, have made taxable income. A formal written protest has similar covenants and agreements in connection been filed and conferences are being held with with long-term leases by SFI of oil storage and an Appeals Officer of the IRS. Any finalliability handling facilities and coal hopper cars At for taxes resulting from settlement with the December 31,1980, the aggregate discounted IRS would not have a material effect on net valuc of these lease arrangements was 559,150,000, income. Income taxes on customer deposits The Company has agreed to purchase, over would be normalized. Most of the other issues a 20-year period,100 million tons of coal for use have been settled and adequate provisions at the White Bluff Steam Electric Station. In have been recorded.
addition, SFI has entered into a contract with The Company has a 35% interest in System a joint venture for a supply of coal from a mine Fuels, Inc. (SFI), a jointly owned subsidiary in Wyoming, which is expected to provide 150 of the four prScipal operating subsidiaries of a 210 million tons over a period of 26 to 42 Middle South Utilities, Inc. SFI operates on a zars. Parent companies of SFI, including the non-profit bas', for the purpose of planning and ompany, each acting in accordance with their implementing yrograms for the procurement respective shares of ownership of SFrs common of fuel supplies for all of the operating companies; stock, joined in, ratified, confirmed and adopted its costs are primarily recovered through charges the contract and the obligations of SFl there-for fuel delivered.
under.
The parent companies of SFI have made loans The Company, under the terms of its nuclear to SFI to finance its fuel supply business under fuel lease, is responsible for the storage and a loan agreement dated January 4,1978, as disposal of spent nuclear fuel. The Company amended January 1,1981, which provides for considers all costs incurred or to be incurred in SFI to borrow up to $261,500,000 from its parent the use and disposal of nuclear fuel to be proper companies through December 31,1981. As of components of nuclear fuel expense and provi-December 31,1980 the Company had loaned sions to recover such costs have been or will be
$17,630,000 to SFI pursuant to this loan agree-made in applications to regulatory commissions.
ment and the Company's share of the unused The Company collected approximately loan commitment is $66,240,000. Notes under
$7,382,000 in 1980 for the storage or disposal of this agreement mature December 31,2006.
spent fuel The Company is also recovering In additiori tha Company had loaned SFI approximately $61,000,000 for decommissioning
$13,565,25D under previous loan agreements.
costs for its two nuclear units through increased Notes mature in 10 and 25 years from date of depreciation charges over the life of the station.
borrowing under the provisions of the previous Based upon a study performed by the Company, loan agreements.
nuclear plant de. ommissioning costs are In connection with certain of SFrs borrowing projected to be in exceu of these amounts.
arrangements, SFrs parent companies, including The Company is requer ng and will request the Company, have covenanted and agreed recovery of estimated increased costs in severally in accordance with their respective applications to its regulatory commissions.
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h The Company, together with the other Middle related to the Grand Gulf Plant and the Company MMl,pg South System operating companies, is obligated and Arkansas-hiissouri Power Company, which under agreements with Middle South Energy, did not reccive allocations will relinquish their Inc. (MSE), to make payments or subordinated rights in the plant. The proposed reallocation advances adeqeate to cover ah of the operating is subject to the receipt of the approval of expenses and capital costs of MSE and, in return, regulatory agencies and of all other necessary is entitled to receive the power available to ap9rovals MSE from the Grand Gulf Plant. Through 1980, During 1980, the Company could not
$1.8 billion had been expend (d by MSE on the continue to fund its portion of three coal units Grand Gulf Plant's two units which are under construction, which the Company owns scheduled for completion in 1982 and 1986.
jointly with both rural electric cooperatives Under certain circumstances, payments may be and various municipalities. Upon notification required to be made commencing December 31, of this fact one co-owner exercised its option 1982 if the first unit of the Grand Gulf Plant to advance the Company's share of these has not been completed by the date. During construction funds in order to keep the construc-1980 the Operating Companies agreed in tion on schedule. As of December 31,1980, principle to a permanent allocation of the Grand approximately $68.6 milFon was so aavanced Gulf Plant's capability. Under this agreement and construction of these projects continued those companies receiving allocations louisiana on schedule. The 1980 construction expenditures Power & Light Company, Mississippi Power do not include the e advances; the D81 budgeted
& Light Company and New Orleans Public construction expenditm.s uflect the reim-Service, Inc., will assume, in proportion to such bursemero of thesa expenditurcs.
allocations all responsibilities and obligations
- 6. LEASES revenues utih. zed to recover the lease costs The Company accounts for leases on the Application of criteria uvd to define a capital same basis as that used by its regulatory au'honty lease would permit r(cording Se following in the ratemaking process which determines the assets and liabilities on the balance sheet:
IWU 1979 1978 in Titousands Assets:
Utility plant.
$35,299
$38,982
$33,948 Accumulated amortir.ation.
8,013 9,533 7,201 Net leased property.
$27,286 529,449
$26,747 Liabilities:
Noncurrent obligations under capital leases.
$29,827
$30,730
$27,117 Current obligations under capital leases.
$ 1,482
$ 2,431 5 1,718 Recording of such leases would not materially Prior to August 31,1978, the Company was affect the amounts reported as either expense a party to two nuclear fuelleases aggregating or net income.
$90,000,000. On August 31,1978, the Company terminated one of the leases and amended the At December 31,1980, there were noncancel-remaining lease to permit the Company to lease able leases with minimum rental commitments nuclear fuel up to a maximum of $100,000,000.
as follows:
On November 2,1979, the Company increased the amount of nuclear fuel which it can lease in Timusands from $100,000,000 to $130,000,000. Lease
~
payments, which are not included in the tabula-1981 5 12,240 tions above, are based on nuclear fuel use. The 1982.
9,639 lease, unless sooner terminated by one of the 1983.
9,546 parties, will continue until 2018. The unre-1984 9,470 covered cost base of the lease at December 31, 1985.
8,998 1980,1979 and 1978 was $123,740,000, For years thereafter.
135,289
$111,037,000 and $91,318,000, respectively.
TOTAL.
$185,182 Nuclear fuel expense of $37,300,000 in 1980, 20
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$15,318,000 in 1979 and $13,279,000 in 1935 amounted to approximately $10,833,000, was charged to operations.
$8,017,000 and $7,295,000 in 1980,1979 Rental expense (excluding nuclear fuel) and 1978, respectively.
- 7. PENSION PLANS includes amortization of past service cost over Total pension expense of the Company a period of 20 years. A comparison of accumu-for 1980,1979 and 1978 was $6,305,000, lated plan benefits and plan net assets for the
$5,035,000 and $5,202,000, respectively, which defined benefit plan is presented below:
January 1, Actuarial present vah!e of accumulated plan benefits:
1980 1979 Vested
$63,710,000
$50,308,000 Nonvested...
1,379,000 3,984,000
$65,089,000
$54,292.000 Total....
Net assets availad!e for benefits.....
$69,935,000
$61,563,000 The weighted average assumed rate of return of accumulated plan benefits was 7% for 1980 used in determining the actuarial present values and 1979.
- 8. LINES OF CREDIT AND SHORT-TERM BORROWINGS Company has authonty to have outstanding At Dacember 31,1980 the Company had at any one time short-term promissory notes and
$56.4 million in lines of credit with Arkansas commercial paper in amounts aggregating not banks. Additionally, the C impany has joined more than the lesser of $170,000,000 or 10%
with three other Middle Sovth System operatint, cf capitalization. The aggregate amounts of the companies in establishing $253 million in lines unused lines of credit as oi December 31,1980 of credit with banks outside the Middle South and December 31,1979 were $127,100,000 System service area. Cornpensating balances and $44,870,000, respectively.
are required by certain of the lending banks.
The short-term borrowings and the applicable The Company may borrow any portion of these interest rates (determined by dividing applicable lines subject to its maximum authorized level interest expense by the average amount bor-of borrowings. Through June 30,1982, the rowed) for the Company were as follows:
1980 1979 1978
$135,250,000
$96,000,000
$87,100,000 Maximum borrowing..
Average borrowing-Bank loans..
$ 93,6P3,000
$33,144,000 Commercial paper.
990,000
$19,961,000
$39,151,000 Average interest rate during the period:
Bank loans.
14.6 %
13.9 %
Commercial paper.
15.3 %
11.0 %
8.1%
Average interest rate at end of period:
21.0 %
15.8 %
Bank loans.
Commercial paper.
13.7%,
10.4 %
Borrowings at end of period.
$ 36,400,000
$80,130,000
$40,200,000
- 9. RESTRICTED RETAINED EARNINGS preferred stock provide for restrictions on ae The indenture relating to the Company's payment of cash dividends on common stock.
long-term debt and provisions of the articles As of December 31,1980, $34,204,000 of re-of incorporation relating to the Companfs tained earnings are free from such restrictions.
21
At
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- 10. PREFERRED AND COMMON STOCK Preferred stock outstanding at December 31,1980 and 1979 consisted of the following-Current Shares Shares Outstanding Call Price Cumulttive, $100 Par Value Authorized 1980 1979 Per Share Without sinking fund:
4.32% series...
70,000 70,000 70,000
$103.647 4.72% series..
93,500 93,500 93,500 107.00 4.56% series..
75,000 75,000 75,000 102.83 4.56% 1965 senes.................
75,000 75,000 75,000 102.50 6.08% series..
100,000 100,000 100,000 102.83 100,000 100,000 100,000 103.17 7.32% uries....
7.80% series.......
150,000 150,000 150,000 107.15 7.40% series.....
200,000 200,000 200,000 106.50 7.88% series..
150,000 150,000 150,000 106.94 Total.
1,013,500 1,013,500 1,013,500 With sinking fund *:
10.60% series...
182,134 182,134 200,000 109.39 11.04% series....
380,000 380,000 400,000 109.78 Total..
562,134 562,134 600,000 Unissued.
2,386,500 Total.....
3,962,134 Cumulative, $25 Par Value Without sinking fund:
8.84% series.
400,000 400,000 400,000 28.21 10.40% series.
600,000 600,000 600,000 28.60 Total....
1,000,000 1,000,000 1,000,000 With a.. king fund *:
9.92% series.....
1,000,000 1,600,000 1,600,000 28.18 29.88 2,000,000 2,000,000 13.28% series..
Total...
3,600,000 3,600,000 1,600,000 Unissued.
5,400,000 Total.
10,000,000 Total Preferred Stock..
13,96't,134 in Thousands Without sinking fund:
$101,350
$101,350 Stated at $100 a share.
Stated at $25 a, hare..
25,000 25,000 540 540 Premium.
Total preferred stock and premium, without
$126,890
$126,890 sinking fund.
With sinking fund:
$ 56,213
$ 60,000 Stated at $100 a share 90,000 40,000 Stated at $25 a share.
Premium.
852 518 Total preferred stock and premium, with sinking fund..
$147,065
$100,518
- These series are to be retired in fu!! through the cperation of sinking funds at a redemption price of $100 pc* share on the 10.60%
and 11.04% series and $25 per share on ti e 9.92% and 13.28% wries plus accumulated duvidends to the a.ste of such redemption.
t The 10.t4% series is being redeemed at the rat: cf 10.000 shares each year. The 11.04% series is being redeemed at the rate of 20.000 shares each year. Beginmng June 1.1984. the 9.92% series is to be rcdeemed at the rate of 80.000 shares each vear. Begin*nnt lanuary 1.1985. the 13.28% series is to be redeemed at the rate of 100,000 shares each year. In addstion, the Company has clie reon-cumulative option to redeem an additional hke amount of said shares each year comritencing in the first year of redemption in each respective series 22
M The changes in the nu.nber of shares of common (all issmo at par value) and preferred stock ^
woou. cum uwe s<m outstanding in 1978,1979 and 1980 were:
Common Stock Preferred Stock Shares Sold _
Shares Sold (Redeemed) 5100 Par
$25 Par 1978.................
1,200,000 1979......
2,400,000 2,200,000 1980......
2,400,0]O
-(37,866) 2,000,000
- 11. LONG-TERM DEBT Long-term debt outstanding consisted of the following-1980 1979 in Tiwusands FIRST htORTGAGE BONDS:
2-7/8% series due 1980.
S
$ 6,000 3-5/8% series due 1981...
8,000 8,000 9-1/4% series due 1981 60,000 60,000 i
3-1/2% series due 1982....
15,000 15,000 3-1/4% 3eries due 1984 7,500 -
7,500 3-3/8% series due 1985......................
18,000 18,000 16-1/8% series duc 1986.....
70,000 i
4-7/8% series due 1991......
12,000 12,000 15,000 15,000 4-3/8% series duc 1993..
i 4-5/8% series due 1995.
25,000 25,000 5-3/4% series due 1996.
25,000 25,000 5-7/8% series dt.e 1997.
30,000 30,000 7-3/8% series due 1998.
15,000 15,000 9-1/4% series due 1999......
25,000 25,000 25,000 25,000 9-5/8% series due 2000...
7-5/8% series due 2001..........
30,000 30,000
)
8
% series due 2001.
30,000 30,000 7-3/4% series due 2002...
35,000 35,000 7-1/2% series due 2002.
15,000 15,000 8
% series due 2003...
40,000 40,000 8-1/8% series due 2003.
40,000 40,000 10-1/2% series due 2004...
40,000 40,000 10-1/8% series due 2005......
40,000 40,000 9-1/8% series due 2007...
75,000 75,000 9-7/8% series due 2008.....
75,000 75,000 60,000 60,000 10-1/4% series due 2009.....
830,500 766,500 TOTAL FIRST h10RTGAGE BONDS..
INSTALLhtENT PURCHASE CONTRACTS:
Pope County, Arkansas; due 1986 to 2008 at rates ranging from 7-1/4% to 10%............
20,800 19,500 l
Jefferson County, Arkansas; due 1986 to 2008 at rates ranging from 6-1/8% to 10%...................
71,700 56,200 7,580 18,246 Less: Amount held in construction funds.......
' TOTAL INSTALLh1ENT PURCHASE CONTRACTS......
84,920 57,454 UNAh10RT1 ZED PREN11Uh1 AND DISCOUNT ON DEBT-NET.....
1,247 1,762 916,667 825,716 TOTAL.
LESS: CURRENT h1ATURITIES INCLUDED IN CURRENT LIABILITIES....
68,000' 6,000 LONG-TERhi DEBT EXCLUDING AhtOUNT DUE 5848,667
$819,716 WITHIN ONE YEAR..........
i l
23 I
At E RO-At December 31,1980, the first mortgage bonds have sinking fund requirements and materities.
for years 1981 through 1985 as follows:
In Thousands Sinking Fund
- Maturities 1961...............................
$6,893 S68,000 1982.............................
6,143 15,000 1983........
6,143 1984.......
6,068 7,500 1985......
5,888 18,000
- Annual sinking fund requirements may be met by certsficatiwr of property sdditwoss at a rate of16% olsude requirerents
- 12. TRANSACTIONS WITH AFFILIATES Operating revenues include revenues from sales to affiliates amounting to $84,415,000, The Company buys from and sells electricity $48,320,000 and 535,680,000 in 1980,1979 and to the operating subsidiaries of Middle South 1978, respectively. Operating expenses include Utilities, Inc., its parent, under rate schedules fuel cost and purchased power charges from filed with the Federal Energy Regulatory affiliates totaling $138,961,000, $197,864,000 Commission. In addition, the Company and S225,439,000 in 1980,1979 and 1978, purchases fuel from System Fuels, Inc.
respectively.
i
- 13. MAJOR CUSTOMER Revenue derived from sales to ReynMds revenue) was 9.2% it.198'J,11.3% in 1979 Metals Company (as a percent of total operating and 7.9% in 1978.
)
t i
- 14. QUARTERLY RESUI.TS (Unaudited)
Operating results for the four quarters of 1980 and 1979 are as followss 1980 March June September December in Th,msands f
Operating Revenue.
$154,880 S154,782 5245,852 S194,983 14,856 15,062 40,757 24,269 l
Operating income.
Net Income.
22,435 6,439 27,618 8,738 1979 March June September December in T1wusands Operating Revenues...
$131,017 S129.486
$172,838
$150,485 Operating Income.
18,127 13,386 24,334 13,902 Net Income..
20.903 15,908 29,183 17,748 The business of the Company is subject ingly, earnings information for any three-month i
to seasonal f?uctuations with the peak period period should not be considered as a basis occuring duning the summer months, Accord-for estimating the results for a full year.
24
Ti EB gg g
- 15. EFFEC TS OF INF1.ATION requirements of Statement of Financial Account-ON OPERATIONS (Unaudited) ing Standards (SFAS) No. 33," Financial The following supplementary informatic,n Reporting and Changing Prices." It should be about the effects of changing prices on the viewed as an estimate of the effect of changing Company is provided in accordance with the prices. rather than a precise measure.
STATEN1ENT OF INCONIE FRON1 OPERATIONS AND OT11ER FINANCIAL DATA ADJUSTED FOR EFFECTS OF CilANGING rRICES FOR THE YEAR ENDED DECEN1BER 31,1980 (In Thousands)
Adjusted For Adjusted For As Reported in General ChangesIn The Financial Inflation Specific Prices Statements (Constant Dollars)
(Current Costs)
Operating revenues.
5750,497 5 750,497*
5 750,497*
Operatir g expenses (excluding depreciation) 595,979 595,979' 595,979*
Depreciation.
59,574 109,707 125,937 Total operating expense,
655,553 705,686 721,916 Operating inwme.
94,944 44,811 28,581 Other income 39,950 39,950' 39,950' Interest and other charges.
(69,664)
(69,664)*
(69,664)*
Income from operations (excluding reduction to net recoverable cost).
S 65,230 5 15,097" 5
(1.' 33)
Increase in specific prices (current costs) of property, plant and equipment held during the year *"
$ 438,582 Reduction to net recoverable cost.
$(168.829)
(182,905)
Effect of increase in general price level.
(408,276)
Excess of increas* in ger:eral price le.d over increase in specific prices after reduction to net recoverable cost.
(152,599)
Gain from decline in purchasing power of net amounts owed.
164,188 164,188 Net 5 (4,641)
$ 11,589
- Anumed to be in " average for t :e year" Jollars and thus are not restated.
t
" Including the rcJuction to twt reco:bable c+.I. the lau from creratwns on a constant del ar basis wou!J have been $153,732 for 1980.
- At December 31.1980, current cost of preperty. plant and equipment net of accumulated depreciation was $3,769.099, whale hhtortcal cost or :wt cet recoverable through deprecia!wn was $1.993.805.
25
At EM EsE FIVE-YEAR COMPARISON OF SELEC'1ED SUPPLEMENTARY FINANCIAL DATA ADJUSTED FOR EFFECTS OF CilANGING PRICES (in Thousands of Average 1980 Dollars)
Years Ended December 31 1980 1979 1978 1977 1976 Operating revenues...........
$750,497 $662,779 $702,873 $730,756 $574,077 Historical cost information adjusted for general inflation income from operations (excluding reduction to net recoverable cott).
15,097 54,310 Net assets at year-end at net recoverable cost.....
494,357 557,954 Current co4 Information income trom operations (excluding reduction to net recoverable cost)...
(1,133) 39,348 Excess of increase in general price level over increase in specific prices after reduction to net recoverable cost.
152,599 186,500 Net assets at year-end at net recoverable cost...
494,357 557,954 General information Gain from decline in purchz. sing power of net amounts owed..
164,188 172,527 Average consunvr price index.,.
246.8 217.4 195.4 181.5 170.5 NOTD SFAS No. 33 requires that Irkhnka cost infor.netion ad usted for general infation and cur.vnt cost information be providel i
fn 1978 ar.J sukap<ent years C>rnparable irrlormation ss revt readily availaNe for uhe years prksr to 1979 cr J thus is not provided.
Constant dollar amounts represent historical of the surviving plant by year of acquisition.
costs adjusted for the effects of generalinflation. Iand and certain o'her plant assets which are The effects are determined by converting these not included in the llWI were converted costs into dollars of equal purchasing power using the CPI-U.
using the Consumer Price Index for all The difference between current cost amounts Urban Consumers (CPI-U).
and constant dollar amounts results from specific Current cost amounts reflect the changes prices of property, plant and equipment (as in specific prices of property, plant and equip-measured by the llandy-Whitman Index) ment from the year of acquisition to the present. changing at a rate different than the rate of The current costs of property, plant and equip-general inflation (as measured by the Consumer ment, which represent the estimated costs of Price Index).
replacing existing plant assets are determined The current years depreciation expense on by applying the 11andy-Whitman Index of Public the constant dollar and current cost amounts Utility Construction Costs (liWI) to the cost of property, plant and equipment were deter-26
A[
gifyg mined by applying the Company's depreciation experiences, that it will be allowed to earn rates to the indexed amounts, on the increased cost of its net investment when The cost of fuel used in generation has not replacement of facilities actually occurs.
been restated from historical cost. Regulation To properly reflect the economics of rate limits the recovery of fuel costs to actual costs regulation in the Statement of Income from through the operatior. of adjustment clauses Operations presented above, the reduction of or adjustments in basic rate schedules.
net property, plant and equipment to net As prescribed in Statement of Financial recoverrble cost is offset by the gain from the Accounting Standards No. 33, income taxes were decline in purchasing power of net amounts not adjusted.
owed. During a period of inflation, holders of The regulatory commissions to which the monetary assets suffer a loss of general purchas-Companyis subject allow on; ne historical cost ing power while holders of monetary liabilities of plant to be recovered in revenues as deprecia-experience a gain. The gain from the decline tion. Ther: fore the excess cost of plant stated in purchasing power of r at amounts owed is in terms of constant dollars or current cost over primarily attributable to the substantial amount the historical cost of plant is not presently of debt which has been used to finance property, recoverable in ratess This excess is reflected as plant and equipment. Since the depreciation on a reduction to net recoverable cost. While the this plant is limited to the recovery of historical rate-making process gives no recognition to the costs, the Company does not have the oppor-current cost of replacing property, plant and tunity to realize a holding gain on debt.
equipment, the Company believes, based on past l
l 1
l 27 l
l
IU
- 4 {4 TEM YEARS OF PROGRESS / FINANCIAL l
F 1980 voan soum (In Thousands of Dollars)
Capitalhation and Capitalization Ration Selected Financial Data unnoss or ootaans Net operating revenues...
$ 750,497 900 l
Net income.
65,230 E
Total assets....
2,147,983 800 I, ESmvem - -
g Long-term debt..............
848,667 E E nunmo 700 My]?%'c'.7,2,2lI-Preferred stock and premium.
$ 273,955 Preferred stock, with sinking fund.
147,065 Capitalization-End of period:
600 l
Common stock.
458,569 500 g
g Retair:ed earnings.
59,024 400 Total.
791,548
}
Long-term debt:
E 3gg rirst mortgage bonds 200 -
and premium 1. 2.
765,430 installment purchase contracts 100 g
and discount 2.
83,237 n,.n#nsmunsnuo.naug.nuniomunio Sinking fund debentures.
O i w n m num nun nuw nu+
Total.
848,667 1971 1973 1975 1977 1979 1980 Total capitalization..
$1,640,215 Annual Payment Requirements:
Interest on:
g p,
First mortgage bonds.
$ 73,55 MIwoNs oF DoLIARs Installment purchase contracts.
6,593
'500 Dividends on preferred stock.
25,778 Utility Plant-End of period:
2250
_ - u,.i ci,,,,y n.,,,
I Electiic pl nt completed.
$2,133,704 2mo
+ "a r**
Construction work in progress.
282.376 p
Nuclear fuel.
7,151 373o i
Total utility plant.
2,423,231 1500 Less-accumul' ted deprcciation.
417,435
^
a l
1250 Net ut:lity plant.
52.005,796 l
1000 Income Statement:
750 Operating revenues.
$ 750,497 Operating expenses:
500 Fuel...
237,346 250 Purchased power.
154,126 Payroll-Operation and g
maintenance....
49,774 1971 72 73 '74 75 76 77 78 79 1980 Other operation and maintenance.
100,700 Depreciation.
59,574 Taxes.
54,033 Met Incorne uiwoss or ooilans Total.
655,553 90 Operating income.
94,9Ji 80 -
lCT.1LL Other income and deduct.ons--net (excluding AFDC*).
17,468 te c-s 70 ~
ICC7~
f Interest and other charges-60 Interest on long-term debt.
67,036 Other interest-net cf 50 debt premium.
17,649 Total (excluding AFDC*).
84,685 4
~
Income from revenues......
27,727 30 -
Non-cash income from AFDC*.
37,503 Income from accounting change 3.
20 -
Net income.
65,230_
10 1 incid ;<namorti:ed premium on long-term dat beginning i.t 1973.
2 En G.L currentlu rnaturt'tgyortion.
3 Cu- :. tire.tcci to January L 1976, of clrange in accounting forfuel costs.
1971 72 73 74 75 '76 77 78 791980 AFDC-Allowance for funds u<ed durmg construction.
28
1979 1978 1977 1976 1975-1974 1973 1972 1971
$ 583,826
$ 556,448
$ 537,408
$ 396,597
$ 316,831
$ 296,811
$ 209,327
$184,810
$166,063 83,742 87,620 70,685 46,963 40,713 55,562 41,946 36,771 28,908 1,940,643 1,694,337 1,563,544 1,421,940 1,311,433 1,124,177 1,002,893 823,096 709,851 819,716 749,262 667,484 591,382 586,318 546,284 480,829 398,175 348,400 100,518 60,063 60,063 60,063 60,063
$ 227,408
$ 171,772
$ 171,772
$ 171,772
$ 161,720
$ 101,657
$ 101,657
$ 86,615
$ 51,529 427,960 397,960 381960 367,960 337,375 291375 257,375 201375 172 375 90,657 81,448 55,641 39,040 41,297 41,869 36,827 34,714 31,043 746,025 651,180 610,373 578,772 540,392 435,901 395,859 323,704 254,947 763,549 709,549 642,979 575,184 586,318 546,284 476,354 393,700 343,700 56,167 39,713 24,505 16,198 4,475 4,475 4,700 819,716 749,262 667,484 591,382 586,318 546,284 480,829 398,175 348,400
$1,565,741 51,400,442
$1,277.857
$1,170,154
$1,126,710
$ 982,185 5 876,688
$721,679
$603,347_
$ 62,436
$ 56,536
$ 49,364 5 42,837 5 42,837
$ 38,787
$ 29,974
$ 23,524
$ 19,687 4,980 4,980 4,103 1,224 19,548 14,020 14,02C 14,020 13,136 6,600 6,600 5,418 2,768
$1,231,832 51,178,601 S1,139,511
$1,111,119 11,097,913
$1,051,248
$ 76L319
$727,558 Se84,668 980,054 785,684 610.557 505,669 350,941 215,794 330,585 216,055 151,747 12,747 4,562 8,179 5,229 23,953 26,722 9,148 2,211,886 1,964,285 1,762,815 1,621,350 1,457,033 1,272,271 1,122,857 970,335 845,613 364.447 331,231 297,464 265,099 240,014 211,456 193,400 175,144 160,665
$1,847,439
$1,633,054
$1,465,351
$1,356,251
$1,217,019
$1,060,815
$ 929,457
$795,191
$684,948 i
$ 583,826
$ 556A88
$ 537,408
$ 396,597
$ 316,831
$ 296,811
$ 209,327
$184,810
$166,063 174,667 167,681 169,890 107,213 76.322 83,840 46,605 36,648 30,151 171,425 120,804 114,225 107,983 56,022 55,936 28,737 25,334 16,705
' 40,607 35,400 29,448 26,626 24,286 19,486 17,647 15,731 14,841 51,425 55,592 52,469 31,224 30,637 24,114 19,416 16,799 15,621 q
39,708 38,365 36,768 35,025 33,790 23,885 21,373 19,609 18,742 1
36,245 57,249 64,091 36,022 38,352 24,949 25,766 25,288 30,235 514,077 475,091 466,891 344,093 259,409 232,210 159,544 139,409 126,295 69,749 81,397 70,517 52,504 57,422 64,601 49,783 p ol 39,768 23,627 16,986 c.166 10,328 8,131 1,352 572 45 75 l
67,091 56,949 45,047 43,152 40,553 32,554 25,528 21,843 17,750 l
1 8,446 4,076 3,917 2,703 3,265 3,323 1,557 1,002 592
.I 75,537 61,025 48,964 45,855 43,818 35,877 27,085 22,845 18,342 l
4 17,839 37,358 34,019 16,977 21,735 30,076 23,270 22,601 21,501 65,903 50,262 36,666 26,445 18,978 25,486 18,676 14,170
-7,407 3,541
$ 83,742
$ 87,620
$ 70,685 5 46,963
$ 40,713
$ 55,562
$ 41,946
$ 36,771
$ 28,908 29 l.
l TEM YEARS OF PROGRESS / OPERATING v cott soum Average Annual Kilowatt Hour Use ms se Residential Customere 1980 TiloUsANDs OF KWil 12.0 Electric Operating Revenues:
(in Thousands of Dollars)
Residential.
5212,833 10.0 Commercial.
128,477 Industrial-Aluminum processing.
69,171 8.0 Industrial-Other.
140,422 Government and municipal.
12,824 6.0 Total from ultimate customers.
563,727 Public utilities...
181,650 h1iscellaneous revenues.
5,120 4.o Total electric operating revenues...
5750,497
' Ar&L Au, age 2.0 Electric Sales (hfillions of Kilowatt flours):
gg u Residential..
4,480 0
Commercial.
2,682 1971 72 73 74 75 '76 77 78 79 1980 Industrial-Aluminum processing.
3,411 Industrial-Other.
3,675 Government and municipal.
292 g jI *" y",*g"[",',g Totalsales to ultimate customers.
14,540 s
Public utilities.
5,445 simoNs or xwii
- U Total energy sold.
19,985 34 U Number of customers-end of year:
Residential.
405,717 12.0 Commercial.
49,444 1
I 'j-10.0 Industrial-Aluminum processir.g.
1 Industrial-Other.
12,284 l
8.0 Government and municipal.
1,548 Total ultimate customers.
468.994
- 0 Public utilities.
19 4o Total customers.
469,01}
to Electric Energy:
Source and disposition 0
(hfillions of Kilowatt Hours) 1971 72 '73 74 75 76 '77 78 79 1980 Generated-net station output Coal.
601 Gas.
4,741 Payroll Oil.
1,653 WLuoNs oF DoWARs Nuclear.
7,831 l
j l
l Hydro.
103 90 Total generated.
14,929 80 -
m r.,,.,,
l
{. ll Purchased.
6,459 70 - E0r...
l 1 'j Net interchange.
(209) u.- ~,,r.'*"
I I
I I
I I
I l
Total 21,179 60 l ll ll l
l. l.. l
- .ess: Company uses, losses and 50 unaccounted for.
1,194 40 Total energy sold.
19,985 Peak demand (hiegawatts).
4,179 30 20 10 0
1971 72 '73 74 '75 76 '77 78 79 1980 30
1979 1978 1977 1976 1975 1974 1973 1972 1971
$161,466
$165,347
$155,225
$121,267
$104,440
$ 66,337
$ 68,098
$ 57,976
$ 49,718 101,048 99,021 93,532 75,641 62,325 53,438 43,448 38,092 33,989 65,861 43,972 40,482 33,100 12,652 28,061 17,358 14,803 13,132 112,912 105,870 102,952 83,844 61,619 58,566 43,565 36,380 31,141 11,486 11,326 10,535 8,536 7,144 6,003 4.737 4,248 3,836 452,773 425,536 402,726 322,388 248,180 232,405 17',506 151,499 131,816 125,979 124,653 128,174 70,362 65,346 61,168 28,942 30,392 32,209 5,074 6,299 6,508 3,847 3,305 3,238 2,879 2,919 2,038
$583,826
$556,488
$537,408
$396,597
$316,831
$296,811
$209,327
$184,810
$166,063 3,884 4,062 3,838 3,369 3,386 3,077 3,103 2,770 2,393 2,444 2,472 2,353 2,162 2,072 1,893 1,903 1,753 1,614 3,349 2,686 2,597 2145 1,011 2,569 2,594 2,569 2,540 3,681 3,545 3,443 3,160 2.840 3,042 2,920 2,702 2,426 326 334 325 307 297 284 290 289 276 13,684 13,099 12,556 11,143 9,606 10,865 10,810 10,079 9,249 4,204 4,475 5,170 3,247 3,548 3,640 2,899 3,382 4,594 17,888 17,574 17,726 14,390 13,154 14,505 13,709 13,461 13,843 400,290 394,766 387,495 379,556 371,491 364,954 355,673 343,468 330,566 49,009 48,424 47,580 46,844 45,657 44,957 44.073 43,188 46,785 1
1 1
1 1
1 1
1 1
12,151 11,724 11,182 10,913 10,431 9,926 9,508 9,173 4,733 1,617 1,573 1,519 1,500 1,4' ;
1,396 1,317 1,282 1,235 463,068 456,488 447,777 438.814 429,026 421,234 410,572 397,114 383,320 19 19 25 25 25 25 25 24 71 463,087 456,507 447,802 438,839 429.051 421,259 410,597 397,138 383,391 2,468 470 487 1,168 2,645 3,209 3,919 5,932 7,630 4,050 6,741 6,973 4,010 2,242
' 920 4,089 2,484 1,496 4,101 5,220 5,085 3,858 4,874 171 251 131 98 94 172 230 321 125 92 10,870 12,562 12,643 9,130 9,933 7,530 8,329 8,541 9,218 7,740 6,162 6,133 6,172 4,070 7,670 5,890 5,944 5,474 296 8
(65) 43 101 181 361 10 17 18,906 18,732 18,711 15,345 14,104 15,381 14,580 14,495 14,709 1,018 1,158' 985 955 950 876 871 1,034 866 17,888 17,574 17,726 14,390 13,154 14,505 13,709 13,461 13,843 3,521 3,654 3,336 3,242 2,868 3,049 2,744 _
2,607 2,565 31 L
OFFICERS y.-
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.l b.:di Jerry L Maulden
- 1. D. Phillips Charles L Steel Wilham Cavanaugh 111 President &
Senwr Vice President Senior Vsce Pressdent &
Senior Vice President Chief Execurits Officer System Engsneenng & Planning Assistant to the Pre >< dent Enngy surply
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Jerry D. Jackson J.xk L King John 1. Hartm*
W. R. Southem**
1 Senwr Vuce Presndent, Financc Sewr Vnce Presinnt.
Voce President, CW Vsce President, Regulation & Legal Serckes, Er ergy Dehary & Semus hnr.ncul Ojncer.freasurer Administratwe Serrten Secretary & Asssstant Treasurer
& Assistant Secretary i
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Ralph C. Mitchell !!!**
Charles ielly**
R. A. Allen **
John h1 Gnffin**
t Vice President. Consertetwn &
Vice Pres 1Jeni, Assistant Vice PrestJent.
Assistant Vuce Pressdent.
RenewaNe Resources Corporats Communications Energy Delircry & Servuces Nuslear Operations
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- Named rue president effective January L 1981
" Named as Company officer effective January 1,1931 Steve L Riggs General Counsel &
Anistant Secretary i
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,.r COMPANY DIRECTORY Transfer Agents for Preferred Stock-Union f
National Bank of Uttle Rock, i Union National Plaza, Uttle Rock, Arkansas 72203, and The Commercial National Bank of Uttle Rock, Second and Main Streets, uttle Rock, Arkansas 72203 Registrar of Preferred Stocks-The First National Bank in Uttle Rock, Capitol and Broadway Streets, uttle Rock, Arkansas 72203 Certified Public Accountants-Deloitte Haskins &
Sells, One Shell Square, New Orleans, Imuisiana 70139 Executive Office-The First National Building, Cap. col and Broadway Streets, Uttle Rock, Arkansas 72203, Phone (501) 371-4000 Engineering Office-Sixth Avenue and Pine Street, Pine Bluff, Arkansas 71601, Phone (501) 541-4700 Annual Meeting-Fourth Wednesday of May The Company's 1980 Annual Report to the Securities and Exchange Commission on Form 10 K (includ:ng Financial Statements and Finandal Statement schedules) is avaDable to any stockholder upon recgest, without charge. Persons interested in obtaining a copy should coNact Mt terry D.
Jackson, Senior Vice Poetident, Secretary and Anwtant Treasurer,at the address below:
AkKANSAS POWER Ac UGHT COMPANY
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P.O. Box 551 Uttle Rock, Arkansas 72203 (501) 371-4274
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i MIDDLE SOUTH UTfUTIES SYSTEM ARKANSAS POWER & LIGHT COMPANY
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