ML20084D379
| ML20084D379 | |
| Person / Time | |
|---|---|
| Site: | Duane Arnold  |
| Issue date: | 12/31/1994 |
| From: | IES UTILITIES INC., (FORMERLY IOWA ELECTRIC LIGHT |
| To: | |
| Shared Package | |
| ML20084D235 | List: |
| References | |
| NUDOCS 9506010092 | |
| Download: ML20084D379 (40) | |
Text
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1 994 ANNUAL REPQRT INDUSTRIES t
I At IES Industries, see provide the 1
warmth, light and services that l
nurturefilmilies, 1
communities and industries in the heartland.
9 e
9506010092 950526 PDR ADOCK 05000331 PDR 1
TARLE OF CONTENTS DEBCRIPTION OF SUBINEBB Finarrial liighlights... 1 IES Industries Inc. is a diversified holding Report to Shareholders.. 2 company bringing long term value to share-Report on Operations.
4 holders through operations and strategic Financial Review.....
11 investments. The Company has two wholly-owned subsidiaries: IES Utilities Inc. and IES Diversified inc. IES Utilities provides electric, natural gas and steam energy to customers in more than 550 communities across Iowa. IES Diversified has interests in energy, telecommunications and transportation businesses.
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FINANCIAL HIGHLIGHTS c
PERCENT DDLLAR AMOUNTS IN THOUB ANDB INCREASE INCREASE (EXCEPT PER SH ARE D ATA) 1994 1993
{ DECREASE) ( DECREASE)
Operating revenues.
$ 785,864
$ 801,266
$(15,402)
(2)
Operating income
$ 147,933
$ 151,269
$ (3,336)
(2)
Net income.
$ 66,818
$ 67,938
$ (1,120)
(2) f Earnings per average common shar:
2.34 2.45
$ (0.11)
(4)
Dividends declared per common share 2.10 2.10 Construction and acquisition expenditures.
$ 201,552
$ 163,644
$ 37,908 23 Cash fkws from operating activities
$ 215,716
$ 177,239
$ 38,477 22 Sales of electricity to customers (Kwh)(000s) 9,291,575 8,905,522 386,053 4
Utility gas sales (dekatherms)(000s) 37,975 39,006 (1,031)
(3)
Number of common shareholders 32,567 33,952 (1,385)
(4)
Number of full-time empbyees 2,763 2,792 (29)
(1)
MARKET PRICE PCR COMMON GHARE 1994 1993 HIGH LOW CLOSE HIGH LOW CLQEE First Quarter.
31%
27 27%
31 %
28 %
29%
Second Quarter.
29 25 %
25 %
32 %
28 %
32%
Third Quarter 28%
24 %
26%
34 %
31%
33 Fourth Quarter.
26%
24 %
25 %
34 29 %
31%
Sales of 1:lectricity Average Revenue per A ssets to Customers Kilowatt flour IMt.O AWA f f HOURS H THOUS ANDS)
{ CENTS PER KWM)
(IN MILLOON S QF QQLLANS) a NM bd g
y 18 u__s_o. 7.244 v.m i,4oi-
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'91
'92
'93
'94
'90
'91
'92
'93
'94
'90
'91
'93
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'94
TO OUR SHARCHOLDERS u ES Industries will be the supplier of choice for its products and services thmugh out-standing perforraance and responsible corporate citizenship" This is the new Vision Statement which drives our aspiration to become ever more a high-performance y
company, distinguished by our skills in competition, quality in customer service and simplicity in structure and processes. With the momentum created in 1993, we have forgd ahead in our journey of change. In 1994 we redefined the meaning of qualay and salue in our corporation We have aho begun an intensive effort to reviev all business processes with the aim to achieve breakthrough improvements in work simplification and cost reduction. In addition, we have introduced a new
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culture of continuous impnwement in every facet of our operations in order to ensme l
the permanency of cost restru.:turing while generating higher quality, shorter cycle time, better customer service and further cost reduction. In the next three years, we expect an emergent high-performance organization energized with confidence to win in a bnxidened energy market.
The year of 1994 was one marked by successful operation, strategic reassessment and continuous ganyth. Due in put to the mild weather conditions, n,um the net income was slightly kmer than the previous year. Ihmtver, I am satisfied e~m,.~
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with the progress male and confident that our long-term financial performance
~c.,oi~r a en,c, will continue to improve in the years ahead.
eocume o r r.c e We hase adopted a new corporate logi shonva for the first time on the cover of this annual report. Its red color represents our traditions and, at the same time, reflects a new image of motion and energy encircled by an expanded scope of busi-i ness opportunities. You will see this kigo widely used in the future.
IES Utilities' operating performance was exceptional in a number of areas.
We have been able to consistently cut production cost, impane productivity and achieve budgetary pxds. Our nuclear facility continues to be one of the best in the country, attaining good performance ratings from the regulatory tulies.
Our profitable gnnvth strategy continues to add value to the utility business unit. Electrical sales increased 4 percent in 1994, with 9 percent ganvth in the industrial sector, capturing a lion's share of the industrial gnnvth in Iowa. In 1994 new industrial investments in our service area exceeded $945 million, creating new jobs and sparring an impressive surge in housing and retail sales.
Another milestone at IES Utilities is the completion of the customer service center in Centerville, Iowa, the second one in our Compmy. 'ioday all of our customers can reach us 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day and seven days a week. The addition of the customer service center is another effort to enhance the quality of service we of fer.
In the non-utility area, our. :'- si transportation business historically 1
has pnwided transportation services to a number of industries in eastern kmn.
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In 19W sales in freight and switching service increased significantly. Operating income for IES Transportation rose 36 percent, yielding the best year ever for our rail transportation business.
Ibr the third consecutive 3 car, Whiting Rtroleum, our wholly-owned subsidiary in the oil and natural gas business, significantly expanded its acquisition
. program in reserves. In 19% our production output increased substantially as the result of these new acquisitions. Whiting Ntroleum's operating income rose 24 per-i
. cent last year in spite of the general depression in oil prices.
THc ue ANiwa o-o u a c-As the result of our recent merger, acquisition and subsequent successful
.vv auo v4eur eu aua ercution of the conwlidation, we are today better positioned to fxe the competition in the new encryy business environment.The actions taken and the results rchieved in the last two years signal the emergence of a new and invipmting culture centered on continuous impnnement in every aspect of our operations. The current drive in process optimization and cost restructuring will pnwide us with a new platform to compete and to win. The transformation from a regulated business to a market-based enterprise cannot be accomplished mernight. I believe, however, that we will be able to capture significant benefits in the next three years.
Externally, we will intensify our effort to seek out the new opportunities across the full spectrum of our businesses in this country and absux!. The new gkihalized economy presents promising long-term opportunities. The Pacific Rim countries and others in Europe and South America are undergoing major privatization cfforts in the enetyy sector. The continuing soundness of the American economy will support our future growth and success in the United
' States. Looking ahea 1, I am confident we will be able to enhance future imestment mlue for our shareholders.
In ckising, I again would like to acknowledge the contributions and dedi-cation from every person in our orpnization. Their enthusiasm and support for the needed changes ensun: the progress and success of our enterprise.
I would also like to c.xpress our gratitude to Robert Kucharski, Vice President and Secretary, who retired at the end of 1994. His 20 years of outstanding service to our Compimy will alwup be remembered.
On February 7,1995, Illake O. Fisher, Jr. was named President, Chief Operating Officer & Chief Financial Officer of IES Utilities. He will also continue to sent as Executive Vice President & Chief Financial Officer of IES Industries.
Lee Liu Chairman ofthe Boani.
Pn sident & ChhfExecutive Officer
OPERAT1ONQ REVIEW 4
ontinued improvements in operating efficiencies and major successes in new industrial loads were among the highlights for IES Industries Inc. during 1994.
The Company's strategy of building upon utility strengths, diversifying selectively PG into areas where it possesses a competitive advantage and strategically positioning itself for profitable opportunities is built upon a continued desire to be the pre-ferred supplier of products and services to customers.
1994 marked the first year that IES Utilities Inc. operated as a combined J
Compmy, folknving the December 31,1993, merger of hma Electrie 1.ight and I\\mtr Co. and hma Southern Utilities Co. The benefits gained from this consolidation are well on their way to exceeding the pre merper estimates of $30 million per year. The merged Compmy now provides service to 330JHX) electric customers and 173fM10 natural pis customers.
Continued sales gnm th for IES Utilities in 1994 reflected the gnnving hmu economy. Electric salts mlumes were 4.3 percent alue the mlumes recorded in 1993, despite a cooler than normal summer. Driving this gnnvth was continued increase in electric sales mlumes to industrial customers, which were 9.3 percent greater than industrial sales in 1993.
The Compmy's economic development initiatives resulted in several customer successes in 1994 arxl will yield substantial gains for IES Industries into the future. Among the many customer successes of 19% was the commitment of Cedar Riser thper Compmy, a joint svnture of Weyerhaeuser hiidwest Inc. and hiidwest Reegle Inc., to build a second piper mill at its new facility in southwest Cedar Rapids. The total investment of this Compmy will be in the rar.g: af $500 million. IliS Industries has positioned itself to meet the needs of this customer by pnwiding electric, steam, rail and storage services.
Several industrial compmies announced both new projects and business expmsions in the IliS Utilities service territory in 1994. In October, Guardian Industries of hiichigan announced construction of a $110 million glass manufac-turing plant in DeWitt. Iblaris Industries began pnxtucing recreational watercraft in Spirit Lake. Roquette America, Inc. announced plans for a $400 million expm-sion of its Keokuk corn milling plant. Cargill incorporated is pursuing a $75 million expansion of its corn processing facility in Eddyville. Archer Daniels hiidland Compmy and Ibnford Pnslucts Co. in Cedar Rapids. Lennox industries Inc. in h1arshallt(nvn, hiaytag Corporation in New ton and Griffin Wheel in Keokuk continued their investments and gnnvth.
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In an effort to prepue for the competitive utility marketplace, on July 8 IES Utilities filed an electric pricing request with the kun Utilities thxtrd (the Board). The proposal seeks to combine regional differences in pricing levels and U
focuses on the recovery of Duane Arnold Energy Center (DAEC) capital and decommissioning costs and increased capital costs. The Board is expected to issue its final order in the Company's request in May 1995.
In addition to the July 8 price filing,IES Utilities also filed its request with the Board to recover costs associated with the Company's electric and nat-ural gas energy-efficiency programs. As prescribed by state law, the filing seeks recovery for costs incurred between 1990 and 1993 for the mandated programs.
Although the Company's electric prices are competitive today, IES Utilities is committed to taking further steps to maintain competitive pricing for all customers. Average electric prices for IES Utilities improved 3.3 percent com-pired to the Compmy's kmest-priced industry peers. That trend is part of the Company's commitment to long-term value for customers.
During 1994, IES intensified its employee quality initiatim effort through the adoption of a Corporate Vision, Values Statement and Quality Iblicy. A number of empkiyees currently are partic'pating in an effort to define and implement process improvements. These changes will help position IES as a more customer-focused, market d.iven organization that will succeed in an increasingly competitive marketplace.
ELECTRIC Q P E R A1 ! O N S IES Utilities continued to gain efficiencies in electric operations in 1994, notably in the generation area. The Company's coal-fired generating stations reported a 57.4 per-cent plant capacity factor, compared with 55.7 in 1993. The Ottumwa Generating Station reported a 1994 capacity factor of 71 percent. The 565-megawatt DAEC nuclear power plant achieved an 88.1 percent capacity factor during this year without a refueling outage. DAEC generated 4.1 billion kilowatt-hours in 1994, the second highest production year in its 20-year history.
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IES Utdities to S
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The lighting and air conditioning impmve.
ments have alloued Grinnell College to reduce its energy f
Jemand and receive i
thousands ofdollars in etficiency incentives.
IES employees lldynda g
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revien plans with l
l'hd Schupach of Grinnell College.
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South-central lowa's worst ice storm in more than 20 years affected the IES Utilities service territory in early December. Trees and power lines were toppled and 25.(XK) customers lost service. As a result of the merger of the utili-rm LJ ties, IES was able to direct substantial resources immediately to respond. From line crews to customer service center consultants, IES empk>yees met the chal-lenge. The result was a sixnv of teamwork that was well appreciated by customers.
Empk>yees continued to work safely throughout 1994. Utility empk>yees achieved a substantial impnwement in safety, recording the fewest lost-time acci-dents of any year in the Company's history.
GAB O P E R ATI O N S The first full year of operations in a post-FERC Onler 636 environrnent saw changes in operations, but continued success in the competitive arena. Warmer than nor-mal winter weather contributed to reduced gas throughput by nearly 3 percent for the year. Careful management of ps puirhases by lES Utilities alkmed the Company's average residential prices to remain among the kmest in kmn and nationwide. The expanding hmn economy and a program to expand the Com-pany's pas system to new communities has resulted in a 5.3 pervent increase in gas customers since 199L U N R E G U L. A T E D ENERGY Whiting Ittroleum Corp. saw continued strong performance in 1994, despite depressed prices for natural gas and oil. The Company focused on increasing its reserves of both commodities. Acquisitions of new properties and investments in current ptoperties in 1994 pushed oil production from an average of 1,300 barrels per da' to more than 7,000 barrels per day. Natural gas production rose to 18 mil-lion cubic feet per day. The Company ended the year with total gas reserves of more than 47 billion cubic feet and oil reserves of 12 million barrels.
Industrial Energy Applications, Inc. (IEA) aggressively expanded operations in 1994. With 10 years of experience providing facilities-based and commodities based energy services,IEA has installed and maintains standby generation for more than 25 customers in kmu, Minnesota and South Dakota.
The Company also buys and sells natural gas and coal, and is positioned to arrange electiicity transactions. IEA has opened a St. Louis office and is prepared to open three other regional offices during 1995.
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l 1994 marked the first full par that IEA prosided steam energy to Ajinomoto, located in the Eddyville Industrial Complex. Plant refurbishments at the Prairie Creek and Sixth Street Generating Stations will alkwv IES Utilities to M
meet many unique customer needs, including those of Cedar River Paper Compmy, and realize substantial gains through its steam service.
Building upon its strengths, IES Industries continued to explore opportu-nities available in the international arena. The Company is focusing its research in the Far East and Central and South America, where energy demaMs are greatest.
T R A N S PQ RTATIO N CRANDIC, the Cedar Rapids and loun City Raihvay Compmy, had an excellent year. While the flooding in kwa in 1993 hamwred customers' ability to acquire and transport grain and other products in that year, the pent-up demand released in 1994 resulted in a substantial increase in business for the short line railroad.
TE L C C O M M U N i C ATl O N S IES Industries has a $7.5 million investment in McLeod, Inc., which pnwides local and long-distance telecommunications services to business customers and offers other communications services. The partnership between IES and McLeod offers substantial benefits in the competitive telecommunications industry. The coming information superhighway and kmu's commitment to fiber optic technol-ogy also bodes well for this investment and inmtvement.
CUSTOMER FOCUS FOR 1HC FUTURE The success of IES Industries in 1994 is a direct reflection of the Company's abil-ity to anticipate the needs and desires of customers and to allocate resources to meet those needs. By folknving that philosophy of customer responsiveness, the
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Company has historically found success in its ventures. That is a trend which will only gnnv in 1995 and the years ahead.
FINANCIAL EVIEW Management's Discussion and Analysis.
12 Report of Independent Public Accountants.
20 Report of Management.
. 20 11 Consolidated Financial Statements 21 Notes to Consolidated Financial Statements..
26 Selected Consolidated Financial Data..
36 Electric Operating Comparison.
. 37 Gas Operating Comparison 38 Stockholder Information...
. 39 Officers and Directors...
Inside Back Cover I
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MANAGCMENT'S DISCUBElON AND A N A LY G l S CF THE N E S U LT S OF 0PERATIONS AND FINANCIAL CONDITION The)<dlowing discm sion analy.~es significant changes in
'Ihe 1994 Nwh sdes were adversely uffected by mikler the crunponenn of net incevne andfinancial cenulition than normal weather, particularly during the summer fann the prior perioch for IES Indwtries Inc. (Indwtries) months. The largest elfect of weather was on sides to and its c<nisolidated 3ubsidiaries (the Company).
residential and rural customers. Under normal weather conditions.19W sales wouki have been flat and total sales n c s u oT a o r O P E R AT1 O N B (eXClutling of[-system sales) wUuki hase increased 4.8%.
Industries' wholly-owned subsidiaries are ll!S Utilities compired to 1993 actual sales. The gnnvth in commercial Inc. (Utilities) and IES Diversified Inc. (Diversified).
and industrial sales continues to reflect the underlying The Compmy's rxt income decreased $1.1 million during strength of the economy as several major industrial expm-1994 and increased $19.2 million during 1993. Earnings sions in Utilities
- service territory were announced in 19W.
per average common share declined from $2.45 in 1993 The 1993 sdes increases are attributable to the acqui-to $2.34 in 19W because of the kmer net income arxl the sition of the UE territory and a return to more normal effect of increased average common shares outstanding.
weather conditions. After adjusting for these items, under-The 1994 results were affected by mikler than normal lying total electric sales (exekxling off system sales) weather, pirticularly during the summer months.The 1993 increased 6% in 1993. which reflects the economic growth results reflect Utilities
- acquisition of the kun service in the industrial and commercial customer base, territory of Union Electric Compmy (Uli)(as discussed Utilities' electric tariffs inchxle energy adjustment in Note 2 of the Notes to Consolidited Financial State-clauses (E AC) that are designed to currently reemer the ments) and a return to more normal weather conditions costs of fuel arxl the energy portion of purchased [xmer in Utilities'senice territory from that experienced in billings to customers. See Note 1[k] of the Notes to Con-1992. The 1993 results also reflect the recording of cer-solidated Firumci.d Statements for discussion of the EAC, tain proper ty write-downs at Diversified and a $2.5 The decrease in the 19W electric revenues is attribut-million contribution to the IES Industries Charitable able to kmer fuel costs collected through the !!AC. kmer Foundation. The 1992 results were athersely affected off system saks to other utilities and the effect of the mix by extremely cool summer weather and a mild winter of sales between hmer margin industrial customers arxl in Utilities' service territory.
higher margin residenti;d and rural customers. Increased The Compmy's operating income decreased $3.3 total sales (excluding olf-system sales) pirtially offset million during 1994 and increased $42.2 million during the effects of the alue items. The increase in electric 1993. Iteasons for the changes in the results of operations rewnues for 1993 is primarily because of the higher sales are explained in the folkming discussion, and increased seemery of fuel costs through the EAC.
See Note 3[a] of the Notes to Consolidated Financial Electric Resennes Statements for a discussion of Utilities' 1994 electric likctric revenues arxl Kwh saks for Utilit.ies mereased or (decreased) as compired with the prior year as folkms.
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loot Lane is mt.uoNio 1994 1993 I!!ectric revenues
$(13.2)
$87.5 Gas revenues increased or (decreased) as compared lilectric sales (excluding with the prior year as folknvs:
off s)slem Niles):
UN WLUONel 1994 1993 Ilesidential and Ilumi.
(1.4)%
17.1%
Gas revenues:
Commercial.
3.4 %
17.4 %
Utilities
$(15.3)
$ 14.9 Industrial 9.3 %
40.6 %
Industrial linergy Applications.
'Ibtal 4.3 %
24.9"4 Inc. (IE A).
(1.1)
(0.1)
_$( 1_6.4 )__ $ 14.8
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Utilities' pts sales in therms (including trans-such outage in 1994. Fuel for production inemased $14.3 imrted w4umes), which also idlect the ef fects of weather, million in 1993 because of increased a nilability of Utilities' decreased 2.7% in 1994 artiincreased 5.3% in 1993.
fossil-fueled generating stations, w hich experienced Adjusting for the ef fects of wrather, Utilities
- pts sales extended maintenance outages in 1992, and because of decreased 1.M% arxl 1.5% in 1994 arxl 1993, respectively.
increased sales.
Utilities
- pis tariffs include purchased pts aljustment Purchased p mer decreased $24.7 million in 19W clauses (PGA) that are designed to currently recover the because of kmtr off-system sales to other utilities, cost of gas sold. See Note 1[k] of the Notes to Consoli-increased generation at Utilities' generating stations arxl dated Fiameial Statements for discussion of the PGA.
the expimtion,in April 1993, of a purchase pmer agree-Utilities' pis rewnues decreased in 1994 primarily ment with the City of N1uscatine. Purchased power because of kmer pis costs recovered through the PGA increased $18.7 million in 1993, of which approximately arx1, to a lesser extent, the effect of the kmtr sales.
$14.7 million represents increased energy purchases and Gas revenues increased in 1993 substantially because approximately $4.0 million is a net inemase in capacity of increased costs of pts reemered through the PGA, charges. De increase in encryy purchases is because of the effect of pts rate increases that became effective in the increased Kwh sales. The increased capacity costs September 1992 arxl the s: des increase, reflect the contracts associated with the acquisition of The decrease in iE A's pts revenues in 1994 also the UE scavice territory, pirtially olfset by the expira-reflects the kmer price of natural pts. Despite an increase tion of the pumhase p(mer agreement with the City of of 16% in pts wilumes, rewnues decmased by $ 1.1 million.
N1uscatine. (See Note 12[b] of the Notes to Consolidated Financial Statements.)
Other Revenues Gas purthased for resale decmased $15.0 million Other revenues increased $14.1 million and $20.6 mil-in 1994 because of kmtr pts costs and kmer pts sales at lion during 1994 and 1993, respectiselv, largely because Utilities. Gas purchased for resale increased $7.6 million of increased revenues at Whitmg R troleum Compmv during 1993 primarily because of increased per unit pts (Whiting) and Diversified's other subsidiaries, pnmanly costs at Utilities and the increased sales.
in the energy and inmsportation uxlustries. In aldition, Other operating expenses increased $14.2 million approximately $10 million of the 1993 increase related arxl $20.3 million in 19% and 1993, respectively. The to the acquisition of certain irsort properties in N1 arch 1994 m.ercase is pnmanly attributable to inemases N 1993; Diversified previously held an equity interest m labor arxl benefits costs, nuclear operating costs, former a compmy that owned the properties. Utih.. ties' steam manufactured cas plant (FN1GP) clean-up costs and revenues also contributed to the 1993 m.erease.
.information technokigy costs at Utilities, and increased Operating Espenses operating activities at Whiting. The 1993 increase is pri-Despite an increase in the amount of Kwh generation marily because of increased labor and benefits costs at from a year ago, fuel for production decreased $1.8 mil-Utilities and increased opemting activities at several of lion in 1994 laipely because of knver merage fuel prices Diversified's subsidiaries, including IEA and Whiting. In and the effect of kmer fuel cost reemeries through the aldition, $9 million of the 1993 increase is attributable to EAC, which are included in fuel for praluction. Genera-tlx resort properties acquired in N1 arch 1993.
tion at Utilities' generating stations increased because of N1aintenance expenses increased $3.9 million and the inervase in electric Kwh sales arxl because of incirased
$7.5 million during 1994 and 1993, respectively. The 1994 muitability of Utilities' nuclear generating station. the increase is primarily because of increased labor costs and Duane Arnold Energy Center (DAEC), which was tkm n maintentmce at the DAEC, pirtially offset by kmer for ptrt of 1993 because of a scheduled refueling outage.
maintertuwe at Utilities' fossil fueled generating stations.
There were refueling outages in 1993 and 1992, but no
The 1993 increase is primarily because of increased Interest Expenw und Other mamtenance at Utilitics' fossil-fueled generating stations Interest expense increased $1.6 million during 1994 pri-arxl the DAEC.
marily because of an increase in the awrage amount of n
Depreciation arxl amortization increased during debt outstanding. Interest expense decreased $1.0 million U
loth years because of increases in utility plant in service, in 1993 because of a kmer avemge interest rate, pirtially increased amortization and depreciation of oil and pts offset by an increase in the average amount of debt properties and,in 1993, the acquisition of the UE terri-outstanding. The kmer average interest rate reflects tory on December 31,1992. An increase in the avemge the refinancing of certain long-term debt issues at pts utility property depmciation rate, resulting from an kmer rates and kmer cost short term bornmings out-updated depreciation sttxty, also contributed to Ihe 1993 starxling for interim periods betwren the ademption increase. Depreciation ami amortization expenses for all of certain long-term debt series and the issuance of their years include $5.5 million for the DAEC decommission-long term rephicements.
ing pnwision, which is collected through rates.
Miscellaneous, net reflects income of $3.5 million and The stalf of the Securities arxl Exchange Commission
$7.5 million in 19% ami 1992, respectiwly, and expense (SEC) has questioned certain of the current accounting of $2.9 million in 1993. The compirabiiity of the years mts practices of the electric utility irklustry regarding the significantly affected by the folkming 1993 transactions:
recognition, measurement and cLtssification of decom-(1) certain property w ritenkuns at Diwrsilial,(2) a missioning costs for nuclear generating stations in the contribution to the IES Industries Charitable l'oundation, fitumcial statements of electric utilities. In response to (3) a kiss on the defeasance of Industries' debentures, these questions, the Firtmeial Accounting Stardirds and (4) piins on tie sale of assets at Whiting aml IEA lhurd has agtved to review the accounting for removal aggrepiting $2.6 million. In 19W, a pdn on the sde of an costs, inciating decommissioning. If current electric utility inwstment by one of Diwrsified's subsidiaries, net of industry accounting pmetices for such decommissioning kmer intemst income, also contributal to the increase in are changed: (1) annual pnwisions for decommissioning income over 1993.
coukt inemaw, (2) the estimatal cost for dec mmissioning Federal and state income taxes increased $4.5 couki be arcorded as a liability rather than as accumulatal million aml $13.2 million in 1994 ami 1993, respectiwly, depreciation, amt (3) trust fumi income from the external The increase in 1994 is largely because of the effect of decommissioning trusts couki be mported as inwstment property related temporary differences for which income rather than as a mduction to decommissioning deferred taxes had not been pnwided that are now expense. If such changes are requited, Utilities believes becoming psyuble. The 1993 increase results from an that them would not be an ahrrse effect on its lirumcial increase in taxable income and an increase of 1% in the position or results of operations htsed on current rate Federal statutory income tax rate. Adjustments of $1.5 making practices. (See Note 1[g] of the Notes to Consoli-million, mcorded in the second quarter of 1992, to dated Financial Statements for a discussion of Utilities
- presiously recorded tax resenes also affected the proposal for collection of decommissioning costs included compirability of 1993 with the prior period, in its current mte filing.)
Other Matters Taxes other than income taxes increased $1.9 mil-The National Energy Iblicy Act of 1992 aldresses several lion and $4.8 million during 1994 and 1993, respectively, matters des.igned to pnmote compet..ition in the electne largely because of increased property taxes. The 1993 wlulesale pmer generation market,incialing mamlated increase is wlated, m. pirt, to the acquisition of the UE.
open access to the electric transmission system and service territory.
greater encouragement of m. dependent p mer pnxtuction and cop neration. Although various states throughout the
I country are currently expkiring the possibility of Utilities' liquidity and capital resources will be exparkled competition in the retail electric energy mar-affected by environmental and legislative issues, including ket, there is no significant activity underway in kwa.
the ultimate disimsition of remediation issues surrounding l
The Compmy cannot predict the long-term conse-the FMGP issue, the Clean Air Act as amerxled, the l
quences of thew competitive issues on its results of oper.
National Energy Iblicy Act of 1992 and Fedeml Energy ations or financial condition. The Compmy's strategy for Regulatory Commission (FERC) Order 636sts discussed l
dealing with these emerging issues includes seeking in Note 12 of the Notes to Consolidated Financial State-gna th opportunities, continuing to offer quality cus-ments. Consistent with mte making principles of the IUll, tomer service, on-p>ing cost reductions arxl productivity managemerit believes that the costs incurred for the above enhancements. The Compmy recently initiated a major matters will not have a material atherse effect on the project to review atxl redesign its business processes fittincial position or restilts of operations of the Compiny.
with the primary puis being reduced opemting costs, The IUll has adopted rules which require Utilities increased etficiency, and enhanced customer service.
to spend 2% of electric and 1.5% of pis gross retail operating revenues annually for energy efficiency pro-liq U1D1TY AND C A PITA L RESOURCcs grams. Energy efficiency costs in excess of the amotint in The Compmy's capital requirements are primarily the most recent electric and pts rate cases are being attributable to Utilities' construction programs,its debt recorded as regulatory assets by Utilities. At fkcember maturities and sinking furxl requirentents and the level 31,1994, Utilities had $35 million of such costs recorded of Diversifieds business opportunities. The Compmy's as regulatory assets. Urxler provisions of the IUll rules, pre-tax ratio of carnings to fixed charges was 3.38,3.38 Utilities nude its initial filing for recostry of the costs in and 2.63 in 19%1992, respectively. In 19W, cash thws August 1994. See Note 3lbj of the Notes to Consolidated from operating actisities were $216 million. 'l hese furwis Financial Statements for a discussion of the filing.
were primarily used for construction and acquisition exp.nditures and for energy efficiency program costs CONBTRUCT8ON AND marklated by the buu Utilities Itoard (lUll).
A C Q Ul SiTlO N PROGRAM The Compmy anticipates that future capital The Compmy's construction and acquisition program requirements will be met by cash generated from opera-anticipites expenditures of approximately $202 million tions and external financing. The level of cash generated for 1995, of which approximately $163 million represents from operations is pirtially dependent upon economic expenditures at Utiliths and approximately $39 million corxlitions, kyislative activities, emironmental matters represents expenditures at Diversified. Of the $163 mil-arxl timely rate relief for Utilities. (See Notes 3 and 12 lion of Utilities' experxlitures,32% ivpresents expendi-of the Notes to Consolidated Fin.mcial Statements.)
tures for electric transmission and distribution facilities, Access to the long term and short term capital and 23% reprewnts fossil fueled generation expenditures,15%
credit markets is necessary for obtaining funds externally.
represents experxlitures for steam distribution plant and The Compmy's debt ratings are as folkms:
9% represents nuclear genemtion experxlitures.
The remaining 21% represents miscellaneous electric,
_,o ps and general experxlitures. Distrsified s anticipated waoocs a paa.c.
Utilities
-Inng term debt A1 A
expenditures ineltkle approximately $26 million at
-Short term debt pl A1 Whiting. In addition to the $163 million, Utilities Diversified -Short-term debt P2 A2 anticipites expenditures of $13 million in connection with marxlated crx rgy efficiency programs. Substantial l
l commitments have been made in connection with all such expentitures.
The C<nupiny's levels of construction arxl acquisition Collateral Trust ihnis on the lusis of First Mortpige expenditures are projected to be $230 million in 1996, Ihnids,it must comply with the requirements for tir
$209 million in 1997, $235 million in 1998 and $227 mil-issuance of First Mortpige Ihuds urxler Utilities' first lion in 1999. It is estimated that approximately 70% of nuirtpiges. Under the terms of the New Mortpige, l
re i
construction experditures will be pnwided by cash funn Utilities luis cownanted not to issue any additional First operating actisities (after piyment of divi tends) for the Mortpipe Ihnxis urxler its first mortptges except to pro-l tiw-year period 1995-1999.
vide the lusis for issuance of Collateral Trust llonds, Capital exgrixliture ard inwstment arxl firuneing The Irxlentures pursuant to which Utilities issues plins are subject to continual review arxl change. The cap-17irst Mortpige lionds constitute direct first mortpige ital exp rxliture arxl imestment pnigmms may be res iwd liens upm substantially all tangible public utility prop-significantly as a result of many consitlerations inchding erty and contain cmenants which restrict the amount of chang s in economic corxhtions, variations in actual sak s atklitiinullunxts which may be issued. At December 31, ard kxd gnmth comptred to forecasts, requirements of 1994, such restrictions woukt have alkmed Utilities to emironmental, nuclear ard other nyulatory authorities, issue $320 million of txklitiotal First Mortptge lloisis.
acquisition opportunities, the availability of alternate Utilities has receiwd autixnity from the FERC to issue energy and purchased puer sources, the ability to obtain
$250 million of long term debt anti is currently autho-alequate and timely rate relief, escalations in construction rited by the SEC to issue $50 million of long-term debt costs arxl conseruition and energy efficiency pnigrams.
utsler an existing registration statement. Utilities expects to replace Iwo series of First Moitpige llorxis that mature in 1995 with other long term securities.
i.oNoronM riN A N C1N O Other than Utilities' periodic sinking fund requi ements.
Di ersified has a variable rate credit facility that which Utilities intends to meet by pledging additional extends through November 9,1997, with twu one year pmperty, the folkming long-term debt will mature extensions asuilabl: to Diversified. The facility also serves prior to December 31,1999:
as a starxt-by agreement for Diversified's commercial piper program. 'I he agreement pnwides for a combined im m m.
Iss ue.
maximum of $150 million of bornavings urtler the agree-Utilities
$ 173.7 ment arxl conunercial piper to be outstanding at any one Dnersified's variable rate credit facility 80.5 time. Interest rates and maturities are set at the time of Other subsidiaries' debt i 1.7 bornswing for direct bornmings urxler the agreement
$ 265.9 and for isstances of commercial p.per. The interest rate options are tused upon quoted market rates arxl the The Compmy intends to retinance the majority of maturities are less than one year. At December 31,19W, the debt maturities with long term securities.
$12 million was bornmed under this facility, bearing an in order to pnnile an up-toniate instrument for the nterest rate of 6.44%, maturing in January 1995. Divers-iwtmice of boists, notes or other evidence of indebtedrx w, fied also lud $68.5 million of commercial piper out-Utilities has entered into an Irxlenture of Mortpige and starxling at December 31,19W with interest rates ranging I
Deed of Trust dated September 1,1993 (New Mortpige).
from 6.27% to 6.3S% arxl maturit y dates in the first The lien of the New Mortpige is subordirute to the lien qturter of 1995, which was also supported by the facility.
of Utilitics' first moitpices until such time as all lxnt' Diversified intends to continue bornming urxler the issued urder the first inortpipes have beeri retired and gm; g, g g gg g,,,gg, n;q g such mortpiges satisfied. The New Mortpige panides for.
December 31,1994, that would prevent such lornmings.
anung other things, the iwtunce of Collateral Trust ihnis Accordingly, this debt is clawilied as long-term in the upon the lusis of I irst Mortpipe lloixls being issued by Conelidated llalance Sheets.
Utdities. Acconhngly, to the extent that Utilities iwues
l The Articles of Incorporation of Utilities authorize average interest rate of 6.13%) and $7.7 million to sup-and limit the aggrepite anmunt of additioisd shares of port certain pollution contn>l obligations. Commitment Cumulative Preferred Stock arxl Cumulative Preference fees are piid to maintain these lines and there are no Stock which may be issued. At December 31,1994, conditions which restrict the unused lines of credit. In E
Utilities could have issued an additional 7tW)JXX) shares addition to the ab(we, Utilities has an uncommitted of Cumulative Preference Stock and 1(M)JWMhuklitional credit facility with a financial institution whereby it can shares of Cumulative Preferred Stock. In addition, hxlus-bornnv up to $40 million. Rates are set at the time of tries had 5JXXVXX) shares of Cumulative Preferred Stock, bornming and no fees are paid to maintain this facility.
no par vahie, authorized for issuance, none of which wtre At December 31,1994, there were no bornnvings under outstartling at ikccmber 31,1994.
this facility. Utihties also has a letter of credit in the l
The Compmy's capitali/ation ratios at year-end were amount of $3.4 mdlion supporting two of its variable as folksws:
rate pollution control obligations.
1994 1993 long term debt.
48 %
47 %
E N ViR O N M E NT A L MATTER 5 Preferred stock 2
2 Utilities has been named as a lbtentially Responsible Common equity 50 51 I arty (PRP) by either the lona Ikpartment of Natural 100 %
100 %
Resources (IDNR), the Minnesota Ibilution Control l
Agency (MPCA) or the United States Environmental The 19W ratios inchrte $100 million of Utilities' Protection Agency (EPA) for 28 FMGP sites. Utilities l
First Mortpipe Ilonds maturing in 1995 that are classi-believes that it is not responsible for two of the sites tied as a current liability in the Consolidited llalance for which it has been designated a PRP, Utilities has Sheets, but which are expected to be refinanced with anodu FMGP site for which it has not yet been formally long-term securities.
designated as a PRP. Utilities is working pursuant to the requirements of the IDNR, MPCA and EPA to imesti-BHOHTTERM fin A N CiN G ite, miti te, present and remediate, where necessary, I or interim fin.meing, Utilities is authorized by the i ERC dear to property, inchding damage to natural resourtes, to issue, through 1996, up to $200 milhon of short-term at aW amuM da remaining 27 sites in onter to protect notes. In addition to puwiding for onpiing working public health and the envimmnent. In addition, Utilities capital needs, this asnilability of short-term financing has recently become aware that two addition:d sites may pnwides Utihties flexibility in the issu;mee of long-term exist, but it has not yet been able to determine if any securities. At ikccmber 31,1994, Utilities had outstand-liability may exist.
l ing shott-term bornmings of $55.5 million,inchding
([tilities has completed the remediation of three
$1K5 million of notes pnuble to ameiated compmies.
sites and is in various stages of the investigation and/or Utilities has an agreement, which expires in 1999' remediation proecsses for 22 sites. The investigation with a financial institution to sell, with limited recourse, process is scheduled to begin in 1995 or 19% for the an undivided fraction,d interest of up to $65 million i" two other sites. In 1994 Utilities received updated its pool of utility accounts receivable. At December 31' nvestipition reports on a number of sites, which, at 19W. Utilities hx! mkl $54 million under the agreement.
some sites, indicated a greater solume of contaminated At December 31,1994, the Compmy had bank lines soil, surface and ground water needing treatment, and of credit aggrepiting $77.7 million (industries-51.5 mil-a greater solume of substances requiring higher cost lion Utilities-$67.7 million, Diversified-$7.5 million incineration, than was anticipited in prior estimates.
and Whiting -$1.0 milhon). Utilities was using $37 mil-h k possible that future cost estimates will be greater lion of its lines to support commercial piper (weighted than the current estimates as the investipition process
o pnicceds and as a(klitional facts become know n.
by switching to kmer sulfur fuels arxl through capital lJtilities has recorded envin>nmental liabilities experditures primarily n lated to fuel burning equipment related to the FMGP sites of $31 million (including $4.3 and boiler nxxiilications. lJtilities estimates capital expen-million as current liabilities) at December 31,1994. These ditures at appmximately $22.5 million, including $4.4 mil-amounts are Insed upon lJtilities' best current estimate lion in 1995,in ortler to meet the requirements of the Act.
of the anuiunt to be incurred for inwstipition ark! reme-The National linergy Iblicy Act of 1992 requires diation costs for those sites where the inwstipition process ow ners of nuclear Imwer plants to juy a special assess-has been or is substantially completed. For those sites ment into a "llranium Enrichment Decontamination where the investipition is in its earlier stages or has not and Deconunissioning Fund." The assessment is based started, the liability represents the minimum of the esti-upon prior nuclear fuel purchases and, for the DAliC, mated cost rance. All investigations are expected to be averages $1.4 million annually through 2007, of which completed by 1999 arxl site-specific remediations,lused LJtilities' 70% share is $1.0 million. tJtilities is recover-on recommerxlations from the IDNit, MPCA arx! liPA, ing the costs associated with this assessment through its are anticipited to be completed within three years after electric fuel adjustment clauses over the period the costs the completion of the investigations of each site. Utilities are assessed. Utilities' 70% share of tir future assessment, may be iequirtd to monitor these sites for a number of
$12.0 million pnuble through 2007, has been recorded as years upon completion of remediation, as is the case with a liability in the Consolidated llalance Sheets, including the three sites for which rennsliation has been completed.
$tt8 million included in "Cunent liabilities-linvinwmiental iJtihties has begun pursuing cowrye for investige liabilities," with a sclated regulatory asset for the unre-l tion, mitipition, pre ention. remediation ard monitoring covered amount.
costs from its insuranse carriers and is imestigating the The Nuclear Waste iblicy Act of 1982 assigned potential for thirtl pirty cost sharing for I MGP investi-responsibility to the U.S. Department of linergy (DOE) pition ard clean-up costs. The amount of shared costs, to establish a facility for the ultimate disposition of high if any,can not be reasuubly determined and, accordingly, lewl waste and spent nuclear fuel and authori/ed the no potential sharing has been recortled at December 31, DOli to enter into contracts with pirties for the disposal 1994. Itegulatory assets of $31.0 million haw been of such material beginning in January 1998. Utilities reconled in the Consolidated llalance Sheets, which entered into such a contract ard has made the agreed reflect the future recmcry that is being punided through piyments to Doli. The Doll, however, has experienced j
Utihties' rates. Considering the rate treatment allowed significant delays in its efforts and material acceptance by Ihe iU11. mangement beliews that the clean-up costs is now expected to occur no earlier than 201(t Utilities incurred by Utilities for these i MGP sites will not haw has been storing spent nuclear fuel on site since plant a mateiial adverse ef fect on its lituncial p>sition or operations bep.n in 1974 and has current on-site capibil-results of opeiations.
ity to stare spent fuel until 2002. Utilities is aggressively The (' lean Air Act Amerdments Act of 1990 (Act) roiewing options for additional spent nuclear fuel stor-requires emission reductions of sulfur dioude arxl nitro-are capibility, including expuxling on-site storage, pur-p n oddes to achieve reductions of atmospheric chemicals suing other of f-site storage arxl supporting legislation to behewd to cause acid rain. The punisions of the Act will resolve the lack of progress by the doi!.
be implemented in two phases with Phase I affecting two The Iuw 1.evel lladimetive hte iblicy Amerd-of Utihties' units beginning in 1995 and Phase 11 af fect-ments Act of 1985 mandated that each state must take ing all units beginning in the year 20nti Utilities is in the responsibility for the storage of low-lewl radioactive l
process of completing the nulineations necessary to waste pnxluced within its borders. The State of hma meet the I hase I requirements.
has joined the Midwest interstate low-1.evel Itadimetive Utihties espats to med the requirements of Phaw 11 hte Compict Commission (Compict), which is plan-l
\\
ning a storage facility to be k>cated in Ohio to store Sheets for the cumulative amount expensed.
waste generated by the Compict's six member states. At c rrc cts o r iw rL ATio w December 31,1994, Utilities has peptid costs of approx-Under the rate making principles prescribed by the imately $1 million to the Compict for the building of regulatory commissions to which Utilities is subject, n
such a facility. Currently, Utilities is storing its kwv-level only the historical cost of plant is recoverable in revenues mdimetive waste gnerated at tir DAliC on site until new as depreciation. As a result, Utilities has experienced dispNil arrangments are finalized among the Compict economic losses equivalent to the current year's impact members. A Compact dispNd facility is anticipiled to be of nflation on utility plant, in opemtion in approximately ten years. On site storaW in addition, the regulatory process imposes a sub-capibility currently exists for kwv-level radioactise waste stantial time lag between the time when operating and expected to be perrrated until the Compict facility is capital costs are incurred and when they are recovered, able to accept waste materials.
Utilities does not expect the effects of inflation at cur-The possibility that exposure to electrie and magnetic rent levels to hme a signitu.mt effeet on its results of fields emanating from power lines, househoki appliances operations.
and other electric somves may result in a&erse heahh ef fects has been the subject of increased public, gtwern-BELECTED C D N S O L1 O AT E D Q U A R T E R LY mental and media attention. A considerable amount of riN A N C 1 A L DATA (U N A U DiT E D) scientific research has been conducted on this topic with-The folkming unaudited consolidated quarterly data,in l
out delimtive results. Research is continuing in order to the opinion of the Compmy, includes adjustments, which l
resolve scientific uncertainties.
are normal and recurring in nature, necessary for the fair l
Whiting is responsible for certain dismamlement presentation of the results of operations and financial and aban k>nment costs related to various off. shore p>sition. Utilities' results of operations are a significant oil and gas properties, the most significant of which pwt on of the consolidated results. The quarterly is located off the coast of California. Whiting accrues amounts were af fected by seasonal weather conditions.
these costs as reserves are extracted and such costs are The compirability of earnings per average common share included in " Depreciation and amortization"in the s affected by the sale of 2.3 million shares to the public Consolidated Statements of income. A corresponding in the first quarter of 1993 as discussed in Note 8 of the environmental liability, $0.1 million at December 31, Notes to Consolidated l'in;meial Statements.
1994, has been recogni/ed in the Consolidated 13alance i
1 QU ARTER ENDED (IN THOUS ANDE. EXCE P T PE R EM ARE AMOUNT Si M ARCH 31
.JUN E 30 st PTEMBE R 30 DECE MBE R 31 1994 Operating revenues.
$ 211,621
$ 171,117
$ 207,345
$ 195,781 l
Operating income.
35,694 28,436 56,700 27,103 Net income 15,144 10,858 28,009 12,807 l
I!arnings per average common share.
0.53 0.38 0.98 0.45 1993 Operating revenues
$ 213.077
$ 170,470
$ 212,052
$ 205,667 Operating income.
34,514 27,455 57,767 31,533 Net income 13,935 11,740 27,957 14,306 liarnings per average common share.
0.53 0.42 0.99 0.51
RCPQRT OF INDEPENDENT REPQRT OF MANAGEMENT P W D t. I C ACCDUNTANTS To alw Iloard of Directors of IES Industries Inc.:
The Compmy's nuuugement luis pregured aix! is respon-We lune atxhted the accompinying consolitLited lulmee sible for the presentation, integrity arn! <dijectivity of the sheets and statements of capitali/ation of Il!S Irxlustries convdittited firtmeial statements aixt schited infornution Inc. (an linva corporation) aral subsidiary com;unies as inchuled in this report. The consididated fin.mcial state-of December 31,1994 and 1993, and the related consoli-ments have been piriured in conformity with generally dated statements of income, retained earnings arxl cash accepted accounting principles applied on a consistent ihnts for each of the three years in the period ended lusis and,in some cases,incitale estiinates that are tused December 31,1994. These tiruncial statements are the upon nunagement's judgment aixt the best auiilible infor-responsibility of the Com;uny's nurugement. Our mation, giving due consideration to materiality. Financial i
{
responsibihty is to express an opinion on these thuncial information contained elsewhere in this report is consis-statements lused on our atklits.
tent with that in the corivilid.ited flitineial statements.
We coexlucted our atklits in accordince with gener-The Coitiguny maintains a sptem of interrul ally accepted atkliting staintards. 'lixwe staist.irds reqtiire accounting controls which it belieses is adeqtute to that we plan and perform the atulit to obtain reasoruble panide reavuuble awurance that awets are safeguarded, awurance about whether the liruncial statements arv free transactions are executed in acconLinee with maruge-of material miwtatement. An attlit inchales examining, ment authori/ation arxl the financial records are irliable on a test lusis, es idence suppor ting the amounts arkt for preguring the consolitLited tirtmeial statements. The dischisures in the hruncial statements. An ata. lit also systern of inter sul accotinting coittiols is supp u ted by inchkles assewing the accounting principles used arxl w ritten policies and pnicedures, by a staff of interrul significant estimates m.nle by maiugement, as well as auditors and by the selection arxl training of qtulitied cuihuting the incrall hiuncial statement presentation.
personnel. The internal audit staff conducts compre-We believe tlut our audits pnn kle a teasinable lusis hensive audits of the Com;uny's system of internal for our opinion.
accounting contuds. Marugement striws to maintain an in our opinion, the financial statements referred to adequate sptem of inter nal controls, recogni/ing that alwar piesent fairly, in all material respects. the financial the cost of such a system shouki not exceed the benchts position of IliS Industiies Inc. arkt subsidiary coinpirties derived. In accordance with generally ;iccepted autliting as of Ikcember 31,19W anxi 1993, aist the results of their stantLirds, the independent public accountants ( Arthur operations and their cash ihm s for each of the thice years Arxiersen I l.P) obtained a sulhcient understainhng of l
in the period erwied December 31,1994,in conformity the Comluny's inter rul controls to plan their atklit mxt with generally accepted accounting principles.
determine the iuture, timitig arxl extent of otlier tests to As discussed in Note 7 to the consolidated lituncial be performed. Marugement is not aware of any material statements, ellective J.muary 1,1993, liiS Irxtustries intenul control weaknesses.
I inc. aixl subsidiary com]unies changed their methix! of The ihurd of Directors, through its Atulit accounting for postretirement bendits other than pensions.
Committee comprised entirely of outside directors.
meets periodically with management, the inter nal auditor and Arthur Andersen 1.1.P to discuss tituncial A L -- / A /*
reporting matters, intenul control and atkliting.
m-AllTill111 ANDlillSliN 1.1.P To ensure their itxlepcixlence,lxith the interitil auditor and Arthur Arwiersen 1.1.P have full and free accew Ubicago, Illinois.
to the Audit Committee.
IW uary 3,19'6
CONOOL1OATED GTATEMENTD 0F 1NCOME iiar Ended December 31 (IN THOUSANDS. EXCEPT PER BHARL AMOUNTS) 1994 1993 1992 Operating rnenues:
Electric.
$537,327
$550,521
$462,999 Gas.
165,569 181,923 167,082 g
Other,
82,968 68,822 48.215 785,864 801,266 678,296 l
Operating espenses:
Fuel for pnxluction 85,952 87,702 73,368 l
Purthased power 68,794 93,449 74,794 l
Gas purchased for resale 120,795 135,830 128.259 Other operating expenses.
176,863 162,642 142,348 Mainten:mee.
52,841 48,913 41,415 l
Depreciation and amortitation.
86,378 77,012 69,392 1
Taws other than income taxes 46,308 44,449 39.696 637,931 649,997 569.272 i
Operating income 147,933 151,269 109.024 l
Interest npense and other:
Interest expense 46,010 44,440 45,426 Allowance for funds used during construction (3,910)
(1,972)
(3,177) i Preferred dividend requirements of IES Utilities Inc.
914 914 1,729 l
Miscellaneous, net.
(3,472) 2.908 (7,495) i l
39.542 46,290 36,483 Income before income f ases 108,391 104,979 72.541 Federal und state income tases 41,573 37,041 23.830 Net income
$ 66,818
$ 67,938
$ 48.711 l
Average number of common shares outstanding 28,560 27,764 25.389 Earnings per merage common share.
2.34 2.45 1.92 t he sa..ni arn mg A.,rn w cavna.h< tare.) I marwwt ww.nenn are an miegrat.ari <.1 thne araremenn 1
l CONSOLIDATED STATEMENTS OF RETAINED CARNINGS l*
l
)k ar Ended December 31 (IN THOUSANoel 1994 1993 1992 l
Italance at beginning of car
$ 211,750
$202,919
$202,882 3
i Add:
Net income 66,818 67.938 48.711 Acquisition of Whiting Petroleum Corporation.
5,233 Deduct:
Cash dividends declared on common stock, at a per share rate of $2.10 for all years 60,065 59.107 53,350 Other 210 557 Italance at end of car 3
($1S.20R000 restricted as to payment of cash disidends).
$ 218.293
$211,750
$202,919 1he m e omtrmurog %.10 to Cuen.*hdawJ lm.um ual Starrmenu are an mweal; art 1.f thne stateme nas
CONSOLlOATED BALANCE BHCETS Assets December 31 DN THOUBANoel 1994 1993 Property, plant and equipment, at original cost:
Utility-Plant in service-g lilectric
$ 1,798,059
$ 1,708,757 Gas.
158,115 147,956
' ther 86,005 75.845 O
2,042,179 1,932,558 less-Accumulated depreciation 880,888 813,312 1,161,291 1,119,246
- 1. cased nuclear fuel, net of amortization.
49,731 51,681 Construction work in progress.
73,339 45,566 1,284,361 1,216.493 Other, ret of accumulated depreciation and amorti/ation of $34,490/XO and $35f W)7/XXI, respectively 153,795 124.275 1,438,156 1,340,768 Current awels:
Cash and temporary cash investments 4,993 7,465 Accounts nceinible-Customer, less reserve 26,098 33,642 Ottwr.
10,388 10,421 income tax refunds receintble,
1,330 3,376 Pnxtuction ftel, at average cost 13,988 14.338 Mattrials and supplies, at userage cost 30,216 29.046 Aljustment clause lut. mees.
1,433 Regulatory assets.
20,145 14,225 Preiu)ments and other.
34,607 34,265 143,198 146,778 investments:
l Nuclear decommiwioning trust funds,
33,779 28.059 Cash surren&r vahie of life insurance policies 8,867 7,562 Imestment in Mclxod, Inc.
7,500 4,500 Other.
5,609 4,349 55,755 44,470 Otler awet4:
Regulatory assets.
192,955 148,592 Deferred chaqrs arxl other I3,925 19,211 206,880 167,803
$ 1,843,989
$ 1,699,819 liv a s sunpun um Mrs to (,*noh.l.acalimarn s.d Arairmeren are an uurgnd pwr of dww statemeret
7.,,.......,
Capitalliation and 1.iabilities vecember 31 (eN THOUB AN DS) 1994 1993 Capitalization (See Consolidated Statements of Capitaliention):
Common stock.
$ 373,490
$ 360,301 l
Itetained earnings.
218,293 211,750 7
i
'Ibtal common equity.
591,783 572,051 Cumulatiw preferred stock of IES U:ilities Inc.
18,320 18,320 473,206 522,343 '
long-term debt.
_1,083,309 1,112,714 Current liabilities:
Short term bornwings.
37,000 24,000 l
Capital lease obliptions 14,385 15,345 Maturities and sinking funds 100,422 464 Accounts piyable 78,582 53,980 Accrued interest 9,494 9.471 Accrued taxes 44,897 42.368 Accumulated refueling outage pnwision.
15,196 2,660 Dividends payable.
15,839 15,519 l
Adjustment clause tulances.
5,149 i
Pnwision for rate refund liability.
8,670 linvironmental liabilities 5,428 4,871 Ot her.
21,844 23,127 343,087 205.624 tong term liabilitles:
Capital lease obliptions 35,346 36 336 linvironmental liabil; ties 38,288 21.324 Other.
58,793 45,231 132,427 102,891 Deferred credits:
Accumulated deferred income taws 245,365 236,131 Accumulated deferred investment tax credits.
39,801 42,459 285,166 278.590 Commitments and contingencies (Note 12)
$ 1,843,989
$ 1,699,819 g
C O N D O LI D AT E D ETATEMENTS O f" CAP 1TALIZATION Unemba 31 tlN THOUSANDS) 1994 1993 Conimon equity:
Common stock-no gur value-authorized 48/XX)/KX) shares; outstanding 28,777946 arx128.3N.188 shares, respectively.......
$ 373,490
$ 360.301 g
Retained earnings..
218,293 211,750 591,783 572,051 l
Cumulative preferred stock of IES Utilities Inc..............
18,320 18,320 j
1.ong. term debt:
I lliS Utilities Inc.-
Collateral Trust flotwis-6% series, due 2008.
50,000 50.000 7% series, due 2023..
50,000 50,000 5.5% series. due 2023..........
19,400 19,400 119,400 119,400 First Mortpge llorxis-Series J,61/4%, due 19(X) 15,000 15,000 Series L,7-7/8%, due 2(MN).
15,000 15,000 Series M,7-5/8%, due 2002......
30,000 30,000 50,000 50,000 Series W,9-3/4%, due 1995 Series X,9.42% due 1995..
50,000 50,000 Series Y,8-5/8%, due 2(M11..
60,000 60,000 Series Z,7.60%, due 1999.
50,000 50,000 6-1/8% series, due 1997 8,000 8,000 9-1/8% series, due 2001 21,000 21,000 7-3/8% series, due 2(W)3.
10,000 10,000 71/4% series, due 2(M)7.
30,000 30.000 339,000 339,000 lbilution control obliptions-5.75%, due serially 1995 to 2003 3,696 3,920 5.95%, due 2007, secured by First Mortpge llonds 10,000 10,000 Variable rate (5.45%-5ML at December 31,1994), duc 2(XM1 to 2010..
I l.100 11.100 24,796 25,020
'Ibtal IES Utilities Inc.,.
483,196 483,420 IES Disvrsified inc.-
Variable rate credit facility...
80,500 32,000 Other subsidiaries' debt maturing through 2013..
12,5H4 10,510 576,280 525,930 Unamorti/ed debt premium atxt (discount), net (2,652)
(3,123) 573,628 522,807 1 ess-Amount due within one >rar.
100,422 464 473,206 522,343
$ 1,083,309
$ 1,112,714 1he en aepes;mg Mrs e,* Cem.nind.urd Iuwnial % atemerus an im ourgral wrt of tow,e statemerest t
1 1
c O N. tB o t I D A T E D t$ T A T E M E N T S OF CASH F t. O W S Year Ended December 31
. (IN THOUBANDB)
'1994 1993 1992 Casih Nows Inan operating actisities:
Net income
$ 66,818
. $ 67,938 5 48,711 Adjustments to reconcile net incane to net cash nows frmu operating activities-3 Depreciation and amortization.
86,378 77,012 69,392 Principal payments under capital lease obligations 16.246 11.429 11,725 Deferred taxes and imestment tax credits,..........
4,050 9,254 (1,374)
Refueling outage pnwision....
12,536 (4.689)
(5.503)
Alkmance for equity funds used during construction....
(2,299)
(824)
(1,831)
Other.........
4,859 8,764 1,761 Other changes in assets and liabilities-1 Accounts receimble..
6,777 (8,861)
(4,000) l Pn> duction fuel, materials and supplies.....
(1,184) 5,836 83 Accounts pouble....
21,871 7,984 (3,894)
Accrued taxes.
4,575 7,549 7,111 Pawision for rate refunds (8,670)
(350) 7,528 Adjustment clause balances (6,582) 6,366 (4,122)
Gas in stomge 1,135 (2,300)
(7,908)
Other..
9,206 '
(7,669) 7,136
)
Net cash flows from operating activities....
215,716 177.239 124,815
- Cash flows frmn financing actisities:
Dividends declared on common stock..
(60,065)
(59,107)
',53,350)
Dividends pnnble...........
320 1,727 13,679 Proceeds from issuance of common stock 16,426 79,746 10,726 Pmthase of treasury stock....
(6,233) l Proceeds fnm issuance of long-term debt 60,140 146,734 114,400
[
Reductions in kmg-term debt and preferred stock (9,790)
(126,803)
(70,158) l Net change in short term bornmings..
13,000 (68,000) 51,100 l
Principal payments under capital lease obligations (16,304)
(11.276)
(12.337)
Sale of utility accounts receivable....
800 10,490 7,710 s
O t her.....
(177) 1.247 (29)
Net cash Ikwvs from fintmcing activities.
(1,883)
(25.242) 61.741 Cash flows from imesting actisities:
Construction and acquisition expenditures-Utility (138,829)
(113,212)
(171,013)
Other....
(62,723)
(50.432)
-(20,821)
Nuclear decommissioning trust funds (5,532)
(5,532)
(5.332)
Deferred energy efficiency costs.
(16,157)
(9,747)
(6,877)
Investments in unconsolidated affiliates (4,956)
(5,373)
(686)
Proceeds from disposition of assets....
8,803 28,790 1,106 Other....
3,089 3,633 642 Net cash Hows from imusting activities.
(216.305)
(151.873)
(203,181)
Net increase (decrease) in cash and temporary cash imestments.
(2,472) 124 (16.625)
Cash and temporary cash imestments at beginning of year 7,465 7.341 23,966 Ca h and temporary cash imestments at end of year...
$ 4,993 7,465 7.341 Supplemental cash flow information:
Cash piid during the year for-Interest.
$ 47,094
$ 44,697
$ 41.747 income taxes
$ 36,097
$ 22.179
$ 23.539 l
Noncash investing and financing activities-Capital leaw obligations incuried
$ 14,297
$ 14,605 1.973 The accewnpmy mg %ses to Gewddued he,arnd $s.ucmcres are an uuegnd part af thesc.uatemenn
NOTcs To C O N B O L1 D AT c o F1NANC1AL STATEMENTS EUMMANY OF BIG NIFIC A NT UN MiLUONS) 1994 1993 ACCDUNTjNO PO Lt CIE B Deferred income (Jts (Mite l{dl).
$ 90.1
$ M8.6 laj liasis of Conuilidathm Tir Gmvdibted finaneul Statements I:nvinomental h.hhties (Nwe 12ll]) -
43.N 25.4 irm hwie the acetontus !!.S Indmitics Inc. (imiustries) amt its cimwili.
I'nergy cf heierry pnyrams (Nde 3lbl).
34.7 1 M.5 h
dated subskluis f cidlectistly Or Gunpm)). All sutwiharies for limpkiyte penskm and benefit costs (Nte 7).
25.0 14.1 whs h Imhntries im ns directly or indirectly nunc than.Wb (4 the i fiRC Onler Nw 636 transitkm cmts (Nite 12[h]).
8.0 5.0 w*ing stock are irrhakd as conwihdated subsiJunct industries.
Unansun/W ims on inquired tkht 6.1 6.4 wh dly-ow ned subudunes are liiS Utahties Inc. (Utahtics) ursl IES CanccHed plant costs.
2A 3.3 1
Diversified inc. (Diverufied). All signihcant interctunpmy imLmen N "*
3#
IO armi transactums, otirr than energy related transactkins affectmg 213,1 162.8 Utahtrs, h.ne been chminalid fnen the Gmvdalated Hnancial Gauhed as Tunent amu-nyulator y awn" 20.1 10 Statenrnit Such errryy related transaetsm are m.ule at pnces ttut G.nuned as "Other aswts-nyulatory assets"
$ 193.0
$ 148.6 approssmate market value arsi the associated cirts are nxtnerable 1
frten Utihtics' custtimers thrtogh the rate making process.
Refer to the indhilual foolnotes referenced abine for a fordrr l
Imtstments for whnh die Gunpmy has at least a 20% interest discusuon of certain items reflected in regulatory assett are generally.scounted for ursier the equity mc0msl of accounting.
Ihese imntnrnts are stated at acquisitim cost,increawd or (ktreaul Idl Income Tuuv1 he Oxnomy folkms the liabihty medud of i
l for the Gwnguny's equity m urshstnbuted net incisne or km which is accounung for deferred income tars, which requires tir establishment inthkled in "Internt expenw arsiinher-Wecibrrim net" in Or of deferrtd tas h.hhtrs ami awts, as appnipriate. for all temporary Cims Anlatal Statements of Income, differerwes bdween the tas htus it asse arst habihties and the Ctrtam prior per kst amounts h.ne been re(lasufied to a lusis amounts repot ted in the financial statements. Dcferred tars are conshtent uith tir 19W presentatum nronted using currently enacted tas rates.
1% cept as noted bekm. income tai expense inchsles pnaisms lbi Regulathm.lletause of its im rersinp of Utihties. Industnes h a for tkferred taws to reflect Or tax effects of temp rary differences hoklmg cinnpmy urskT the Pubhc Uuhty llokhng Comp ny Act it hetwven the time wirn certain costs are recorded,m the accounts and 19M tot (l.ums an ermpino inun all pns hn ms Oiereof escept when tiry are deducted for tax return purpmet As temporary differ-Set tum 9(a)(2), w hich apphn to the purthase of suwk of 00rt unhty ences roerse, the tvlated accumulated (kferred irwome laws are vunpmis Utihtin n subject to styubtaw, or hma Uuhun thiard roersed to meome, Imestment tax credits for Utihties hae been 11U111 assi Or I cdcral 1 nerp~ thyulator) unnmhsko (IT RC).
deferred and are subscytrntly credited to inconic mer die aserage icl Regulatory Awets Uuhues n subret t s tir pnnisam t( State-livn of the related property.
ment of firuntul Acimnting Starmbrds N 71. "Acetuntmg for Or Gmhtent uith rate makmg pracSces for Utihtks. deferred tas I fkytud Certam T)in of Rtyulatum"(SI AS 71). Ihe nyulatory espense is nt4 nrortkd for certain tempery differenccs (primarily assets reprnent pnihible future rocntr to I tihnes awocuted with related to utihty pniperty. plant aml equipment). Accordmgly. Utihties certain irrurred costs as these cmts are stu sered through the rate has reconkd deferred tax lubihues and nyulatory assets. an idenutkd l
makmg pnwns. At Decembes 31, regulator: and as retktted in the in Nte 1[cl.
Gowdabkd llalante Shete wrie (tvuprne of the fidhming items:
=
6
bl Temporary Cash Inmtments Tempirary cash inststments are See "Manap ment's Di.scussam arul Analpis of the Resultwf itated at cost, which appnrumates market salue, ami are consakred Operatums arwl l'irtmeial Conditu m" for a discuwu m of mdustry issues car.h equivalents for Or Consdulated Statementud Cash I kms.
raised by the staff (4 de Sl:C arki a finimcial Accounting StarkLtals
~ihew investments consist of dort term hqualinsestments whwh Ihnni rnicw nynhng the electric utihty uthntry method (4 account-have nutunties of kw than % lap Inun the due of acquisituin.
ing for decommissionii.g costs.
h IIl Depreciation of CIHity Property, Plant aint l'quipmentJik
{hl Alkmance for Furuts (Ned During Construction The alkmance merare rates of depreci.itu o for ekxtric and pis priperties of 11tihties, for fursh used during civntrtwtum (Al'C), whwh represents the cost inchahng l!tihtici nutlear pieratmg statu m, the I Ahur Anniki i nergy during tic ctostructsm peraxiit funds uwd for nwntructkm pur-Center (DAIT), whkh is bemp depariated invr a 36->rar life using posts is capit.di/cd by Utihties as a coinponent of the etwt of utihty a remaining hfe method. annistent with ctn rent rate making pratices, pLmt. "I he amount if Al C apphcable to skht fursh and to other wvre as follows:
(equi? ) fumh. a non cash item, n ctunputed in acconlance with tlw i994 i993 i992 pn senbed i I:lK' formula. The aggrepite gniss rates uwd by Utihties lilatric.
3.fi%
3.5%
3.5%
for 19%1992 wvre 9 3%,17% ami V2%, respectarly Gas 3.H%
3.5%
30%
lij Oil and Ga* Pnipertin Whiting Ittndeum Coenpins (Whiting),
a windly-tuned suhsn.liary of Dnersified, uses the full cost metini of lg) Dcomimiwinning of the D WC Induded in Utihtici piopowd accounung for its oil and pis pnpertiet Accordmgly all costs of acqui-dectne rate iirreaw dncuwn! in Note 3(al is a pnyosal to increase uthm.exploratain and devckyment of pnperties are capitah./cd.
the annual nuncry of anticipated onts to dectwnnussum the DAl C Ansirtiratum of pnned oil and pts pnperties is calculated using the to a(pioxunately $9 rmlinui annthilly Ironi tlw current lorl of U.S umts of prohrtum metinid, At IArember 31,19'A c.ipitali/ed costs nullu m. Ikcommnsk ming opciise is irwhkled in "Depreciatum and less related accumulated ensq ti/ation di not esceed the sum of (1) drhtirli/alu m" til liv ('onsidklatcJ Staternents of Irwoitw arsi the the prewnt valuc of future net tornue Inun ntunated pnsluctkm of cumulatne ansmnt n mcitated in "Accumulatn! deprecutnin" iri the pnned oil and pts resenn (calculated using current prico). plus (2)
Consolatated Ital. rec Strets to the estent rectnered thniugh rates.
the cost of pnyrrties not being amorti/ed,if any; plus (3) the kmer 1 he pn3usal is hned on the foll. ming assumptionv 1) cost to of cost or estanatal fair vakr of unpaned pnpeities included in the tiecomnuumm the DAl'C of $252.7 nulinin in 1993 ddlars, twed costs being annirti/cd, if any; kss (4) unune tax dfects related to def.
on the Nuclear Regulatory Otennuwion (N RC) nunimum formula Ierences.m Or biok arm! tax hasis of oil and pts pugrrtiet See Note (which exceeds tie amount in Or current ute4ptuhe staly ownplettd 12lfj for a d'seuwion of dnmantlement ami ahuskoment etnts awoci-in 1994). 2) milainen of 4 91% annually to Or 3rar 2014. wten skuun-ated w ith ces tain oil aisl ps protyrties.
mounming n c%pcCled to bcgth,3)llW pnWnpt d% mantling alk!
tennnal nwdul of (kuunnussn wung. 4) usmthly f>nkng of all future ljj Operating Itoenun The Compmy accrues rnentes for scruces colkrta os mto external trust f umh,us! f umkd on a tat-quahlied hnis rerstered but unhlied at month-emiin order to rnore pnperly match to the ettent pnuble. 5) an metan; af ter tat nturn of ru2% for all revenues wi h eyrn et estet tul irnntnients arsi 6) adlet ta m id the ce nts on a straight hne
[kl Adjustment t lauwo Utihhes. tariffs pnn kle for subsequent hnn,in real terms, thniugh 2014 Current lock of rate rtunely 1) aljusternts to its electne arkl natural gat ratn for changn in tir cost di not nuipm/e estimated f ut ure inflatum for itr entire perni pnor of fuel arti purthned errrgy and m the cost of natural pn purchased to onnnwncenwnt (4 Or deuunmnsu ming pnicew,2) awume that for reule Changes in the mskrrwer cidlectum of these costs are tkuunnuwaming Ivgins in 2010, amt 3) pan kle nunct) in a st raight-g,
g d W M" M lue hnn w nhout omsklenng tte ef fetts of inflatnin. At Dorember 31.
d d W uwm d b e Ur m & W dfe we 19% Ctihues hal U3S nullum unoted in estern.d (kunnmnsunung d m W Cmdhd hw Wm a a mm W w w trust fumh.n nsheated m Or Considulited llalance Mwets, atal aho rent hahht). pershng automane nilecta m in future Nihngs to cusionwrt h.nl an mieirul(kunumiumming reserse of $21.7 nullnm reconkd as acumulatut depteuanon 1:armnes in the cuernd tiust furtis whwh lIl Accumulated thfuding Outuge Pnnhion ~1he IUll alkms wrre $10 nullam m lek are nronkd :n internt unone assi a corre.
L 'uhues to odktt. as pirt of its hne roenues furah to ofIset oder spushng internt cyienw pnable to the fursI3 n nronkd Die canungs olwratmg am! m.unterunce eyrixhtures incurnd during refuchng accumutne m the ettenul tr ust lumi tularwes and in Arumulital outages at the DAl C. As tirw nwnues are collected, an equisalent sk pet utum im utihts plant.
annont n durged to other operatmg ami mamienance ey enses with a un respwxhng credit to a nserse. Dunne a reftthug outape, tie reserve n rocrwd to of het die reiuchng outagr eyrmhtmet
9 a ACQuaeiTeoN oreawA a E RVIC E TENR1TOHY ytLintlfled their pnithms have generally argued for a price decrease.
OF UNOON ELECTRIC COMPANY but ihme as large as that poposed by the OCA.
Flfective Ihrember 31, IW2,l'Ohties purchased the knva distnbutum Utihiies cqwels to recche an order fnun the IUllin Niay 1991 system an61 a pirta m 64 tir knm transnnwn e frihties of linam i krtne lhl 1994 F.ncrgy l{ffie.wney Cost knmery Filing..the IUll has E
Ownnmv (l!!;) for ;qpuximately $M imlinin m cash. 'I he net twwik ad pted rules that maalate Utihties to sperst 2% 44 electric artl 1.5'%
value of the acquired assets was a;pioumately $35 rmitam arsi the of pts gnns retail operating rtwnues for encryy cf heiency pnyrams.
l anniunt t4 the pianitne prite in exci'ss is the biok wihr (a;puni-Uraler pnnismms of tir 11Ill rules,iri Attgust 19'R tItihties ;gyhed to mately $W millum) has been reconktiin an acquisitum af niment.
tir IUll for recinery of appnaimately $23 millkin arxl10 millkm for
't he acquoitum aljustment n being amortired (ner tir hfe of tic the elette r arsi pn pnyrann respectntly, related to onts irwurred a
pnperty arsi the annwh/atum is intluded m " Interest espense and thnogh 1993 for such pnynuns. The $1n millam total for tir electne ottrr-Nhseellarran. art" in the Omsidalated Statements of ineimie.
aid ps pnyrams n.etunpowd of $21 nullkm of dintt espetsfitures Rectnery if the acquisitu m.nipntrnent thnogh rates h.n hten retposted arti carry ing etnis (reconkd as a " Regulatory asset" in the O mvih-m 1:hhtwi current electric rate hhng, which is dneussal in Mte 3la[
dated flat.mte Strets incluthng $3.h nulla e as current),17 nullkm for See Mte 12[bl for a dneuwkm of tte purchase peer cos. tracts a return on tir experwhtcres mer the rectner) Irrkd ard SS nullum hetween Unhties aist Ul awiciated with this acqunitism kw a nwird hned im a shanng of the benefits of ukh pnyrams.
In (ktober 19'M the OCA and an intersenor in the pnweetling 3
NATE MATTERS filed tirir direct testimony. ~l he pnncipd ddfererte between (fukties lal 1994 I httrk Hate Case In 19% Unhhes.qvhed to the IUll for anti the other puties is approximately $7 nullk n in the reward caleu-an increase in nt.ul electric rates of approumately $2h rnillu m annu-latun lleanngs in tir proceedmg were heki m Jaauary 1991 Any ally.or 5.2% Utihnei pnqwnalirrhales :qvnnunately $12 nullam increase appnned by tir IUllis suit espected lo be ef fective before in annual roenue regmrenwnt related to mereasul reemery lesels Apnl lWS, arwi reemer) will be mer a hiur-> car ;rraid with a return of depectatum expense asst nuclear &commnsuwung eyrnse. ~10 allowed on tir unreemeral portion mer the reemery penod.
the estent these pnipnah are.qpnned by the 11'l6, correspnhng un reaws in eitpense walk! be rtconkd ais.1 there woukt be no ef fect
,,g, im irt urome M imeinn increaw w n requested t 'tilines has a captal lease emering its M unths kled interest in 1he Otf.cc of Consunrr Aaucate (OCA) filed a petituin m ntAlear fuel pun.hased for tir DAI C. l'utute purchaws of fuel may corusvuon with thn pniecedmg to redute the rates for retail ekxtric aim be akkd to tir f uel lease. ~l his leaw prmwles for annual one-> car senne by appniumately $27 nulinm or 55% 1he pnmary dif fer-estenskins anti l'tihties mterth to ewrcise such estenskm thnogh t nees httween the anumnt of the increase reytosted by l'tilities arkt tir I)Al CN operatmg hfe, Inferest etnis urnier tir lease are tused on the &trerne pnipned by the OCA are. !) a IW6 return on coin-etunmernal pyrr costs meurred by the leww. Utihties is resposible nuin equity requested by Uhhties ownpired to 111% propned by lor the pn ment (4 taics, mamten.mee, operating cost, tok of kas assi tir OCA; 2) OCAi re tan of Utihhei pnpisal to us rease colkv-insurance relaimg to tir leasett f uel.
tam for decomnuwn wung the DAl C; 3) OCAN reption of l'hhtici i tr lew w has an $m nullum cruht agnenwns with a lunk sign pnposal to urrease depreciath m r iics 4)(X'Ai pnenal to reJeet pwiing tir ntAlear fuel lease..I he agreenwnt uminnrs on a year to-> car nwnt of Uhlitici tet rst to reoner an acqunium at!)uitment associ.
hnn, unlew cittrr piits peu Kles at least a thnv year notre of ternmu-alett with it$ aquNthm of the lin%a seh KC terntor) of l'IN ark! 5) tu m; thi suth notice <4 ternuruth m h.n twen prmitkd by either pirty.
an al ntment to test Star vies ksch popweil by the OCA. If a rate Annual ntwicar fuellease expenses irrhale tir e nt of fuel,lused nductam k ultimately unkred by the ll'll, tir reshktum wouki be on the gnantity of Irat pnshred for the peer, I clettne encity.
eflectise fnun Ostuber 22 l'M ark! rewnues colksted beyonti that plus the leseriinterest costs related to fiel in tm er or and atiminn-date wtokt be subjett to relmd to the estent of tir reilucinin,qrnned tratne espenses. I hese c yrnses (irx haled in "l'ucl foi pnductuin" in by the 11'It, if any As of ikeemtwr 31, l'M L'ulitici resenues cul-the (.onsoldated Staterirnts of Inomic) for IW -lW2 were 117.8 inil-krted subpt to reiuist were.qprounutely $5 nullan In c. $12 4 nullnin ard $12.9 nullam. respectnely Interwnors in the proteethng aim subnnited fihngs m October I he ComIunsi operatmg lease rental e yrnses for luu4_ tw; 19% 1 hese puties whsh p unanly repewnt irsliskhul of grasps were $11 I nullum, $91 nullnin and $77 nullam. respectnel).
of custiwners. gritrath theet to gurtrular elements of the pire na tease and ('tihtici p re design propa Umwe nuerwoots that 1
l
~lhe Cisnpiny's future minintum leaw payments by year are
't he metall effective income tas rates shown beks for the years as folkms:
crskd December 31, were computed by dniding total incorne las o~ rsnumanom>
l caperat onemarma espenw by income before income lases.
vran trase traars 19 6.
$ 15,6'14
$ 8.549 Matutory I'ederalincome tas rate..
35.0 %
35.0 %
34.0 %
i
!?m.
15.653 N479 Ak! (tkduct):
19 0.
12.942 5.674 State income taws, net of IVM.
6.394 4.245 l'ederal benefits 5.9 5.5 5.M I
197L 4.176 3.109 liffect of pnycrty rtlated temporary M O-2t02.
1.267 601 differences for which dtferred taws are not pnnitksi untkr 56.066
$ 30.657 rate making principles.
3.0 1.5 0.4 LeM: Ankumt reprewnting intetest.
6.335 Amortilathm of imestment tas credits (2.5)
(2.6)
(3.9) hesent salue of rai minimum capital lease pn ment s.
149.731 Resersal thnnigh tariff s of tkferred taws pndksi at rates in excess of the current statutory l'etkral e U riLITY ACCOUNTS R E C EIV A U L E Aljustnwnt of prior peritd taws.
(1.6)
(2.3)
(1.6)
Customer accounts receivable. includmg unbilled resemrs. anse pri.
Other items net.
~
(O.1) 0.6 marily Inen the sale of electriary aid natural pis. At December 31.
Oserall effectise inconw tas rate 3N.4 %
35.3 % 33 9 %
19'Li, Utihties wm wning a darnitied tuse of residential, cisnmercial and irmimir al cusionwn consisting of appnmimately 330juo ekstric an61 173Jx 0 pn customers.
'I he accumulated del'rred income taws as set forth bekw in the Utilities has entered into an agreement, which espires in 14r),
Consolidded llalance Sheets at December 31, arise Inun the folkw.
with a hn.uwial instituta m to sell, with finnled recourse, an ursinitkd ing temporary differences:
on mtuonsi 1gg4 i99a fractumal interest of up to $65 nulhon in its pool of utihty atcounh recenabi.:. At December 31,1994, $54 millum um sok! under the Ph'perty related.
$288
$280 Investment tas credit related.
(28)
(30) i agreenwnt.
1 lkeommissisming related.
(13)
(12) l Ot her (2)
(2) e INCOME TAMEE
'I he components of I ederal arkt state income taws for the yean
$245
$236 ersled December 31. r ere as folkmv E D E N E FIT F8 L A N S on mtuoN58 1994 1993 1r92 Current tat esgwnse.
$ 37.5
$27.8
$ 25.2 lal pensiim Plansd he Cornpiny has one contnbutory and two non.
Deferred tax cyvnse 6.7 14.1 1.4 contributory retirement plans that, collectively. coser substantially all of its empk ces. Plan benchts are penerally tused on years of senice Annitvata m anti adjustnwnt S
of imestment tax credits.
( 2.6)
(4.9)
( 2.8) and compensation during the emphgees' Litter years of emph ment.
9
$ 41.6
$ 37.0
$23.M Paynwnts m mle Inwn the pensum funds to retired empknees and benenciaries during 1994 touled $9.9 milluin.
The Ctwnpmy's puhey is to fund the penskm cost at an amount
=
that is at least equal to the minimum furding requirenwnts mandated by the I mpk ec Retirement inconw Security Act (liRIM) and that 5
d es not eseced the masimum tas dettuctible amount for the year.
1
pursuant li. the punwiims of SI AS 71 certam aljustm nts to
{b] Other 1%temphn nwnt Itenefit I'lanwThe Coingmy pnn ules cer.
Utahtici penskm pnniske are treessary to reflect the neasunung for tain berrfits to retirees (primanly health case benefits). Through 1992, peinum costs aikmed m its nwist recent rate cases the Cornpm> cxpensed such onts as berrlits were pud ($2.2 millawi
'Ihe ownponents of the penam pnn e. inn for tir 3rars ended for 1992) which was consistent with rate making practices at that time.
E ikeember 31 were e folkw I fIcetne January 1.199\\ the Company akpted SFAS 106, which gums W xend d the ewkd ont of pntmtirt ment Matts am mausasomt i994 1993 1992 Sersice ont
$ 5 H63 $ 4.3 42 5 4.529 other than pensn os stunng the empkweci years of sersice. The IUD Interest etwt on proiceted he ak pied rules stating that postretirement benefits other than pen-benefit obhpitam.
11.431 11.314 10,219 sions mill be irwhided in litihtici rates pursturit to the progisitos (4 Anunwil return on pLmi asxts.
(12.593) (12.363) {l1.872)
SI AS 10(t The rules permit Utilities to amortire the transitam obhga-Amorti/atum of unrecogni/ed piin (IMO)
(767)
U 35) tion as of January 1.1991 mer 20 years and require that all annunts Amortiratkm of prkn seruce ont.
1.354 1.213 956 odlected are to be fumled into an external trust to piy benefits as they Anuuti/atnm of unrcoymied plans' heunne due. Beginning in 1991 the gas portkm of these onts is twing mwis ns ut January 1, tw7 1333)
(389)
(389) rennered in Unhues' pis rates and is funded in exterrut trust funds.
itnsao uwt.
5.542 3.350 3.308
.h IUH h Mi ted a rule Ait permits a deferral of the incremental Aljustnrni to fwshng kvel.
(5.4316 I?.940) 294 ekrtric SI AS 106 costs until.ie earker of: 1) an onkt m an ekstrie
' hit il p 4 m oists pud to rate case, or 2) Ikcember 31.1995. Accordmgly, pursuant to the pnnd g
y,
, g y
6 m of SI AS 71. Utihties h.sl deferred $16 ruillkm of such car,ts at Actual niurn on plani aswis (97) 112.880 $ H.949 December 31.1994 Utihties has requested rectnery of these costs in the electric rate case discussed in %te 3lal A reconcihatioa of the f urated status of the plans to the amounts
.D d
for the non-regulated operatums was recogni/ed in the Consolutated Halure Sheets at Iktember 31, is pre-expensed in 1993 ami is reflected in other operaung expenses.
The coingwients of postretirement beidit costs for the years iocuaan m moumasomi 1994 1993 c xted Decernber 31, were as folkm I air market whic (4 plani aswts.
$167.535 $176.935 (iN THOoB ANDR) 1994 1993 Acttwaal present mlue of bedit' Serciec owt.
$ 1.H38
$l 744 rerak rul to date-Accumulatal bersiits hnsed im e unpensatam IntereM emt on accumuLited postretirement to date, uwkahne vnted beruhtus bencht obhgithm.
3.275 3,363 19K M4D00 armi $102/i21M respectnel).
10N5M5 112.56i Actual return on pLms' assis (47)
Akhtm wul benefits tml on estimated Anwntuatno of transitam oblipthm custmg at future salary kwels 40.146 43.673 January 1.1991 for regulated operatums 2.024 2,024 prop ted beimtit obhpitam.
I4N 731 156234 Amortitatu m (4 unrecogni/ed aswt kiss.
(13) plani mwts m eteen of projecied Anwittitathm of unrectyni/cd pun (6) benefit obhpitum.
IH.H04 20.70i flemaimng unnuynued trt asst
~
custmg at Januar y 1.1987. being Write off of tnmsition tbliptuo existmp at answtued ener 20 ) cars.
13.844)
(4.177)
January ).1991 for non-rquiattd operatans 1.434 tinreuyni/cd praw serence ont,
18.260 16.985 1%tretirement benefit uwts.
7.090 H 565 l'onuym/cd net pun 134,420) (29.27 N)
Ins: Ikfer rnt postretrrenwnt benefit costs.
2.732 2.85 H prepikt (acerued) penn m ont rtuynued Net poseretirement benefit costs
$ 4.358
$ 5.707 in tir Consolklaved llalance Mrets.
$(1.200)
$4.231 Awumed rate of return, all plans 8.00 %
N 00%
%eightal anerare dneutml rate of piojected berrht obhpit u m. all plans.
H.25 %
7.50%
llanpc of msumed rates of urreme m future oimpensatun kweh los the plans.
4.00 5.75% 4. tin 175%
l l
A rec,wrahatim of the furakd status if tic pLms to the amounts
% CDMMDN BTDCK I
rtcognised in the Omydalatetl llalance Sheets al thremtwr 31, is The folkwing table presents informathm relating to the swuance of presented bckw:
ctwnmon stock.
NUMDE M OF (DOLLa4RW IN THoumANust 1994 1993 BHAREE (DDLLARBIN THOUSANDSi DUT E T AN DING AMOUNT q
l air market valuc of plans' awets.
$ 1,127 $ 1,171 llalance, December 31 lWl.
24,298.807
$ 260.414 Accumulatext pntretirement benefit obhpitswr Stock plan issuances'.
404,324 11,473 Active emph ees not yet chgible.
IN,M96 19,092 9
Shares issued in omroctum with Active empkgees chpible.
5,306 4,294 the Whiting nrrger 853.H32 7,923 Retirees.
IH,602 20.739 Italance, December 31,1992.
25,556,963 279,810 lotal accumulated pr tretirement Pubhe offering 2,300.000 66,555 baniit obhpitum.
42,804 44.125 Stock plan issuances'.
447.225 13,936 l
Auumulated p atr 1irement benefit oblipituiti llaLuwe,1)ecember 31,1993.
2H,304,188 360,301 m excess of plans' aswts,
(41,677) (42.954)
Shares issaxiin ctwurctum with linrcoigm/ed transitam obhpitam.
36,439 38,463 acquisitkm of OLie Ownpmies.
139,102 4.027 linrecogni/oi nct pun.
(5,703)
(1,175) p a
mik (213,300)
(6,233) 1Inrcoignized prh >r service cost 170 SM plan issuances'.
547.056 15.395 Accrutd pwtretm meni bencht cost m tir novdatated llalarre Strets.
$f10,77 D $ (5.666) llalance, December 31,19'4.
2 M,777,046
$ 373,490 Shares reserved for issuance pursuant to tir Gunsmy's siwk plans at Auumtd rate of return.
8.00.
H.00%
Decernber 31,19'4*.
2,457,397 Waghted avery/ disuiunt rate of accumulited
. pn.g,.nd Re anmtmens und arm a Pun hair Plan, i mplowe Arm a Pun haw pstretirement betrht obhgatnm.
K.15'%
7 5U'N Plan, implowe Suone Plan, long&rm ina ntn-e Plan nlIW.11.5 ffonus Mshcal tresal on pil charp s:
Som a ownenhsp Plan and Hhurmg Sim a Optum Plans iniimi t retsi mte.
I1.00.
I2.00' in 19(4, Industries issued 139,102 shares of its ownmou ntock for (litimate treral rate.
6.5fL 6.50'%
t}c purt haw of certain compmics, collectively referred to as the Okie nunpmies in a transactam that was accounted for as a purchase. Ihe Tic assunrd medical trerd rates are critical assumptums in Okie Ownpimes hold oil and ps pniperties in the United States and htermming tir service ont arsi accumulatal pistretirement benefit are raw wtudly-owned subsitharies of Whiting.
ubhpituo related to pr,tretircirritt bertfit onts. A l'b chang m the During lwa, irsiustries reacquired 213.3410 sluucs of its etunnnn medical t retal tales, h ikhng all ot her awumptkww constant, wouki skwk to the open ntuket, at an averag price of $29.22 per share, which h,iw changni the 1954 senitc ont by $1.0 milla m (20'A) and tir were subscyuently issued to tir Divklerd Remwstment Pkm armi cer-accumulatal pistretirenrnt bersht obhpitam at I Arember 31,19'4' tam of its bencht plans. At December 31,19'4. tu shares remairrd hekt by $6.8 nullam (WL).
as treasury stock.
On Jamsary 1,1994. the Gwnpmy abpted the prmisums of in tir first quarter of 1993, Industries suki 2.3 rnillkm shares of SI AS 112. "limployers' Accountmg for l'ostempkg ment lierrfits,
its owmnon stak in a pubbe offering. The sluucs were priced at $30 ard its abptum dn! not have a material cf feet on the Ownpir.;'s er share. Net pnieceth to Industrn s fnwn this rade were apprtmimately firmncial pisiiniti or results of operatu mt gg
PREFERRED AND PREFERENCE BTQCK TIN THOUS ANDS)
Of B r M AruRfTift M Dentissut 1995 1996 1997 1 'J 9 8 1999 Utihues hin 466A06 shares of Cumulative Preferred Stock, $50 per Utihtiet uduc, autinwired for issuance at December 31,19W. of which the Sinking f urd A10%,4 80% aal 4.30% Senes hal 100.000,146.406 and 120J M Kl requirements $
780 $ 630 $ 550 $ $50 $ 550 mb shares, respectively, outstandmg at both December 31,1994 ark! IWA lututim
'llese shares are redecmable at the opinm of Utihues upon 30 days aintn d.
140 140 140 140 140 notice at $5100, $9t25 aml $5100 per share, respectively, plus Series W.
50,000 accrued du klendt Series X 50,000 Tirre are 5,Ulx(000 shares of Imlustries Cumulatne Preferred Series J,
- 15,000 Sto(L (no pir salue) avsl 71M UN NI shares of Utilities Cumulative 6-1/8% Series 8.000 Preferente Stock ($100 par salue) authorized for tsuance,of which Series Z
- 50,000 mnr utre outstarshng at Decernber 31,1+4 Disersihed.
Vanable rate E DEDT
~
80,500 credit fachtv 00rr lal Inngilerm Debt.Utahtici hukntures and Ikeds of Trust secur.
subskhariei ing its first Mortpipe ihmds omstitute dmxt first moripige hens uno okht.
282 305 331 357 10.393 substantially all tangible pubhc unhty pniperty Utihties' Indenture 1btal.
$ I 81,702 $ 16.075 $9,021 $ LO47 $61.0H3 ami Deed d 1 rust securing its Odlatend Trust Ihwxis omstit utes a wciud hen on substantully all tangible publ' utihty pnyerty whik The G mpmy intends to refmance the majority of the debt w
l'irst %ntpige thush remain outstarshng.
rnatunties uith kmg term securities.
Dnersit ed has a uuiable rite credit facihty that extemh thnogh p,g g,,,fg.crm Debt of Mct. cod,Inc..Diverutied has a $7.5 millum Memtvr 9.1997, with two otr-yeat extensum auiilable to Dnersified.
investment in Class H Gnurrum Stock of McLad,Inc. (McLeod),
The frihty aim scrws as a stenstby agreenwnt for Dnerutied's aimmer-which reprewnts a memg interest of less than 20%, McLod pnwicks cut pqvr pnigrmu The agreement pnn itks for a combined masimuni k, cal and kog-distarre teleannmunicatniti services to business cu+
of $150 millam of hwnminn umler the agreement and commercial tomers and other services releed to hber optics. In 1994, Diversified pyrr to be outstamhng at any one ume. Interest rates rd maturitie$
entered into an agreement wirreby it will guarantee $6 millairi uritkr a are set at the tirne of hanming for direct bornmings unler the agree ~
credit facihty between McLeod aid its hmkers. Diwrsified is piil an ment and for iwuances of cornmerci,d pqvr. The mterest rate (ptum annual commitment fee and receives optkm to purch,tse akhtsvul art hised upon quoted market rates aml die matunties are less than sg g ci,, g ngum,n Stock for as long as Or guarantee remains one year. At Ikeember 31, lW4, $12 millu m was hwnmed urkler this outstar.dmg. At ikccrnber 31,1994, McLad itd $3.5 milhon out.
facihty, bearing an mierest rate of A44%, matunng in January 1995.
starsimg urkki its facihty.
Diversified aho hal $hM.5 tmllum of ovnmercul piper imistarkimg at
[cl d-1nm Deb At Decernber 31, IW4, the Gunpmy had hmk Ikccmber 31,19W wnh mterest raies ranging fnim A27% to A3M%
lims of credit apung W mWmm Undustries-$1.5 millkm, and matunty d.nes in tir first quiu ter of 1995 which was also sup.
Whow $h7.7 millum, Diwruhed-$7.5 millkm arxl Whiting -$1.0 posted by die tacihty Diversif ed intemh to amtmue hirnming umkr nuhmt Utihties was using $37 millkm to suppwt ownmercial piper the remw.d optum of the facihty and no comhtum cust at thember (weighted mer4'c intaN nite oM13M aml $73 rnmum tm[ pat 31,19N. that wouki prewnt such b wnm inp. Acconhngly, this debt is certam twdlutam omtad obhpnm. Gunmitnrnt fees are paid to dtssihed as kmg term in the Conwdalated Balance Shetts.
maint.un thew hirs ami Orre are no condnum whk h restrict the
'ibial sinking fwd requirements, whwh Uuhties intenth to meet unuwd luss of cn M in aboon to tir ahne, Unhties has an uncom-by pledgmg aktatswud property untki die terms of UtahticiIrwientures nuttcJ credit facihty w nh a finarri,d instituthm utrreby it can bornu amiIkeds o(1 rust.mw!ikbt matunnes for 1961999 are as folkms:
up to $40 rmilum. Itites are sit at the time of hirnming amt no feet, aie piid to maintain this friht). At Ikeember 31,19% Orre were no hanmings utiler this facihty. Utihties alc las a letter of credit in the annont of $14 mdlkm supportmg two of its vanable rate pollutam notnd obhpnam.
g EaTlMATED FAIR VALUE OF lW hlw of dehstrUd c,qnrit) deciming to N) Mw in 1997. Utilrties w ill reNANCiAL iN 8TR U M E NTs aho purcltne an addithmal annual maumum interrtiptible capleity of The estimated fair values of financial instruments at December 31, up to 54 N1w of 25 IIz pturr, which estersh thnogh 19% anti will 19% and the lusis upon which they were ntimated are as hilkms:
continue tirreafter unless ei:ler party gives a three year notiec of can-cellatnin. Tir costs of cagucity purthases for these c<mtracts are reflected II ls) Current Aswin and Current ljahilities 'Dr carrying annont in "Puichased pmer"in the Consoldated Statements of incorne.
appnnimates fair unhr because of the short maturity of such hnancul Utihties tus a contract to purchase capicity of 50 htw fnwn tir instrurrrnts.
City of hiuscatine for the period htav 1,1995, through October 31, lhj Nuclear Decommiwinning Trust l'uruis The carrying anxont lwi Utihties has alsi entcied into an agreement with Ilasin Electne trpresents the fair value of these trust funds, as nported by tir trustec.
f\\mcr Cooperative to purchase capicity of 50 htw,75 h1w, im htw On January 1. lir4, tir Compmy ak vted SI AS 115. " Accounting for ami 100 Alw during the annual sionxinth summer wasm for tir years Certam in estmenu in Iet arst 1.quity strurities." Dn standard, 19wi thnogh IPN. respectively.
which agphes to Utihtiu' ntwlear decornminumirig trust furxis retjuires
'lotal caprity Airres urkkT au existing cimtniets willigproxb that unreah/cd pins and knses on such imntments be irwhded m the mate $16.3 nullum, $143 milton, $12.3 millam, $47 milhon ard $3.4 repwted ful.ure of stwh mvestmentt At December 31,19W, the lui-milton for tir years 1995-1999. resortively.
ance of the " Nuclear tkciwnmnsummg trust fursis" as damn in the lcj Coal Contract Cummitments.Utihties has entered into ctal suppl)
Consolniated Italance Strets imImkd $nM nullam 44 unreah/ed kisses im the investrnents hekt in the trust fursis. The arcumulatsd rrsent gnerating statums. At December 31,194k the contmets caer appnni-for decommnsuming cosh was at;usted by a correspordmg an> unt mately $199 millao of cml over the hfe of the contracts, which includes aral there was no ef fat on net incorne or earnm, gs per averan: common
$NIimilum capected to be incurred in 19% Utihtrs espects to sup-share from akpting thn starstant piement these coal ctotracts with spot market purchases to ful6llits (c] Cumulathe Preferred Stock of Utilities The estimated fair value future fossil fiel reeth.
of thn stock 01 $1n2 millum is lused upo the market yickl of similar
[d]Information Technology Senices Tir Compmy entered into an wcurities.
agntment. expiring in 2mk with l~lectnmic Data Systems Corporatiin
[dllongelerm Debt The carrying anuont of kog-tcrm okht *
(l:Ds) for informatim technokigy sen ices. He contract is subject to
$5h millon cisupurd to ntimated fair wilue of $551 million The esti-tkchning terminatum fees. Tir Comptny's anticipited expenhtures j
mated fair value 64 kog4crm debt is tused uno quoted market prket urskr the agreement for 1995 are estimated to be approxmutely $9.5 mil-1 Smee Utthties is subject to nyulatam, any puns or ktsses related to la m. I-uture costs urder the agreement are variable ard are dependent the difference betwirn the carrying anamnt am! tir fair uittr of finan-upm the Comguny's level of usage u( technokyical services from EDS.
cial imtrumenn may not be teah/ed by the Compmis shareholders.
lel Nudcar Imurance Programs.The Price-Arklerum Amertiments Ad o A pn n s w nh dr bcMt oW Mun q COMMITMENT 5 AND CDNTINOENClEB laj Comiructiou Program.The Gwnpun constructkm and acquni-P"
" Y '**F '""
"E I"""""## ""
tao program antwipites expenhtuin of appnnimately $202 nullam biUbn thitennal n1ns anmnenu inwn & ou nen of for 1995, whwh itwhales $1M nulino at Utihues aral $39 millae at nudcar power plana Had upon in ow ndup of dr IM. umkr
""O" lbvrut ed in alJithm to tir $1M nuunm, Utihties anticipites expen-ditures of appnnimately $13 nuthon for marxiated errryj efhtrney per nutlear irrkknt,with a masimum of $10 millum per year (of which PI""" *"" h# "PP" * "*D E """""
pnyramt Tirse cyrmhtures will be deferred pursuant to IUll rules as dncuwed in Note 3lb] Substantial comnutnrnts tant been m.nle in aml U nuunn. nycuwW d lose niung to dr indnu exceW
'" *b"""*""I"'" d'""
connection with all such experminuret m future, wars.
[h] I untune 1%mt Contracts in etwurctum with the acqumtam of the Uli propertin dncussed in Note 2 Utikties is purchasmg pmer inen t 'li uiskt a lis m capa ity contr.wt with a IM requirement of
litihhes as a nwmber (4 Ntricar I.kttnc Insurance 1.inutal to be ownpleted by IPN and sitempecibe remnhathms,luwd im ree-(NI ll.). which pnn aks insur.ure a nerage for the cost <4 certam pnip-orunwrniatkms fn un tir IDN il, MPCA artl !!PA, are anucipital to crty kws at nta kwir gerrrating stata an assi for tir cost of repLrcment be ownpkied within three years after the ownpktnisi(4 the inwstipi-p eer durinnertain outans Gunpinics insured thnogh N!!.ll. are tums of each site. Utihtrs m.ry be required to nwmitor tirse sites for 4
subject to ninuettw gwvnuum aljustnrnts if kisses encets) accumutued a number if years upin ownpleta e of remedutum, as is the case with rewrve furnis. NI.ll/s arcumulated rewrw fuimis are currently sufhcient tir three utes for which remedutum has tren cinnpleted.
to nn we than cowr its expisure in tir event of a single incalent unter litihues has begun pursuing emerap for mvestigatkm. mingatkm, the pniper ty d.unape it repLwenwnt p eer anvrags. Ilomer Utilities prtwntam, renndiatiim assi mimitoring ctwts iniin its inntirarre cartiers omkl be awwd annually a nuumum of $R5 emilum fig certam pne assi is invntipiting tir pitential for thm! puty cost sharing for i MGP crty bwses armt $117 nullso for wpLwenwnt pmer if NI:ll A knws relat-inunupita o arti clean-up costt 'Ihe annont of shared costs,if any, my to at aknts extcukd its accumulated rewrw furnis, Utahnes is tw1 can rn 4 he reasiwubly deier mwd ami, aconding!), no p dential sharing aware of any k ws that it belnws are hkely to n.sult m an assewment.
has been rtuirtkd at Decemtwr 31.174 Ikgulatory assets of $31.0 mil-lam h ne been reconkxl in the OmsolnLited llalance Mwets, whkh (fl Isironmental 1.iabilitinille Gunpiny has reconkd emin m-reflect tir future recover y that is being pitn nkd thnugh Utiletts' nwntal kduhtrs of aptwoumately $44 millum, uxhmimg $5.4 rmilum m rates. Camsalering the rate treatment alkami by the IUll, maruipenrnt current kduhtrs, m its Gmviintated llalance Strets at I Arember 31, beheves that the (Ican up costs incurnd by Utahties for these l'MGP l'N & signiheant items are dncuswd belim sites w ill in 4 have a nulerial alverse cifect on its financial p sitkm or l'urnwr Manufactured Gas Plant (l'MG P) Siln Utthties his been tunrd as a lidentially itespmible Party (PRP)
National 1:arrgy Policy Act of IW2 by cister tir lowa !)eputment of Natural iteviurtes (ll)N R), tir I he Nata wul 1 ncryy Ibhey Act <4 IW2 requires ow ners <( ntalear Mmirsuta Ibilutio nminil Agney (Mi*CM or tir i buted States peer plants to piy a sptrul assewment into a ** Uranium lintKhnwnt I minonrntal Pnsectim Agncy ll PA) for 2H IWGP sites. Utihues Ikumtammatam arkt i Auwnmtwaming I und.' Ilr aswsstrrnt is trhews that it n not avsp unible for two of the utn for whkh it his htwd up o pr kn nuck:ar fuel purt hws and, for the IMI C, merap btrn sk ugtuted a PRP Utahties has armitirr i MGP ute for which.it
$1.4 nullum annually ihnuph 2007a4 wtuch Utahties' MN share is $1.0 has tw a wt been for mally (ksicrutal as a PRit Utihun is working pur-nulin m. Utihties is rtuwring the costs associated with this aswssment Munt to (tr lequireinents of the IDN R, MPCA aml i PA to imtsligate, thnogh its ekttric fuel aljustnrnt clauses awr the grriod the costs are nungite, prnent assi renuhate, wirre twressary, daman to propertv, aswwd Utihtici M% share of tir future assessment,512.0 nullum un hahng (Lunar to sutural revertes, at aral anment the remaining 27 pmdik. thnugh 2007, has been nu utkxl as a khhty in tir Cims Antited uses in onk r to pnWeet pubhc tralth and the eminoment. In akhino, llal.ure Sloth im itahng $4M oullum itrittkxl in " Current habihties-Unlities hts nsunty benwne.nuut that two akhin vul utes nuy cust, I minonwntal habihten," with a related regulatory asset for tte unre-tut it has not yet been able to(kiernmr if ans hatnhty niav crist.
eintral anw unt.
lIhhhes has o unpkled the renrdutum of three sites and is in varaius stagn of tir uneshpitam arapur rennskatao pnicewn for 22 Oil aml Gas Properties Dismantienwnt arul Abandonarnt Costs utet 'Ihe imnupiin m process n schululed to bepn in 1% or IPO Whiting is r sp osible for certain dismantlement arsi ahamlunment e
for the two other utes. In 144, Unaues receival updated imestipitum costs related to varLos idfsluire oil arxl pts pniperties, the nunt signih-repvts on a numbei of utes, stuch, at v mr utes,irslicated a greater cant of which is locatut of f the oust of Cahhnma. Whiting accrues u dunr of o mtanuruted sini, surf ace anni gniural water necthng treat -
tin se cmts as reservn are extrxted ami stwh costs are int haled in nrnt, ami a greater w dume of substanees sequirmg higter cost irrurr-
"Depnuatum arm] anuirtiratam" in tir GmvdnLitetl Statements ain m, than was antripital in pimit ntiinates. It is pwsable that tuiure of Irrome. A correspushng emmomentalliabihty,501 nullkm at oist ntimates will be greater ttun tir cur rent estunales as ttr unnti-I hTembeT 31, PM, Ius Irell rtug'nl/t'd ifl the ('illlviidatett flabiIre pita m pnicew pnicents ami as.mkhtuntil f<Kts troiine Lim n Ninrts for the cumulauve anwiunt expensed.
Unhtrs has rtronkd em mmmental habihnes rtlatal to the l M(iP uto ad 5 4 nuthon (ushthng $4 3 millam as current habihun) lg] Clean Air Act.Ihe Okan Air Act Anemiments Act of IWO(Act) at iktember 11,174 Ilrw at.nunts are htwd upm Uuhtrs' best requien emnsum inhntums of sulfur daiude arsj mtrogen oules to current ntmiate of the anuxun to tr usurtal for uneshpitam ami a hnw rahrta m of ainuspirrie ctemrals behesul to cauw ackl ram.
semnhatam nests hw thu vin where ite unestigatum purew has lhe pnn tsum of tiv Att will tv irnpk-nrnicd m twu phaws with Phne i been or n substanlulls ownpktal ioi Lluw uto wtric tir unntrw alkrung Iwo of l nhtici umts lxyuunng in 196 and Phase il af krtmg tum is in its carirr stags or has not stattal, the habih:3 reprewnts tir all umts txymnmg in the year 2tu uk li htrs is in tir procas of own ti nummum of ttr ntimatal tost rance. All invnligainm are espected pleting tir nxm.hhcatum rarewary to runi tir Phaw I requuements.
Utihties cupects to nxxt the requirements of phase 11 by switch-Kik m:itt-taiur p neratkin ars! openstiry expenses are divnkd on the ing to krwer sulfur fuch urs! thniugh capital experxhtures primarily sant hisis as im nership with each (m ner nilecting its rnpectiw costs rebacd to fuct burmng equipment and boiler nudificatums. Utihties in its Statements of Income, Informatkm relative to Utihtics' tu rrrship estimates capital expenditures at appnmimately $22.5 milhon,incluthng interest in tirw fxihties at December 31,1994 is as folkms:
$4.4 millam in 19'X in onler to med the requirements of the Act.
Drruwwa Neac t DDLL ARE IN MILUDNS)
DAEC UNIT 1 UNIT 3 lhl l'IcitC Order M 636-The i 1 RC isstad Onler Nu 636 (Ortkr Utihty plant in service, 1490.8
$ 1 H7.9
$55.5 6%) in 1992. Onler 636, as nxdihed on rehcarmg: 1) requires l'tihties' Accumulated depreciath n,
$242.4
$ 80.6
$ 25.7 pipchne supphers to unbundle their wnices so that pas supphes are Constructnin work in progress
$ 5.3
$ 1.3 obtaurd wpimicly fnwn transpirtathm senice, ard transportathm Plant capicity-Mw 515 716 515 armi storage wnices are operated arxl hiled as selvrate ark! distinct Y'
Mo servKev,2) requires the pipchne suppin:rs to offer "no rugiec" trans-pirtathm service urtler which firm transporters (such as Utihties) can in-senice date.
1974 1981 1975 nxcive dehver y of pn up to their ctotractual capicity level on arry day without p air sdvduhng; 3) alkms pipchnes to ahukkin b og-term g aEGMENT5 QF GUBiNEB5 Owr year or more) transportatum service pnnkxl to a customer Tir principil business segments of Industries are the gerrration, ursler an expnng ciotract whertwr tir customer faik to match the transmission, distributkm and sale of ekctnc energy by Utihties and higirst rate aral kmgest term (up to 20 years) offered to the pipeline the purchase, distribution and sale of natural pis by Utihties and by oder customers for the pirticular capicity; and 4) pnnides for a industrial I ncrFy Applicathms, Inc., a wholly-ow ned subsidiary nrchanhm uraler which pyichnes can recmer prtalently incurred tnm-of Diversified. Certain firuncial information relating to Industries' sithm cmts awictated with tir restnicturing pn> cess Utihties h n significant segments of busirrss is presented bekw:
enharnd access to etunpetitively priced pts supply anil more lle xible
,,,, c yoc o og crung, 3 i transpwtatum senices its a result of Order 6.Vt I huvver, ursier Order 6% Utihties is required to piy certam transition costs incurred artl Ogmting results:
N*""
Nikd by its pipelar suppliert I:lectric.
$ 537J27 $ 550,521 $ 462,999 Utihties' thnx pipchne supphen have made lihngs n ith the I !!RC Gas,
165,569 181.923 167,082 to begin colk ctmg their respective transitu o cmts, und akhtm mal fil-anys are expected. Utiblics bepm pi)mg tie tnmsitam costs in 1991 Operanng inmne tno 125, M 12W W,W aal,.it ikccmber 31.1948. has recorded a haNhty of $RO nullum for Gan H,
6U W
timme transitko costs that hme been incurnxl by tir pyrlines to date, Mer informadon:
nwltdmg $10 millum expected to be billed through 1995, Utihties is
" '"I currently reemenng the transitam costs f nnn its customers through I
its Pun hawd Gas Adjustment Clauses as such cmts mr hiled by tic 0
63332 59J07 pipchnes. ~1ransitam costs in akhthm to the treonkd Hahlit3. that gg g
may ultimately be charped to Utihties coukt appnnimate $10 millam.
g g g Tir ultimate !cvel of costs to be Nikd to Utihtrs deperwh on the experxhtunt pipebrai htmps nith the i i RC and uthcr future events inciating the I:lectric 99,543 84,720 154,902 market piiee of rutural pts. Ihmner,I'tihties behcws any transitum Gas.
12,719 12,5N2 17.323 cmts that tir i 1:RC wouki alku tir pipelines to collect inwn Utihtrs Aswis:
woukt be numered fn su its custorners hisod upm reptilitory treatment kicntifiable :tswts of these costs currentl aal smular past cmts by Or IUIL Accordmgl).
111ect nc.
1,347,024 1,288.505 1,226.614 3
regulatory aswts m anumnts costrspwkhng to the recorded hahhtim, G as.
192,397 168.800 147.395 hae ban reconled to rdlect the anticipited nuntr>
1,539,421 1,457,305 1,374,009 Other corporate assds,
304,56M 242.514 220.373 IJ J O i N T LY + 0 W N E D ELECTRIC UTIL1TY PLANT
'hda] consolultled t hier pomi sm nersinp agreemenis with otter kma utihties t 'tthties has 4* * -
.$ 1.843,989 $ 1.699.819 $ 1,594.382 pain Akd im trnlup mierests m Jointly -on rul ciectue penerating sta-ta m aal related transnnsskn fuhnes. l.A h of die respective im nets n irsposible for the inunemy of its puimm of the cimtructam cmts j
l l
QCLCCTED CONSOLIDATED FINANCIAL DATA 1994 1993 1992 1991 1990 1989 income statement data (000%):
Openning revenue
$ 785,N64 $ 801,266 $ 678,296 $ 661,538 $ 624,214 $ 599,838 Operating inetune.
147,933 151,269 109,024 103,357 98,043 106,592 y
Net income.
66,818 67,938 48,711 44,657 80,330*
53,565 Common stock data (per share cscept percentages):
th:rnings.
2.34 2.45 l.92 1.85 3.37* $
2.27 Divideixls declared 2,10 2.10 2.10 2.03 1.82 1.77 Ihturn on averap common equity.
I 1.5 %
12.4 %
10.3 %
9.7 %
18.4%
13.2 %
Market price at year cnd 25,25 $
31.25 $
29.50 27.25 $
27.75 $
27.63 Ilook value at year erxl,
20,56 20.21 18.89 19.07 19.15 17.52 Ratio of market price to liook vahie at year-crxl 123 %
155 %
156 %
143 %
145 %
158 %
Capitalisathm:
Common equity,
50 %
51 %
48 %
50 %
53 %
49 %
l' referred arxl preference stock 2
2 2
3 3
4 Iung term debt,
4N 47 50 47 44 47 100 %
100 %
100 %
100 %
100 %
100 %
Other selected finandal data:
'Ibtal aswts ((N Wrs)
$ 1.H43,989
$ 1,699,819
$ 1,594,382
$ 1.448,492
$ 1,400,802
$ 1,342,615 l
Non-utihty assets ((Hrs) 19N,621 152,841 155,144 145,283 141,739 127,684 long-term obligations ((nrs).
626.011 577,611 553,257 507,921 462,798 472,760 Construction aixl acquisition expenditures (0(Krs) 201,552 163,644 191,834**
I I 9,821 103,154 87,381
~Iimes interest earned before income tavs 3.38 3.38 2.63 2.69 4.45 3.10 Selected financial data for IES Utilities Inc.:
Utility plant in senice ((nfs)
$ 2,042,179
$ 1,932,558
$ 1,852,733
$ 1,680,108
$ 1,587,886
$ 1,475,550 Accumulated depreciation ((nrs) 880,888 813,312 759,754 691,015 639,211 579,160 Con (nietion and acquisition eqwnditunts ((H rs) 14H,062 * *
- 113,212 171.013 "
105,009 95,075 79,919 Times interest carned before income laws 3.39 3.64 2.67 2.93 3.04 3.36 I!!cetrie Kwh sales (exchkling olf-system)(turs).
9.291,575 8,905,522 7.132,671 7,244,209 6,880,136 6,671,474 Gas Dih sales (int haling tnmsported wilumes)((Hrs).
37,975 39,006 37,035 37.129 36.486 40,050
- Ino,lu.lv the vlin t, via FM mullum port.u pan um wie of kin e.m e t %t st,n k
- I,whnic,561 mellws tror the au qmutum ut the ime wrn.r territ.w y inom l'num iin tn, Company
'
- In, lusies $ V.' molb.on.sl a+ qmutwm fmm, afblearni n u ompames l
1 l
ELECTRIC O P E R AT t N O CDMPAR1 SON col U o 1994 1993 1992 1991 1990 199 9 oIo r$n Operating resenue ((HMN:
Residential and Rural.
$ 200,629
$ 206,561
$ 177,625
$ 189,194 $ 185,302 $ 175,899 Ownmercial 146,086 145,898 124,829 124,320 119,908 112,662 y
Industrial 143,948 137,595 103,886 100,733 97,788 94,222 Street lighting and publie authorities.
6,504 6,098 5,410 6,332 6,478 6.282
'lotal fmm ultimate consumers 497,163 496,152 411,750 420,579 409,476 389,065 Sales for msale.
19,195 20,254 18,602 19,745 19,582 18,214 Of f4ystem,
18,077 29,400 28,304 36,596 31,144 28,281 Ot her, 2,892 4,715 4.343 5,658 3,047 2,973
$ 537,327
$550,521
$462,999
$482,578 $463,249 $438,533 Diergy sales (IMH6 Knh):
Residential and Rural.
2.493,702 2.528,220 2,158,768 2,367,979 2,254,913 2,222.152 2.3 %
Gunmercial 2,148,302 2,078,635 1,771,357 1,764,495 1,686.132 1,626,046 5.7%
Industrial 4,014,821 3,674,217 2.612,803 2,467,533 2,312.109 2,236,388 12.4 %
Street lighting and public autinrities,
67,029 63,174 60,991 87,022 88,305 86.635
-5.0%
Ltal to ultimate consumers,
8,723,854 8,344,246 6,603,919 6,687,029 6,341,459 6,171,221 7.2%
Sales for resale,
567,721 561,276 528.752 557,180 538,677 500,253 2,6%
Sales of electricity to customers 9,291,575 8.905,522 7,132,671 7,244,209 6,880,136 6,671,474 6.8 %
Off sptem.
I,137,219 2,068,015 2.275,616 2,738,159 2.282,204 1,959,828 -10.3 %
10.428,794 10,973.537 9,408,287 9.982,368 9,162,340 8,631.302 3.9 %
Niurces of electric energy ((HHW Kwh):
Generation:
limit, primarily eml,
5.522,966 5,356,930 4,317,154 4,758,720 4,354,697 4,063,974 Nuclear (2) 2,875,867 2,264.507 2,402.501 2,902,768 2,108,100 2,228,068 Ilydro.
8,205 7,201 7.579 6,547 4,195 1,902 8,407,038 7,628,638 6,7?7,234 7,66M,035 6,466,992 6,293,944 Purchases.
2,646,673 3,949.296 3.322,182 2.994,216 3,282,886 2,891,808 11.053,711 11.577,934 10.049,416 10,662.251 9,749,878 9,185.752 Net capability at time of peak load (Kw):
Generating caiubility 1,741,100 1,733,700 1,718,600 1,719,150 1,684,700 1,633,000 Purchase caphlity 280,000 248,000 207,000 227,000 179,000 170,000 Capeity credits (3) 18,960 20,650 2,021.100 1,981,700 1,925,600 1,946,150 1,882,660 1,823.650 2.1 %
Net peak kul(Kw )m 1,779,627 1,716,380 1.425,441 1,607.606 1,547,826 1.486,243 3.7%
Number of custoners at y.ar cml 330,405 327,265 325,172 305.663 304,265 302,632 1.8 %
I Resenue per Kwh (escluding off-splein) in cents.
5.59 5.85 6 09 6.16 6.28 6.15
- 1.9 %
tli Ihe hst 5,ur certwed gn~ th ruw, um lude the rHn i of Ac au,iunas,,n ed the hm.a sen t. c tena.,wto,m i noon Ila tror G,mpann on twember 31, tw2
(,') Ret.nunn 11 % i:sdase, ' hr', runJ;,oded mocont on the iMane UmdJ f nerp ( cnwr. s,hu h n vtwruted bn 11 % l'idaws im I h hpre wrn anp.m an nhh tw munn,;,al, sc,rd in ll 5 L tJerws Inc th w n,nnae, nnt,ynacJ
I GAG O P E' R A T e N G CDMPAReBCN r
.u..
CD,4M',. e,D 1994 1993 1992 1991 1990 1989 "N m=
P Operating rewnue (IMMli):
IES Utilities Ire.:
thsidentir.!,.,,..
5 82.795
$ 90,462 5 78,685
$ 74,114 $ 66,513 $ 68,751 g
Commercial..
40,912 45,528 39,780 37,613 35,378 38,035 i
Irs.lustrial..
12,515 15.593 18,649 17,383 21,500 25,172
+
136,222 151,583 137,114 129,110 123,391 131,958 j
Other....
2,811 2,735 2.341 1,908 1,884 1.923 Thtairevenues.
139,033 154,318 139,455 131,018 125,275 133,881 i
Industrial Energy Applications,Inc..
26,536 _ 27.605 27,627 15,219 6,808 1,049 f
$ 165,569
$ i H1,923
$ 167,082
$ 146,237 $ 132,083 $134,930 4
Energy sales (000% dekatherms):
IES Utilities Inc.:
iksidential..
15,766 16,971 15,098 15,571 14,315 15,878 4).1 %
Comnwrcial.
9,298 10,133 8,479 9,389 8,798 9,854
-1.2 %
Industrial.
4,010 4,618 6,175 5,980 6,640 7,409 -11.6%
29,074 31,722 29,752 30,940 29,753 33,141
-2.6%
Industrial-transported wdumes..
8,901 7,284 7,283 6,189 6,733 6,909 5.2%
lbtal wdumes delivered.
37,975 39,006 37,035 37,129 36,486 40,050
-1.1%
Industrial Energy Applications Inc.,
14,443 12.493 14,830 7,666 4.465 624 87.5 %
[
52,418 51,499 51,865 44,795 40,951 40,674 5.2%
Operating statistics for IES Utilities Inc.:
Cost per dekatherm of gas purchased for resale,,,
3.31 3.49 3.36 3.10 $
3.23 $
2.95 Ibak daily sendot in dekatherms.
288.352 268,419 254,989 266,344 272,089 311,600
-1,5%
Number of customers at year.cnd..
172,829 170,719 16' 13
, n < 178 161,794 160,792 1.5%
{
Rewnue per dekattwrm unid
[
for IES Utilities inc, (exchiding transported wilumes).
4.69 4.78 4.P 417 $
4.15 3.98
'3.3%
j e
' l t
-._,.~.._.
OHAREHOLDER I N F" D R M A T I O N receive a Safekeeping receipt in place of your certificate.
ANNUAL M E ETIN G The annual meeting of the shareholders will be held at Contact Shareholder Services for a Safekeeping form 220 p.m., Central Daylight 'Ilme on Tuesday, May 16, and additional information.
1995, at the Collins Plaza llotel,1200 Collins Road N.E.
y in Cedar Rapids, kmu. A proxy statement with irspect to WHERE TO HUY AND EELL STOCK this meeting will be mailed on or about March 20,1995.
Common stock may be purchased and sold privately or All common shareholders are cordially invited to attend.
on the open market through a brokerage firm. A share-flowever, those who are unable to attend in person are holder enrolled in the Company's Dividend Reinvestment urged to promptly sign and return their proxy.
and Stock Purchase Plan can purchase additional common stock with no brokerage fees through the aTOCK EXCHANOE L 15 T1 N G optional cash feature of the Plan.
IES Industries Inc. common stock is listed on the Shares held in the Dividend Reimestment and New York Stock Exchange under the symbol IES.
Stock Purchase Plan can be sold through the Plan Newspaper listings often use the symbol IES IND.
Administrator upon written request of the shareholder, who will receive all proceeds of the sales less any GENERAL lNQU1 RIES brokCrage Commission.
Shareholder inquires, including the replacement of If you are an IES Utilities Inc. customer you may dividend checks, address changes, transfer or reissuance purchase stock directly from the Company and be of stock certificates, and requests from the general public enrolled in the Dividend Reimrstment and Stock for any financial publications may be directed to:
Purchase Plan. Contact Shareholder Services to IES Industries Inc. Attn: Shareholder Services receive a Direct Purchase form.
P.O. Ilox 351 Cedar Rapids, kma 52406 1-800-247-9785 or 319-398-7755 D U P L1 C AT C ACCOUNTS ANO M ail 1N G S Shareholders sometimes receive more than one Annual Report because shares owned by one shareholder may D1VlD E N D RE1NVEBTMENT AND STOCK PURCHABC PLAN N
it with slight variations in names. The Com-The Company has a Dividend Reinvestment and Stock pany is required to mail an Annual Report to each Purchase Plan which alkws shareholders to automatically name on the shareholders list unless the shareholder reimrst their cash dividends in additional shares of com-requests that duplicates can be eliminated. To eliminate mon stock. IES Industries Inc., Sharrholder Services, duplicate mailings, please send a written request to P.O. Ilox 351, Cedar Rapids, kwa 52406 acts as the Shareholder Services.
Plan Administrator. A prospectus describing the Divi-dend Reinvestment and Stock Purthase Plan can be 1994 FORM 1 oak AVA 1 L A B L E ON REQUEST
, obtained by writing to Shareholder Services.
The Company files annually with the Securities and Sirekeeping Exchange Commission an Annual Report Form 10-K.
Safekeeping is a comenient feature of the Dividend This required report contains certain other information Reimestment and Stock Purchase Plan designed for not made a part of this report. The Company will be shareholders who prefer to have their shares held on happy to send you a copy of our 1994 Form 10-K with-account rather than receive a stock certificate. You do out charge. Requests should be made to Shareholder not have to reimest your dividends to take adsuntage of Services, P.O. Ilox 351, Cedar Rapids, kmu 52406.
Safckeeping. When Suu sign up for Safekeeping you will
l l
l olVio E N o PAY M E NT oATES TRUSTEE Scheduled Dividend Payment and Record Dates for The First National Bank of Chicago, Chicago, Illinois 1995 are: Record Dates March 10,1995; June 9,1995; IES Utilities Inc.
September 8,1995; ar.d December 8,1995. Payment kwa Electric Light and Rwer Company-Dates April 1,1995; July 1,1995; and October 1,1995.
Mortgage and Deed of Trust - dated August 1,1940 January 1,1996,is the first piyment date in 19%.
Mortgage and Deed of Trust - dated September 1,1993 Dividends paid on common stock in 1994 were kwa Southern Utilities Company-Deed of Trust j
fully taxable for federal income tax purposes.
SPECIAL N OTIC E oeveoeN o onneCr oePoaer in,Iune 1993, theperiod allourdfor the settlemerst ofmost We can send your dividend electronically to pur stock tmnsactions will be rrduced to three days /mm the financial institution for deposit. Contact Shareholder curirntfive days. As a result, many bmkers are now Services to receive a Dividend Deposit Form.
urging customers to move their securitiesfivm ngisterrd ownership to sttres name ownership.
Tn AN e rc n Aa c NT s neaeeTn An 7'here is no requirement that securities be held in 1ES Industries Inc. Stock Transfer Dept.
street name ownership by a bruker As an investor, you 200 First Street SE, Cedar Rapids, hwa 52401 will retain the power to choose theJbrm ofownership 1-800-247-9785 or 319 398 7755 best suited to your needs after the new settlement ndes 1ES Industries Inc.-Common Stock take ellect. The choice is stillyours. Ile encourageyou IES Utilities Inc.-Preferred Stock to keep your IES Industries Inc. Common Stock orgistered with the Company. Ifyou have questions or ara Cn N cuo eN anancnAae concerns callIES Industries Inc. Sharrholder Services ACCaUNTB
- B T R E C T NAME" g ygg7,97g g7 gpggg,77g When pu purchase your stock and it is held for you by 1
pur broker, it is listed with the Company in the broker's name, or " street name." lES Industries Inc.
does not know the identity of individual shareholders who hold their shares in this manner-we simply know that a broker holds a certain number of shares which may be for any number of customers.
Accounts held in street name are not eligible to ptrticipite in IES Industries Inc. Dividend Reinwstment and Stock Purchase Plan. Also, pu receive all dividend piyments, annual reports and proxy materials through pur broker. Other financial reports may be obtained directly from the Compmy by contacting Shareholder Services, P.O. Ilox 351, Cedar Rapids, kwa 52406.
COARD D F'.D I R E C T Q R D OFFICERQ' ses INDUSTnlEE INC.
IES U Til.lTI E S INC.
C.S.S. Anderson o e David Q. Reed e lee Liu (61.37) leeLiu(61,37)
Retired Chairman d the Attorney and Counselor at Law, Chairman d the lhurd President Chairman d the Board &
Ikard of the Company, Kansas City, Missouri
& Chief Earutive Officer Chief Ercutive Officer Sanibel, Fkirida S
Ilenty Royer e e Blake O. Fisher,Jr. (M 4)
Blake O. Fisher, Jr. (M 4)
J. Wayne Besis e President atsl Chief Ercutive lircutive Vice Presklent &
President. Chief Operating Vice Chairman & Chief Officer, River City flank, Chief Financial Officer Officer & Chief Financial Officer Ercutive Officer, Sacramento. Cahforma hila Corporation (Wuxim Larry D. Root (58,24)
Rene II. Malts (62,4) and Dmr Manufacturing).
Rotwrt W.Schluta e Executive Vice President Ercutive Vice Presklent itila, kma President, Schlutz Enterprises (Diversified Iarming Dr. Robert J. Latham (52.11)
Dr. Robert J. Latham (52,11)
Dr. George Daly e and Retailing),
Senior Vice President. Finance Senior Vice President, Finance Ikan, Leonard Stern School of Columtus Junction, kun Dusiness, New York University, Stephen W. Nmthwick (48,19)
Nephen W.Southwick (48,19)
New WL, New bk Antiumy R. Weiler Viec President.
Vice President, Senior Vice Preskient, General Counsel & Secretary General Counsel & Secretary Blake O. Fisher, Jr.
Mertharklising, Ercutive Vice 15nident & Chid lleilig.Meyvrs l'urniture Timmas R. Seldon (% 7)
John F. Franz,Jr. (55,3)
Financial Officer of the Cominny (Furniture Merchandising),
Vice President.
Vice President, Nuclear Richmond, Virginia iluman Resources C. Sharp Lennom, IV e Philip D. Ward (54,21)
President & Chief Ercutive Dean IL Ibtrian (47,9)
Vice President, Officer, Delong Spmtswear, Inc.
pincetons s>tantrus Vice President, Engineeriag & Generation (Sportswear Manufacturing).
Marugement Systems Grinnell, kma Robert F. Brewer liarold W. Rchrauer (57. 22)
Retired Chairman of the D<mrd Peter W. Dietrkh (55,7)
Vice President, Fick! Operations lee Liu e
& Chief Excutive Officer, Vice Presklent.
Chairman of the Ihnrd, kma Southern Utihties Company, Curporate Development kichard A.Gahhiancill (38,12)
Present & Chief Ercutive Centerville, kun Controller & Chid Officer of the Comruny kkhard A.Gahhimnelli (38,12)
Accounting Officer Dr. Salonum levy Contruller & Chief Jack R.Newman e Chairman & Chief Excutiw Accountmg Officer Dennis H. Vass (45,4)
Ihrtner. Morgan, i.ewis &
Officer,Irvy & Associates, Treasurer
~
thicklus (l.aw Firm),
San.kme, Cahfornia Dennis H.Vass (45,4) li #'rs in purrnth.en nywrsent age Wtshinghin. DC Treasurer N
e Alemkr Em unw Committer andyears ofsemce e Alemkr Au.hs Cumnunce
- Y e Alemkr Compensatwn Commstsee
- 111ective l'ebruary 7.1993 linident and Chid Esrutive Atemkr Nommanng Comminer Officer,I ASD flealth Services Inc.,
Des Moirrs, kma l
clBS)
INDUSTRIES IES Industries Inc.
200 First Street SE f
Cedar Rapids, h>wa 52401
)
i l
1 f
1 k
4 9
_