ML20099D772
| ML20099D772 | |
| Person / Time | |
|---|---|
| Site: | Cooper  |
| Issue date: | 07/29/1992 |
| From: | Horn G NEBRASKA PUBLIC POWER DISTRICT |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| NSD920802, NUDOCS 9208070026 | |
| Download: ML20099D772 (89) | |
Text
rm .-. GENERAL OmCE f;h P.O DOX 499 COLUMDUS. NEBRASKA OBfG0499 E "j: Nebraska Public Power District "T0323'*
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NSD920802 July 29, 1992 U.S. Nuclear Regulatory Commission Attn: Document Control Desk Vashington, DC 20555
Subject:
Licensee Guarantees of Payment of Deferred Premiums Cooper Nuclear Station NRC Docket No. 20 298. DPR 46 Centlemen:
In accordance with the requirements of 10 CFR Part 140.21, relative to deferred insurance premiums, the Nebraska Public Power District submits the following information which, we believe, demonstrates our ability to obtain funds in the amount of $10 million for payment of such pruniums within the specified three month period.
The Nebraska Public Power District has renewed a Credit Agreement, which is included as an enclosure, with the Amnrican National Bank and Trust Company of Chicago which indicates that said bank will lend the District funds, not to exceed $5 million as specifically reqaired to pay public liability claims arising from nuclear incidents. This Credit Agreement is valid through July 31, 1993, at which time the District will submit the appropriate documentation to verify
+he guarantee requirements for the following year.
Iowa Power under the terms of a power purchase contract, has acknowledged its responsibility to assume 50 percent of the retrospective premium requirements in an amount not to exceed $5 million in one year. Iowa Powe Ss chosen to utilize the type of guarantee defined in 10 CFR 140.21(e). There ;e, as enclosures to this letter, we are submitting the following documents in support of 50 percent of the required $10 million premium.
- 1. Iowa Power Inc. 1991 Annual Report to the Securities and Exchange Commission Form 10-K
- 2. Five Year Financial Forecast dated May,1991 for Midwest Ret ources, the holding company of Iowa Power.
We believe that the enclosed information is sufficient to demonstrate our ability to generate the necessary funds required by the deferred premium; however, should you require additional infr>rmation, please do not hesitate to contact me.
Sine rely
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G. Horn Nu ar Power Group Manager a~ r n ' O. .
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i July 29, 1992 Page 2 of 2
/ dis Enc 1(sure cc: U.S. Nuclear Regulatory Commission v/o enc 1.
Regional Office Region IV Arlington, TX NRC Senior Resident Inspector Cooper Nuclear Station v/o enc 1.
Ira Dinitz Insurance Indemnity Analyst Office of State Programs
- U.S. Nuclear Regulatory Commission Washington, DC 20555
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RESOLUTION OF NEDRASKA PUBLIC POWER DISTRICT HQ32:M Adoptod: July 10,1992 E91gMjon Auth_g& lng _$1QQQADO Bank Qtdit of 1993 BE IT RESOLVED by the Board of Directors of Nebraska Public Power District as follows:
SECTION 1. Pursuant to the Public Power and Irrigation District Law, Article 6 of Chapter 70 of tho Revised Statutes of Nebraska, as amended and supplemented (horoin called the *Act'), Nebraska Public Power District (herein called the
- District") shall be authorized to entor into a credit agreement (hmoin called the "Crodit A0rooment") for ono or more loans in an aggregato principal amount up to, but not exceeding. $5,000,000 from American National Bank and Trust Company of Chica00 (horoin called tho
- Bank") in substantially the form submitted at this meeting, to which shall be annexod, as Annex A, a copy of this resolution adopted by the District. Each loan shall be made in the principal amount of not loss than
$250,000 on any date on or before July 31,1993; provided that the District shall givo the Bank two (2) days prior notico of the dato and amount of each borrowing and shall be evidenced by an Electric System Noto, Series NRC of 1992 (herein called a " Note;" all Notes made under the Crodit Ag*ooment are herein collectively called the 'Notos") of the District in the aggregato principal amount of each loan, which Noto shall be issued and delivered by the District t' the Bank in the principal amount and on the date of the loan evidenced thereby. Each Note shall be payable to the order of the Bank from the scurces set out in Section 10 of tha Credit Agreement, shall be dated the date of its delivery, shall be payable one year from its dato of iss','e (subject to optional propayment as a whole or in part, at any timo or from time to time, withot.t penalty or premium, as provided in the Credit Agreement) and shall boar Interest (payable on the first day of each January, April, July and October and upon maturity) on the unpaid principal amount thereof from its date fluctuating at the rate per annum equal to 87% of the rate of interest announced or published publicly from time to time by the Ba ik as its base rate or equivalent rate of intorost. Intorost is to be computed on the basis of a 365/3GFday year. Each Note shall be in substantially the form set forth in Annex B to the Credit Agreement.
SECTION 2. The proceeds of the Noto shall be applied by the District to the purposo and in the manner provided in Section 9 of the Credit Agreomont.
SECTION 3. The President, any Vice President the Treasurer and the Assistant Treasurer of the District are cach hereby authorized to execute the Credit Agrooment and the Socrotary, or any Acsistant Secretary, are each hereby authorized to affix the seal of the District on the Credit A0reomont.
SECTION 4. The Chairman, Vice Chairman, President, Treasurer or Assistant Treasurer of the District are each hereby authorized to execute the Notes by manual signature and the Secretary or any Assistant Secretary are each hereby authorized to cause the soal of the District to be affixed, imprinted, engraved or otherwise reproduced on the Notes and to attest the same. Any of the fotogoing officers are hereby authorized to deliver the executed Notes in accordance with the provisions of the Crodd Agreement.
liesolution No. 92137 Page 2 Adopted: July 10,1992 SECTION 5. The Chairman, Vico Chairman, President, Treasurer or Assistant Troasurer of the District and the Socrotary or any Assititant Socrotary are, ard each of thom horeby is althorized to do and perform all things and to execute all papers in the name of the District or othorwise, as they deem advisable, and to inake all payments, necessary or convenlont in their rescoctivo oplnlon, to the end that the District may carry out the objects of this resolution and its obilgations under the terms of the Credit Agreement and of the Notes.
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CREDIT AGREEMENT CREDIT AGREEMENT, dated as of August 1, 1992, between NEBRASKA PUBLIC POWER DISTRICT (herein called the " District") and AMER 7CAN NATIONAL BANK AND TRUST COMPANY OF Ci!ICAGO (herein called the " Bank").
The District desires to provide for future borrowings, and the Bank is willing to commit to lend to the District, upon the terms and conditions herein set forth, the aggregate sum of up to
$5,000,000, in such installments and at such times as hereinafter provided, to be evidenced by notes of the District therefor.
In consideration of the foregoing and the covenants and conditions herein contain( ., the parties thereto agree as fol-lows:
- 1. lefinitions. The following terms shall, for all purposes of this credit Agreemcnt, have the following meanings:
"Act" shall mean the Public Power and Irrigation District Law, constituting Article 6 of Chapter 70 of the Revised Statutes of Nebraska, as amended and supplemented.
" Electric Resolution" chall mean the resolution enti-tied " Electric System Revenue Bond Resolution" adopted by the Board of Directors of the District on August 22, 1968, as sup-plemented or amended in accordance with the terms thereof.
" Electric System Bonds" shall mean Electric System Revenue Bonds of the District authorized to be issued under the Electric Resolution.
" Electric System General Reserve Fund" shall mean the Electric System General Reserve Fund established in Section 502 of the Electric Resolution.
" Loans" shall mean the loans provided for in this credit Agreement.
" Note or Not_es" shall mean any note or notes, as the case may be, issued pursuant to this Credit Agreement by the District to evidence any Loan.
" Note Resolutign" shall mean the resolution of the Distrfct entitled " Resolution Authorizing $5,000,000 Bank Credit of 1952," adopted July 10, 1992 authorizing the issuance of the Notes and authorizing the execution and delivery of this Credit Agreement, a true and correct copy of which resolution is annexed hereto as Annex A.
- 2. Commitment to Lend. The Bank hereby agrees, upon the terms and conditions herein set forth, to make one or more Loans to the District, in accordance with the provisions of this Credit Agrooment, on or before July 31, 1993 in an aggregate principal up to, but not exceeding $5,000,000, each Loan to be in the principal amount of not less than $250,000.
- 3. Borrowings. The District shall give the Bank at least two (2) days prior notice of the date and amount of each borrowing hereunder. Each borrowing pursuant thereto shall take place at the principal office of the Bank at LaSalle and Washington Streets, Chicago, Illinois. Not later than 11:00 a.m.
on the date of each borrowing, the Bank shall, subject to the terms of this Credit Agreement, make available to the District, Federal Reserve or other immediately available funds in the prin-cipal amount being borrowed, upon delivery to the Bank of a Note in such principal amount.
- 4. The Notes. Each Note shall be designated as
" Electric System Note, Series NRC of 1992," shall be payable to-the order of American National Bank and Trust Company of Chicago, shall be dated the date of its delivery, shall be payable one year from its date of issue (subject to optional prepayment as provided in Section 8 hereof), and shall bear interest (payable on the first day of each January, April, July and October) on the unpaid principal-amount thereof from its date fluctuating at the rate per annum equal to 87% of the rate of interest announced or published publicly from time to time by the Bank as its base rate or equivalent rate of interest. Such interest rate shall be com-puted on the basis of a 365/366-day year.
The Notes shall be executed on behalf of the District by the manual signature of its Chairman, Vice Chairman, President, Treasurer or Assistant Treasurer and its corporate seal shall be affixed, imprinted, engraved or otherwise repro-duced thereon and att9sted by the manual signature of its Secretary or any Assistant Secretary and shall be otherwise in substantially the form annexed hereto as Annex B.
- 5. Commitment Fee. The District shall pay to the Bank as a commitment fee contemporaneously with the execution of this Credit Agreement the sum of $5,000.
- 6. Tax Indemnification.
(i) The parties intend that the Bank shall receive in respect of the Notes-amounts equal to the principal thereof ?
and interest thereon as provided hereunder, when due, without deductions, penalties, charges, or withholdings as a result of the imposition of any federal income or similar federal tax imposed on the Bank as a holder of any of the notes (collec-tively " Taxes").
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.. o Any such Taxes shall be paid by the District. The District will pay the Bank the amounts necessary such that the not amount of the principal and interest received and retained by the Bank is not less than the amount payable under this Agreement had such Taxes not been imposed.
If, notwithstanding the previous two sentences, the Bank pays any such Taxes, the Bank will furnish to the District official tax receipts or evidence of payment of all such Taxes and the District will promptly reimburse the Bank therefor.
(ii) If the Internal Revenue Code of 1986, as amaried (the " Code"), or any other federal income tax law, rule, regula-tion, or governmental interpretation thereof hereafter enacted, adopted or issued, other than any such change mentioned in (iii) below, when affecting the Bank as a holder of the Notes or com-pliance by the Bank as a holder of the Notes with such, (a) subjects the Bank to any tax, duty, charge, or withholding due on the principal of or interest on the Notes or changes the basis of taxation of-payments to the Bank in respect of the principal of or interest on the Notes, in-cluding, without limitation, the effect of any limitation on the deductibility of interest on the funds obtained to purchase or carry the Notes; or (b) imposes any other condition or circumstance the result of which is to increase the cost to the Bank of pur-chasing, funding or carrying the Notes, or reduces any amount receivable by the Bank in connection with the prin-cipal of or interest on the Notes-or requires the Bank to make any payment calculated by reference to the amount of the Notes or interest received by it in an amount dramed material by the Bank; then, within thirty days of demand by the Bank, the District shall pay the Bank an amount which will be equal, on an after-tax basis co the Bank (taking into account any taxes payable by the Bank on such amount), to (a) that portion of such increased cost incurred or (b) the amount or reduction in an amount received which the Bank determines is attributable to purchasing, funding or carrying the Notes to the extent of the principal amount thereof cutstanding from time to time. The effect of any such increased cost which is imposed on the Bank generally may be allocated to the Notes on any reasonable basis in the discretion of the Bank.
-(iii) If at any time or times while the Bank is the Holde, of the Notes there is a change in the maximum marginal tax rate (the " Tax Rate") at which the Bank-could.be taxed for fed-eral income tax purposes, the interest rate on the Notes shall be d
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'i decreased (in the case of a decrease in the Taz Rate) to an in-terest rate equal to the product of-(i) the interest rate on thu Notes in effect immediately prior to a change in the Tax Rate times (2) a fraction (expressed in decimals) the numerator of which is the number one (1) minun the applicable Tax Rate after such change and the denominator of which is the number one (1) minus the Tax Rate which had been in effect p.ior to such change in the Tax Rate.
(iv) Notwithstanding any of the other provisions of this Agreement, if the Dintrict has paid the additional amount specified in (11) and (iii) above,-the District shall not be obligated to pay or reimburse the Bank for any tax on the income of the Bank to the extent that such income tax is attributable to the inclusion in the gross income of the Bank for-federal tax purposes of interest on the Notes as if such interest had been timely reported and timely paid.
- 7. Conditions Precedent to Loans.- The Bank shall not be obligated to make any loan unless at the date specified for the making thereof the District delivers to the Bank:
(a) The opinion of the General Counsel to the District, dated as of such date, to the effect that:
(i) There is no litigation pending in-any court, either State or Federal, questioning the creation, or-ganization or existence of the District or the validity of this Credit Agreement or the Note being issued to evidence such Loan; and (ii) The District has the power to borrow the amount being loaned; to execute and deliver this Credit Agreement; to evidence the Loans by its-Notes to be made and delivered-in accordance: herewith, and to per-form and observe all of the terms and conditions of this Credit Agreement on its part to-be performed and observed; and (b) A certificate ot the Chairman, President, Treasurer or Assistant Treacurer of the District, dated as of such date, to the effect that the representations and warranties of the District contained in Section 14 of this Credit Agreement are true and correct as of such date; and (c) A certificate of the Chairman or President or Treasurer cur Assistant Treasurer of. the District, dated as of such date, setting forth the aggregate amount of bonds and notes of the District that will be outstanding ~immedi-ately after the issuance of the note then being' issued and stating that no default has, occurred in the payment-of prin-cipal of cnr interest on arv indebtedness for borrowed money
1 of the District which remains uncured; and I
(d) The opinion of Mudge Rose Guthrie Alexander & 3 Fordon, Bond Counsel to the District, datec as of such date, ,
substantially in the form annexed thereto as Annex C;
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(c) A certificate as to Arbitrage, dated as of such l j; date, in accordance with the provisions of the code; and !
(f) Such additional certificates, instruments and other documents as the Bank or its counsel may deem necessary to
- effect good delivery of the Note being delivered on such 4 date or evidence the due performance by the District of tha
! conditions precedent hereunder.
i 8. Optional Prenavment. The District may prepay any No' as a whole or in part, at any time or from time to time,
. witnout penalty or premium, by paying to the Bank all or part of the principal amount of the Note to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment. Each prepayment of a Note shall be made on such date.and in such principal amount as shsll.be spec-ified by the District in a written notice delivered to the Bank not less than 10 days prior thereto. Notice having been given as
, aforesaid, the principal amount of the Note stated in such notice or the whole thereof, as the case may be, shall become due and-payable on the prepayment date stated in such notice, together with interest accrued and unpaid to the prepayment date on the principal amount then b91ng paid; and the amount-of principal and interest then due and payable shall be paid (i) in case the entire unpaid balance of the principal of any Noce is to be paid, upon presentation and surrender of such Note to the District or its representative at the principal office of the Bank, and-(11) in case only part of the unpaid balance of principal of any Hote is to be paid, upon- preser.tation of such Note at *.he principal office of the 3ank for notation thereon by the Bank of the amount of principal and interest on euch-Note _then paid. If on the prepayment date moneys for the payment of the principal amount to be prepaid on such Note together with interest to the prepayment date on such principal. amount, shall hate been paid to the Bank as above prtvided and if notice of-prepayment shall-have been -
given to the Eana as above provided, then from und after the prepayment date interest on such principal amount of such Note shall-c'ese to accrue. If said monsys shall not have been so paid on-the prepayment date, such principal amount of such Note shall continue'to bear interest uncil payment thereof at tne rate
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provided for in Section 4 of this credit Agreement.
- 9. Application of Note Proceeds. The proceeds of the Notes shall be used to pay amounts required-to be paid by the
- District as a result of one or more nuclear incidents, as pro-
"'ded in the Price-Anderson Act, as amended (Pub. L.94-197, as
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amended and as compiled in 42 U.S.C. Section 2210 and pertinent subsections of 42 U.S.C. Section 2014, as amended) and certain regulations of the Nuclear Regulatory Commission (10 C.F.R. Part 140, as amended in particular by 42 Fed. Reg. 46-54 (January 3, 1977)) or any act or regulation supplemental thereto or amenda-tory thereof.
- 10. Pavmont. The obligation to pay the principal of and interest on the Notes and the other amounts-payable hereunder is a special obligation of the District payable solely from such amounts in the Electric System General Reserve Fund as may be available therefor under the District's bond resolutions then outstanding; provided, however, that such obligation to pay the principal of and interest on the Notes and the other amounts payable hereunder from amounts in the Electric System General Reserve Fund shall be subject and subordinated in all respects to the pledge of the Revenues (as defined in the Electric _
Resolution), moneys, securities and funds created by the Electric Resolution and, provided, further, that the obligation to pay the principa) of and interest on the Notes and the other amounts payable hereunder from amounts in the Electric System General Reserve Fund shall ba subject and subordinated to any payments which shall at any time be required to be made from Electric System General Reserve Fund pursuant to Section 713 of the District's Power Supply System Revenue Bond Resolution, adopted by the Board of Directors of the District on September 29, 1972, as supplemented and amended in accordance with the terms thereof.
The District shall duly and punctually pay or cause to be paid from the Electric System General Reserve Fund, in Federal Reserve or other immediately available funds, the principal of the Notes, the interest thereon and the other amounts payable hereunder at the dates and place and in the manner provided herein and in the Nota- according to the true intent'and meaning thereof. If the principal of the Notes becomes due and payable on.a Saturday or Sunday or a day which is a Bank holiday, such payment shall be made on the next succeeding Bank businese day and the extension of time for payment shall be-included in computing interest in connection with such payment.
- 11. All of the Bank's. rights and'romedies under this Credit Agreement are cumulative and non-exclusive. The acceptance by the Bank of any partial payment made hereunder after the time whnn any of District's Loans become due and payable will no* establish a custom, or waive any rights of the Bank to enforc. prompt payment-thereof. The Bank's failure to require strict performance by the Djstrict of any provision of this credit Agreement shall not waive, affect or diminish any right of the Bank thereafter to demand strict compliance and performance therewith. Any waiver of an event of default hereunder shall not suspend, waive or affect any other event of default hereunder.
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- 12. Rate Covenant. The District covenants and agrees with the Bank that so long as any credit shall be available here-under or any Note or interest thereon is unpaid it shall comply for the benefit of the Bank with requirements of Section 712 of the Electric Resolution.
- 13. Necative covenants of the District. The District, if and so long as credit shall,be available hereunder or any Note or interest thereon is unpaid, will not alter, amend or repeal the Note Resolution, or take any action impairing the authority thereby or hereby given with respect to the issuance and payment of the Notes.
- 14. Tax covenant. In order to maintain the exclusion from gross income for purposes of federal income taxation of interest on the Notes, the District'shall comply with the pro-visions of the Code applicable to the Notes, including without limitation the provisions of the Code which prescribe yield and other limits within which the proceeds of the Notes and other amounts are to be invested and require that certain investment
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earnings on the foregoing be rebated on a periodic basis to the Treasury Department of the United States of America. In further-ance of the foregoing, the District shall comply with the Tax Certificate as to Arbitrage and Instructions as to Compliance with the Provisions of 103(a) of the Code, to be delivered by Mudge Rose Guthrie Alexander and Ferdon, Bond-Counsel to the District, at the time the Notes are. issued, as such letter may be amended from time to time, as a source of guidance for achieving compliance with the code.
The District snall not take any action'or fail to take any action, which would cause the Notes to be " Arbitrage Bonds" within the meaning of Section 148(a)_of the code.
- 15. Representations and Warranties. The District rep-resents and warrants that:
(a) The District has the power to borrow the amount provided for in this Credit Agreement; to execute and de-liver this credit Agreement; to evi' nce the Loans by its Notes to be made and delivered in accordance with the pro-visions hereof and to perform and observe all of the terms and conditions of this credit Agreement on its part to be performed and observed; (b) The: making and performance by the District of this credit Agreement will not violate any provision of the Act, or any bond or note resolution of the District, or any regulation, order or decree of any court, and will not result in a breach of any of the terms of the petit.on for creation, as amended, of the District or any' agreement or
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j instrument to which the District is a party or by which the
- District is bound; and i
i (c) The District, by adoption of the Note Resolution
] has duly authorized the borrowing of the amount provided for l in this Credit Agreement, the execution and delivery of this Credit Agreement, and the making and delivery of the Notes
< to the Bank au-herein provided; and to that end the District warrants ti.at it will take all action and will do all things which it is authorized by law to take and to do in order to fulfill all covenants on its paru to be performed and to pro. ion for and to assure payment of the Loans as herein ;
j provided. <
- 16. Acceleration of Due Date Uoon Default. If one or i more of the following events of default shall occur and bo 3
continuing:
I (a) tefault shall cccu': and be continuing in the pay-ment when due of any pr ncipol or interest on any Note; (b) Any representation er warranty made herein or puc-suant hereto shall prove to be untrue in any material
- respect; (c) Default shall oesur in the performance of any of the other covenants or agreements of the District contained herein, and the abt or omission creating such default shall
, continue for a period of 30 days after written notice there-
- of shall have been given to the District; or (d) oefault shall be made in the payment of the prin-cipal of or interest or any Electric _ System Bonds when due, and as a result of such default, the maturity of such Bonds is acceleirated; I then, and in any such event, the Bank shall have the right to i
declare the principal of and all interest then accrued on all
- Notes to be due and payable immediately, cnd upon such declara-tion the Notes and the interest accrued thereon shall become duo and payable, anything in this Credit Agreement or in the Notes contained to the contrary notwithstanding.
- 17. Defeasance. If the District shall pay or cause to be paid, or there'shall otherwise be paid, to the Bank the prin-4 cipal of and interest on the Notes at the times and in the manner i
stipulated herein, then.the covenants, agreements and other obligations of the District hereunder shall thereupon cease,-
terminate and become void and:be discharged and satisfied. If moneys sufficient to pay the principal amount of the Notes and interest thereon until maturity or a date fixed for repayment-shall have been paid to the Bank for application to such purpose, the Notes and the interest thereon shall be deemed to have been paid within the meaning and with the effect expressed in this Section. Amounts so set aside and held may be invested in obli-
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gations of, or guaranteed by, the United States of America, nrovided, however, that said obligations shall matu* not later than the maturity date of the llotes. All earnings from such investments shall be paid over to the District, as received, free and clear of any trust, lien or pledge.
- 10. I!oticen. All notices under this Credit Agreement shall be in writing and written notices shall be deemed to have been duly given if delivered or mailed by reg 4.stered itiall, in the case of the District, at Box 499, Columbus, Nebraska 68601, Attention: President, and in the case of the Bank, at its prin-cipal office at LaSalle and Washington Streets, Chicago, Illinois 60690, Attention: Staven H. Abbey.
- 19. Counterparts. This Credit Agreement may be exe-cuted in any number of counterparts, and all such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the District and the Bank have caused this credit Agreement to be duly signed on their respec-tive behalf by their officers thereunto duly authorized, all as of the date and year first above written.
NEBRASKA PUBLIC POWER DISTRICT (SEAL)
By #
Treasurer Attest:
bued k
, Assistant Secretary fa-m AMERICAN NATIONAL BANK AND TRUST COMPANY OF CUICAGO
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Net G. Angel ,
P[ Notary IWe, State of Maels '
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i By Vice President f"/- l] '(--
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ANNEX A Roeolution Authorizina $5,000,000 BaDB Credit of 1992 Be it Resolved, by the Board of Directors $f Nebraska Public Power District, as follows:
Section 1. Pursuant to the Public Power and Irrigation District Law, Article 6 of Chapter 70 of tne Revised Statutes of Nebraska, aa amended and supplemented (herein called the "Act"), !
Nebraska Public Power District (herein called the " District")
shall be authorized to enter into a credit agreement (herein called the " Credit Agreement") for one or more loans in an aggre-gate principal amount up to, but not exceeding, $3,000,000 from American National Bank and Tr'Ist Company of Chicago (herein called the " Bank") in substantially the form submitted at this meeting, to which shall be annexed, as Annex A, a copy of this resolution adopted by the District. Each loan shall be made in the principal amount of not less than $250,000 on any date on or before July 31, 1993; provided that the District shall give the Bank two (2) days prior notice of the date and amount of each borrowing and shall be evidenced by an Electric System Note, Series NRC of 1992 (herein called a " Note"; all Notes made under the credit Agreement are herein collectively called the " Notes")
of the Districe in the aggregate principal ambant of each loan, which Note shall be issued and delivered by the District to the Bank in the principal amount and on the date of the loan avi-donced thereby. Each Note shall be payable to the order of the Bank from the sources set out in Section 10 of the Credit Agreement, shall be dated the date of its delivery, shall be payable one year from its date of issue (subject to optional pre-payment as a whole or in part, at any time or from time to time, without penalty or premium, as provided in the Credit Agreement) and shall bear interest (payable on the first day of each January, J.pril, July and October and upon maturity) on the unpaid prin11 pal amount thereof from its date fluctuating at the rate per annum equal to 87% of the rate of interest announced or published publicly from time to time by the Bank as its base rate or equivalent rate of interest. Interest is to be computed on the basis of a 365/366-dny year. Each Note shall be in substantially the form set forth in Annex B to the Credit Agreement.
Section 2. The proceeds of the Jotes shall be applied by the District to the purpose and in the manner provided in Section 9 of the Credit Agreemert.
Section 3. The President, any Vice Pres.ident, the Treasurer, and the Assistant Treasurer of the District are each hereby authorized to execute the Credit Agreement and the Secretary, or any Assistant Secretary, are each hereby authoricev to affix the seal of the District on the Credit Agreement.
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i Section 4. The Chairman, Vice Chairman, President, t H
.1 Treasurer or Assistant Treasurer of the District are each hereby l authorized to execute the Notes-by manual signature and the Secretary or any Assistant Secretary are each hereby authorized j to cause the seal of the District to be affixed, imprinted, on- l
- l. graved or otherwisc reproduced on the Notes and to attest the !
! same. Any of the foregoing officers are hereby authorized to 1 deliver the executed Notes in accordance with the-provisions of the Credit Agreement.
, Section 5. The Chairman, Vice Chairman,' President, I- Treasurer or Assistant Treasurer of the District and the i Secretary or any Assistant Secretary are, and each of them hereby j is authorized to do and perform all things and to execute all i papers in the name of the District or otherwise, as they deem i advisable, and to make all payments, necessary or convenient in j their respective opinions, to the end that the District may carry J out the objects of this resolution and its obligations under the
- terms of the Credit Agreement and of the Notes.
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ANNEX B (FORM OF NOTE)
NEBRASKA PUBLIC POWER DISTRICT ELECTRIC SYSTEM NOTE, SERIES NRC OF 199_
No. S FOR VALUE RECEIVED, the undersi,ned, NEBRASKA PUBLIC POWER DISTRICT (the " District"), a public corporation and polit-ical subdivi31on organized and existing under and by virtue of the laws of the State of Nebraska, hereby promises to pay to the order of Auerican National Bank and Trust Company of Chicago (the
" Bank") on , 19 upon presentation and sur-render of this Note at the principal office of the Bank, the principal sum of _ Dollars ($ ),
in lawful money of the United States of America, and to pay interest (payable on , 19 and quarterly there-after on.the first day of each January, AprII, July and October and upon maturity) on said principal sum at said office in like money from the date hereof fluctuating at the rate per annum equal to 87% of the rate of interest announced or published publicly from time to time by the Bank as its base rate or equivalent rate of interest. Such interest shall be computed on the basis of a 365/366-day year.
This Note is a special obligation of the District and is one of a duly authorized issue of notes of the District (the " Notes")
issued and to be issued under and pursuant to the Public Power and Irrigation District Law of Nebraska, _as amended and-supple-mented (herein called the "Act"), and under and purcuant to a resolution of the District, adopted July 10, 1992, entitled Resolution Authorizing $5,000,000 Bank Credit of 1992 (the " Note Resolution"), and under and pursuant to a credit Agreement (the
" Credit Agreement"), dated as of August 1, 1992 by and between the District and the Bank.
The obligation to pay the principal of and interest on.this Note is a special obligation of the District payable solely from such amounts in the Electric System General Reserve Fund (as de-fined in the credit Agreement) as may be available therefor under the Distri.ct's Bond resolutions then outstanding; provided, how-over, that such obligation to pay the_ principal of and interest on this Note from the Electric System General Reserve Fund is subject and. subordinated in all respects to the pledge of the revenues, moneys, securities and funds created by the Electric Resolution (as defined in the Credit Agreement); and, provided, further, that the obligation to pay the principal of and interest on this Note from-the Electric System General Reserve Fund is subject and subordinated to any payments which shall at any time be required to be made from the Electric System General Reserve Fund pursuant to Section 713 of the District's Power Supply B-1
System Revenue Bond Resolution, adopted by the Board of Directors of the District on September 29, 1972, as supolemented and amended in accordance with the terms therer'.
This Note is subject to the terms and conditions contained in the Note Resolution and the Credit Agreement, copies of which are on file at the principal office of the District, and refer-ence is made thereto for a complete statement of such terms and conditions.
The District shall have the right to prepay this Note as a whole or in part, at any time or from time to time, without pen-alty or premium, in accordance with the terms of the credit Agreement. The prepayment dato and the principal _ amount of the Note to be prepaid shall be specified by the District in a written notice to the Bank not less than 10 days prior tc any prepayment. If on the-prepayment date moneys for the payment of the principal amount of this Note to be prepaid, togt u er with interest to the prepayment date on such principal amcu.t, shall have been paid to-the Bank as above provided, then from and after the prepayment date interest on such principal amount of this Note shall cease to accrue. If said roneys shall not-have been so paid on the prepayment date, such principal amount of this Note shall continue to bear interest as provided above until payment thereof.
This Note is not an obligation of the State of Nebraska and the Act provides that the State of Nebraska shall never pledge its credit or funds, or any part thereof, for the payment or settlement of any indebtedness whatsoever of the District.
IN WITNESS WHEREOF,. Nebraska Public Power District has caused this Note to be signed in its name and on its behalf by its President or Treasurer or Assistant Treasurer, and its offi-cial seal to be hereunto affixed and attested by its Secretary or any Assistant Secretary, as of day-of ,
19__. ,
NEBRASKA PUBLIC POWER DISTRICT By Treasurer (SEAL)
Attest:
Assistant Secretary B-2
ANNEX C 19__
Nebraska Public Power District Columbus, Nebraska American National Bank and Trust Company of Chicago Chicago, Illinois
}
Gent 1(Len:
We have examined the record of proceedings relating to the issuance of the S Electric System Note, Series NRC
< of 1992, No. , dated , 19__ (the " Note"),
of Hebraska Public Power District (the " District"), a body cor-porate and politic, constituting a public corporation and polit-ical subdivision of the-State of Nebraska.
The Note is issued under and pursuant'to .. _pter 70, Article 6, of the Revised Statutes of the dtate of Nebraska, as amended (the "Act"); and under and pursuant to a Credit Agreement (the
" Credit Agreemor t") , between the District and American National Bank and T'tust Company of Chicago (the " Bank"), datad as of August 1, 1992, authorized by a resolution (the " Note Resolution") of the District adopted on July 10, 1992 and entitled " Resolution Authorizing $5,000,000 Bank Credit of 1992."
The Note is payable to the order of the Bank, matures on
, 19__ (subject to prepayment in_accordance with-the-erms of the Credit Agreement), and bears interest (payable on 19__ and quarterly thereafter on the first day of January, April, July and October and upon maturity) from its date fluctuating at-the rate per annum equal to 87% of the rate of interest announced or published publicly from time to time by the Bank as its base rate or equivalent rate of interest. Such interest rate shall be computed on the basis of a 365/366-day year.
The obligation to pay the principal of and interest on the Note is a special obligation of the District payable solely from such amounto in the Electric System General Reserve Fund (as de-fined in the credit Agreement) as may be available therefor under the Distri'ct's bond resolutions then outstanding; provided, how-ever, that such obligation to pay the principal of and interest-on the Note from the Electric System Reserve Fund is subject and subordinated in all respects to the pledge of the revenues, -
moneys, securities and funds created by the Electric Resolution (s3 defined in the credit Agreement; and orovided, further,_that the obligation to pay-the principal of and interest on the Note from-the Electric System General Reserve Fund is subject and subordinated to any payments which shall at any time be required C-1 ,
_.m._ . _ _ _ _ . _ - _ _ . _ . - - -
4 E
l to be made from the Electric Systou General Reserve Fund pursuant to Section 713 of the District's Power Supply System Revenue Bond
! Resolution, adopted by the Board of Directors of the District on
, September 9, 1972, as supplemented and amended in accordance with j the terms thereof.
1 l We are of the opinion that:
1 1. The District is duly created and validity existing under
, the provisions of the Act, with power to adopt the Note j Resolution, to enter into the Credit Agreement, to issue the Note i
! thereunder and to make and perform the covenants contained in the j i credit Agreement.
, 2. The Note Resolution has been duly adopted by the
! District, is in full force and effect and is valid and binding on I i the District and enforceable in accordance with its terms, and !
i the credit Agreement has been duly authorized and executed by the i District, is in full force and effect, is valid and binding upon ,
- the District and enforceable in accordance with its terms. I 1
j 3. The Note las been duly authorized and issued by the District in accordance with law and in accordance with the Noto
., Resolution and the Credit Agreement, and is a valid binding and i direct obligation of the District enforceable in accordance with its terms and entitled to the benefit of the Act and of the
! Credit Agreement.
I
- 4. The Internal Rever*te Code of 1506 as amended (the
- " Code") sets forth certain lequirements which must be met'sub-sequent to the issuance and delivery of the Note for interest
- thereon to be and remain excluded from gross income for purposes l of federal income taxation. Noncompliance with such requirements l may cause interest on the Note to be included in gross income retroactivo to the date of issue of the Note. The District has covenanted to comply with such requirements.
l In our opinion, under existing law, and assuming compliance I with the aforementioned covenant, interest on the Note is ex-cluded from groLs income for federal-and State of Nebraska income
- . tax purposes. The Note is not a "specifitd private activity bond" within the meaning of Section 57(a) (5) of the Code and, therefore, the interest of the Note will not be treated as a preference item for purposes of computing the federal alternative minimum tax imposed by Section 55 of the Code. However, we note
- a portion of the interest _on the Note owned by corporations may be subject to the federal alternative minimum tax, which is based in part on adjusted current earnings.
i i
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4 4-Except as' stated in the preceding two paragraphs,-we express-no opinion as to any rederal or atate tax consequences of the
, ownership of, recolpt of interest on, or disposititn of the Note.
i The opinions contained in paragraphs 2 and 3 above are i qualified to the extent that the enforceability of the Note j Resolution, the. Credit Agreement and the Note, respectively, may be limited by any applicable bankruptcy, moratorium ar ne fiar laws relating to the enforcement of creditors' rights.
2
] We have examined the Note, as executed, and, in our opinion, the form of said Note and its execution are regular and proper.
- Very truly yours, i
I
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I FORM 10-K SECURITIES AND EXCIIANGE COMMISSION Washington, D. C. 20549 (Mark One)
[x] ANNUAL REPORT PURSUANT TO Sf3CTION 13 OR 15(d) OF Tile SECURITIES EXCHANGE ACr OF 1934 IFEE REOUIREDI For the fiscal year ended December 31. 1991, OR
[] TRANSITION REPORT PURSUAMF TO SECrlON 13 OR 15(d) OF Ti1E SECURIT. '
EXCHANGE ACT OF 1934 INO FEE REOUIREDI For the transition period from to Co' emission file number 1-3567 4
IOWA POWER INC.
(Exact name of registrant as specified in its chaner) 42-03M050
_. JOWA (1.R.S. Employer (State or der jurisdiction of incorporation or organization) Identification No.)
666 Grand Ave.. P.O. Box 657. Des Moines. Towa - ,
50303 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 515 ',81-2900-Securities registered pursuant ;o Section 12 (b) of the Act: NONE
- Securities registered pursua. . to Section 12 (g) of the Act: NONE
~
Indicate by check mark whether the registrant (1) has filed all repons requirrd to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shoner period that the registrant was required to Hle such repons), and (2) has been subject to such filing requirements for die pas: /3 days.
Yes X No Indicate by check mark if (. )sure of delinquent filers pursuant to item 405 of Regulation S-K is not v contained hetein, and will not t.c contained, to the best of registrant's knowledge, in definitive proxy or informatien statements incorporated by reference in Pan III of this Form 10-K or any amendment to this Ferm 10-K [ ).
.The aggregate market value of voting stock held by non-affiliates of the registrant-was $0 as of -
March 25,1992, when 7,586,456 shares of common stock, $10 par value, were outstanding.
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IOWA POWER INC.
1991 Form 10.K Annual Repon TABLE OF CONTENTS Pace Pan i Ite m 1 Business 3
General Development of Business . . . . . . . . ...........
3 Narrative Description of Business . . . . . . . . . . . . . . . . . . . .
................. 3 Capital Expenditures and Financing 4
4 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Electric Operations Generation . . . . . . . . . . . . . . . . . . . . .
6 Electric Operations Fuel Supply . . . . . . . . . . . . . . . . . . .. .
7 Regulation . . . . . . . . . . . . . . . . . . . . . ........... 8 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Em ploye es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Item 2 Properties . . . . . . . ............................
8 Item 3 Legal Proceedings ..............................
Submission of Matten to a Vote of Security Holders . . . . . . . . . 9 .
Item 4 Part 11 Item 5 Maiket for the Registrant's Common Equity and Related Security Matters . . . . . . . . . . . . . . , , . . , . . . . . . 9 9
11em 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . 9 Financial Statements and Supplementary Data . . . . . . . . . . . . . . 9
', Ite:n 8 Item 9 Changes in end Disagreements with Accountants on Accounting and Financial Disclosure .. ,.....,. .... 9 Part III '
Directors and Executive Officers of the Registrant ........... 10 Item 10 Il' Item 11 Execut:ye Compensation ...........................
, item 12 Security Ownership of Certain Beneficial Owners 16 and Managetrent ..............................
Cenain Relationships and Related Transactions ............. 16
. Item 13 Pan IV Item 14 Exhibits. Finandal Statement Schedules, and 17 Reports on 1-orm 8.K ........ ..................
....... ............., ....... ............ 57
- Signatures Exhibits
.................. .......... ... . 58 c Index ... ..
1 E
FORM 10-K 1991/ INUAL REPORT IOWA POWER INC.
!' PARTI
- Item 1-Business (a) General Development of Business Iowa Power Inc. OPR or Company), an Iowa corporation, is a wholly-owned utility subsidiary 4
of Midwest Resourcee Inc. (Midwest Resources or MWR).
IPR was previously the utility subsidiary of Iowa Resources Inc. 00R), a holding company.
On November 7,1990 IOR and Midwest Energy Company (MWE) merged into MWR, a newly created
- holding company. The utility operations of MWR are carried out through IPR and towa Public Service
' Company (IPS).
(b) Narrative Description of Business
. GENERAL IPR is engaged in the generation, purchase, transmission, distribution and sale of electric energy, serving 234,000 customers in 125 communities in central and southwest towa. CBEC Railway Inc.,
! an Iowa Corporation, formed in 1990, is a wholly-owned subsidiary of IPR that was organized to own and operate rail facilities for the transp tation of coal. CBEC Railway Inc. has not commernd i operations. Properties held by Redlands Incorporated, previously a wholly-owned subsidiary of IPR, l were :ald during 1991 and the company war dissolved.
?
IPR is a regulated yblic utili yt holding franchises to operate in various municipalities and having territorial protection in other areas granted by the state regulatory commission.
On June 6.1991 IPR and IPS announced a plan to merge into a single utility company. See Pan IV, item 14, Foomote (6) of Notes to Consolidated Financial Statements and the Prospective Information section of Management's Discussion and Analysis of Financial Condition and Results of Operations for funher information.
CAPITAL EXPENDITURES AND FINANCING IPR consolidated capital expenditures, including Cooper Nuclest Station capital improvements
' and allowance for funds used during construction and accrued on aavances, for the five' years ended December 31,1991, were 5332 million, of wnich $264 million was for IPR's plant additions. IPR's property retirements and sales for the same period amounted to $35 million.
IPR's sources of capital are provided from fteds generated intemally, contributions from the parent and various extemal sources such as commercial paper, bank lines of credit and other debt and equity securities.
- - l
)
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i IPR's Articles of Incorporation and indentures under which first mortgage bonds are issued contain certain camings and capitalization tests and other conditions which must be satisfied prior to the issuance of additional IPR preferred stock or cenain types of debt securities. At Decembar 31, 1991 appmximately $143 million'of pn:ferred stock $1*/5 million of first mongage bonds and $151 million of unsecured short-term debt could have been issued under the most restrictive of suc and conditions, IPR currently has authority from the Federal Energy Regulatory Commission (FERC) to issue -
on or befom December 31. 1993, short tenn debt in the form of commercial paper and bank notes =
amounting to $135 million.
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< ELECTRIC OPERATIONS GENERATION Electric genenting facilities at December 31,1991 consisted of th .bilowing, all of which are located in Iowa. The net accredited generating capacity, along with participation purchases and sales, net and finn purchases and sales, net are shown for sumtrer 1991 accreditation.
IPR Accadited Generating Unit Fuel Capability OcW)
Plant i
Steam Electric Generating Plants:
1 Coal 46,000 4 Council Bluffs Er.ergy Center ..........
2 Coal 88,000 j Council Bluffs Energy Center .,,. ......
3 ' Coal 315,200 (1)
Council Bluffs Energy Center . . . . . . . . . .
3 Coal 118,500 (2)
Neal Generating Station . . . . . . . . . . . . . , .
1 Coal 101,300 (3)
Ottumwa Generating Station ...........
- Coal 198.200 (4) 1 Louisa Generating Station . . . . . . . . . . . . . 1 i 867.200 I Nuclear:
Cooper Nuclear Station Capacity Purchase ... 1 Nuclear 389.000 (5) 4 4 Combustion Ttdines: 127,200 -
River Hills Energy Center ....... 1-8 Gas / Oil 1-2 Gas / Oil 148,000 Sycamore Energy Center ... ... .... .
Pleasant Hill Energy Center ........ ... 1-2 Oil 70.000 345.200 Net Accredited Generating Capacity . . . . . . 1.601.400 l Add:
51,800 Participation Purchases and Sales. Net . . . . . .
Firm Purchases and Sales, Net .......... 47.000 1.700,200 Adjusted Net Generating Capability ............
Temporarily Deactivated Uni's:
Des Moines Energy Center . . . . . . . . . . . . . 6-7 Coal 188,000 (6) i (1) IPR's portion (46.7%) of this jointly-owned 675 MW facility.
(2) IPR's portion (23%) of this jointly-owned 515 MW facility.
(3) IPR's portion (15%) of this jointly-owned 675 MW facility.
(4) IPR's portion (30.5%) of this jointly-owned 650 MW facility.
(5) Cooper Nuclear Station is owned by Nebraskc Public Power District (NPPD) and the amount shown is IPR's entitlement (50%) of Cooper's accredited 778 MW i
capaciirf under a puwer purchase agreement extending to 2004. (Refer to Foomote (3) of Notes to Consolidated Financial Statements included in Pan IV)
(6) Units deactivated in 1985, with planned reactivation in the late 1990's.
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The annual hourly peak load occurs dudng the summer principally as a result of air e ditioning. The total summer accredited capacity, hourly sysicm peak and the date of the system peak for each of the last five calendar years are shown below.
Summer Homly Accredited System Date Of Generating Peak System Year Capacity (kW) pemand (kW) Peak 1987 ..........,... 1,517,000 1,276,000 July 30 1988 ..........,, . 1,517,000 1,373,000 August 16 1989 .............. 1,531,400 1,358,000 July 10 1990 ......... ... 1,601,400 1,390,000 August 27 1991 .............. 1,601,400 1,359,000 July 22 IPR is interconnected with certain Iowa and neighboring utilities and is one of 46 uti'ities involved in an electric power pooling agreement known as the Mid-Continent Area Power Pool (MAPP). The purpose of MAPP is to coordinate the planning, construction and operation of generation and transmission facilities, including the purchase and sale of power and energy among members. IPR and four other lowa investormwned utilities fonned ENEREX, a general parmership. ENEREX coordinates the purchase and sale of electric energy among the partners and handles the daily unit
, commitment function.
Generation by coal, nuclear, oil and natural gas as a percent of the Ccmpany's total net generation of electricity during each of the last three calendar years and- the average cost to the Company of those fuels are as follows:
All Fuels Year % of Generation Average Cost
. Ended Coal Nuclear Gas / Oil (Mills t,cr kWh) 1989 .. ... ....... 63 36 1 11.1 1990 ,.. ........ . 63 36 1 9.2 1991 .............. 65 34 1 9.1 The transmission lines of the Company, operating from 34,500 to 345,000 volts, totaled 1,447 circuit miles.
ELECTRIC OPERATIONS - FUEL SUPPLY IPR has contracts and commitments providing for the fumishing of coal in quantitles which are adequate, in the opinion of management, absent circumstances not now foreseen. All of the Company's wholesale and retail sales of electricity ve subject to energy adjustment clauses.
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The Company's major coal supply conuacts under which deliveries are being received are as
> follows:
Year in Contracted
- Which Contract Annual Expires Tonnate (1) 1994 .. ......... 456,000-235,000 (2) i 1999 ,........... 760,006-921,000
]
2001 ............ 293,000-357,000 (3) 2003 .........,,. 464,000-669,000 (4)
J (1) IPR's share only where contract penains to jointly owned plant.
- (2) Option to extend for 2 years.
- (3) Tonntge varies per specified annual contract amounts.
(4) Tonnage varies per specified annual contract amounts and include.
only a panial annual requirement in the year 2003.
Natural gas and oil are used for peak load electric generation and for standby purposes. These
- sources are in adequate supply and available to meet ue Company's needs.
Approximately 25% of the fuel in the wra at Cooper Nuclear Station must be replaced a annually.-
For additional information concerning electric operations, see "Unaudited Utility Statistics', in Pan IV, Item 14, of this filing.
REGULATION The Iowa Utilities Board (IUB) regulates IPR's electric rates, service territory, accounting and
- r"; vices. In addition Iowa law requires that a cenificate of convenience and necessity be obtained from the IUB prior to construction of a proposed electric generation station with a total capacity of 100 or more megawatts. ~ Need for the station must be established and approval of the proposed site obtained before a tenificate can be issued.
Iowa law authorizes the IUB to suspend new rates for up to ten months beyond the date of j initial filing. During the interim period of the rate proceedings, statutory authority in Iowa allows for l interim rate increases, subject to n: fund, staning no later than 90 days frum the initial filing date.
t as in Iowa, non-exclusive franchises which cover the use of streets and alleys for public utility facilities in incorporated communides are granted for a maximum of 25 yeart by city councils, subject to ratification by a majority vote of local qualitled residents. The IUB has jurisdiction and grants franchises. for the use of public highway right-of-way for electric facilities, and the power of condemnation of right-of-way for transmission purposes, outside of incorporated communities.
IPR's electric operations are conducted under franchises (expiring in various years from 1992 to 2016), permits and licenses obtained from state and local authorities. The franchises for Des Moines and Council Bluffs expire in 2012 and 1994, respectively.
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IPR is a public utility within the meaning of the Federal Power Act. Therefore, IPR is subject to regulation by FERC as to numerot;s activities, including issuance of securities, accounting policies and practices and the establishment and regulation of ciectric interconnections and transmission services.
For the year ended December 31,1991, approximately 5.3% of the total electric revenues were sales for resale and subject to FERC regulation.
MWR is exempt from the Public Utility lloiding Company Act of 1935. MWR's exemption is based upon its filing with the Securities and Exchange Commission (SEC) in November 1990, an Initial Statement by lloiding Company Pursuant to Regulcion 250.2 of the Public Utility ifolding Company Act of 1935. MWR maintains its exemption by filing a Form U-3A-2 with the SEC cach year.
For information nlatlog to IPR's current rate matters, reference is made to Footnote (9) of Notes to Consolidated Financial Statements, and to item 3. " Legal Proceedings".
ENVIRONMENTAL MATTERS IPR is subject to numerous legislative atJ regulatory environmental protection requirements.
involving air and water pollution, waste management, hazardous chemical use, noise abatement, land ur and aesthetics, The company has no outstanding notices of violations with respect to existing environmental regulations.
4 For funher infonnation relating to Environmental Matters, reference is made to Footnote (14) of Netes to Consolidated Financial Statements and to item 3 " Legal Pmceedings".
EMPLOYEES On February 29,1992 IPR had 1,181 full-time and 36 pan time and temporary employees for a total of 1,217 amployees.
- Item 2-Properties Reference is made to item 1. " Business - Electric Operations" for a description of the facilities utilized by IPR to generate electricity.
It b the opinion of management that the principal depreciable utility propenies owned by IPR are in good operating condition and well maintained.
4 The Indenture of the Mongage and Deed of Trust of-IPR as amended and supplemented constitutes a first mongage lien on substantially all of IPR's utility propenics su'oject only to expected encumbrances.
Item 3 Lecal Proceedln.g3 IPR has no material legal proceedings except for the following:
J Rate Matters-In re Iowa Power Inc. before the Iowa Utilities Board, Docket No. TF-9214.
a Refenmcc is made to Pan IV, item 14, Note (19) of Notes to Consolidated Financial Statements.
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i Envirenmental Matters As a user of polychlorinated biphenyls (PCB's), the Company is subject to govemmental
- regulations pertaining to the use, handling and proper disposal of PCB's. The Company is involved 4 as one of several panies it a cleanup at one site and has been notified by the EPA that it is being considered one of several potentially responsible panies at a second site. IPR is conducting an J investigation of a release of PCB's at the Des Moines Power Station. Notifications were made to the a
U.S. Environmental Protection Agency Region Vll, National Response Center and lowa Department 1
of Natural Resources, Investigation, site assessment and remediation began in January 1992.
item 4-Submission of Matters to a Vote of Security flo1ders No matters were submitted to a vote of IPR's security holders during the founh quaner of I 1991.
i 4 PART 11 a
item 5-Market for the Registrant's Common Ecuity and Related Seculit,v Matters IPR's common stock is held entirely by its parent company, Midwest Resources, and is not publicly traded. The annual total of quanerly common stock dividends paid by IPR in 1991 and 1990 were 540,580,000 and $35,155,000, respectively.
{
Item 6-Selected Financial Data For a summary of selected financial data of IPR for each of the last five fiscal years, reference is made to Part IV of this report.
item 7-Manacement's Discussion and Analysis of Financial Condition and Results of Operations C
Reference is made to Pan IV of this report.
i Item 8-Financial Statements and Sunclementary Data For the financial statements of IPR, including (i) Consolidated Statements of Income, (ii)
Consolidated S'.atements of Cash Flows,(iii) Consolidated Balance Sheets (iv) Consolidated Statements of Capitalization, (v) Consolidated Statement of Retained Ihrnings, (vi) Notes to Consolidated Financial Statements and (vii) Repon of Independent Public Accountants, reference is made to Part IV of this
. report.
Item 9-Chances in and Disacreements with Accountants on Accountine and Financial Disclosure None.
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l PART 111 Item 10-Directors and Executive Officers of the Recistrant Information conecrning the directors and executive officers of IPR is as follows:
(a) Identification Present Served in Present Served as Ag Position Poshion Since Director Since Name 63 Dimetor - 1974 Mark W. Putney 56 Chairman, Chief Executive 1990 1990 Russell E. Christiansen >
Officer and Director Director - 1990 Richard C. Engle 57 President, Chief Operating 1989 1986 Lynn K. Vorbrich 53 Officer and Director 50 Senior Vice President 1990 -
James R. Bull Robert L. Lester 50 Senior Vice President 1990 -
48 Senior Vice President, Chief 1990 1990 Philip G, Lindner Accounting Officer and Director Paul J. Leighton 38 Secretary 1990 -
J. Sue Rozema 39 Treasurer 1985 -
Each director and executive officer serves an annual term of office. There aic no family relationships between the foregoing executive officers and directors of IPR.
(b) Business Experience During the Last Five Years Mark W. Putney Chainnan and Chief Executive Officer of MWR since 1990. Chairman from 1987 to 1990 and President and Chief Executive Officer from 1984 to 1990 of IOR. Chairman and Chief Executive Officer of IPR from 1984 to 1990.
Russell E. Christiansen Vice Chairman, President and Chief Operating Officer of MWR since 1990. Chairman and Chief Executive Officer of MWE from 1985 to 1990 and President fro n 1985 to 1990. Chainnan and Chief Executive Officer of IPS since 1986, and Chairman and Chief Executive Officer of IPR '
since 1990.
Richard C. Engle President and Chief Operating Officer of IPS rince 1990, Senior Vice 4 President and Chief Operating Officer from 1987 to 1990 and Senior Vice President from 1984 to 1987.
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4 a
President hnd Chief Operating Officer of IPR since 1989. Executive Vice Lynn K. Vorbrich President of IPR from 1986 to ;989.
James R. Bull Senior Vice President of IPR since 1990. Vice President of IPR from 1988 to 1990. Assistant Vice President of IPR,1983 to 1987, i
Robert L. Lester Senior Vice President of IPR since 1990. Vice President of IPR from 1986 to 1990. Assistant Vice Pasident,1983 to 1986, i
Philip G. Lindner Senior Vice President of IPR since 1990. Vice President of IPR Jn 1989.
Prior to joining IOR and IPR in 1989, Mr. Lindner served as Vice
!' President and Chief Financial Officer for MacNeal Hospital from 1987 to 1989, and as a partner with Arthur Andersen & Co. f om 1981 to 1987.
i Paul J. l_cichton
' Secretary of MWR and IPR since 1990. ' Secretary of IPS since 1938.
Assistant Secretary of IPS and MCG from 1985 to 1988.
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4 J. Sue Rozema Treasurer of MWR and IPS since 1990. Treasurer of IPR since 1985.
(c) Compliance with Section 16(a) of the Exchance Act None of the Company's directors or executive officers failed to file on a timely basis reports
- required to be filed by the Securities Exchange Act during the two most recent fiscal years.
ltem 11-Executive Compensation
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The following table sets forth all compensation paid by IPR during the year ended December
- 31,1991, for services rendered during the year, to each of the five most highly compensated er.ecutive officers of IPR whose aggregate cash compensation exceeded $60,000, and to all executive officers as a group.
Capacities in Which Cash Name of Individual T .npensation (1) p1 Identity of Group Compensation was Received Chairman, Chief Executive 5405.063 R. E. Christiansen l Officer and Director i
President, Chief Operating 236,152 L. K. Vorbrich
' Officer and Director i
I 153,466 J. R. Bull Senior Vice President 135,807 R. L. Lester Senior Vice President 161,935 P. G. Lindner Senior Vice President and Director S1,269,304 Executive Cfficers as a Group (7) i i
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1 (1)-
Annunts shown include all cash compensation distributed or accrued during 1991 in the form of salaries and fees for services rendered during the year, whether deferred or paid.
Amounts shown also include the cash ponion of incentive compensation awarded in 1991 for performance during 1990 on a 50 percent' cash - 50 percent performance share basis pursuant to an Executive Compensation Plrr. available to certain individuals who are ofGcers of IPR. Ble plan was designed to provide total compensation, subject to corporate performance, equivalent to the average compensation of executives in similarly s'ted companies in general industry. Payment of deferred awards based on performance shares, which are equivalent to shares of MWR Common Stock (Common Stock), is made in cash and is contingent upon continued employment for a period of four years from the date the performance shares were awarded or until employment is terminated due to retirement after r,ge 55, death or disability. Deferred amounts awarded in 1991 pursuant to the plan are as follows: R. E.
3 Christiansen - $30,062; L. K. Vorbrit.h - $16,700; J. R. Bull - $10,803; R. L. I ester - $9,1fM;
' P. G. Lindner - $11,272; and all executive officers as a group $82,603.
(2) The aggregate amount of other compensation, not otherwise described, with respect to each named executive officer does not exceed the lesser of $25,000 or 10% of their cash compensation and with respect to all executive officers as a group does not exceed the lesser of $25,000 times the number in the group or 10% of their aggregate cash compensation.
(3) Pursuant to a letter agreement dated as of March 27,1989, if a merger or acquisition results in a change of control of the Company, Mr. Lindner may, at his option, within a 12-month period after such merger or acquisition, resign fmm his position with the Company. If Mr.-
Lindner resigns during such period, or if following such change in control and prior to January 1,1994, he is terminated for any reason other than for cause, Mr. Lindaer would be entitled to twelve months' severance pay at his base salary.
INCENTIVE COMPENSATION PLANS f' MWR adopted Annual and Long-Term Incentive Compensation Plans for key employees, including certain executive officers of IPR, effective in 1992. The purpose of the plans is to recogrdze and rewaad outstanding performance of the participants in achieving annual and long-tenn goals designed to benefit shareholders'and customers. The plans are administered by the Management Development Committee of the MWR Board of Directors which has the authority and discretion to select panicipants and establish the criteria for maldng awards.
s Individual awards under the Annual Incentive Compensation Plan are based on the achievement of specific individual and corporate goals and may range from 14% to 52.5% of a participants annual salary. One half of the award is paid in cash aad the remrinder in performance shares, which are
- equivalent to shares of Common Stock. Additional performance shares are credited in an amount equal ~
to dividends paid on Common Stock. Deferred awards are paid in cash in amounts equal to the number of performance shares credited to the participant multiplied by the closing price of the Common Stock on the last trading day of the year prior to such payment and is contingent upon continued employment for a period of three years from the date the performance shares were awarded or until employment is terminated due to retirement after age 55, death or disability. Individual awards under the Long-Tenn incentive Compensation Plan are based on the achievement of target rettims on equity and camings per sLre during each thiee-year performance cycle c.nd may range from 7.5% to 37.5%
of a panicipant's annual base salary. Cash awards are paid at the end of a perfomlance cycle.
3
l De MWR Board of Directors has adopted a Non-cash Bonus Award Plan for emin executive ofDcers of MWR and panicipating subsidiaries including IPR, as determined by the Board of Directors.
The purpose of the plan is to recognize and reward outstanding pertemiance of the participants and to encourage their continued employment with the Company until retirement. Awards are determined by the Board of Directors and are made in units equivalent to one share of Common Stock. Additional units are credited in an amount equal to dividends paid on Common Stock. Participants are to receive a lump sum cash distribution payable in twelve consecutive monthly payments equal to the number of units credited to the panicipant multiplied by the closing price of the Common Stock on the last trading day preceding payment. Payment will only be made on the earliest of the participant's retirement under the Company's retirement plan, death, disability or involuntary tennination without cause. Awards are not subject to transfer, assignment or encumbrance of any kind and will beR. paid E.
out of general corporate funds. Awards made in 1991 pursuant to the plan are as follows:
Christiansen - 25,000 units; L. K. Vorbrich - 10,000 units; P. O. Lindner - 6,000 units; and all executive officers as a group 41,000 units.
EXECUTIVE DEFERRED COMPENSATION PLAN Executive officers, at their option, may defer up to 50% of their annual base salary pursuant to the Midwest Resources Inc. Executive Deferred Compensation Plan (Executive Deferred Compensation Plan). Amounts deferred are convened into units equal in value to the per share book value of Common Stock on December 31 of the pieceding year, ne value of such units wiP subsequcntly vary depending on the book value of the Common Stock. MWR ;redits additional unik in an araount equal to dividends paid on Common Stock, bas.:d on the per share book value of the Common Stock on December 31 of the preceding year.
We value, based on the closing market price or the book value of Common Stock as of December 31 of the year prior to distribution, may be paid out in a lump sum or annual installments upon retirement, death or permanent disability. Undistributed units under the annual installment payment method will continue to be credited with dividends and fluctuate in value unless convened into a fixed value based on either the closing market price or book value of the Common Stock. The converted value will be credited with a fixed rate of interest equal to the annual dividend rate at the
+ time of conversion. Payment is made in cash.
EXECUTIVE LIFE INSURANCE MWR makes available at its expense supplemental life insurance to each of the individuals and .
the group identified in the foregoing table of cash compensation equal to two times annual base compensation less $50,000. Such persons are deemed to receive auditional income equal to the actual premium cost of their respective policies which are as follows: R. E. Christiansen - $12,155; L. K.
"' Vorbrich - $5,978; R. L. Lester - $2,830; P. G. Lindner - $2.744; J. R. Bull - $3,231 and all executive
. officers as a group - $28,241.
EMPLOYEE STOCK PURCllASE PLAN The shareholders of MWR have approved an Employee Stock Purchase Plan by which employees of IPR and other MWR subsidiaries have the oppornmity to acquire MWR Common Stock.
A maximum of 1,200,000 authorized shares may be offered through the plan. The plan pennits each employee of IPR who has completed at least one year of service to purchase, thmugh payroll
- ded iction, shares of Cormnon Steck at 85% of market price on the last business day of each moath.
Panicipants are entitled to designate a payroll deduction up to the lesser of ten percent of regular annual base pay or E.1,250 annually for purchases under the plan.
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401(k) PLANS Iowa Power Inc. has a Salary Deferral Plan whereby the panicipants of the plan may elect to reduce their salary by an amount from 1% to 15% of their base salary and to hwe their employer contribute such amount w the plan ("401(k) contribution"). A panicipant's 401(k) contribution up to 6% of the panicipants base salary (up to a present maximu'n of $8,728) will be matched by an employer contribution equal to one-third of such amount. Prior to 1992, the IPR matching contribution was made iri Common Stock with a mt.ximum contribution of $1,000. Each panicipant has a nonforfeitable right to amounts contributed to the plan as 401(k) contributions. Benefits are not subject to transfer, assignment or encumbrance of any kind.
Aay 401(k) contribution amounts contributed in 1991 by executive officers are included in the foregoing table of cash compensation. Matching 401(k) contributions made in 1991 are as follows; t R. E. Christiansen - $2,825; L. K. Vorbrich - $1,000; R. L. Lester - $1,000; P. G. Lindner - $1,000:
L R. Bull - $1,000; and all exect'tive officers as a group $7,000.
RETIREMERI' PLANS The Iowa Pcwer Inc. Salaried Employees' kefirement income Plan (Retirement Plan) provides for payment of fixed pension benefits to persons who retire after a specified age and number of years of service, based on average annual salary during the five highest paid consecutive years out of the last ten years prior to retirement. All of the officers named in the compensation table panicipate in the Retirement Plan.
MWR maintains an unfunded Supplemental Retirement Plan (Supplemental Plan) to provide additional retirement benefits to cenain ofdcers of IPR as determined by the MWR Board of Directors.
The Supplemental Pian covers all of the officers named in the ccmpensation table.- Part A of the Supplemental Plan pmvides retirement benefits up to 65% of a panicipant's highest annual salary duririg the five years prior to retirement reduced by the participant's Retiremerit Plan bene'it. The percentage applied is based on years of credited service. A participant who takes early .etirement is entitled to reduced benefits under the plan. A survivor benefit is payable to a surviving spouse. Part '
B of the Supplemental Plan provides that an additional 150% of annual salary is to be paid out to participants at the rate of 10% per year over 15 years, except in the event of a panicipant's death, in which event the unpaid balance would be paid to the participant's beneficiary or estate, c
Benefits from the Supplemental Plan will be paid out of general corporate funds. Midwest I Resources maintains life insurance on nanicipants in amounts actuarially determined to be sufficient to fund all of tue future liabilities unau the Supplemental Plan. Midwest Resources through a trust is both owner and bcneficiary of all such life insurance. The Supplemental Plan has been designed so that if the assumptions made as to mortality experience, policy dividend, tax credits and other factors are realhed Midwest Resources will recover fully its premium and benefit payments over the life of the' Supplemental Plan. Deferred compensation is considered pan of the salary covered by the Supplemental Plan.
The table below shows the estimated aggregate annual benefit payable (for the first 15 years of retirement) under the Supplemental Plan and the Retirement Plan. The amounts exclude Social Security and are based on-a stmight life annuity and retilement et age 65. Amounts shown are calculated on the basis of credited service. All of the persons named in the compensation table will have at least 25 years of credited service at age 65.
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i Current campensation covered by the Supplen.cntal Plan (regular salary plus deferred Mr. Putney $380,000:
compensation) for individuals named in the compensation table is as follows:
Mr. Vorbrich $224,000; Dr. Bull $150,000; Mr. Lester $134,000; and for Mr. Lindner $150,000.
Estimaud Annual Benefit
- Highest Annual Salary Years of Service 25 or in Five Years Pdor More to Retirement 10 15 20 _
$ 60,000 $ 65,000 $ 70,000 S 75,000
$100,000 97,500 105,000 112,500 150,000 90,000 130,000 140,000 150,000 200,000 120.000 150,000 162,500 175,000 187.500 25J,000 195,000 210,000 225,000 300,000 180,000 j 227,500 245,000 262,500 350,000 210,000 240,000 260,000 280,000 300,000-
' 400,000 337,500 270,000 292,500 315,000 450,000 325,000 350,000 375,000 500,000 300,000
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- Federal law limits the amount of benefits payable to an individual through the Retirement Plan. Benefits 1.aich would exceed the limitation will be payable under the Supplemental Plan.
COMPENSATION OF DIRECTORS During 1991, each director of IPR was entitled to an annual fee of f.8,000 unless the director is also a director of Iowa n ublic Service Company, an affiliate, in whi::li case the din:ctor receives an annual retainer fee of $4,000. No meeting fees are paid. Direct;,rs have the opponunity to make an c'ection prior to the commencement of any year to defer a poriion or all of their compensation received for directors' services provided to IPR pursuam to the Midwest Resources Inc. Board of Directors Deferred Compensation Plan. Deferrals under this plan and distributions upon tennination of service as a director are accomplished in the same marmer as provided in the Executive Deferred Compensation plan.
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ltem 12-Security 04Tiership of Certain Beneficial Owners and Manacement MWR owns 100% of the 7,586,456 shares of IPR's common stock, par value $10, which were outstanding on February 28, 1992.
The following table sets forth information concerning each class of MWR's and IPR's equity securities which were owned of recotd or beneficially held on Febmary 28, 1992, by all of IPR's directots and nominees ?,r election as directors, and by all directors and officeni as a group. - The
' number of shares owned by sny director or nominee, or by all directors and officers of IPR as a group did not exceed one peirent of MWR shares outstanding on February 28,1992.
Name of Director Number
! or Identity of Group pf Shares 1 Title of Class
' 9,468 Midwest Resources common Russell E. Christiansen stock, without par value Richard C. Engle 7,266 Midwest Resources common Stock, without par value Philip G. Lindner 250 Midwest Resources common stock, wit' 't par value Mark W. Putney 15,687 Midwest Res tces common stock, wit' .t par value 1,955 Midwest th tees common Lynn K. Vorbrich stock, w -t par value
- rces common 9 directen and officers, 47,329 (1)
Midwest R:
stock, wt - par value as a pt>cp (1)
Does not include 390,527 shares held for the Iowa Power Paymil-llased Employee Stock Ownership Plan by Ms. Rozema as Tmstee.
Item 13-Cenain RMationships and Related Transactions a
- Reference is made to Note (18) of Notes to Consolidated Financial Statements for a summary of affiliated transactions.
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i PART IV Item 14. Exhibits. Financial Statement Schedules, and Renons on Form 8-K
? (a)1. l~mancial Statements (included herein):
1 Pace No.
Document 18 Selected Consolidated Financial Data . . . . . . . . . . . . . . . . . . . . . .
Management's Discussion and Analysis of 19
' Financial Condition and Results of Operations . . . . . . . . . . . . . .
Consolidated Statements of Income for each of the three 25 years in the period ended December 31, 1991 . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows for each of the three 26
' years in the period ended Decembei 31, 1991 . .............
Consolidated Balance Sheets - December 31,1991 and 1990 . . . . . . 27 9 Consolidated Statements of Capitalization - December 31, 29 1991 and 1990 ..................................
Consolidated Statements of Retained Earnings for each of the 30 three years in the period ended December 31, 1991 . . . . . . . . . . .
31 Notes to Censolidated Financial Statements . . . . ... ......... 40 Managements Responsibility For Financial Statements . . . . . . . . . . .
4i Repon of Independent Public Accountants .., ......... . . . .
42 Unaudited Utility Statistics . . . . . . . . . . . . . . . . . . . . . . . . . , .
(a)2. Financial Statement Schedules (included hew, The following schedules, for the years ended December 31,1991,1990 and 1989 should be read in conjunction with the aforementioned financial statements (schedules not included have been omitted because they are not applicable or the required data is shown in the atorementioned financial statements):
I Schedule Pace No.
No. Doedment As of December 31, 1991 -
Ma:tetable Securities - Other Investments . , . . . . . . . . . . . 43 1
For the years ended December 31,1991,1990 and 1989 Consolidated Propeny, Plant and Equipment . . . . . . . . . . . . . 44 V
VI Consolidated Accumulated Depreciation and Amorti -
zation of Propeny, Plant and Equipment . . . . . . . . . . . . . . 47 Consolidated Valuation and Qualifying Accounts . . . . . . . . . . 50 VIII Consolidated Shon-Term Borrowings . . . . . . . . . . . . . . . . . 53 IX I
X Supplementary Consolidated Income Statement .
S 56 Infonnation ... ............ ............... l (a)3. Exhibits See Exhibits Index on page 58.
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b IOWA POWER INC, .
- SELECTED CONSOLIDATED FINANCIAL DATA -
Year Ended-December 31 (In Thousands) 1991- 1990 _
1989 1988 1987
$ 381,752 $ 371,048 $ 371,297 $ 352,483 $ . 350,813 Operating revenues 67,315 68,918 69,098 59,287' 65,519 -
Operating income . 41,387 37,432 41,558 43,238 36,210 Net income ,
1,162,239 1,109,737 ~ 1,086,516 1,081,073 1,058,702 Total assets
' Long-term debt (ex.cluding 336,501 338,255 348.291._ 349,885 289,019 current maturities)
Cumulative preferred stock -
19,971 19,971 '19,971 19,971 19,971 without sinking fund 382,496 - 329,690- 324,128 318,051 317.333.
.. Common equity 788,968 687,916- 692,390 687,907 .626,323 Total capitalization 150,835 159,293 .167,282 174,832 181,977 Power purchase contract 1
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18 r
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CORPORATE STRUCTURE lowa Power Inc. (IPR or Company) is a wholly-owned subsidiary of Midwest Resources Inc. (MWR), a holding company which was formed on November 7,1990, through the merger of Iowa Resources Inc. (IOR) and Midwest Energy Company (MWE). IPR was previously a wholly-owned subsidiary of IOR and currently provides electric service to 254,000 customers in Iowa.
RESULTS OF OPERATIONS Electric Revenue increase (Decrease) from Prior Year 1991 1990 (In Millions) '
Sales volume ..... $18.8 $8.8 Rates - . . . . . . . . . . (3.0) 3.8 Cost of energy ..., (2.5) (13.2) '
Other . . . . . . . , , , (2,5) 0.4 Total ..... $10.8 $(0.2)-
- 1991 Compared to 1990 The Company continues to experience growth in both customers and usage per customer, especially for residential and small general service customers. Electric revenues increased 2.9 percent ever 1990.
A 50.4 percent decrease in allowance for funds (AFUDC), an increase in maintent.nce expenses and in property taxes and costs recorded for a reorganization and stafling plan (including an enlanced voluntary early retirement and a severance plan) announced in 1991 were major reasons for Eamings on Common Stock
". decreasing $4.1 million to $36.6 million.
Electric sales to jurisdictional customers increased 4.5 percent to 5.6 billion kWh for 1991, Residential-
.and small general service customer sales volumes increased 7.7 percent and 9.4' percent, re:pectively, due to customer growth and increases of 6.6 percent and 8.3 percent, respectively, in usage per customer. :'Ihe primary cause of these increases was colder temperatures during the heating season and wanner temperatures during the cooling season compared to 1990. Sales to large general service customers decreased 2.5 percent.
Overall, the impact of these items was an hicrease in resenues of $18.8 million. .
2
- The Company's sales for resale were 10.3 percent lower than 1990, resulting in a $2.5 million decrease in revenues An extended outage at Cooper Nuclear Station in 1991 and increased sales to jurisdictional customers reduced the amount of energy available for sales for resale.
Although generation at Company-owned facilities increased. Fuel for Generation decreased sligh:.y'due to lower coal and transporta: ion costs. Nuclear Power PurchasadLwas $0.6 million lower than-1990 due to a de"rease in fuel costs resulting from the outage. Other Operating Expenses increased 10.9 percent, or $6.3 1 million. Expenses related to the early retirement and severance plans and increases in information systems,-
- marketing, demand side management and outside services expenses accounted for $3.5 million of the increase.
'Also contributing to the increase were transmission and distribution and electrical engineering expenses.
- These increases were partially offset by decreased costs of the merger of MWE and IOR.
-19 Y.
Maintenance expenses were 17.7 percent greater than 1990 prit'arily due to unplanned maintettance at generating stations and the timing of mgularly scheduled generator and boiler plant overhauls. Depreciation and Amonization increased 6.8 percent due to an increase in depreciable plant in service. General Taxes were $3.2 million, or 11.4 percent, over 1990 mostly due to increases in propeny assessment values and the average mill levy.
AFUDC decreased $2.6 million compared to 1990. Construction of two combustion turbines, placed in service in mid 1990, and a new energy center, placed in service in mid-1991, resulted in a significant decrease in the construction balance on which AFUDC is computed. In addition, the use of low-cost, shon-term financing caused equity AFUDC to drop substantially.
1990 Compared to 1989 In 1990, Eamings on Common Stock decreased $1.7 million to $40.7 million compared to 1989.
- Sales of electricity to jurisdictional customers for 1990 exceeded 5.3 billion kWh, an increase of
.approximately 2.8 percent over the pior year. Sales to small general service and large general service cus'9mers increased 6.7 percent and 4.2 percent, respectively, due to the improved economy of the service territory. Sales to residential customers decreased 0.3 percent. Increases due to a 1.1 percent customer growth were partially offset by the effect of mild weather conditions during the first and fourth quaners.
Sales for resale increased 10.8 percent during 1990, representing continued deliveries under existing bulk i
power sales contracts and an increase in available energy, Although total sales of electricity increased 4.6 percent, Fuel for Generation decmased $3.1 million, or 5.7 percent, due to lower coal and transponation costs. An increase in energy available from Company-o .ned faciliues and Cooper Nuclear Station resulted in a decrease of $3.6 million, or 43,9%, for Power Purchased and Interchanged. Other Operating Expenses increased 2.6 percent due to $2.1 million of costs related to the merger of MWE and IOR. Maintenance expenses increased 20.7 percent due to overhauls of the Company's generating units and to repair of power lines damaged by the March 1990 ice storm. Depreciation expense increased 9.5 percent due to an increase in depreciable plant in service. General Taxes increased 6.9 percent because of increases in pmpeny assessment values and in the t.verage mill levy.
4 Increased construct'.on activity related to a new energy center and two combustion turbines during 1990 was the primary cause of a $1.6 million increase in AFUDC.
LIQUIDITY AND CAPITAL RESOURCES Capital resources of the Company are derived primarily from funds generated fmm current operations, shon.
term borrowings, long-term borrowings and equity financing. These capital resources provide funds required
.$ for current operations, debt interest and retirement, dividends, convruction expenditures and other capital requirements.
At December 31,1991, the Company's material sources of liquidity included current assets of $107 million and bank lines of credit of $86 million.
In December 1991, the Company issued $50 million of long-term debt to replace short-term borrowings.
The Company has property of approximately $291 million which can be used to support future long-term borrowings.
Short-term debt, which increased during the first three quaners of 1991 primarily because of the Company's g
construction programs was refinanced with long-term debt and a contribution from MWR during the fourth quaner. The increase in short term debt, offset partially by lower interest rates, was the primary cause of an increase of $0.6 million or 19.1 percent. in Other Interest Charges compared to 1990. Interest on Long-term Debt decreased $0.4 million, or 1.5 percent, compared to the prior year.
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The Company's policy is to be ht position to access the capital markets whenever market conditions are appmpriate to replace short-term borrowings, refinance higher cost debt and preferred equities and finance capital expenditures. In 1992 the Company intends to file a shelf registration with the SEC for the issuance of up to $100 million of long-term debt.
The Company's access to extemal capital and its cost of capital are influenced by the credit ratings of its secunties. The Company's latest credit ratings are as follows:
Moody's Fitch Investors Standard Investors Service & Poor's Jervice First Mertgage Bonds A2 A A
, Preferred Stocks a3 A A-Commercial Paper P-1 N/R F-1 Due to the differences in the securities ratings of IPR and IPS, the consummation of the utdity merger
.is expected to have an effect on the current ratings. The rating agencies have informed the Company and the investment community of the potential changes ta its current ratings after the merger is consummated. Standard i
& Poor's has indicated that IPR's ratings 1. ave been placed on review with posit 'e implications. The merged utility's securities indicated ratings would be "A+" (senior debt), "A" (prdx.x stock) and " Al" (commercial paper). Fitch investors Service has placed IPS's first mortgage bonds on review with negative implications and IPR's preferred stock on review with positive implications. Indicated ratings for the merged utility's se:urities would be "A" (senior debt), "A" (preferred stock) and "F-1" (commercial paper). Moody's investors Service has placed its credit ratings of the securitie: of IPS under review for possible downgradt., The merged utility's preferred stock indicated rating should be an "a3" and indicated debt rating would be "A2".
Commercial paper rating should be unchanged at "P-1".
The above ratings reflect only the views of such rating agencies and each rating should be evaluated independently of any other rating. Generally, rating agencies base their ratings on information fumished to them by the issuing company and on investigation, studies and assumptions by the rating agencies. There.is no assurance that any panicular rating will continue for any givea period of time or that it will not be changed or withdrawn entirely if in the judgment of the rating agency circumstances so warrant. Such ratings are not a recommendation to buy, sell or hold securities.
The following is a summary of the meanings of the ratings shown above and the relative rank of the Company's rating within each agency's classification system.
Moody's top four long-term debt ratings (Aaa, Aa, A and Baa) are generally considered " investment grade,"
Obligations which are rated "A" possess many favorable investment attributes and are considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but 1 elements may be present which suggest a susceptibility to impairment sometime in the future. A numerical
, modifier ranks the security within the colegory with a "1" indicating the high end, a "2" indicating the mid-range and a "3" indicating the low end of the category. Standard & Poor's top four long-term debt ratings (AAA, AA, A and BBB) are considered " investment grade". Debt rated "A" has a strong capacity to pay.
interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in economic conditions than debt in higher rated categories. Fitch Investors Service considers the top four long-term debt ratings (AAA, AA, A and BBB) as " investment grade," Fitch's "A" rated bonds are considered to be of good quality. The issuers ability to pay interest and repay principal is considered to be strong but may be more vulnerable to adverse changes in economic conditions than bonds with higher ratings. A plus (+) or minus (-) sign is used after Standard & Poor's and Fitch ratings to designate the relative position of a credit o
withiri the rating category.
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Ratings of preferred issues are an indication of the company's ability to pay the preferred dividend and -
any sinking fund obligations on a timely basis. Moody's top four preferred stock ratings (aaa, aa, a and b are generally considered " investment grade." Moody's "a" rating is considered to be an upper-medium preferred stock. Eamings and asset protection are expected to be maintained at adequate levels in the foreseeable future. Standard & Poor's top four prefened stock ratings (AAA, AA, A and BBB) are considered
" investment grade." Standard & Poor's "A" rating indicates adequate earnings and asset protection. Fitch's top four preferred stock ratings (AAA, AA, A and BBB) are generally considered " investment grade".
"A" rating is considered gaod quality. Asset protection and coverage of preferred dividends are considere adequate and are expected to be maintained.
Moody's top thn:e commercial paper ratings (P 1 P-2 and P 3) are generally considered " investment Issuers rated "P-1" have a superior ability for repayment of senior short-term debt obligations and repayment ability is often evidenced by a conservative capitalization structure, broad margins in camings coverage financial charges and well established access to a range of ftnancial markets and assured sources of alternate liquidity. Standard and Poor's commercial paper ratings are a current assessment of the likelihood of
? payment of debt having an original maturity less than 365issues days.ratedTheAltop threethat indicate Standard & Poor's c the degree
- ' paper ratings (Al, A2 and A3) are considered " investment grade."
of safety regarding timely payment is either overwhelming or very strong. Those issues determined to posses overwhelming safety are denoted with a plus (+) sign designation. Fitch's commercial paper ratings are assigned at the request of the issuer to debt obligations with an original maturity not in excess of 270 days.
An "F-1" commercial paper rating is regarded as having the strongest degree of assurance for timely payment.
Consolidated cash capital expenditures, including Coope- Nuclear Station capital improvements, were $66 million for 1991. The Company believes its capital resources and liquidity are sufficient to meet its cuntnt and projected requirements. See the discussion of planned capital expenditures in Prospective Informatio PROSPECTIVE INFORMATION The Company's results 'of operations are significantly influenced by weather conditions, the general economic conditions of the service territory and the ability to recover costs through the regulatory process.
The addition of new customers indicates general economic conditions continue to improve in the Company's service territory.
,a In late January 1992, the Company filed a notice with the Iowa Utilities Board (IUB) of its intention to file for an electric rate increase during the first quarter of 1992. Increasing nuclear expenses are a significant reason for the IPR electric rate case of 1992. While the Company expects nuclear expenses will continue to increase substantially over the next few years, the Company believes that such increases will not have a material impact on its financial position or its results of operations based on the historical inclusion of such expenses in the ratemaking process. The outcome of this ;ase will have an impact on the Company's revenues and camings for future periods (See Foomote (19)).
- The Company is allowed current recovery from retail and wholesale customers for fuel and purchased power costs through the energy adjustment clause. The clause reduces the impact of changes in cost on Company.
The Company's management annually reviews long-range capital expenditure needs. Based upon such a review, the Company has planned cash capital expenditures of $76 million for 1992. Estimated cash capitas.
expenditures for the years 1993 through 1995 are $248 million. The Company has not included any of the capital expenditures for the repowering project discussed below in its long-range capital plan amounts for 1 through 1995. Through the next five years, the Company has adequate base load generating reserves, inclu 2 capacity under contract, to meet its energy demands.
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9 The Depanment of Energy (DOE) has entered into a cooperative agreement for a mpowering project of the Company's Des Moines Energy Center (DMEC). The DMEC, which closed in 1985, is the site' chosen to demonstrate a developing coal-buming technology believed to be substantially cleaner and more efficient than technologies now in use. The DOE committed to provide approximately $93 million, or about half the cost of the project. Nearly all of the remaining costs will be paid by the Company, as the general panner, with small contributions to the project from key vendors and a limited panner.
The Company curmntly has been granted funding for budget period #1 of Phase I which covers the period September 1991 through August 1992. The Company has no material capital commitments associated with budget period #1. If the pmject proceeds as expected and DOE funding is awarded under budget period #2, the Company's obligations could be as much as 59.6 million over the twelve-month period ending in August 1993. Phase 2 the construction period, could obligate the Company to an additional $62.5 million over a.
twenty-three month period (19941996.)
The cooperative agreement may be terminated unilaterally or by mutual agreement per the contract. In addition, the DOE is obligated to pay its share of all noncancellable obligations properly incurred by the Company before the effective date of any termination.
The Company's customers will continue to realize savings over the next several years as a result of mnegotiated coal supply and rail transportation contracts. The coal supply contract, which became effective July 1989, will reduce fuel costs through January 1993. The renegotiated rail transponation contract will continue to reduce the cost of transporting coal through 1997.
The Company's current fuel mix for installed capacity is 54 percent coal,22 percent oil and gas and 24 percent nuclear. No significant changes in the fuel mix are planned through 1994.
As a user of polychlorinated biphenyls (PCB's), the Company is subject to govemmental regulations penaining to the use, handling and proper disposal of PCB's. The Company is involved as one of several parties in a cleanup at one site and has been notified by the EPA that it is being considered one of several potentially responsible panies at a second site. The Company has also notified the EPA with respect to a PCB incident at one if its propenies.
The Company's coal-fired generating units are minimally affected by the provisions of the Clean Air Act Amendments of 1990. By the year 2000, some coal-fired generating units will be required to install controls to reduce emissions of nitmgen oxides. The cost of these controls is expected to be nominal (see footnote 14).
Legislation enacted in Iowa in 1990 requires electric and gas utilities, beginning in 1992, to spend 2 percent and 1.5 percent, respectively, of their annual lowa jurisdictional mvenues on demand side management activities (effons to improve customer energy efficiency). The legislation permits periodic recovery of these costs so long as the utility's demand side programs are cost effective or,if not cost effective, so long as the utility was i
prudent and reasonable in the planning and implementation of the programs. Under the legislation, the utilities
( are also eligible for a monetary reward or subject to a monetary penalty depending upon the cost effectiveness ,
of the overall demand side management effort.
On June 6,1991 MWR announced a plan to merge IPS and IPR, its two wholly-owned subsidiary utility companies. The result will be a single utility company with approximately 412,000 electric customers and approximately 363,000 gas customers in Iowa, Minnesota, Nebraska and South Dakota. The proposed merger mquires various approvals, including approval of the transaction by the preferred shareholders. The IUB and the Minnesota Public Utiliues Commission approved the merger on December 23,1991, and January 21,1992, respectively. The Company and IPS filed an application with the Federal Energy Regulatory Commission
- (FERC) for approval under the Federal Power Act on December 17, 1991. The Company anticipates a FERC decision within the next 12 months.
l l
As part of the application filed with the IUB, the Company and IPS provided testimony projecting total merger related savings of $89 million for the periods 1992 through 2001. The effect of any such reduced expenses could be' offset by increases in other utility expenses; reduced revenues due to moderate weather or economic conditions in the IPS and Ccmpany service territories, or for other reasons; or the treatment of such reduced expenses by regulatory authorities in the establishment of rates the utilitics are pennitted to charge their customers for electric and gas services. In current rate proceedings, the Company and IPS are proposing a sharing of any savings exceeding the cost of the merger on an equal basis between shareholders and customers.
The Company is unable to assure 1) that proper and acceptable regulatory appmvals of the merger will be obtained and, if obtained, the timing of such approvals; 2) the ultimate achievement of the projected savings included in the filed testimony; or 3) the outcome of the proposed sharing, if any, of savings from the regulatory proceedings.
As a further step towards the realignment of utility services, MWR announced on October 23,1991, that a voluntary early retirement program was being offered to salaried employees of IPR and IPS who were age 55 or older by December 31, 1991, regardless of length of service with the companies. There were 100 t
i employees, of which 44 were IPR employees, who elected retirem:nt under this plan. Since the Company is looking for greater reductions in the number of salaried positions than the early retirement program and normal attrition pmduced, additional reductions are required. A comprehensive separation plan, including outplacement assistance and severance benefits, has been developed for employees whose jobs are eliminated and who cannot be placed in other suitable jobs within MWR, MWR has identified additional salaried positions that will be eliminated as a result of the separation plan (see footnote 7).
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r IOWA POWER INC.
CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31 1991 1990 1989 (In Thousands)
OPERATING REVENUES $370,928 Electric ........... ..............., $381,452 $370,689 300 359 369 Other .............................
To tal . . . . . . . . . . . . . . . . . . . . . . . . . , . 381.752 371.N8 _371.297 OPERATING EXPENSES 53,470 50,272 50,406 Fuel for generation . . . . . . . . . . . . . . . . . . . . . 4,596 8,194 Power purchased and interchanged . . . . . . . . . . . 4,352 72,659 73.300 72,990 Nuclear power purchased . . . . . . . . . . . . . . . . . 56,310 M,063 57,760 Other operating expenses . . . . . . . . . . . . . . . . . 19,890 28,236 23,998 Maintenance . . . . . . . . . . . . . . . . . . . . . . . . 42,159 39,492 36,058 Depreciation and amonization . . . . . . . . . . . . . . 26,059 -
General taxes ........... .....,,..... 31,033 27,855 Current income taxes . . . ., . . . . . . . . . . . . . . . .
18,639 23,462 27.105 4,874 3,125 3,771
. Deferred income taxes . . . . . . . . ..........
- Investment tax credit . . . . . . . . . . . . . . . . . . . . (1.850) (1.8M) (1.648) .
314.437 302.130 302.199 Total ............................
67.315 68.918 69.098 OPERATING INCOME . . . . . . . . . . . . . . . . .
OTHER INCOME 587 508 1,084 Interest and dividend income . . . . ..........
Allowance for equity funds - >
- Used during construction . . . . . . . . . . . . . . . . 59 1,169 921 Accrued on advances .................. 65 587 836 Non-operating income taxes . . . . . . . . . . . . . . . (150) (4)- (32)
Othe r, ne t . . . . . . . . . . . , . . . . . . . . . . . . . . . (321) (650)- _
(531)
Total ......................,..... 240 1.610 2.278 FIXED CHARGES Interest on long-term debt ................ 28,577- 29,005 29,203-Other interest charges ................... ' 3,956 3,322 657 Allowance for borrowed funds -
Used during construction . . . . . . . . . . . . . . . . . (1,416) . (2,069) '(915) -
Accrued on advances . . . . . . . . . . . . . . . . . . (994) ' (1.288) (807) 30.123: 28.970: 28,138 Total ............................
NET INCO ME , . . . . . . . . . . . . . . . . . . . . . . -37,432 41,558 . 43,238 841 841 841 Preferred stock dividends . . . . . . . . . . . . . . . . . )
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EARNINGS ON COMMON STOCK . . . . . . . , S 36,591 $ 40,717 - $ 42.397 The accompanying notes are an integral pan of these statements.
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l IOWA POWER INC.
CONSOLIDATED STATEMENTS OF CASil FLOWS Vear Ended December 31 1991 1990 1989 (In Thousands)
NET CASil FLOWS FROM OPERATING ACTIVITILS Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 37,4 32 5 41,558 $ 43,238 Adjustments to reconcile net income to net cash provided: 42,159 39,492 37,665 Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,118 12,799 Amonization of advances for nuclear fuel and capital improvements .. 9.599 2.072 873 2,123 Net increase in defened income taxes and investment tax credit, net ..
(124) (1,756) (1,757)
Allowance for equity funds . . . . . . . . . . . . . . . ............
Cash flows resulting from changes in: (16,061) 2,032 1,331 Receivables . . . . . . . . . . . . . . . . (1,082) 119 (22)
Receivables from affiliated companies . . . . . . . , ,. .........
6,298
. . . . . ............ 3,926 (2,837)
Inventories ...... . . . . . . . . . .
70 (390)
...... ... 55 Prepayments and other current assets . . . . . . . . . . 4,490 (4,762) 517 Accounts payable. . . . . . . . . . . . . . . . . . . . ...... ......
282 (1,305)
. . . . . . ... .. .... 622 Accounts payable to affiliated companies 45
. . . . . ....... . ... 81 (88)
Interest accrued .............. 3,646 (3,730) 566 Taxes accrued . ........... . . . . . . . . . . . . . . . . . . .
(4,N9) (339)
. . . . . . . . ..,..... .... (879)
Other current liabilities . . . . . . (5.913) (3,750) 1.882 Othe r . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ... .....
... . 94.946 76.ml 85.259
' Net cash provided . . . . . . . . . . . . . . . . . . ......
- 4 NET CASil FLOWS FROM INVESTING ACTIVITIES (54,666) (58,380) (75,123)
Capital Expenditures . . . . . . . . . . . . . , . . . . .......
(14.297) (16.022) (11.837)
Cooper Nuclear Station capital improvement advances , . . . . . . . . . . . . (68,963) (74,402) (86,960)
Total capital expenditures . . . . . . . . . . . . . . . ..... . .. .. 1,756 1.757 124 Allowance for equity funds . . . . . . . . . . . . ....... ....
4,000 - -
Proceeds from sale of assets . . . . . . . . . . . . . ... ...... .. 33 20 123 Net casb from investments . . . . . . . . . . . . . .... ..... .. (85.080)
. . . . . . . . . ..... ....... (64.806) (72.626)
Net cash used . . . . . . . . .
NET CASil FLOWS FROM FINANCNG ACTIVITIES 50,000 - -
Long-tmn debt proceeds . . . . . . . . . . . . . ...........
(40,580) (35,155) (36,560)
Dividends paid on common stock . , . . . . . . . . . ........ ....
(841) (841) (841)
Dividends paid on preferred stock . . . . . . . . . ........ .
(9,334) (1.117) (6.993) .
Retirement of long-tenn debt . . . . . . . . . . . .,,. ..... .
Contribution from parent . . . . . . . . . . . . . . . ........ .... 56.795 -
33.800 11,400 Net increase (decrease) in notes payable . . . . . . . ............. (45.20__0)
., (3.313) (32.994) 10.840 Net cash provided (used) . . . . . . . . . . . . . . . . ....... .....
NET INCREASE (DECREASE) IN CASII AND 40,980 102 (32,815)
CASII EQUIVALENTS . . . . . . . . . . . . . . . ... .... . .
2.359 2.257 35.072 CASil AND CAS11 EQUIVALENTS AT BEGINNING OF PERIOD
$ 43.339 $ 2,359 $ 2,257 CASII AND CASil EQUIVALENTS AT END OF PERIOD
" The accompanying notes are an integral part of these statements.
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IOWA' POWER INC.
CONSOLIDATED HALANCE SliEETS ASSETS ,
As of December 31 - -
1991- 1990 (In Thousands)
UTILITY PLANT Gross plant, including construction work in $1,911,648 . $1,165.053 progress of $19.323 and $32,452, respectively . . . . . . . . . . 454.015 419.274-Less accumulated depreciation and amortization _ . . . . . . . . . . 745.779 757.633 Utility plant, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
~
OTIIER PROPERTY AND INVESTMENTS 1,277 5,479 Property, net of accumulated depreciation . . . . . . . . . . . . . . 474 507-Investments . . . . . . . . . . . . . . . . . . . . . . . ......... 1.751 5.986 Total ...................................
POWER PURCHASE CONTRACT 150,838 159,293
{ Productive capacity . . . . . . . . . . . . . . . . . . . . ......
Advances for capital improvements, net of accumul .ted 93.413-98.111 amortization of $60,268 and $50.669, respectively . . . . . . .
248.949 252.706 Total: ................ ..................
CURRENT ASSETS '43,339 2,359 Cash and cash equivalents ..........,..... ......
_ 44,051 42,019 Receivables, less reserves of $242 and $155, respectively ..
1,408 326 l
Receivables from affiliated companies . . . . . . . . . . . . . . . . 12,379 10,602 Electric production fuel, at average cost . . . . . , . ....... 7,674 9,823 -
Materials and supplies, at average cost ...............
1.869 1.814 Prepayments and other . . . . . . . . . . . . . . . . . . . . . . . . . . 106.856 -70.807 Total ...................................
....... 47.050 34.459--
DEFERRED CHARGES AND OTIIER ASSETS
$1.162.239 - $1.109.737 -
4 TOTAL..................................
The accompanying notes are an integral part of these statements.
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IOWA POWER INC.
CONSOLIDATED llALANCE SIIEETS CAPITALIZATION AND LIAlllLITIES As of December 31 1991 ,
1990 (in Thoutands)
CAPITALIZATION (See accompanying statements)
Common stock equity . . . . . . . . . . . . . . . . . . . . . . . . . . $ 382,496 $ 329.690 Cumulative non. redeemable preferred stock . . . . . . . . . . . . . 19.971 19.971 Long tenn debt (excluding current ponlon) . . . . . . . . . . . . . 386.501_ 338155 788.968 687.916 To t al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
POWER PURCil ASE CONTR ACT . . . . . . . . . . . . . . . . l{490 150.838 CURRENT LIAlllLITIES Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
- 45.200 632 9,232
. Cuntnt portion of long-term debt . . . . . . . . . . . . . . , . . .
Current ponion of power purcluse contract . . . . . . . . . . . . . 8.948 8.455 23,507 19.017 Accounts payable . . . . . . . .....................
1.307 685 Accounts payable to affiliated companies . . . . . . . . . . . . . .
9.825 9,744 Interest accrue . . . . . . . . . . . . . . . . . . . . . . .. ....
26,518 Taxes accrued . ............,................ 30.lM
............................. 4.197 8.246 Other ..
Total ...............................,,.. ,
78.580 127.097 RESERVES AND DEFERRED CREDITS 101,561 106,115 lxferred incomo taxes . . . . . . . . . . . . . . . . . . . . . . . . . .
investment tax crcJit . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.697 36.547 11.989 5.778 Other ..... .. ...........................
Total ................................ .. 152.801 _ _143.883
$1,162,239 11,109.737 TOTAL . ....... .......................
The accompanjing notes air an integral pan of these statements.
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IOWA POWER INC.
CONSOLIDATED STATEMENTS OF CAPITALIZATION r
As of December 31 1991 ,
1990 (in Thousands)
COMMON STOCK EQUITY Corasa stod, $10 par value, 8,000,000 shares authorized; 75,865 7.586.456 shares outstanding . . . . . . . . . . . . . . . . . . . . . . . $ 75,865 $
138,958 82,163 Additional pa'd.in capital . . . . . . . . . . . . . . . . . ........ 171.662 Retained ea rnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . _ 167.673 Total......................,............... ),1!22f 48.5% 329.690 47.9 %
CUMULATIVE NON.REDEEMAllLE PREFERRED STOCK
$100 par value, 800,000 shares authorized:
3.30% Series, 49,846 and 49,850 shares, respectively . . . . . . . 4,985 4.985 5,000 5,000 4.40% Series, 50,000 shares . . . . . . . . . . . . . . . . . . . . . . . 4,995 4.35% Series, 49,950 shares . . . . . . . . . . . . . ....... 4,995 4.80% Series, 49,908 shares . . . . . . . . . . . . . . . . . . . . . . . 4.991 _ 4.991 19.971 .. % 19.9/1 2.9%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... .
LONG TERM DEllT First mongage bonds: 50,000 8 1/4% Series, due 1996 . . . . . . . . . . . . . . . . . . . . . . . . 50.000 50.000 50,000 8 3/8% Series, due 1997 . . . . . . . . . . . . . . . . . . . . . . . .
13,174 13,174 6 5/8% Se ries, due 1%8 . . . . . . . . . . . . . . . . . . . . . . . . .
" 964 12,964 9% Series, due 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,
. ),425 13,490 7 5/8% Series, due 2001 . . . . . . . . . . . . . . . .........
8 2/10% Series, due 2003 . . . . . . . . . . . . . . . .........
50,000 -
29.203 29,203
. 8 3/4% Series, duc 2006 . . . . . . . . . . . . , . . ....,....
29,400 29,400 8 1/4% Series, due 2007 . . . . . . . . . . . . . . . .........
70,000 70,000 !
101/2% Series, due 2018 . . . . . . . . . . . . . . .....,... r Pallu' ion control revenue bonds:
5 4/10% average rate, due annually through 2003 (guaranteed) . 8,4(M 8.948 61/2% Series, due 2003 (secured by first mortgage bonds) . . . 9.900 9,900 5 9/10% Series, due 2007 (secured by fin;t mongage bonds) . . 18,000 18.000 r
Louisa Coun',y, Iowa floating 30-day municipal 23,900 23,900 i
" bond rate, duc 2015 . . . . . , . . . . . . . . . . .........
. Notes: 2,000 6 4/10% Series, due 2003 through 2007 . . . . . . ......... 2.000 7~v to 15% Series, due annually through 1996 . . ......... 148 251 91/20A Sedu, Jue annually tiuough 2009 . . . . . . . . . . . . . . 969 991 5,424 6,339 Obligauon under capital leases . . . . . . . . . . . . .........
Unamonized debt discount / premium, net . . . . . . ......... (410) (305) 386.501 49 0 % 338.255 49.27c, Total . . . . . . . . . . . . . . . . . . . . . . . . . . ......... ,
TOTAL .............,.,.................... $ 78R,968100.6% $ 6R7,916 Imo%
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The accompanying notes are an integral pan of these statements. ;
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IOWA POWER INC.
CONSOt.lDATED STATEMENTS OF RETAINED EARNINGS Year Ended December 31 1991 1990 1989 (in Thousands)
Balance, beginning of period . . . . . . . . . . . . . .. $171,662 5166,100 $160.023 I 36,591 40.717 42,397 Eamings on common stock . . . . . . . . . . . . . . . . .
Less cash dividends on cosmnon stock . . . . . . . . . . 40.580 35.155 36.370
$ 167,673 $171,662 5166,1(Y)
B alt.nce, end of period . . . . . . . . . . . . . . . . . . . .
The accompanying notes are an integral part of these stateme.nts.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1)
SUMMARY
t)F SIGNIFICANT ACCOUNTING POLICIES:
(a) Corporate Organ 17ation and Principles of Consolidation:
lowa Power Inc. (Company or IPR) is a wholly-owned subsidiary of Midwest Resources Inc.
(MWR), a holding company. IPR provides electric service to 254.000 customers in 125 lowa communities.
The consolidated financial statements include the accounts of all subsidiaries after climination of significant intercompany accounts and transactions.
In 1991 the Company began reponing off system sales as Operating Revenues rather than as a reduction to Power Pun.hased and Inteichant;cd.
Prior year amounts have been icclassified on a basis consistent with the 1991 presentation.
(b) Recognition of Revenues and Costs:
Utility revenues are recorded based on service tcadered to the end of the month. Acented unbilled revenues are $13,827,000 and $15,595,000 at December 31,1991 and 1990, respectively, and are included in Receivables on the Consolidated 11alance Sheets.
The majority of the Company's electric revenues are subject to an adjustment clause. This clause allows the Company to adjust the amounts charged for electric service as the costs of fuel for generation or purchased power change. 'Ihe costs recovered in revenues thmugh use of the adjustment clause are charged to expense in the same period.
(c) Depreciation and Amortization:
The Company's pmvisions for depreciation and amonization are based on straight line composite rates. The composite rate for 1991,1990 and 1989 was 3.7%
Utility plant is stated at original cost, which includes overheads, administrative costs and an allowance for funds used during construction.
The cost of repahs and minor replacements is charged to maintenance expense. Property additions and major property replacements are charged to plant accounts. Utility property retired or-g disposed of in the normal course of business is charged to accumulated provisions for depreciation,less net salvage credits, (d) Incon'c Taxes:
The Company provides defen d income taxes for all differences in the timing of income and expense except where such defened income taxes are not allowed by regulatory agencies as an expense for rate purposes, income tax expense related to these transactions is included in tne period in which
- the taxes become payable. The estimated cumulative net amount of defened taxes which has not been provided for as .of December 31,1991, is $57 million. primarily- related to depreciable assets.
- Investment tax credits have been deferred and are being amoitized over the life of the related propeny.
31-a
The Financial Accounting Standards lloard (FASil) issued a new accounting standard which requires an asset and liability approach for Dnancial accounting and reporting for income taxes rather than the deferred method. The FASil has announced mat the effective date will be for fiscal years beginning after December 15,1992. The Company anticipates adoption in 1993 on a restatement basis.
llecause of rate regulation, the adoption of Re new standard will result in the recording of additional regulato:y assets and liabilities of approxi.wely $96 million with no material impact on camings in the year of adoption.
(c) Consolidated Statements of Cash Flows:
The Company considers all cash and highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents for purposes of the Consoi6ted Statements of Cash Flows.
Cash paid for interest and income taxes for the years ended December 31 was as follows (in thousands); 1 1
1991 1990 1989
$ 28.R25 $ 28.170 $ 27,195 Interest paid, net of amounts capitalized . . .
$ 18.005 $ 29.117 5 25,963 1 income taxes paid . . . . . . . . . . . . . . . . .
(2) RETIREMENT PLANS:
'the Company has non-contributory defined benefit pension plans covering substantially all employees. The benefit formulas are ba3cd on employees' years of service and individual camings.
The Company generally uses the aggregate actuarial cost method to detennine annual funding requirements. Under this meti:od, there is no unfunded prior service cost. The excess of the pitsent value of projected benefits over plan assets i: funded as a level percentage of covered paymil. IPR has been allowed to recover funding contributions in rates. Tlv plan assets are stated at fair market value and are composed of insurance contracts, federal government debt and corporate equity securities.
Net periodic pension cost includes the following components for the years ended December 31 (in thousands):
1991 1990 1989 W
Service cost benefit camed during the period S 2,715 $ 2.203 $ 1,967 .
Interest cost on projected benefit obligation . 2.472 2,247 2,247 increase (decrease) in pension costs from' (14,456) 1,647 (6,348) actual retum on assets . . . . . . .,, ..
9,956 (6,766) 2,594 Net amoniza: ion and deferral .........
452 2.223 1.951 Regulatory ircognition of incurred cost ...
Net periodic pension cost . . . . . . . . . . . . $ 1,139 $ 1,554 $ 2.411 Assumptions used were:
- . 8.50% 8.50% 9.25 %
Discount rate . . .............,,.. :
Rate of increase in compensation levels . . . 5.50% 5.00 % 5.50 %
Expected long-term rate of retum on assets . 9.00 % 9.00 % 9.25 %
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, ---- _=-s . .. . - . _ _ _ . - - . , . . . _ . . - _ -, _ _ _ , , . _ - . . . ._ , -_
ne following table presents the plans' funding status and amounts mcognized in the Company's Consolidated Ba'ance Sheets as of Decemtwr 31 (in thousands): :
1991 1990 Actuarial present value of benefit obligat;ons Vestod benefit obligadon . . . . . . . . . . . . . . . $(19,G19) ! (18,057)
Non vested benefit obligation ... ,,...... (305) (156)
Accumulated benefit obligation . . . . . . . . . . . (19,444) (18,213)
Provision for future pay increases ......... __( 13.059) .f11.101)
(32,503) (29,321)
Projected benefit obligation . . . . . . . . . . . . . .
Plan assets at fair value . . . . . . . . . . . . . . . . . 56.018 44.631 23,515 15.316 Projected benefit obligation less than plan assets .
(12.795) (9,894)
Unrecognized net gain . . . . . . . . . . . . . . . . . .
(2,998) (3,199)
Unrecognized net tmnsition asset ...,, .....
- (2.223)
O the r . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability recognited in the
$ 7,722 $ .
Consolidated Balance Sheets . . . . . . . . . . . . . .
In addition to providing pension benefits, the Company provides certain .calth care and life insurance berv, fits for retired employees. Under the current plan substantially all of the Company's employees may become eligible for these benefits if they reach retirement age while working for the Company. Ilowever, the Company retains the right to change these benefits anytime at its discretion.
The cost of retirce health care and life insurance benefitt. is recognized as an expense as claims or premiums are paid. These costs amounted to $1,501.000 for 1991, $1,856,000 for 1990 and $1,040,000 for 1989.
In December 1990, the FASB issued a standard, FAS 106, on accounting for postretirement benefits other than pensions. This standard sequires that the expected cost of these benefits be charged to expense during the years that the employees render service. This is a significant change from the Company's current method of recognizing these costs on the claims or premiums paid basis. The Company is required to adopt the new accounting ar.d disclosure rules no later than 1993, although $
earlier implementation is pennitted, and may adopt the new standard prospectively or use a cumulative catch-up adjustment.
The Company expecu to prospectivel) adopt the new standard by January 1,1993 and plans ta amonize the discounted present value of the obligation at that date to expense over a 20-year period.
The estimated accumulated postretirement benefit obligation and the estimated net periodic costs as defined under FAS 106 are appmximately $30 million and $4 million, respectively.
The Company has previously been allowed rate recovery on these postretirement benefits on '
a claims or premiums paid basis. In future rate proceedings tht. Company is requesting recovery of costs on a FAS 106 accrual basis. The Company is unable to predim the regulators
- acceptance of the accmal basis. If the Company is successful in its request, there would be no material impact on :
camings as a result of adopting this pronouncement.
l^
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(3) LONG TERM POWER PURCilASE CONTRACT:
Under a long-term power purchase contract with the Nebraska Public Power District (NPPD),
expiring in 20N, IPR buyr, one half of the output of the 778 megawatt Cooper Nuclear Station (Cooper). He Consolidated Balance Sheets include a liability for the Company's fixed ob!!gation to pay 50% of NPPD's Nuclear Facility Revenue Bonds. A like amount representing the Company's right to purchase Cooper power is shown as an asset.
Monthly payments to NPPD cover one-half of the fixed and operating costs of the plant (excluding depreciation but including debt service) and the Company's share of nuclear fuel costs (including nuclear fuel disposal) based on energy delivered. The debt service ponion on a monthly basis appmximates $1.5 million and is not contingent uprn the plant being in operation. Payments also include amounts to maintain various funds and reserves which art anticipated to be available for plant decommissicving costs. NPPD has filed a decommissioning plan with the Nuclear Regulatory Commission (NRC) and established an extemal trust for nuclear decommissianing funds. As of December 31, 1991, the Company's share of planned decommissioning costs is approximately
$60,650.000 in 1990 dollars. $7,608,000 har been funded. Nuclear power purchased in the Consolidated Statements of Income reflects such chalf,es. We debt amonization component of the Company's payments to NPPD was $8,455,000, $7,990,000 v.J $7.550,000 and the uct interest component was $6.600,000, $6,811,000 and $6,929,000 each for the years 1991,1990 and 1989, respectively Current maturities of the power purchase contract obligation are $8,948,000, $9,470,000,
$10,038,000, $10,638,000 and $11,273,000 for 1992,1993,1994,1995 and 1996, respectively.
Capital improvement costs for new propeny, including carrying costs, are being deferred, amonized and recovered in utes over the term of the NPPD contract. Capital improveme ut costs for propeny replacements, including carrying costs, art being deferred, amortized and recovered in rates over a five year period.
NPPD has pnmary and excess propeny insurance for Cooper in the amount of $1.3 billion, and the Company purchases $625 million of excess pmpeny coverage directly from a mutual insurance -
company. The combination of insurance programs pmvides the Company coverage for its 50% share of losses up to $2.515 billion. Currently, this is the maximum available coverage. Under NRC rules, the required excess propeny insurance must be used to pay the co.t <
of any obligation to decontaminate the facility and remove debris befo,e any other claims for pmperty damage in the event of an accident at any of the mutual company members insured nuclear plants, the Company would be subject to a retmspective maximum additional premium of approximately $2.6 million. The Company also purchases insurance coverage from the mutual insurance company for increased costs of generation and purchased power in the event of an accidental outage at Cooper.
NPPD purchases nuclear liability insurance in the amount of $200 million. In accordance with
- the Price-Anderson Amendments Ac; of 1988, excess liability coverage is provided by a mandatory industry-wide program under which the owners of nuclear generating facilities could be assessed for liability incurred due to a serious nuclear incident at any commercial nuclear reactor in the United States. The Company's 50% share of the maximum amount of such an assessment would be $31.5 million per incident, payable in annual installments of not more than $5 million. Ilowever, an additional assessment of no more than 5% of this amount may be payable if the public liability claims and legal costs arising from a nuclear incident at an indemnified facility exceed the Price Anderson financial protection.
- - An industry wide policy with an aggregate limit of $200 million for the nuclear industry as a whole is in effect to cover tort claims of workers as a result of radiation exposure on or after January 1, 1988, The Company's share of a maximum retrospective premium adjustment would be approximately $1.3 million.
. 34-
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(4) LONG TERM DEllT:
The Company's sinking fund requirements and maturities of long team debt for 1992, 1993, 1994,1995 and 1996 are $1.325,000, $2.360.000, $2,496.000, $2.207,000 and $51,775,000, respectively.
The Company may reduce sinking fund requirements for first mongage bonds by cenifying propeny additions in accordance with tenns of tbc tridenture and its supplements. - Substantially all utility plant is p!cdged.
(5) INCOME TAX EXPENSE:
Income tax expense includes the following for the years ended Decemter 31 (in thousands):
1991 1990 1989 income Taxes Current Fed e ral . . . . . . . . . . . . . . . . . . . . . . $14,789 $17,964 $20,306 State . . . . . . . . . . . . . . . . . . . . . . . . 4.93 5.800 6.831 19.741 23.854 .J2J32, Deferred Federd ............. ........ 4,196 2,880 3,798 State . . . . . . . . . . . . . . . . . . . . . . . . -(274) (142) (27) 3.922 2.737 3.771 Investment tax credit amonization . . . . . . (1.850) (1.8M) (l.M8)
Total ....................... $21.813 $24.727 $29.260 The sources of timing differences resulting in deferred income taxes and the tax effect of each for the years ended December 31 are as follows (in thousands):
~
1991 1990 1989 Deferred federal and state income taxes, net, related to:
Accelerated depreciation . . . . . . . . . . . . . $ 3,936 $ 2.788 $ 3,750 Othe r, net . . . . . . . . . . . . . . . . . . . . . . (14) ISI) 21 Total ....................... $ 3,422 $ 2.737 $ 3.771 The following table is a reconciliauon between the effective income tax rate, before preferred stock dividends indicated by the Consolidated Statements of Income and the statutory federal income tax rate for the years ended December 31:
1991 1990 1989 Effective federal and state income tax rate . . . . . 37 % 37 % 40%
State incon? tax, net of federal income tax benefit . . . . . .. . . . . . . . . .... (5) (6) (6)
' Amortization of investment tax credit ...,.... 3 3 3 Differences between book and 'ax depreciation foi which deferred taxes have not tren provided (1) -
'(3) i' Statutory fedent income tax rate . . . . . . . . . . . 34 % 34 % 34 %
35- !
i 1
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4
, (6) PROPOSED UTILITY MERGER:
)
On June 6,1991, MWR announced a plan to merge its two wholly-owned subsidiary utility companics, IPR and towa Public Service Company (IPS). The Iowa Utilities Board (IUB) and the Minnesota Public Utilites t Commission approved the merger on December 23,1991, and January 21 1992, respectively. A filing request!ng Federal Energy Regulatory Comtnission approval has been made and is pending. ' Die tvrger also requires approval from the preferred shatchniders.
('i) VOLUNTARY EARLY RETIREMENT AND SEPARATION PROGRAMS:
On October 23,1991, MWR announced a reorganization and staffing plan which coruists of an enhanced voluntary early retirement plan and a comprehensive separation plan for salaried employees of IPR and IPS. . Employees eitglble for the enhanced voluntary early retirement plan were those 55 years of age or older by December 31,1991.
There were 44 IPR employees who retired under this plan. Cenain costs of the early ictirement plan will result in increases in future pension fund contributions which are the basis by which these corts are included in rates. Other costs of this plan and the severance plan am estimated l I
to total $1.013.000 and were expensed during the fourth quarter of 1991. i (8) JOINTLY OWNED UTILITY PLANT:
Under joint plant ownership agreements with other utilitics, the Company had undivided interests at December 31,1991, in jointly-owned generating plants as shown in the table below.
The dollar amounts below represent the Company's share in each jointly-owned unit. Each participant has provided financing for its share of each unit. Operating Expenses on the Consolidated Statements of income include the Company's share of the expenses of these units.
Neal Council Ottumwa Louisa Unit Bluffs Unit Unit No.3 - Unit No.3 No.1 _ No.1 (Dollars in millions except capital cost per kW)
Utility plant in service . . . . $ 37.6 $165.2 $ 58.6 $184.9 Year placed in service . . . . . 1975 1978 1981 1983 Accumulated depreciation . . . $ 17.9 $ 66.4 $ 19.0 $ 49.8 June 1991 unit capacity mW . 515 675 675 650 a
Percent ownership . . . . . . . . 23.0 % 46.7% 15.0 % 30.5 %
Capital cost per kW ...... $ 317 5 524 5 579 $ 933 (9) RATE REGULATION:
The Company's utility operations are subject to rate regulation by tt.c IUB.
On January 28,1992, IPR filed a fonn of notice for a proposed rate increase with the IUB.
The IUB has approved the Cornpany's proposed rate notification filing (See Foomote (19)).
-36 l
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s (10) CAPITAL EXPENDITURES:
The Company's capital expenditures, including Cooper Nuclear Station capital improvements i
and allowance for furt.; used duritig construction, are estimated to be 580,6S9,000 for 1992, i
(11) SilORT TERM 110RROWING:
Interim financing of working capital needs and the construction program may be obtalried from the sale of commercial paper or short term borrowing from banks. De Company's 1, hon af December 31,term notes 1991, j
payable consisted of commercial paper borrowings of none and $45.200.000
' and 1990, respectively. He Company had bank lines of credit of $86,170,000 at December 31,1 These lines are used to suppon commercial paper and bank borrowings. The average interest rate on a
the commercial paper and bank borrowings was 6.15% for 1991 and 8.27% for 1990.
4 (12) COMMON STOCK:
Common stock outstanding and additional pald in capital changed during the years ended December 31 as shown in the table below (in thousands):
~ 1990 1989 1991 Amount _ Shares Amount Share! amount _ shares
$158,028 7 %6 5158,028 7,586 Balance, beg!nning of year . . . . . . 5158,028 7,586
~
Changes due to: - - - -
Contribution from parent . . . . . . 56.705 -
7,586 1158,028 7,586 $158,028 Balance, end of year . . . . . . . . . . S'14,823 7,586 (13) CUMULATIVE NON REDEEMABLE PREFERRED STOCK:
All series of the Cumulative Non-Redeemable Preferred Stock ($100 par value) are redeemable at the option of the Company at prices varying from $101,50 to $102.70 plus dividends accrued and
, Each series is entitled to $100 per share plus accrued dividends
- unpaid at the date of redemption.
upon involuntary liquidation, have no preemptive rights and are entitled to cumt'lative dividend respective mies per annum. De series of Cumulative Non Redeemable Preferred Stock have no v rights except as permitted by the Articles of Incorporation or required by law.
The Company redeemed 4 shares during 1991. Annual dividend requirements for the preferred stock outstanding at December 31,1991, total $841,000.
~' (14) ENVIRONMENTAL MATTERS:
The Company's coal fired generating units are minimally affected by the Phase i provisions of the Clean Air Act Amendments of 1990 (CAA). These generating units cunently meet the new CAA sulfur dioxide emission rate standards by buming low sulfur Wyoming coal. Additional emission rate reductions will not be required to achieve compliance. The Company estimates that sufficient emission allowances will be allocated on a system wide basis for its units to operate at the capacity factors needed to meet system energy requirements.
Once established, the numb:r of emission allowanct a allocated and any pro rata reductions in those allowances will determine the extent, if any, to which sales for resale will be restricted. By the year 2000, some Company coal fired generating units will be required to intall controls to reduce emissions of nitmgen oxides. The cost of thcsc controls is expected to be nominal. Essentially all utility generating units are subject to CAA provisions which address continuous emission monitoring, permit requirements and fees, and emission of toxic substances.
The costs to achieve compliance with these provisions are expected to be nominal.
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l (15) STORM DAMAGE:
A major ice storm struck the Company's service tert. wry during the fourth quaner of 1991, damaging certain electric transmission and distribution systems. Appmximately 90 miles of 345 kV transmission line, which are jointly-owned by four utilities, were destroyed.
Restoration costs of $2,500.000 for the distribution systems were capitallred or deferred in anticipation of future rate recovery. Rebuilding the damaged 345 kV tansmission line is estimated to cost $27,000,000 to the joint owners. The Company's share is estimated at $6,200.000 which will be capitalized. Reconstruction will not be complete until the summer of 1992. ' Die Compariy can continue to meet customer electncity needs through other transmission facilities.
(16) UNAUDITED QUARTERLY OPERATING RESULTS:
Operating Operating Earnings On Jevenues _ Income. Common Stock (In Thousanos) 1991
$ 88,976 $ 15,086 $ 7,494 1st Quanct .........
95,784 16,505 8,867 2nd Quaner ........
3rd Quaner . ....... I11,009 4.321
. 17.235 85,983 10,903 2,995
. 4th Quaner . . . . . . . . .
1990
$ 83,723 $ 12,661 5 5,733 1st Quaner . . . . . . . . .
87,058 I4,935 7,752 2nd Quaner ........
I13,994 27,552 20,170 3rd Quaner . . . . . . . . .
4th Quaner , . . . . . . . . 86.273 13,770 7,062 (17) DIVIDEND PROVISIONS:
The Anicles of incorporation of IPR pilow the payment of cash dividends on common nock to the extent of the available retained camings of IPR, providing that the percentage of common stock equity is 25% or more of total capitalization. If the common stock equity is less then 25% but more than 20% of tote capitalization, ccmmon stock dividends shall not exceed 75% of net income available for common stock dividends. If the percentage of common stock equity to total capitalization is less than 20%, common stock dividends are restricted to 50% of net income available for common stock dinderds. IPR meets the most stangent of these requirements, and there was no common stock dividend restriction at December 31. 1941, except to the extent of available retained earnings.
(18) AFFILIATED COMPANY TRANSACTIONS:
IPR is a wholly-owned subsidiary of MWR, IPR was previously a wholly-owned subsidiary of Iowa Resources Inc. (IOR), a holding company. On November 7,1990, IOR and Midwest Energy Company (MWE) merged into MWR, a newly created holding company. The companies identified as affiliates, other than the paxnt company, are wholly-owned subsidiaries of MWR. The basis for these charges is provided for in service agreements between the companies, in the opinion of management,
- the expenses between entitles is fair and reasonable.
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IPR leased unit trains from an affiliate for the tr .;ponation of coal to IPR generating stations.
l Unit trala costs, including maintenance, were $802,000, $E55,000 and $894,000 for 1991,1990, and 1989, respectively. !
j
(
IPR leases an office facility and other propenies from an affiliate and these lease payments j
were $265,000, $219,000, and $224,000 for 1991,1990 and 1989, respectively.
IPR purchased and sold energy to an affiliate. Erergy purchases from the affiliate were
$139,000, $233,000 and !397,000 for 1991,1990 and 1989, respectively. Energy sales to an affiliate j amounted to $6,000, $55,000, and $52,000 for 1991,1990 and 1989, respectively, IPR purchased .
! natural gas from an afnliste in the amount of $2,186,000, $1,272,000 and $466,000 for 1991,1990 and i 1989, respectively, Under a joint ownership agreement with other utilities, IPS is the managing partner of the Neal Generating Station Unit #3. Each particlotnt has provided financing for its share of the unit. IPR paid .
l to IPS its share of the other operation and maintenance expchse in the amount of $2,761,000, l
f $1,948,000 and $2,078.000 for 1991,1990 and 1989, respectively.-
g IPR's parent company incurs cenain administrative and general expenses which are of general benefit to all of its subsidiaries. IPR's share of such expenses _was $2,081,000, $4.213,000 and
$2.302,000 for 1991,1990 and 1989, respectively. Included in the 1990 amount are $2,061,000 of l - costs related to the merger of IOR and MWE (nto MWR.
I IPR is reimbursed for charges ' incurred on behalf of its parent company and other affiliated companies. The amount of such expenses were $3,558,000, $2,071,000 and $2,514,000 for 1991,1990 i and 1989, respectively. The majority of these reimbursed expenses were for employee wages atxi i benefits, insurance, building rental, computer costs, administrative services and travel expenst.
4
? - Beginning in 1989, IPR has a joint ownership agreement concerning various liber optic lines
- with an affiliate. In 1989, the affiliate sold $600,000 of fiber optic lines to IPR at cost.
At December 31, 1991, IPR owned investments in IPS commercial paper amounting to .
$38,000,000 which is included in Cash and Cash Equivalents on the Consolidated Balance Sheets. The ,
! IPS commercial paper was purchased by IPR tiuuugh a third pany. Interest income earned on the investment during 1991 was $44,000.
i IPR and IPS each utilized crews of the other company to estore electricity to customers after f
storms during 1991. IPR paid IPS $80,000 for use of IPS crews and IPR received $653,000 from IPS l
- for use of IPR crews.
U (19) EVENT OCCURRING SUBSEQUENT TO REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS (UNAUDITED)r On March 17, 1992 IPR'. filed a request with the IUB' .for an electric rate increase of $36.1 milion, or 10.0% annually, The IUB has until April 16,1992 to either allow the proposed rate increase to go into effect or docket the request as a contested case proceeding; .Should the IUB docket the '
request and suspend the proposed rates, IPR requests an annualized interim rate increase, to be collected subject to refund, of approximately $19.0 million, or 5.3 percent, which would become effective April:
16,1992. .'The IUB would have umil June 16,1992 to rule on tl.e request for the interim rate increase.
- IPR expects a final decision to be issued no later than January 17, 1993.
)
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MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS The management of Iowa Power luc. is responsib!c for the preparation and presentation of the accompanying financial statements. The nnancial statements have been prepared in confntmity with >
generally accepted accounting principles and include announts that are based on infonned estimates and judgments of management.
Management maintains a s,vstem of intemal accounting contmls which it believes is adequate ;
to provide rea3onable assurance that assets arer sa aguarded trar.sactions are executed in accordance with management authorization and the Gnancial records are renab!c for preparing the financial staternents.
De system of internal accoun'.ing controls is supported by written policies and procedurce, by a staff of intemal auditors who conduct comprehensive intemal audits and by the selection and training of qualified personnel.
ne Midwest Resources Inc. Board of Directors, through its Audit Committee comprised entirely of outside directors, meets periodically with management, intemal auditors and the Company's independent auditors to discuss auditing, intemal controi and financial reporting matters. To ensure their independence, both the internal auditors and independent auditors have full and free access to the Audit Committee.
The independent public accountants, Arthur Andersen & Co.. were engaged to audit the Company's financial statements in accordance with generally accepted auditing standards.
Russell E. Christiansen Chairman and Chief Executive Officer s
a e
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P REPORT OF INDEPENDENT PU13LIC ACCOUNTANTS To lowa Power Inc.:
We have audited the accompanying consolidated balance sheets and consolidated statements of capitalizati,.. of Iowa Power Inc. (an Iowa corporation and wholly owned subsidiary of Midwest Resources Inc.) and subsidiaries as of Dewmber 31,1991 and 1990, and the related consolidated statements of mcome, retained camings and cash flows for each of the three years in the period ended
)
December 31, 1991. These financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing sttndards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. - An audit also includes assessing the accounting principles used and significant estimates made by managem.:nt, as well as evaluating the overall financial statement presentation. We believe that our audits pmvide a reasontble basis for our opinion.
In our ophion, the financial statements referred to above present fairly, in all material respects, the financial position of Iowa Power Inc. and subsidiaries as of December 31,1991 and 1990, and the results of their operations and their cash flows for each of the tlute years in the period ended December 31,1991. in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the b: sic financial statements taken as a whole.1te schedules Sted in the index of financial statement schedules (Item 14 (a) 2) are presented for purposes of complying with the Se:urities and Exchange Commission's rules and are
- not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fMrly state in all material respects the financial data required to be set fonh therein in relation to the Wic financial statements taken as a whole.
! Chicago, Illinois, Arthur Andersen & Co.
i January 30,1992 k
. . _ _ . . _ _ . _ _ _ _ _ _ _ . . _ _ _ _ _ _ _ . _ . ~_ . . . _ _ . _ _ _ . _ . . , . . _ _ . _
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UNAUDITED li'R ELEC'IRIC STATISTICS 1990 1989 _._ 19xs _ 1987 l'or the years ended December 31. 1991 Rcteues (000) $ 156,047 $ 157,020 $ 148.324
$ !?7.905 $ 169.975 97,447 Residential . . . . .. .. .....
96.381 100.382 102,644 Small general serviec ...... . 101.659 81,678 77,477 71,996 80,390 Large general service . . .,.. 70.654 (669) 11.175 j
11.126 9I65 _ 11.55!2 334,423 Other .................. , 348,017 348.375 340.673 361.344 S ubtotal . . . . . . . . . . . . . . . .
20.108 22.672 22.553 11.510 __1Mf1 Sales fer resale ...., ......
$ 3MI,452 5 170,6M9 f 170,928 {, _351,1 H 3 $ 350.409 Sales (000 kWh) 1.891,707 1,935.131 1,791.531 2,030.570 1,885.447 Residential . . . . . . . . . . . . . . . 1,438,065 1,382,989 1,278,37I 1,678,778 1.534,707 Small general service ....... 1,778,884 1,789.601 ' M3,437 1.806,987 1,853,477 ,
large general service ...... . 94.007 RR.42,,9, R9 Sig 74.194 74.137 Other ..... ............ 5.202,753 5.196,150 _4,803,227 5,590.529 _5.347,768
- S ubtotal . . . . . . . . . . . . . . . 1.735.926 1.567.447 615.055 9?9.241 1.557.378 5,742,468
) Sales for resale . . . . . . . . . . . . 7.0M1,594 6,770,700 5,N11.?O5 i
7.147f07 4
. EnerR; (000 kWh) '4,564,353 4.180,064 3.219,957 2,962,275 4,611,612
- Gencrued .............. _2.968 A42 _3.238/69 Purchacd a".d interchanged L9;t7.f2.1 3.914.225 _2.943.979 o
7.559,017 1
H.498.578 7.124 JM3 3 8,399 6.700.944 i Customers (end cf period) 215,735 212,837 210,449 220,090 218,033 Residential ............... 32,600 32,136 31,608 31.027 Small gene al service . ... .. 32.883 435 j
371 382 463 Large general service ........ 392 996
! 978 1.018 1.022 993. 242,9trl j Ot'.cr ... .............. 251,997 249,231 245,926 254,387
, S ubtotal . . . . . . . . . . . . . . . . . 37 36 40 3'l 40 Sales for resale . . . . . ......
254,427 252,014 249,767 245,966 74?fM4 Average Annual Use Per l
- Residential Customer $ 728.52 $ 742.44 5 708.73
' Revenue . . . . . . . . . . . . . . . . . $ 812.52 5 -785.08 8,708 8.832 9,150 8.560 I K Wh . . . . . . . . . . . . . . . . . . . 9.274 Average number of residential 214,198 211,492 209.280
- t. ustome,s . . . . . . . . . . . . . . . 218.954 216.507 i
b Revenues as a % of Total 45.9 % 42.1 % 44 6 % 42.3%
46.6%
g Resid:ntial . . . . . . . . . . . . ..
26.0 27.0 m 27.8 Smali general service ....... 26.7 ;
! 21.7 22.1 i 18.5 19.4 '
12rge geceral service ...... .
31 _ y a) 32 2.9 2.6
- Other ..................
W.7 93.9 93.9 L .7 95.4 i Subtotal . . . . ......... . 5,3 61 6,1 _ . ;j 4_6 Sales for resale . . . . . . . . . . . . 100 0 % 100 0 % '000%
im o%
' 100 0 %
Sales as a % of Total 26.6 % 27.9 % 33.3 % 31.2 %
28.4 %
Residential . . . . . . . . ......
21.7 21 ' '3.8 22.2 '
Small general service 23.5 I 26.2 26.3 30.8 -
28.6 large general ervice ...... 25.3 1.6 1.0 1.0 1.4 1.5 Other .........,,.... ,. 89.4 83.6 78.2 75.5 76.8 Subtotal . . . . . . . . . . . ... 24.5 23,2 10 6 16 4 ;
Sales for resale . . . . . . . . . . . . 2.LR 100 0 % 100 0 % 100 0 % im o% 10g%
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SCHEDULE 1 l ;
10WA K)WER INC, MARKETABIE SECURITIES - OTHER INVESTMENTS
_ DECEMBER 31. !WI (In Thousands)
?
Column C Column D Column E Column A Column E A:nount at Which Fach ,
?
Portfolio of Equity Market Vahr SecurMy issues ar.J Cost of of Each Exh Other Secrity Each issue at Issue is CATied in l' N3me of Issucr and Principal Amount of Issue Balance Sheet Date the Balance Sheet Title of Exh issue _ Donds and Notes * ,
(Note 1) lt Inc.stments- $37,775 537.775 $37,773 .
lowa Public Service Cwmenial Paper 38,000 !
2,799 2,799 2,799 Memil Lynch Commercial Paper 2,800
- a 474 474 E/4 !
474 Sil,(kt5 i - w Other 541,G2R i
j Notes- (1) Due to the nature of these in~estmutts the market value is assumed to be cost
- Represents dollar amounts.
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_m_ __ . _ . __ _ _ . _ _ _ _ _ _ _ . . _ _ _ _ _ . _ . _ _ _ _ _ _ . _ _ _ _ _ _ _ _ . _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ . _ _ _ - - _ _ _ 4___ . _ _ _ . _ _ . _ _ _ _ _ _ _ . _ _ _ _ .___
- . - _ ~ - - _ . - _ - - . -.,, _
SCIIEDULE V l YEAR ENDED DECEMBER 31, 1991 IOWA POWER INC.
CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT i
(in Thousands) 6 Column E Column F 4
Column B Column C Column D ,
Column A Additions Retirements Other Chances l at Original Transfers at l and Reclass- Balance Balance Original Cost (Nme 1) ifications _ Other Dec. 31.1991 Dec. 3L 1990 Cost ..
Clausification .
l STATED AT ORIGINAL COST: -
Utility plant - $ 3.833 $ - S 5380 j S 879 5 1273 $ (5) !
- Intangibles !
- 476,962 i' Production- 471,710 5252 - -
- 58,913 Steam 34,819 - -
24.094 - 144,100 i Other 138,003 7.013 (916) 345,974 :
- Transmission 323,998 24.863 (2,887) - -
i (3,833) 68,002 i Distribution 72,491 5394 (6,050) -
t
- - 58,850
! General 78,223 (12,373) -
' 'In service, not unitized - -
3.465 (2) 10A49 6984 -
3,465 I,169 230 l . Property under capital lease - _ 1,109,382 66241 (9.858)
Total i utlity plant in service . 024) 23.095 23,219 -
i IIeld for future use t l- 3.465 1.192325 2
_1,132.601 66.241 (9.982) -
i Total utility plant
- - 19323 i
' 32.452 (13.129)
Construction work in progress - -
Total utility property, plant }
and equipment, including - 3,465 1211,648 1,165,053 53,112 (9382) 1,278 intangibics ~ 4
,, 5.576 (292) (4.010) -
! Non-utility property Total property, plant and equipment, S 0 S 3 460 $1,212.926
! S 1,170,629 ' 552,820 5H3992) including intangibles
( ) Denotes deduc:2on '
n 31, 1991. The ddTerence of ;
i NOTE 3:(1) 'De reserve for deprec: anon has been charged with the amount indicated on Schedule VI for the year endedl
$3,944 represents lanci sales of $3313 and undepreciated value of property retired of $31.
1 i
(2) The $3,465 reflects s. change in the methu! of accounting for capital leases.
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SCilEDULE V YEAR ENDED DECEMBER 31,1990 IOWA POWER INC.
CONSOUDATED PROPERTY, Pl>MT AND EQUIPMENT (In Thousands)
Column E Column F Column B Column C Column D Column A Additions Retirements Ottwr Chances at at Original Transfers and Reclassifi- Other Balance Original Cost Balance catnns (Note 2) Dec. 31,19%
Dec. 31.1989 Cost (Note 1)
Classification STATED AT ORIGINAL COST:
S 879 Utility plant - S 846 5 - S (1) S 34 S -
Intangibles 5,552 - 471,710 Production- 466,315 -
(157)
Steam -
- - - 24.094 24.094 13E,003 Other 134,565 - (6SG) 4.124 -
Transmission (2,286) 19,756 - 323.998 305,532 (4) 72,491 Distribuuon (IJXN) 4,721 -
l 68,779 -
71.223 General 81,866 - (34,187) -
l 23,544 6 S84 In service, not unitized -
(514) 7.503 1,109,382 IWy under capital lease 1,032,178 81.862 (4,139) -
(519)
Total utility plant in service -
(29t0) 23.219 5- 26.072 77 -
l T IIc!d for future use O,449) 1.132/01 1.058.250 81939 (4.139) -
Total utility plant
- - - 32.452 57.316 (24.RM) _
Construenon nrk in progress Total utility groperty, plant and equipment, including (3,449) 1,I65,053 1,115.566 57,075 (4,139) -
intangilAes -
(3.163) 5.576 8.547 397 -
Non-utility property Total property, plant ami equipment, 557,472 S - S (6 R17) $1.170 629 51.124.113 5(4.139) including intangibics
( ) Denotes deduction NOTES.
(1) The reserve for depreciation has been chargal with the amount indicated on Schedule VI for the year ende (2) The S2,930 deduction to Utility Pirnt IIctd For Future Use and the $3,368 deducuon to Non-utility Property rep of portions of the Des Moines Power Station and the defened costs from the reduction of land values to deferre
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l SCHEDULE V YEAR ENDED DECEMBER 31, 1989 IOWA POWER INC.
CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT (In Thousands)
Column C Column D Column E Column F :
Column 1. Column B Additions Retuements Other Chanres !
at at Original Transfers and :
Original Cost Reclassifi- Other Balance Balance Com (Note 1) cations fNote 21 Dec. 31.10R0
' Classifkation Du. 31.1988 STATED AT ORIGINAL COST:
Utility plant - 846 Intangibles S 766 5 46 $ (10) $ 44 5 - S ,
Production- 217 466,315 466,130 -
(32) - .
Steam -
24.094 Other 24,094 - - -
3.697 134,565 131,701 8 (841) -
Transmission {1,406) 306.53?
284,630 6.753 16.555 -
Distribution (1,975) 19,657 68,779 50,614 483 -
General (40,170) 23 %
In service, not unitized 30,250 33,465 - -
8.436 - - -
(933) 7303 Property under capital lease ~ 1,032,178 996,621 40,754 (4,264) -
(933) 5 Total utility plant in service 26.072 43.445 59 (3.927) -
(13303)
-T licid for future use 1.fu0.066 40,R13 (R.191) -
(14.438) 1.058.250 Total utility plant i
24.254 33.062 - - - 37316 Construction work in progress Total utility property, plant and equipment, including (14,438) 1,115.5 % i 1,064,320 73,875 (3,19I) -
intangibles 8347 21.242 -
(56)- -
0 2.639) ,
Non-utilny property Total property, plant and equipment, $(R,217) 5 Sr27.077) 51,121,113 SI ,085.562 571,R75 -
includirg intangibles -
( ) Derotes deduction The difference i NOTES: (1) "the reserve for depreciation has been charged with the amount indicated oa Schedule VI for the year ended December 31,1989.
of $120 represents the sale of land.
(2) The 513,505 deducuon to Utility Plant Held For Future Use and the 512,639 deduction to Non-utility Property represent a transfer of portions ,
of the Des Moines Porwer Station to Unrecovered Plant.
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SCHEDULE VI L YEAR ENDED DECEMBER 31,1991 IOWA POWER INC. !
CONSOLIDATED ACCUMULA'IT.D DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT (In Theusands) i i
Columr. D Column E Co umn F 8
Column B Column C Column A Retrements Other Additions Giarged to At Cost of Addiuons Trartsfers Original Removal or Charged to and Costs and Balance Cost Salvage. Clearing Reclassi- Other .
Balance Expenses (Notes 1&3) (Note 2) Net Accounts fications . (Note 4) Dce.31.1991 Description Dec. 31.1990
)
$ (9,221) $ 400 S(1,929) 5 (22) 416.835
$389,955 $39,571 $ (1.928)
Utility plant 82 1,415 - -
9.515 8.437 218 (637) 5,957 Specific equipment - - 1,929 3.276 752 -
Intangibles Depreciation on: property - - - - -
4.195 4.195 under capital lease .
6 Total depreciation and y amortization ekctnc 491,668 40,541 (9.858) (1,846) 1,824 - 4,173 436.502 plant in service Depreciatien on plant held - - 17.513 17.606
- (93) - -
for future use Total utility depreciation (1,846) 1.824 4,173 454.015 419,274 40,541 (9,951) -
and amortization Depreciation on non-utility - - 1 98 - (97) _
property Total depreciation and $ (1,R46) $ 1,R2.1 S 54,173 $4R016 5419.372 5 40,sti (10 air) -
amorttzation
( ) Denotes Deduction NOTES:
(1) See Note 1 of Notes to Consolidated Financial Statements for cc ".msis of the provision for depreciation.
(2) See Note 1 to Schedule V for the year ended D ccmber 31,1991, (3) Depreciation and rmortization on electric plant in service as shown on the Consolidated Stav. ment of Income and the C Flows includes $1,618 of amtwiu.unni of deferred charges.
(4) Represents a gain on sale of land of $22, a change in the talance sheet presentation for capital c:ses of $3,465 and amoruz
$730.
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SCIIEDULE VI i
YEAR ENDED DECEMBER 31, 1990 IOWA POWER INC, ,
CONSOLIDATED ACCUMULATED DEPRECIATION AND AMORTIZA110N OF '
PROPERTY. PLANT AND EQUIPMENT i
(in Dousands)
Column B Column C Column D Col.unn E Column F Colunm A t Retirements Other I Additions Charged to At Cost of Additions Transfers Charged to 4
Costs and Original Removal or and Balance Expenses Cost Salvage, Clearing Reclassi- Other Balance (Notes 1&3) (Note 2) Net Accounts _ fications (Note 4) Dec. 31,1090 Devriptiori Dec. 31.1989 S 356,563 $ 37,372 $(3,315) $(1,079) $ 414 5 -
S - S 389,955 i Utility plant (g) 7,561 218 (822) 171 1,317 -
8.437 Specific equipment 2.998 280 (2) - - - -
3.276 Intangibles I Total depreciation and amortization electric 367,122 37,870 (4,139) (908) 1,731 -
(8) 401/48 plant in service Depreciation on plant held 18.798 - - - -- -
(1.192) 17.606 a for future use m Total utility deprecir.on 419,274 385,920 37.870 (4,139) (908) 1,731 -
(1.200) and amortization Depreciation on non-utility 94 4 - - - - - 98 property Total depreciation and 5 386,014 5 37.R74 $(4.139) $ (90R) $ 1.711 5 - 5(1,200) 5 419372 i amortization t
() Denotes Dedettion ,
NOTES:
(1) See Note 1 of Notes to Comolidated Financial Statements for the basis of the provision for depnxistion.
(2) See Note 1 to Schedule V for the year ended December 31,1990. i (3) Depreciation and amortization on electric plant in service as showa on the Consolidated Statemera of Incune and the Consolidated Statement of Cash Flows includes $1,618 of amortizauon of deferred cNirges.
(4) The S1,192 deduction to deprectauon on Plant Held For Future use represents a transfer of portions of Des Moines Power Station to deferred debits.
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SCliEDULE VI YEAR ENDED DECEMBER 31, 1989 -
t IOWA POWER INC.
CONSOLIDATED ACCUMULATED DEPRECIATION AND AMORTIZA110N OF i FROPERTY, PLANT AND EQUIPMENT (In Thousands) :
Column E Column F r Column B Column C Column D Column A 1
!' Retirements Other Additions Charged to At Cost of Additions Transfen Original Removal or Charged to and Costs and Balance Cost Salvage. Clearing Reclassi- Other Balance Expenses ;
Dec. 31,1988 (Note 21 Net Accounts _ fications (Note 4) Dec. 31.1989 Description (Notes 1&3) '
$ 404 $ (18) $ 6 $ 356,563 a
S 325,823 $ 34.810 S(2.896) S(1,566)
Utility plant 1,056 18 7,561 199 (1301) 234 i Specific equipment 7358 - - - 2.998 2.746 252 - -
intangibles Total depreciation and amonization electric (1,332) 1,460 - 6 367,122 4
335,927 35,261 (4,200)
! plant in service Depreciation on plant heki (3.927) - - - (10.8'ts) 18.798 for future use 33.559 -
e Total utility depreciation 385,920
$* 369,486 35,261 (8,127) (1,332) 1,460 - (10.828) and amonization Depreciation on non-utility - - - -
(9.825) 94 9.908 11
, property i Total depreciation and . 5f8,127) S(1,132) S t,460 $ - S(20,6ST) S 3R6.014 S 3793 % $ 35.2'g amortization 1
( ) Denotes Deducten NOTES (1) See Note 1 of Notes to Consolidateo Financial Statements for the basis of the provision for deprxistion.
~
(2) See Note 1 to Schedule V for the year ended December 31,1989.
l (3) Depreciation and amortization on electne plant in service as shown on the accounts and $933 amortization of capital leases.
(4) The $10,834 deduction to depreciation on Plant Hekt For Future use and the 59.825 deduction to depreciatio of portions of Des Moines Power Station to Unrecostred Plant.
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SCHEDULE VIII l 4
! YEAR ENDED DECEMBER 31.1991 i
J ,
IOWA POWER INC. i l CONSOLIDATED VALUATION AND QUALIFYING ACCOUN'TS f
(In Thousands) t Column D Column E j Column B Column C 4 Colemn A ,
4 Deductions t for Purposes for Which Balance Balance Additions Charged to Reserves Dec. 31 ,
Dec. 31 Charged to 1091 l
- Income Other Were Created
1900 4
Description
! $ 242 Reserve deducted from applicable 5 977 5 - 5(890) ,
' 5 155 !
assets-Uncollectible accounts e
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_ . . _ _ . . _ - - . _ . . . ~ . _ _ - . _ .
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l SCHEDULE Vill YEAR ENDED DECEMBER 31.1990 i IOWA POWER INC.
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS (In Thousands)
Column C Column D Column E i Column A Column B Deductions ,
1 for Purpus Balance Additions for which Balance Charged to Charged to Reserves Dec. 31,
" Dec. 31 Income Other Were Created 1990 Descriggion 1989 ,
i Reserve deducted from applicable S O,026) 5 155 S 740 $ 941 5 -
assets-Uncollectible accounts ,
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s SCHEDULE VIII
) YEAR ENDED DECEMBER 31,1989
) IOWA POWER INC.
- i i
CONSOLIDA~ED VALUA' HON AND QUALIFYING ACCOUNIS ;
- (In "Ihousands)
- i. Column C Column D Column E J- Column A Column B 1- Deductions for Purposes i Additkm for Which Balance Balance Dec. 31 Dec. 31 Charged to Charged to Reserves i Other Were Created 1989 1988 Income ,
- Descritxion Reserve deducted from applicable 5 (RRI) S 7 10 S 291 $ R'40 S -
assets-Uncollectible accounts i i US .
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SCIIEDULE IX ;
o YEAR ENDED DECEMBER 31,1991 4 i IOWA POWER INC. l CONSOLIDATED SilORT-TERM BORROWINGS (NOTE 1)
[' (In Thousands) l Column D Column E Column F ;
Column A Column B Column C I k
i Maximum Average Weighted amount amount average a
Category of- Weighted !
j outstanding outstanding interest rate Balance average !
. aggregate ,-
during the during the - during the
{ at end of interest j short-term period reriod(Note G period (Note 3) ,
turowings period _ rate ,
l r 4
Commercial 6.1% i i- NA $S0,000 $58.565 i
- Paper 5 -
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)'
NO1T.S Commercial paper may be issued in an amourn ust to exceed 25% of gross operating revenues for the preceding twelve months I f (1) stes then in effect.
and is issued with maturities not to exceed 270 days at inter 1
4 il di divided
.(2) 'Ihe computation of the average amount outstanding during the pened is based on the sum of the da y amount outstan ng j i by the number of days in the year. i 1 '
l l (3)
The computation of the weighted average interest rate for commercial paper outstanding in 1991 is tused on the sum of the annual interest on each commercial paper transaction divided by the sum of the daily net amounts of commercial paper outstanding.
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SCIIEDULE IX YEAR ENDED s
-DECEMBER 31. 1990 2
IOWA POWER INC.
CONSOLIDAED SIIORT-TERM BORROWINGS (NOTE 1)
(In Thousands)
Column C Column D Column E Column F Column A Column B Maximum Average Weighted Weighted amount amount average Category of outstandmg interest rate Balance average outstanding aggregate during the during the at end of interest during the short-term period period (Mee 2) period (Note 3) txwrewinns period rate Commercial 534,368 8.3%
4 5 45,200 8.1% $54,600 Paper 7 NOTES:
(1)
Commercial paper may be issued in an amount not to exceed 25% of gross operstmg revenues for the precedmg twelve months and is issued with maturities not to exceed 270 days at interest rates then in effect. At December 31,1990 commercial paper maturity dates ranged from January !!,1991 to February 15. 1991.
(2) The computation of the average amount outstanding during the permd is based on the sum of the daily amount outstanding divided l
. by the number of days in the year.
4 (3) The computatun of the weighted average interest rate for uuneArdal paper outstandmg in 1990 is based on the swn of the anaual interest on each commercial paper transaction divided by the sum of the daily net amounts of commercial paper outstanding.
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i SCHEDULE IX YEAR ENDED DEtX.MBER 31, 1989 IOWA POWER INC.
CONSOLIDA'ED SHORT-TERM BORROWINGS (NOTE 1) l (in Thousands)
Column E Column F Column B Column C Column D Column A Maximum Average Weighted amount amount average ;
Weighted ;
Category of outstsndmg outstanding interest rate Balance average aggregate during the during the during the at end of interest period (Note 3) short.tmn period reriod (Note 2) twrowings period - rate Commercial $20,900 $7,780 9.2%
5 11.400 8.7%
Paper w
NOTES- !
T (1)
Commercial paper may be issued in an amount not to exceed 25% of gross operating revenues At December 31, 1989for the preceding twelve 4
months and is issued with maturities not to exceed 270 days at interest rates then in effect.
commercial paper maturity dates ranged from January 22,1990 to February 9,1990.
(2)
The co;nputauon of the average amount outstanding durmg the period is based on the sum of de daily amount outstanding l divided by the number of days in the vear. ,
(3)
The computation of the weighted average interest rate for commercial paper outstanding in 1989 is based on the sum of the annual interest on each cosemercial paper transaction divided by the sum of the daily net amounts of commercial papen !
outstanding. .
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9 SCHEDULE X IOWA POWER INC, SUPPLEMENTARY CONSOI.IDAED INCOME STATEMENT INFORMATION (in Thousands)
Column A Column B Charged To Costs And Extienses Year Ended December 31 1991 looo 19g9 Taxes, other te.- payroll cnd income v. ,es -
Property $25,752 $22.979 $21,421 NOTE: The amount of mair mance, other than sat feid on the Consolidated Statements of Income, is uot significant. Adverting cxts are not significant. IPR paid no royalties. Depreciation and amortization of intangible assets is included in Schedule VI.
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SIGNATURES I
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereato duly authorized.
IOWA POWER INC.
Date: Erch 25,1992 By R E. Christiansen (R. E. Christiansen)
Chairman and Chief
- Executive Officer Pursuant to tir uirements of the Securities Exchange Act of 1934, this report has been signed below by the followin; rrsons on behalf of the registrant and in the capacities and on the date indicated:
- - Sirnature py, Date R. E. Christiansen Chairman and Chief Executive Officer 3/25 S 2 (R. F. Christiansen) (Principal Executive Officer)
P. G. Lindner Senior Vice President (Principal 3/25 S 2 (P. O. Lindner) Accounting and Financial Officer)
J. W. Hamilten Controller . 3/2562 (J. W. Hamilton)
R. C. Encle _
Director 3/25S2 (R. C. Engle) m M. W. Putney Director 3/25 S 2 (M. W. Putney)
L. K. Vorbrich Director 3/25S2 (L. K. Vorbrich)
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Sequential l EXIIIlllTS INDEX Pace Nos.
Exhibits Filed Herewith 4.18 Tweity-Founh Supplemental Indertture dated December 1,1991, between IPR, 62 Harris Trust and Savings Bank am L flanolini, Trustees.
12 Computation of ratios of carrungs to fixed charges and computation of ratios 74 of carnings to fixed charges plus preferred dividend irquirements.
76 22.1 Subsidiaries of IPR.
77
, 24 Consent of Independent Public Accountants.
Exhibits incomorsted by Refef.pngg 3.1 Restatet
- tticles of Incorporation of Iowa Power Inc. (Filed as Exhibit 3.1 to IPR's Annual
. epon k R 3rm 10 K for the year ended December 31,1989, Commission File No.1-3567.
3.2 Amended and Restated Bylaws of IPR. (Filed as ErNbit 3.2 to IPR's ' Annual Report on Form -
' 10-K for the year ended December 31, 1983 Codmissio., File No.1-3567.)
4.1 Indenture of Mongage dated as of August 1,1943, between H'k and liarris Tmst and Savings Bank and Harold Eckhan, Trustees. (Filed as Exhibit 8(a)(1) to IPR's Registration Statement, Registration No. 2-5138.)
4.2 Instmment relative to appointment of W. H Milsted as Individual Trustee under Indenture of Mongage. (Filed as Exnibit 4-B-5 to IPR'r Registration Statement, Registration No. 2-9619.)
l 4.3 Ninth Supplemental Indenture dated as of January 1,1968, between IPR and Harris Trust and Savings Bank and R. H. Long, Trustees. (Filed as Exhibit 2-B 12 to IPR *r Registration Statement, Registration No. 2-27681.)
4.4 Tenth Supplemental Indenture dated as of January 1,1970, between IPR and Hanis Trust and Savings P,ank and R. H. Long Trustees. (Filed as Exhibit 2 B-13 to IPR's Registration Statemec., R' gistration No. 2-35624.)
, 4.5 Eleventh Supplemental Indenture dated as of December 1,1971, between IPR and Harris Trust and Savings Bank and R. H. Long, Trustees. (Filed as Exhibit 2 B-14 to IPR's Registration Statement, Registration No. 2-42191.)
4.6 Thineenth Supplemental Indenture dated as of March 1,1976, between IPR and Harris Trust ar.d Savings Bank and R. H. Long, Trustee 2. (Filed as Exhibit 2-B-15 to IPR's Registration Statement, Registration No. 2-58163.)
4.7 Founeenth Supplemental Indenture dated as of March 1,1977, between IPR and Harris Trust and Savings Bank and R. H. Long, Trustees. (Filed as Exhibit 2-B-16 to IPR's Registration Stateinent, Registratien No. 2-59339.)
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t - .. . - , - . - . . . - , - - . _ - . . ---
4 4.8 Loan Agreement No. I between the City of Council Bluffs, Iowa, and IPR providing for the borrowing by IPR of the proceeds of Pollution Control Revenue Bonds issued by the City.
(Filed as Exhibit 2-B-17 to IPR's Registration Statement, Registration No. 2-59339.)
4.9 Loan Agreement No. 2 between the City of Cot.ncil Bluffs, Iowa and IPR providing for the botrowing by IPR of the proceeds of Itllution Control Revenue Bonds issued by the City and the issuance by IPR of its Note due 2007. (Filed as Exhibit 2-B 18 to IPR's Registration Statement, Registration No. 2 59339.)
4.10 Instmment relative to the resignation of R. H. Long as individual trustee and appointment and acceptance of R. S. Stam as individual trustee under the Indenture of Mortgage and Deed of Trust between IPR and liarris Trust and Savings Bank, dated as of August 1,1943, as amended and supplemented. (Filed as Exhibit 2-B 19 to IPR's Registration Statement, Registration No.
2-59339.)
4.11 Fifteenth Supplemental Indenture dated as of September 15, 1977, between IPR and Harris Trust and Savings Bank and R. S. Stam, Trustees. (Filed as Exhibit 2-B-20 to IPR's Registration Statement, Registration No. 2-59752.)
4.12 Sixteenth Supplemental Indenture dated t.s of December 1,1978, between IPR and Harris Trust and Savings Bank and R. S. Stam, Trustees. (Filed as exhibit 2-B-21 to IPR's Registration Statement. Registration No. 2-63259.)
4.13 ? can Agreement dated a of December 1,1985, between Louisa County, Iowa, and IPR providing for the borrowing by IPR of the proceeds of pollution control revenue bonds issued by the County. (Filed as Exhibit 4.31 to IPR's Annual Repon on Form 10-K for the year ended December 31, 1985, Commission File No.1-3567.)
4.14 Twenty-Fust Supplemental Indenture dated as of July 1,1986, between IPR and Harris Trust and Savings Bank and R. S. Stam, Trustees. (Filed as Exhibit 4.26 to IPR's Annual Report
- on Fonn 10-K for the year ended December 31, 1987, Commission File No.1-3567.)
4.15 Twenty-Second Supplemental Indenture dated as of December 1,1986, between IPR and Harris Trust and Savings Bank and R. S. Stam, Trustees. (Filed as Exhibit 4.27 to IPR's Annual Report on Form 10-K for the year ended Dcccmber 31, 1987, Commission File No.1-3567.)
4.16 Twenty-Third Supplemental Indenture dated July 15,1988, between IPR and Harris Trust and Savings Bank and R. S. Stam Trustees. (Filed as Exhibit 4.28 to IPR's Annual Report on Form 10-K for the year ended December 31,1988, Commission File No.1-3567.)
4.17 Instrument relative to the resignation of R. S. Stam as individual tmstee and appointment and acceptance of J. Banolini as individual trustee under the Indenture of Mortgage and Deed of Trust between IPR and Harris Trust and Savings Bank, dated as of August 1,1943, as amended and supplemented. (Filed as Exhibit 4.29 to IPR's Annual Report or' Form 10-K for the year ended December 31,1989, Commission File No.1-3567.)
10.1 Power Sales Contract between IPR and Nebraska Public Power District, dated September 22, 1967. (Filed as Exhibit 4-C-2 to IPR's Registration Statement, Registration No. 2-27681.)
e 10.2 Amendments No. I and 2 to Power Sales Contract between IPR and Nebraska Public Power District. (Fiied as Exhibit +C 2 a to IPR's Registration Statement, Registration No. 2-35624.)
1
e 10.3 Amuidment No. 3 dated August 31, 1970, to the Power Sales Contract between IPR and Nebraska Public Power District, dated September 22, 1967. (Filed as Exhibit 5-C-2 b to IPR's Registration Statement, Registration No. 2-42191.)
10.4 Amendment No. 4 dated March 28, 1974, to the Power Sales Contract between IPR and Nebraska Public awer District, dated September 22,1967. (Filed as Exhibit 5-C c to IPR's Registration Statement, Registration No. 2-42191.)
10 5 Coal Supply Agreement between the Amax Coal Company Division of American Metal Climax, Inc., and IPR dated August 31,1973, and Amendment to Agreement between the same panics dated December 19,1973. (Filed as Exhibit 5-J 2 to IPR's Registration Statement, Registration No. 2-51540.)
10 4 Letter Agreement dated July 30,1974, between Amax Coal Company and IPR amending Coal Supply Agreement. (Filed as Exhibit 5-3 2-a to IPR's Registration Statement, Registration No.
2-52835.)
10.7 Amendment No. 3 dated January 1,1979, to the Coal Supply Agreement between Amax Coal Company and IPR, dated August 31,1973. (Filed as Exhibit 10.7 to IPR's Annual Report on Form 10-K for the year ended December 31, 1987, Commission File No.13567.)
10.8 Amendment No. 4 and supplemental letter dated July 1,1982, to the Coal Supply Agreement between Amax Coal Company and IPR, dated August 31, 1973. (Filed as Exhibit 10.8 to IPR's Annual Report on Fonn 10-K for the year ended December 31,1987, Commission File No.1-3567.)
10.09 Amendment No. 5 (letter agreement) dcted July 23, 1987, to the Coal Supply Agreement between Amax Coal Company and IPR, da*,d August 31,1973. (Filed as Exhibit 10.17 to IPR's Annual Report on Form 10 K for the year ended December 31,1988, Commission File No.1-3567.)
10.10 Amendment No. 6 dated December 14, 1988, to the Coal Supply Agreement Irtween Amax Coal Company and IPR, dated August 31,1973. (Edited to exclude confidenual information.)
An unedited version of this document has been filed with the SEC under separate cover, pursuant to an OBJECTION TO DISCLOSURE OF INFORMATION AND APPLICATION FOR CONFIDENTIAL TREATMENT. (Filed as Exhibit 10.18 to IPR's Annual Repon on Form 10-K for the year ended December 31,1988, Commission File No.1-3567.)
10.11 Revised and amended Supplemenr4 Retirement income Plan for IOR and Subsidiaries dated October 24,1984. (Filed as Exhibit 10.24 to IOR's Annual Report on Form 10 K for the year ended December 31, 1984, Commission File No.17830.)
10.12 Revised and amended Executive Compensation Plan for IOR and Subsidiaries, dated July 24, 1985. (Filed as Exhibit 10.21 to IOR's Annual Report on Form 10-K for the year ended December 31, 1985, Commissica File No.1-7830.)
10.13 Revised and amended Executive Deferred Compensation Plan for IOR and Subsidiaries, dated July 24,1985. (Filed as Exhibit 10.22 to IOR's Annual Report on Form 10-K for the year ended December 31,1985, Commission File No.1-7830.)
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4 10.14 Revised and amended Deferred Compensation Plan for- Board of Directors of IOR and 1 Subsidiaries, dated July 24, 1985. (Filed as Exhibit 10.23 to IOR's Annual Repon on Fonn-10-K for the year ended December 31, 1985, Commis:: ion File No.1-7830.)
10.15 Revised and amended Executive Compensa@n Plan for IOR and Subsidiaries, dated December 18,1987. (Filed as Exhibit 10.14 to IPR Annual Report on Form 10-K for the year ended l
December 31,1987, Commission File No.13567.)
J 10.16 Revised and amended Executive Deferred Compensation Plan for IOR and Subsidiaries, dated l
December 18,1987. (Filed as Exhibit 10.15 to IPR's Annual heport on Form 10-K for the
. year ended December 31, 1987 Commission Fi!c No.1-3567.)
10.17 Revised and amended Deferred Compensation Plan for Board of Directors of IOR and
.: Subsidiaries, dated December 18, 1987. (Filnd as Exhibit 10.16 to IPR's Annual Repon on Form 10-K for the year ended December 31, 1987, Commission File No.13567.)
10.18 Amended and Restated Agreem::.17.ad Plan of Merger among Midwest Power Systems Inc.,
lowa Public Service Company and towa Power Inc. (Filed as Annex A to Midwest Power l
Systems Inc.'s Registration Statement, Registration No. 33-42866) l
! (b) Renons on Form 8-K No repon on Form 8-K was filed during ac last quaner of the year ended December 31,1991, MWR owns all of the common stock of IPR. IPR, therefore, sends no annual report or pmxy material to the holders of its common stock.
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Midwest Resources Inc. is a holding company with major interests in electric and natuml gas utilities and additional holdings in diversified industries. The company is headquanered in Des Moines, Iowa.
Midwest Resources was fomled by the merger of Iowa Resources Inc. of Des 1
- Moines and Midwest Energy Company of Sioux City on November 7,1990.
The utility operations of Midwest Resources are carried out through Iowa Power Inc. and Iowa Public Service Company. Iowa Power provides electric service to 252,000 customers in central and southwest Iowa. Iowa Public Service provides electric service through IPS Flectric to 157,000 customers in western and nonh central Iowa and southeastern South Dakota and gas service through Midwest Gas to 356,000 customers in Iowa, Minnesota, Nebmska and South Dakota. Major communities served in Iowa are Des Moines, Sioux City, Council Bluff: and Waterloo.
Midwest Resources operates its diversified holdings through Midwest Capital Group Inc. These businesses are involved in; construction of electric lines and cogeneration facilities,
- telecommunications, real-estate development, coal j g6 transportation and railcar he F' "
- leasing and management..
' Midwest Resources and
- its subsidiaries have more pg " "i .- A than 3,200 employees.
$ With 56,000 shareholders, ,
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pMjb 4pv and have increased ;
eW 2- dividends'in each of the l IA E d @$ Y $ [ h m id E M E s s E mp ~fQggggggggd last 30 years. J
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Ml0WESTPOWER GR0t/PCONS0llDATED ,
Forecast Actual 1991 1995 1990 -1991 -1992 1993 1994 1995 Rate of Gati -
Midwest Power Group Electric (Note 1)
Retail sales (Millions of kTh)(Note 3) 8.94 9,182 9,403.- . 9.604 9,811 10.033 -
Annral sales gmwth rate 324_ 2.7% 2A% . 2.1% 224 234 23%
Electric generating capability (MW) 2,783 2.815 2,815- 2.815 2,815 2.815 . 0.0%
Capacity purchases 156 174 285- 327 342 350 2534 Capacity sales 196 222 308 333 358. 329 12D4 Peak demand 2.274 2,287 2.298 2,314 2,333 2.353 07%
, Percent resene margin 20 96 21.0 % 21.5 % 21A% 20D4 20.5 % -
Fuel sources for energy Coat ~7% 77% 77% - 7-'% mt 77% . -
Nuclear (Note 2) 22W 236 2?M 22 % - 224 22't -
Oil / Gas 1% 1% -1% - 1%- 1% 1% --
Total 10&4 ' 10(M 1GW 1004 1NP4 1004 Midwest Gas (Note 1) -
Retail saks (mmcf)(Note 3) 58,948- 64,577 66,260 66.886 67,477 67;917 1J%
I Transportation sales 9,688 9,507 10,232 10.341 10,392 10,503 2&b Annual retail sales growth rate 1124 9.5% 2.6% 094 09% 0.Mb -
Notes
- 11) --Midwest Power Group-Electric reflects the generated significant amounts of energy for the cc,mbined foreca: ts of the Iowa Power Inc. and o unpany since that time.
Iowa Public Senice Company electric operations. (3) Legislation enacted in low in 1990 rcquires electric Midwest Gas is the natural gas dhision of Iowa and gas. utilities to spend 2.0 percent and 1.5 -
Public Senice Company. per- ent, respectively,'of their annual revenues on s
(2) The compmy has a long-term power purchase denund side management programs. The contract with the Nebraska Public Power District for effectiveness and magnitude of such progran;s on .
>- one-half the capacity of the Cooper Nuclear Station. . projected sales is unknown and not reflected in this The station went into sewice in 1974 and has forecast.
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MIDMST P0MR GROUP CONSWJDATED (NOTE 1) .
(Dodarsin Milhons) -
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FORFCAST .
Actual .. Total ;
- 1990 1991 WS2 1993 1994 1995 1991 1295 i Capital Requirements
, Capital expenditures $ 120 $ 136 $ 137 5 141 $ 149 a le $. 701 Maturities and sinking funds 2 10 1 20 -8 7 _ 46 -
l Total capital requiremenn $ 122 $ 146 $ 138 $ 161 $ 157 $ 148 $ 750
[ Internal Sources of Capital Depreciation and amortization $ 91 5 96. $ 104 5 108 $ 119 $ 17,3 $ 550 j ..
- . Deferred tax items-net 3. 4 '1 1 1 (D 6 l Other (22) (10) 1 (4) (3) 6 (105 -. 3
- Sulmal 5 -72 $ 90 $ 105 5 105' $ 117 s'128 5 546 Percent of total capital requirements 59% _ 62% 77 % 65% 75% H()% 73%
i-ExternalSources of Capital l
4 1.ong-term financing $ 0 $ 10 $ 158 $ 25 $ 77 $ 29 $ 209 . -;
Short-term financing 50 % (126) ?1 (37) _ _ 0) ( (os)
- Subtotal $ 50 $_. 56 5 32 5 56 $ 40 $ 20 $ 204 W% '
- f. Percent of total capmal requirm.ents 41Sn 23 % 35% 25% 14% 27 %
4 Total capital requirements $122 5-146 $ 13h $ 161 5 157 ' $ 148 - $ 750-l 1
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t Note
{ (1) Midwest Power Group Consohdated reDects the i
2 combined forecast results of Iowa Power Inc. and Iov.a Public Senice Company.-
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, . Ml0MSTRESOURCESINC. CONSOUDATED .
(Dollars in Millions) -
O Forecast >
Actual _
Total i 1990 1991 1992- 1993 1994- 1995- 1991 1995' I CapitalRequirements - _. _
l Midwest Powr Group $ 120 $ 136 $-137 _ $ 141 5 149 $ 141 $ 704 Midwest Capital Group inustments 32- 15 7 7 3: 3- 35 ~
f . Maturities and sinking funds 6 13- 9 27 14 14 77
- Total capital requimments 5 158 5 164 5 153 $ - 175 - $ 166- $ 158 -$ 816 p _ - -
InternalSources of Capital i Depreciation and amoitization $ 99 $ 102 5 110 $ 114 $ 125 $ 129 - $ 580 1' Deferred tax items-net (1) -2' (4)- (10 - (13)- -(4) (30)-
- . Other (R.) 18 - 16 14 13 79 i Subtotal - 1 90 $ 122' .$ 124 $ 110 $ 126 - $ 138 $ 629.
, Percent of total capital requirements - 5?M' 74% -81% 68% 76% 8% 77%'
l _ External Sources of Capital .
, I.ong-term fituncing $- $ 10 $. 158 5- 25 5 77 - .$ 29 - $ 299 .
! Short-term financing ,
68 32 Q2(n 31 (37) (9) (112) j Subcotal s 68 i il -s 'O $ 56 s. ein s 3)- 4 1s7 j- Percent of total capital requirements 43% 26 % 19 % 32% - 24 % 13% 23 %
. Total apital requirements $158 $ IM $ 153 -$ 175 S 166- 5 158_ $ 816--
1:
[ -- Celtalization Ratios (Year and) _
l- lxmg-tenn debt 51% -50% 49% 48'_4 48% 4?%
Preferred stock 6% 6% 5%- 5% 4% 4%
Common equit'/ 43 % 4-l% 4(y% 47% . 48 % 49M i
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+ The number of elenric custorners will inctease 1.1% peak set in 1988 Peak load growth of .7% is annually through IW: sales will increase 2St forecasted for 1991-199i annually 1991-1Wi.
+ Rate increases reflected for the period 1991 through
+ The number of gas customers will increase .N 1995 will be in the 2% to yt range.
annually through 1995: saics will increase 15i, annually 1991-19 % + The inihtion rate for operations and maintenance.
excluding fuel, is projected to average 15% per
+ The combined peak demand of 2.27i AIW during annum.
1990 "cas 1 StW almve the previcus record combined x
I yvMIDYJEST ESOURCES
i-4 MIDWEST RESOURCES IND. CONSOL10A TED 1
4 Pertent increase 1990 1989 (Decrease)
Financial Highilghts Revenues (000) $ 891.357 $ 933.098 -4.2%
Net income 1000) $ 62.299 $ 90,8977 -31.4%
Retum on average common equity 9.9% 14.6 % -31 t06 Eaniings per average share $ 1.25 $ 1.80 -30 6 %
Common stock dividend rate at yearend - $ 1 56 $ 1.43 9.1%
5tock price range -(Note D Inw $ 18.00 $ N/A N/A high $ 19.25 $ IFA N/A Average shares out.standmg (000) 50,019 50.3 % 4.7"6 Tot.nl assets (000) 5 2,bO536 $ 2,307,305 1.4%
Capital expenditures (000) $ 135,459 $ 145,291 70%
, Utility 6peratfors l<evenue>t000) $ 847,166 $ 868.350 -2.4%
Rctail electric saks - millions of kWh 8,9+i 8,n)1 2#'s Total electne sales - miPions of kWh 10.932 10,543 3.7%
Average annual residen*ial use kWh 8,368 8.y)6 - J13%
Average annual residenti.d revenue pe' kWh 8 10 7.00 51%
Fkctric peak kud - megawatts 2,27i 2.210 2fp6 Retail gas sak s - thousands of mcf 53,918 (4,394 - 11,2%
Transportation g.m sales - thousands of mcf 9,o88 12,844 -2 i.6%
i Average annual use per residential customer - mcf 100 112 -10 M Average atinual remn'ie ps rustomer - gas 503 547 -8.0%
Cooling degree days (nomul - 912) 892 9i6 3Fo Heating riegree days (nomvl - 7,268) 6.439 7,420 -13.n Note l (O Midwest Resources Inc. wcs formed by,the l
merger of low Resources Ine: and Midwest Energy Co. on November 7.1990. Stock price j
. information is not available foi periods prior to the merger. j i
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COMPANYCONTACTS GaryJ. Ilarward J. Sue Rozema Chief Financial Officer I'reasurer Midwest Power Croup Midwest Resources Inc.
(712) 277-7722 (515) 281-2250 Midwest Resources Inc. i 656 Grand Avenue P.O. Ilox 9214 Des Moin~:s, Iowa 50306-9244
+
i RFFiMIDWEST M_ RESOURCES.
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