RBG-14-762, Annual Financial Rept 1982.W/830407 1tr
| ML20071M119 | |
| Person / Time | |
|---|---|
| Site: | River Bend  |
| Issue date: | 04/07/1983 |
| From: | Booker J, Lee N, Murrill P GULF STATES UTILITIES CO. |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| RBG-14-762, NUDOCS 8305310102 | |
| Download: ML20071M119 (46) | |
Text
{{#Wiki_filter:b 4 GULF STATES UTILITIES COMPANY egy POST OFFICE BOX 2951 = OEAUMONT. TEXAS 77704 AREA CODE 713 838-3843 April 7, 1983 RBG-14,762 File No. G9.5 Mr. Harold R. Denton Director, Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C. 20555
Dear Mr. Denton:
River Bend Station Units 1 and 2 Docket Nos. 50-458/50-459 Annual Financial Report Enclosed are ten (10) copies of the Gulf States Utilities Company 1982 Annual Report. This report is being submitted in accordance with Section 50.71 of Title 10 of the Code of Federal Regulations and U. S. Nuclear Regulatory Commission Regulatory
, Guide 10.1.
Sincerely, c' dok, ' J. E. Boolder Manager-Engineering, Nuclear Fuels & Licensing River Bend Nuclear Group JEB/WJR/kt Enclosures
)
8305310102 830407 PDR ADDCK 05000458 [O PDR [ no L
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R J C Q ; b */ ~. AMQ==; v= ;Tr&1: ilWP6 : .. . .- -- Our basic strategy to meet these Doubtlewly, hom all the new spaper. energy needs is asoidmg additional teles ision and new s maca/ine stones in dependence on natural gas as our future 1982, the Amenean people are gettmg the unmntakable mewage that our men prime f uel source to make electricity. In the long-tenu gas will increasingly In is in a ivriod of tundamental eco- be one of the most expensise f uels we nomic change. It n a fomiof change could use to make electncity. Consersely. that offers many complex nsues, none coal and uramum will be among the least oIwhich has more tacets and nuances espensise and that is why we are turn-to it than encrpy supply. ing to them. For instance. in 1982 our customers Whde there are many valid siew-along the Texas-Louisiana Gult Coast were treated to a seenungly endlew points in the energy supply iwue. it is unfortunate that the pohtical debate of "od glut" that put gasoline pnees mto the subjett continues to restit in sugges-dechne. In pomt of f act, the od glut n tions, potential solutions and decisions at least the partial result of Americans' that are tar too otten aimed at the shon-transition to smaller. more etlicient cars term f uture. At Gull States, we. too. see and other consen ation measures These, many nagging short-tenu problems. but m tum, caused decreased use of pro-w hen we step back f rom our immedute cewed petroleum pnslucts which forced circumstances and new the long-tenn some retinenes into mothballt and others to cunad production. Od and gas prospects the course that Gutt States adopted ses eral y ears ago looks mcreas-esploration slowed and created a sub-stantul recewinn for that part of the ingly accurate. r De course is a long-tenu and sery mdustn as well as its supphert Dunng expensise construction program that has the same penod that dnlling w as talhng begun to btar fruit and will ultimately of1. there w as aa almost contradicton and steady increase in natural pas pnces sase our customers bdlions of dollars in because of the tederal gosernment's tuel costs by linuting our need for nat-ural eat That sas ing will in tum, help ma/c of natural cas pncing regulations. our customers be economically competi- . Despite the array of forces that butfet tis e w hich pros ides the basis for the the economic picture, it is esident that long-tenu crowth of Gutt States The Gull States Utihties as a pnme suppher first significant step awa) from natural of electricity in a 2X.msquare-mile gas occurred in May when we began area of Southeast Tesas and South the commercial operation of the 5S)- tvuniana, must play a major role m the megaw att coal-tired Nelson 6 generating economic recosen and long-tenn well unit near lake Charles. la Esen though being of this area Ilut we must do this it uas in operation for only about half while operating with stringent self-the year, it supplied four percent ot the imposed cost controls to conduct our energy we generated in 19S2. If that businew at the lowest cost consstent energy had been generated with market with de[vndable sen ice. While the sen - priced pas instead of coal. it woulJ hase ice area is in a general recewion. we cost our customers an extra 524 million continue to add new customers at about in tuel costs. We ow n 70 per;ent of three percent per year, and they must receise the electricity they need if there this unit. Later this year, we anticipate that a is to be economic recos ery and long-second coal-tired plant. in w hich we tenn economic prosperity in our area. has e a 42 percent ownership interest. will begin commercial operation. It is the thg Cajun 2. Unit 3. a 5S)-megaw att coal-tired plant near New Roads. La. 2
l-1 l In 19S4, we plan to put into operation past, and electne utihties are becoming ( a transmission line that will tie Gulf more and more a focal point for publie States to utilities in Mississippi, Alabama, debate, we determined during the y ear l i Georgia and Florida. Under the tenns of that our management group could ne a contract between GSU and the South- strengthened by putting seseral tradi-em Companies,1000 megaw atts of pre- tionally separate corporate disciphnes dominantly coal-generated pow er w ill under one senior otticer. In October, g% l flow mto the GSU sy stem from Southem Dr. E. Linn Draper, Jr., a senior dce F/. bT Companies' units in Missiwippi and president and nationally noted expert _k Alabama. GSU and the Southern Com-panies has e signed a contract that w ill and communicator on nuclear pim er issues, w as named senior s ice president p t-
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bring this electricity, made from rela- of extemal atf airs. In his new position, tisely cheap tuel, to our customers he will coordinate the public aff airs, through mid-1992. rates and legal departments. Our final major mose an a) f rom nat- In an unrelated. but significant devel ural gas in the near f uture w ill be made opment that potentially may be sery in 19S5 w hen the 940-megaw att Ris er beneticial to customers, we beliese a Ilend 1 nuclear unit near 13aton Rouge, settlement is quite close in a long- y l ~ I a., is scheduled for commercial opera- standing law suit betw een Gult States tion. GSU ou ns more than two-thirds and United Gas Pipe Line Company. [. of that unit. flhe details of the utrious The suit centers on natural gas cunail- C generating unit panicipation agreements ments put into ef fect by United Gas in are in the Construction section of this the early 1970's, w hich forced GSU to ' -! - report. ) purchase much more expensis e f uel on The sum total of these projects will the open market. The tentatise agree- ,% be to move the company f rom being ennrely reliant on natural gas and oil to a ment calls for United to make a cash pay ment of 5112 million, extend an hd position in which less than halt the kilo- existing contract w ith Gulf States for U watt hours sold in 19S6 may be gener- tise years, and begin supplying gas to Paul W Murnil (seated) and Norman R. Lee ated from natural gas. our Texas units in 19S5 for a 10-) ear Cenainly, such an ambitious program period. A more detailed discuwion of requires major capital expenditures that this issue is cos cred in the Efficiency I ultimately will be retletted in higher section of this report. electric rates. These higher rates are a In closing, let us urge y ou to read the mandate to the company to operate in remainder of this repon that documents the most financially lean manner pos- 1982. It w as a sear in w hich the 4h00 sible to minimi/e the costs to our employees of Oult States contributed customers- substantially to the long-tenn success of I rom this plan for the f uture, let u' the company, and it w as a y ear in w hich tum to the recent past, the results of thes can be proud of their achiesements. 19S2. Eamings for the y ear ended On'the pages that follow, you will has e a Dec. 31,19S2, w ere 51.95 per share of chance to meet a few of those people. I common stock w hich is a dechne from and perhaps, get a sense of the magni-the 52 24 earned in 19S1. It should be tude and disersits of the work Gulf noted that the 19S2 earnings retlect only States' people do. a nunor ponion of the more than 5150 milhon in rate increases the company Sincerely, receis ed in the second half of 1952 Diudends of 51.56 per common 6tdne2.w - _C. share in 1982 were up f rom the 51.4S N"'*"" R I~ paid in 19SI. \ Prenh nt and Clue l l llecause increasing electric bills are (>peratmv (1//i. < r attecting customers more than in years N _, & v_ x -
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Sales declined from the 30.7 billion kilo- For 1982 earnings were $1.95 per I watt hours recorded in 1981 to 29 billion share of common stock compered to kilowatt hours in 1982. The decrease was $2.24 for the previous year. Earnings for due primanly to low er industrial sales the last quarter of 1982 were 53 cents per w hich consistently remained about nine common share compared to 37 cents for percent below the 1981 levels. Aho, the corwsponfr.g period in 1981. he w holesale electne sales were substan- decrease in earnings per share in 1982 tially less than 1981 because during the was primarily attnbutable to a 21 percent first half of 1981 we supplied about 262 increase in average shares outstanding in , megawatts of power to a neighboring 1982, lower kilowatt hour sales in 1982, utility. When the other utility brought a and lack of adequate rate relief until the 1O new generating unit into operation, our last half of 1982. De 1981 camings sales ceased to that utility and, of course, benefited from a 14 cent per share gain J s did not recur in 1982. attributable to a lignite coal exchange , Somewhat offsetting these declines between a GSU subsidiary and another , w ere four and live percent increases in company. 'n he dividend was M.56 per sales to commercial and residential share of common stock in 1932 com-classes of customers respectively. Rese pared to $1.48 in 1981. increases were attributable to growth in To finance the company's 1982 con-the number of customers in both classes stmetion program, w hich included por- , as w ell as increased use per customer. tions of two coal-tired generating units A definitive breakdow n of electricity and one nuclear facility, we issued more use by class of customer as well as aver- than $490 million in tirst mortgage age customer use is available in the bonds, guaranteed debentures, common Joseph L. Donneny Statistical Summary on page 42 of this stock and preference stock. Early in Executive Vice Presdent-Finance report. 1982, w hen the capital markets were Trending with the sales decrease was a unstable, we backstopped the company's l decrease in earnings per share. long-range financing program by estab-I lishing an $800 million revolving credit i agreement between Gulf States and more than 100 domestic and intemational banks. The agreement calls for three different interest rate options from w hich we can choose, and the agreement but-tresses our financing plans through the anticipated completion of the River llend nuclear unit in 1985 by providing a source of intermediate capital during periods of long-term capital market turbulence. Specifically, our 1982 long-term construction financing took the form of nine different issues dunng the course of the year. 6
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I Dey wcre: Recognition of the necessity to become
- 527 million, first mortgage bond 3 greatly less dependent on natural gas led with an annual interest rate of 16.8 to the costly construction program w e percent. began in 1978. While we are beginning
- 540 million, first mortgage bonds to see results from that program, it will with an annual interest rate of 17.5 continue to require hundreds of millions ,
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- 2 million shares (550 million) of $25 of dollars in financings each year until 1986. Dat pressure forces us to make 4 Jg ' f j ha%dNd/9MJ ]
stated value preference stock sold periodic requests for rate increases and i@um.sms _ q 5 for $27.50 per share with a $4.40 1982 was no exception. Dems i annual disidend yielding 16 percent De Liuisiana Public Sersice Com- [ 88 i at issue. The 52.50 premium, after mission, the Public Utility C mmission [ j expenses, w as added to common of Texas and the Federal Energy Regula-
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5N1 million, guaranteed debentures company to put higher rates into effect [
' [h ;' $
.i sold in the European capital market during the course of the year.
with an annual rate of 16 percent. The leuisiana commission granted im ' N l
* $5S million (5 million shares) com- the company a 597.3 million rate -
, j mon stock sold at $11.75 to the increase in September based on a [ 1 g ]
public. requested $230.4 million sought by ; ; ,, t -
$100 million, first mortgage bonds GSU. The decision includes a 16.25 per- ;
E with an annual coupon rate of 15 cent retum on a target common equity {} h ' j percent. ratio of 3S percent. ta t-f ?i 8,p 2 million shares (550 million) of $25 stated salue preference stock sold In Texas, we negotiated a settlement w ith all parties for a 557.5 million p: y ..x Lq ; y , ] y': ! r. for $27.50 per share with a $3.S5 annual increase and the Texas commis- s (y L annual diudend yielding 14 percent at issue. The 52.50 premium, after sion affimled that settlement in October. De settlement w as based on a request of ; 'E E 5: 55j
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'. . .j expenses, w as added to common 5124.8 million and prosides for a retum equity. on common equity of 17.15 percent 548.3 million, pollution control based on a common equity ratio of 34.M bonds w ith an annual interest rate percent. & - q -
6 1 of 10 % percent. FERC authorized a 532.6 million 561.5 million t 5 million shares) increase in July for our wholesale cus- % F g.ww~ @ h9 @f. m, N - common stock sold at 512.625 to tomers. That was based on a request ear- ;w, 3 the public. lier in the year of 533.3 million. De ; A separate financing in 19S2 was the 532.6 million was authorized until hear- yl ' am , sale of 2.3 million pounds of uranium ings or negotiations w ere completed. It t appears that the linal negotiated amount i yellowcake for $109 million. Under terms of the transaction, the fuel will be of the rate increase may be somewhat [ tm 74 pp f E # 5
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u"6 The economy of the Gulf States 3
.g~ yF? 2 service area burgeoned through-i e .l,h out the '70's. In the 10-year period f '_ i'MOJy,gda from 1972 to 1982, our peak load x
and energy distnbuted grew at a compound annual growth rate of
, ly 'L 3.7 percent. However, in 1982, j - ?
there was a significant downtum if as the recession slipped through ( y , jw,4 -l the Sunbelt. a Today, our service area econ-4 , gg [ ~ omy continues to grow in the com-L$ - mercial and residential areas, but s the industnal segment suffers, par-ticularly for those who staked their
, livelihood on the oil and gas indus-tnes including petrochemicals.
- . While statistical evidence does j not yet support any contention of recovery, it is clear that the reces-sion has bottomed out and there
< are trace signs of a beginning recovery l Most encouraging is a growing
, attitude of cooperat:on across the
- g service area between labor and M _xp , ,._ .- management. It is an attitude that
*'" we must all work together to make recovery work.
i ylggg g a Our service area is sprinkled with excellent colleges and univer-A sities irv ding Louisiana State University and Texas A&M Univer-sity that have potential to draw new h;gh technology industry At the same time, the natural resources along the Texas / Louisiana Gulf Coast simply are too abundant to be ignored by the basic industnes that are located here to draw upon them in the first place.
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In the area of operations,19S2 w as De marketing program has tw o dis-characterized by a decreased use of clee- tinct components. De first is a major tricity and a decreased peak load. Our economic development effort aimed at customers consumed about 29 billion bringing new and diversified industry kilowatt hours of electricity in 1982 as into the area we senc. A similar pro-compared to 30.7 billion kilowatt hours gram w as eminently successful a decade in 19S1, w hich is a 5.6 percent decline. ago when the company was actisely Peak demand for the year was 51M tn ing to build load. Five major deep-megaw atts August 5 compared to 5542 water pons with adjacent industnal sites, i megaw atts in 19SI, representing a seven responsise hical governments, outstand-percent decrease. ing colleges and unisersities and excel- ... While customer demand for electric- lent transponation are successful selling points to industry. ity did not put any undue strain on the - company's generating facihties in 1982. He second aspect is to increase the , it w as encouraging to see that the gener- use of outdoor lighting-street, security, ating units were available for use during and floodlighting-along w ith greater s the hot summer months more than 83 use of electne heat pumps. He heat . percent of the time. That u as a con- pumps are receising special emphasis , tmued improvement oser previous because they use electricity efficiently years' " peak availability". during the summer when they are in the p$ j . An equally good indicator of our sy s- cooling c)cle and they etticiently replace [. , tem operations w as a report published in other fonus of home heating in the win- - mid-1982 by the First Boston Corpora- ter. Heat pumps will help build the elee-tion research group. He repon, w hich trie load on our system in the off-peak Joseph E. Bondurant w as an in-depth analy sis of 75 major winter months. Executwe %ce President-Operations electrie utihties in the United States, Re overall marketing program con- i ranked Gulf States number one in sys- tinues to emphasize customer education tem efficiency. De ranking is based on in the efficient use of energy. Tow ard a number of criteria including heat rate, that end, consumer education programs load factor, capacity factor and several increased by more than one-third in our others. operating dis isions last y ear and there Cenainly efficient operations are w as a doubling of school programs. l important to us, but the matter of declin- Also, more than 300 science teachers I ing sales in a serv ce area that has felt panicipated in the 1982 Thomas Alva the effects of the national recession is Edison Foundation Science Institute equally imponant. Ilowever, it is imper- held at Lamar University in Beaumont. l atis e to address the problem of decreased Efficient use of our generating sy stem sales without being counterpnductive is important to produce the minimum i in our energy conservation efforts. We cost for electricity to our customers. l have achieved this balance by moving improvemtnt of our service area econ-1 into a very selectise marketing program omy and da eloping additional load that aimed at increasing the sy stem load fac- occurs at times w hen otherwise some of tor by building off-peak electric sales. our generating units would not be fully i utilized are tw o methods to deselop that efficiency. Another important method is . to keep our operatmg expenses as low as possible consistent with reliable senice J l to customers. ' l l l l l l l io I I
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fo gauge our ef fectis eness in these Two programs hase been staned to areas, we calculate how much it costs in help minimi/c the effect of higher elec-the areas of customer sen ice, transmis- trie bills on our elderly customers. One sion and distnbution, and pniduction to came about w hen we realized that there sen e one customer. At the beginning of w ere many retired customers w ho had 1982, through the budgeting process, we pixwl credit records w ith us, but w ho established stnngent goals in each of w ere w orried because of ten their pen- , , , , (([~ ~ ] those areas on a cost per customer basis. sion or Social Security checks were l, '1 - Ihe goals for 1952 were not only met, receis ed af ter their electrie bills became but exceeded, w hich is a tnbute to the sessmH j! os erdue. To stop this needless v.orry, we ' dihgence and understandmg of all instituted a com enient pay ment program
! 8 employ ees that in an era of increasing for those customers. Atter they sign up electneity costs, we must do esery thing for the program, their pay ment due dates a possible to minimi/e expenses. are matched with the time they receise
'Ihese results wcre reali/cd by a num. their pension check, so the needless a ber of methnh that included lYoductis. w orry is ehminated.
its improsement lYoprams in all tise The secor.1 program n of a much larger magmtude and is called Project of our operating dnisions in these programs, employ ees are ins ited to CARli. With $19 Ull10 of shareholder dncuss ideas and methods thes think money authorized in Januan 19S3 by a may impros e the way a certain job pres. the board of directors as seed money, ent!) is being done. Abnost without fail, Gulf States and three social senice , w hen these ideas are put into ettect, pro _ agencies in our service area began a pro-ductis ity is, mdeed, increased and gram to identify and assht elderly cus-8 costs pe'r customer decreased tomers with emergency energy-related Operating expenses were cut in expenses. A Ilyer explaining Pro.iect CARE was included with Febmary Gult 8 anotaer area atter an anah sis w as done to detennine if there was a particular States' bill pay ment and it insites cus- , IlIlIi ty pe of customer w ho might leas e the tomers to add one dollar to their monthly - - - area with an outstanding balance owed electrie bills. Gulf States employees can the company. Not surpnsingly, it w as contnbute through payroll deductions. 3 found that there were mans bad debts lhe money collected for Project CARii r- - incurred by shon-tenu, transient custom. will be distnbuted on an emergency ers w ho might stay in the area only two basis by the social sen ice agencies. It , q; ;y er three months. Collection pokeies on w ill help elderly peopic pay for electrie % these customers were tightened and in and gas senice bilh, costs of other ese 1982 bad debts were only .35 percent fuels suth as propane or butane, minor of total residential and conunercial wcatherization work and repairs to cool- - res enue. mg and heating equipment. see ,,}
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kn 3 3 Asoneof thelargestusersof "E naturalgasin the worid, Gulf States always shops forthe M lowest prices, soitwas 3 ratifying 5 to readin the Department of Ener- 3 gyh" Cost and Quality of Fuels for a Electnc Utility Plants"that GSU , paidless for naturalgasin the s summer of 1982 than did any = J otherinvestor-owned electric E
~
utility that relies heavily on gas. s The monthly report contains data on cost, quality and quantity _= of coal, gas and oilpurchased y by electric utilities throughout the -
, country. Of the 10 largest gas _,
~4 [',_ .
consuming electric utilitiesin the @ country, Gulf States paid theleast =
#4 for natural gas in May, June, July i and August.
Nationally,the average price paid by utilities for naturalgasin 3
, themonthof August-thehighest 1 electricity use month forour cus- -j tomers-was $3.67 per thousand a cubic feet. Gulf States paid $1.56 -a per thousand cubic feet and other i utilities' cost rangedupwardtoa a high of $5.51 perthousand cubic E
feet recorded by aWestCoast g utility. m Ourcosts remainlow because, 2 almost20 years ago,we negoti-ated avery favorable contractthat is still in effect today. During these % years ourcustomers have saved billionsof dollara because of this ]; contract. i ^
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y j,g .. am .m.2.AllEh2/1-_ ,w.__ - . -_-_um.m._.__.___ . u_ m _ . _ _. __ _ .nt J The extraordinary efliciency and reli- States and United Gas Pipe Line Com-
! ability of the American electric utility pany over natural gas curtailments
]
I industry did not just happen. It is the instituted by United in the early 1970's. I j culmination of decades of dedicated Parties to the suit are in general agree-effort by hundreds of thousands of peo- ment to the tenns of settlement. The leu- l ple. In an era w hen electricity and other isiana Public Sen ice Commission, w hich l fonns of energy have become much intenened in the suit on behalf of GSU .
- at . g more expensive than the American pub- customers, has been advised by its out- -
lie sees as reasonable, it requires more side counsel and retained experts that the 4 effort to keep costs as low as possible to tenns and conditions of the settlement I the customers. are in the best interest of our customers. ) Dunng 1982, the rate of increase in While the settlement is still subject to natural gas prices slow ed, presenting us certain conditions, Gulf States believes it j j with new opportunities to moderate fuel will become effective. The settlement v l costs fo: our customers. The company calls for United to make a $112 million i still has in effect a major contract for cash pay ment, which will be held in an ., natural gas at a very favorable price. interest-bearing escrow account until ) l 1his contract, coupled w ith the efforts regulatory authorities can detennine how y
- of our fuel buyers, has produced average the money will be used to benefit Gulf f natural gas costs that are among the States customers. ,
\3 lowest in the natien. Other aspects of the settlement assure -
)
i Es en so, total fuel costs have been Gulf States of a much more stable natu- ~ rising steadily as natural gas becomes ral gas supply into the 1990s. One prosi- _ 1 l moie expensive. In 1982, fuel costs were sion calls for a United sister company, Edward M. Loggins 48 percent of the company's operating United Texas Transmission Company, Execut.ve Mce Presiderd-Administratrve
, expenses. to begin supplying gas to GSU's Texas and Technical Sennees ,
A very significant and strategically units for a 10-year period beginning l l important legal settlement was tentatively January 1,1985, which is the day the i reached this I ebmary between Gulf existing Exxon contract expires. Also, United will extend its existing contract to supply GSU's Imuisiana generating units until 1992. Both United and United Texas will transport seme natural gas which GSU purchases from other companies. GSU will pay for the United gas and other senices at rates comparable j to those paid by other large industrial customers. i i l 4 I l l 14
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In an era of fundamental technologi. Another area that has significant I cal change, there is none that has more potential for major cost sas ings is the present and pitential impact than the results that may come from research and computer. We are now integrating data development projects. One of the more
! processing, word processing and com- promising projects we have underway, munications into one network called and one in w hich Gulf States is a leader, OFFICE SYSTENIS. The results of is investigating the use of micronized I~ ~ ~~~ ]
computer networking are sery high operational ef ficiencies coupled w ith coal as a boiler fuel. Tests conducted by GSU and others over the last several %. f: M %L' M' (W R M 1
. , j greater confidence in decision making. years have indicated that coal reduced to {Peemt ~ i Also, computer netw orking presents us with a future in which we anticipate a nearly microscopic size may has e high potential for replas ing natural gas in 3
]
few er additional people will be needed some power plant boilers. It could lead , y to manage an increasing w orkload. to lower cost fuel for existing generators. j j Presently. OITICE SYSTEN1S allows flowever, the p>tential for using micro- 4 us to forw ard mail electronically through nized coal is going to take considerable ; e ; computer tenninals, eliminates the additional testing. This year w e intend to , f ' drudgery of compiling routine reputs, mn in-depth tests on micronized coal in 8 ' and offers a my nad of applications that an industrial size boiler. If the results are s-i impros e productis ity. The emphasis is to good, we will do more tests in larger < personalize the computer sech that the boilers. GSU, the Electric Power v ; decision maker can interact with engi- Research Institute and several other i. j neenny or business models in onter to companies are considenng a joint spon- j. test mlutions in seeking the best answer sorship of this project. i~ r to problems. Other smaller research projects the i company is conducting, and w hich may I hold long-temi benefits, include the j e direct conversion of sunlight into elee- 1 I .E l 5 I. t tricity and applications of wind power 6 --- --- generation of electricity.
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i n. w ,,7 - With our 1500 vehicle fleet,the " costof agallonof gasisinposti d
.r l _ and sois the mileage the fleetis getting. By down-sizing the cars only,the expected fuelsavings 4 i a'unetotalsnearly$80,000per year.We save an addebonal
$130,000inlower purchase
- pnces
; When a replacementis needed
~ ,f ! foralarge truck,the replacement
! nowcomes with adeselengme v l The deselis more expensive,but
. . _ the company plansto use that truckday-in and day-outfor at
, least seven years. Because a gasolme buming engmeis much
' '55 e ..
more complex and fragile,it would have to be replaced once or twice in that seven years,but not sowith the desel.The truckwillhave the same deselengneinit at the end of seven years thatit started with. Plus, GSU mixes waste trans-formeroilwith deselfuelforthe truckfleet and that broughtthe cost pergallon down from $1.10 at the filling station to 56 centslast l, g-1 j
~,
yearwith nolossin performance il Even a simple paintjob on a
.. truckcan be done more cheapy
- ~ The truck fleetof the pastwas
_*j .y blue and white. However, that
%' , "j .-
extra coat of blue paintwas esti-y mated to cost between $300 and
$400in materialandlabor.
To mangle an old saying,"Now, i = ct I - . you can get a GSU truckin any
- color you like as lor.g as it's y hite."
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Garage Foreman Arthur Smith oversees the operation of the $1 rnithon auto fleet that has been recently downsized with a resulting sav-Ings of about 51000 a year per car in gasohne expense 17
. _ _ _ _ _ _ _ _ _ _ _ .I
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The company reached major milestones Environmentally, the unit has been i in its constmetion program in 1982, and u ell accepted in Lake Charles and sur- { we saw the first significant steps taken rounding communities. In fact, customer { toward our goal of reducing our depend- attitude surveys indicate bke Charles ence on natura! gas with the completion area residents base a higher regard for l i of the company's first coal-fired power coal-fired power plants than do residents plant. It is the 540-n egawatt Nelson 6 in any other area that Gulf States serves. unit built in conjunction with two affili. Nearly 68 percent of Lake Charles area , ates of the Texas-based Sam Raybum residents favor the use of coal w hile 63 g ! Dam Electne Cooperatise. Gulf States percent of all customers favor its use. l owns 70 percent of the unit with Sam A second coal-tired unit in which l Raybum 51onicipal Power Agency GSU has a major interest is approaching i owning 20 percent and Sam Ray bum completion near New Roads, La., on the i I G&T owning 10 percent. Ireated near Lake Charles, La., the N1ississippi River. It is the Big Cajun 2, Unit 3, being constmeted by the Cajun - ( {
/'
f unit went into commercial operation at Electric Power Cooperative. GSU has : the end of Slay, and by year's end had a 42 percent ownership interest in the ( produced nearly four percent of the com- 540-megawatt u.it that is more than pany's total kilowatt hours generated in 95 percent complete and should go into j 1982. Its completion was on schedule commercial operation later this sear. . and close to budget with GSU providing This unit will further reduce the com-l about $315 million in direct constme- pany's dependence on natural gas. g. l tion costs. In total, the GSU ow ned ponions of - l Because we have made arrangements the two coal-fired generating units will wmiarnJ Cahm j to purchase our partners' shares of the represent about nine percent of the com- Senior Vce President-River Bend unit's output for the next several years, it pany's generating capacity when the Big Nuclear Group is conceivable that the unit could praluce Cajun unit is in commercial operation. as much as !I percent of the kilowatt floweser, it is our intention and Cajun's hours to be generated by GSU in 1983 at intention to mn these units at full power a fuel cost of about one half that of mar- as much of the time as possible because ket priced natural gas. of the lower fuel costs and that should The unit's appetite for coal will keep make the units' contributions to total five,110-carunit trains shuttling between sales larger than eight percent. the power plant and the Gillette, Wyo., To continue the trend away from nat-coal mine. Each train carries about ural gas, the company signed a contract i1,000 tons of coal to feed the plant, and with the Southern Companies, w hich is the 18-story boiler at Nelson 6 can con- a holding company for a group of Stis-sume about 338 tons of coal an hour sissippi, Alabama, Georgia and Florida when it is in full operation. utilities, to establish a major electric transmission intenie between GSU and Southern. The contract provides for Gulf States to buy 1000 megawatts of predominantly coal-fired power from l Southern Companies subsidiary generat-ing units from 1984 through mid-1992. , I I is
k-a.i.u..-- wa- .L-w .w. . - ---_aa * . -- LL. a a~ - .a The transmission line will be about Both cost and constmetion schedule 140 miles long crossing 74 miles of estimates were reviewed carefully late in southeastern louisiana to the N1ississippi 1982 by GSU and the architect-engiacer, border and continuing another 70 miles Stone & Webster Co., and they show no into Niississippi Nfore n aching N1issis- anticipated delays or cost increases. sippi Power's Plant Daniel. Presently, Additionally, the Nuclear Regulatory _ _ , _ , , ._ we have receised all the necessary per- Commission, in its annual review of the t. . .
?
mits to complete the GSU portion of the line to the N1ississippi border. Virtually plant construction, said "NRC attention should be maintained at normal levels" Q%$ i%xa' .; f i all of our portion of the right-of-way has and " management attention and involve. !seen j been acquired and engineering is pro- ment are es ident and (they) are concemed i m ; gressing smoothly toward the on-time completion of the line. 51ississippi with nuclear safety." As with the tw o coal-fired units, we
^
[ EIB gg yjj Power, the builder of the eastem half of have a partner in the River Bend project; ! k' gi the line, reports satisfactory progress Cajun Electric Power Cooperative ow ns , gas Jj and present plans call for power to a 30 percent ponion of the unit. Both i- y[f:, 9 _ [j j M j begin Howing in June of 1984. GSU and Cajun are funding their pro- ; l , rx Qg i l
' Die major constmetion project in our ponionate shares of construction costs.
Sam Raybum G&T was thwaned I* i
. h; present move away from natural gas is the 940-megawatt River Bend I nuclear fmm panicipating in 1982 when the Rural p ; j.1yrk-g . ]j j unit being built near St. Francisville, La., Electrification Administration denied ((.m g$ p IF,4" 4 j about 30 miles north of Baton Rouge, the loan guarantees necessary for Sam hH --A-La. The unit was two-thirds complete Ray burn to finance a seven percent por- t[ - IIs f' %@y j, fl 3) in February and is scheduled for com. tion of the unit. Negotiations are continu.
mg m an effon to reach some altemate p ,4b Q ;jq t; p La > r { mercial operation in December 1985. ) Estimated to cost about $2.5 billion panicipation agreement that would be j. e }= p P f [t:
- i i in direct construction costs, the unit will agreeable to all panies. , j i
proside power from the lowest priced : fuel available-uranium. While the ini-tial high cost of the plant will counterbal-anee the immediate fuel cost benefits, I the long-tem 1 outlook is for the plant, by itself, to save customers billions of dol- [E . [I M k g/m M Q ' 7~) i lars in fuc. expense over its 30-year esti-mated life. Pn sently, nuclear fuel costs [ r sisuus ?
] 3 about one-founh as much as market I W -"
priced natural gas and that difference is j expected to widen by the end of the dec- k*EIB l j ade. Our estimates indicate that nuclear I i fuel may be only one-eighth as expen. [asse j sive as natural gas in 1990. ( 6 2,81B d. I
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~1heDMC hasasealdent inspectorettioeteandcGier NRCteamscameemeheun . .
announcedinspecNonsdiskigtie year.Theesinspecnionsiumed, onlyahendruiofminorquesly controlvioiellons rangingfrom a-welSng merkiinethatwas mcWing too slowlyb someboltsthat had
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companyto modwyits pmcedures to determine when poesnnelprob-. Iems shocid be communicered to the govemmen'egency Ouakty Assurance Clerk Tanya Whetstone sits on the dome that soon wdl be raised to cover the reactor of the 52 5 bdhon. 940-megawatt, River Bend Station unit 1 21
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s f;- - *, ?{ + n.k$n &hnl*,,b d$W b$k Here are a few of the accountants who put in kh ~ hundreds of unheralded hours to prepare the financialsectionof this annualreport intheir leisure time they make up the league cham-pion 'Bhnd Factor ( softban team. The name is no retectvon on their account 2ng skMs. it just haDDenS10 t>e the Dame Of the sponsonog company D
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s -. -- w w w w w a + - NK n Selected Financial Data f For the years ended December 31 gn thousands escept per share amounts, ratios, and saleo 19M2 19MI 19MG 1979 1978 Electric Sales (millions of KWil) . 28,969 30,697 30,585 29,742 28,892 Operating Reienue . $1,307,259 $ 1,221,714 $ 1,005,226 $ 864,338 5 717,958 Net income
- 165,979 150,931 117,189 84,181 70,146 Income Applicable to Common Stock 127,030 120,550 92,309 68,559 59,156 Earnings Per Share of Common Stock:
Hased on average shares outstanding 1.95 2.24 2.05 1.74 1.73 Assuming conversion of convertible debentures. l.95 2.20 1.96 1.65 1.62 Diiidends Per Share of Common Stock I.56 1.48 1.39 1.36 1.24 c Total Assets 3,806,111 3,343,419 2,925,701 2,439,345 2,059,425 l 1.ong-Term Debt and Preferred Stock Subject to Mandatory Redemption . 1,771,078 1,642,894 1,444,505 1,066,938 877,097 i l Capitaliiation Ratios: Common Shareholders' Equity 36.0% 34.4 % 32.6% 35.6% 37.47r Preference Stock 3.2 - - - - I Preferred Stock (not subject to mandatory redemption) 4.3 5.0 5.8 7.3 7.4 Preferred Stock (subject to mandatory redemption) 5.6 6.5 7.5 4.0 1.9 1.ong-Term Debt 50.9 54.1 54.1 53.1 53.3 , Return on Aierage Common Equity . 12.32 14.21 12.94 10.91 10.93 Book Value Per Share, end of year . $ 15.25 $ 15.41 5 15.60 $ 15.53 $ 15.50
- See Note 2 to the Financial Statements for the proforma elTect of the change during 1981 in accounting for fuel costs.
Common Stock Prices and Cash Dividends Per Share For years ended December 31 Cash Cash t h,idends Dividends Paid Paid 19M2 liigh im* Per Share 19M1 Iligh low Per Share d Fourth Quarter $14 $12 $.39 Fourth Quarter $12% $10% $.37 Third Quarter 13% 11% .39 Third Quarter 12% 10% .37 Second Quarter 13 % 1I% .39 Second Quarter 12% 10 % .37 First Quarter 12% l l ','n .39 First Quarter 12 10% .37 The Common Stock of the Company is listed on the New York, Midwest and Pacific Stock Exchanges. The approximate nuraber of common shareholders on December 31,1982 was 95.000. 24
4._ _ ha .- ~. _.- -_ ---- - _ a-- - _-w wC a-- Management's Disctission and Analysis of the amount agreed upon in preliminary settlement
. discussions.
Results of Operations and h,.nancial Kilowatt. hour sales decreased vi during 1982. Cond,i tion after an increase or less than l'i during 1981 and 3'? during 1980. Decreases of 9'] and 21'J, Results of Operations respectively, in sales to industrial and w holesale customers were primarily responsible for the 1982 Net income increased $15,04M,000, or 10'.i, sales decrease; however, such decreases were otTset during 1982, as compared to 1981. lixcluding the in part by increases of 5'? and 4'? in residential ) non-recurring gain realized by Varibus Corporation and commercial sales, respectively. The decline in (Varibus) on an exchange of lignite leases and the industrial sales was a reflection of the economic recording of certain tax adjustments during 1981, recession experienced throughout 1982, particularly net income increased by 27'J. Despite increases in in the housing and automobile industries. The both net income and income applicable to common decline in sales to wholesale customers is the result stock, earnings per share of common stock of transferring a major RiiA cooperative load to decreased 13'J primarily as a result of the dilt.tive another suppher in June,1981. During 1981, clfect of having 21'J additional average shares increases in commercial and industrial sales of 5'1 outstanding. and I'J, respectively, were otTset by an Il'3 Operat.mg Reienue decrease in sales for resale. The increase in } kilowatt hour sales during 1980 was attributable to Operating revenue increased 7'J during 1982, as a 10'i increase in sales to residential customers, compared to increases of 22'J and 16'J during partially otTset by a l'J decline in industrial sales. 1981 and 1980, respectively. The primary causes of Operating thpenses and Tases these increases are detailed below: The C,ompany's primary operating expenses are i 1982 1981 1980 fuel for power generation and purchased power. (In thousand4 After increases of 23'? in 1981 and 7'i. during Rate inercases . $ 93,033 $120,036 5 61,771 19S0, these two expense items decreased by less. Changes in Fuel than l'J durmg 1982. Substantially all char.ges in Cost Recovery (19,41I) 77,519 57,536 fuel and purchased power costs are rellected in Fuel included customer bilhngs through the Company's fuel in liase Rates . 13,59g _ _ adjustment clauses and thus base no effect on net Sales Volume income. (See Note 12 to the Financial Statements and Other . (I,675) 18,933 21,581 for information on changes to the Company's Texas Fuel Adjustment Clause). The decrease m,
$ 85,545 $216,4_S8 $140 888
_ fuel expense during 1982 resulted from reduced generation requirements caused by lower sales lilectric rate increases granted during 1982, on levels, otTset in part by higher unit fuel costs. an annuali/cd basis, and their approximate effect increases in fuel expense during the years 1981 on revenues for the year, are detailed below: and 1980, were primarily attributable to increases Anmunt of %Ionth Placed I trect on n & unn p&e pM,h fud Anp wit lacrease in t trect s w 2 Re.enues in generation due to improved availabihh ty of inmases inn stimnsi iin itinions, Company-owned generating units. Texas $57.5 Oelober $ 10.7 The increases in purchased power expense during Imuisiana . 97.3 September 26.2 198 2 and 1981, were caused primarily by increases i 1:RC 32.6 July 15.8 in the unit price paid for energy purchased. The i reduction in purchased power expense during 1980, 1 The Public Utility Commission of Texas resulted from the increased availability of both (PUCT) approved and the Company placed into lower cost natural gas and Company-owned effect a $63.7 milhon increase in retail rates in generating facilities. October, t oSi, and a $44 million increase in October,1980. .I.otal ther operating and maintenance expenses continued a trend of steads increases durmg the In November,1980, the Company placed m.to three-sear period from 1980 to 1982. Operating ell,ect $50.2 million of a $77.3 million rate increase expenses have risen primarily because of increases ordered by the imuisiana Public Service experienced in the cost of gas purchased for resale, Commission (i.PSC). The additional $27.1 million labor and material costs, and general had been placed into etreet in N1 arch,1980, as an administrative costs resulting from intiationary mterim rate increase. The Company currently has pressures and increased demand for energy a petition before the I.PSC requesting increases in services. N1aintenance expenses increased during electric and gas retail rates of approximately $124 1980 and 1981, primarily due to the performance million and $2.4 milhon, respectively. An order of scheduled and unscheduled maintenance on f rom the I.PSC is expected during 1983. generating units while the decline during 1982, The Company is currently recognizing revenue reflected the improved availability of generating from the 1982 FliRC rate increase on an units resulting from the Company's preventive annualized basis of $28.8 million which represents maintenance program. t 25
_AgEM M m mWM V l MTV3XMWMW HUM WM -%w_4F A Depreciation expense has increased as a result of subsequently refinanced using proceeds from increases in depreciable plant resulting primarily issuances of long-term debt, equity, and other from placing Nelson Unit 6 into commercial securities. operation. During 1982, the Company generated 26% of its The decrease in federal income taxes during construction expenditures (including AFUDC) 1981 was primarily the result of recording certain from utility operations as compared to 31% during non-recurring adjustments for prior year taxes and 1981, it is currently expected that internally other adjustments made in accordance with gen rated funds and AFUDC will provide an regulatory agency instructions. average of approximately 42% of construction
. expenditures (including AFUDC) during the "M'."8 U"' period from 1983 through 1985. Improved future Increases in allowance for funds used during internal cash generation will be directly related to construction ( AFUDC) are primarily due to the adequate and timely rate relief which recognizes increases in the rate used to compute AFIJ,DC, increases in the Company's cost of capital and its such increases in turn being due to contmumg cost of service, and allows the Company to earn a increases in the Company's cost of capital. These cash return on CWIP.
increases have been otTset in part by varying < The Company's ability to adequately fund its amounts of construction work m progress (CWIP) ram is, and will contmue to be, mcluded in the rate base (thereby not qualifying for AFUDC), as allowed ,by the PUCT and the , construction pr7ent ubn its ability to obtain primarily depen funds through externa mancings, such ability, in LPSC, and by reductions m the amount of CWil turn, being de ndent upon electric rates sullicient resultmg from placmg Nelson Unit 6 int to maintain de t and preferred stock coverage commercial operation. ratios, and common stock equity earnings which The increase in non-utility subsidiary operations permit the issuance of additional securities at during 1981, resulted primarily from a gain reasonable rates. Long-term debt fmancings, sales , realized by Varibus on an exchange of lignite of common and preference stock, and the sale and leases durmg September and a change by Varibus lease-back of nuclear fuel (see Note 5 to the in the , method used to account for its oil and gas Financial Statements), provided 5649 million of I operations. the Company's capital requirements during 1982. Increases in interest charges on long-term debt An aggregate of $200 million of debt was repaid are attributable to increased borrowings made in during 1982. Average daily short-term borrowings connection with the Company's construction were approximately 591 million during 1982, up program. 12% from last year. (For information concerning funds available to the Company under a revolving g gRgg gPg g credit agreement, bank Imes of credit, and short-The Company's investment in utility and other term borrowings, see Notes 9 and 10 to the plant totaled $629 million during 1982, up 44% Financial Statements.) over 1981, when funding by participants m jointly- During January,1982, the Company completed owned projects helped reduce the Company's . modification of the Trust Indenture under which its required cash outlay for construction. Construction 7%% Convertible Debentures due 1992 were expenditures are expected to total, approximately issued. The modification climinates the Indenture's
$1.74 bilhon, mcludm.g $455 milhon of AFUDC, interest coverage convenant thereby increasing the .
during the period from 1983 to 1985, with Company's financial flexibility. l expenditures (including AFUDC) of approximately
$620 million in 1983,5600 million in 1984, and The Company's Mortgage Indenture places limitations on the amount of first mortgage bonds
$523 million in 1985. The main focus of the Company's construction program continues to be which the Company is allowed to issue. The most the completion of River Bend Unit 1. During 1982, restrictive of these is, presently that based on the 53% of the Company's total construction ratio of pre-tax earmngs to interest on such bonds.
expenditures were related to construction of the Based on the results of operations at December 31, nuclear-fueled unit, Additionally, the Company 19 md.82, hon the Company would be able to issue $373 must provide funding for its 42% share of Big < (assum,m additional first mortgage bondsing an interest rate o Cajun 2 Unit 3. In addition to funding the construction program, the Company is required to Limitations based on the ratio of after-tax periodically retire long-term debt and pay earnings to fixed charges and preferred dividends t dividends to the holders of its preferred and are imposed by the Company's Restated Articles of preference stock. Long-term debt maturities are Incorporation upon the issuance of additional expected to approximate $10 million during the preferred stock. Based on the results of operations period from 1983 to 1985. for the year ended December 31,1982,the The Company's construction program is funded Company would have been able to issue at year end by a combination of internally generated funds and $134 milh,on m additional preferred stock short and intermediate-term borrowings, which are (assuming a 14% dividend rate for such stock). 26
}
,- v--
y . - ha~,,_ _ n-.. .:.w--n.-.. , - + - ~ , - ~ , , . . . . - . -~s... .-+ - ~.~ ~ -~ a+% ~ ~ +~~ , ~ ~ - - l Statement of income for the years ended December 31 lin thousands escept per share amounto 19M2 19Ni 19MO Operating Resenue l Electric S1,188,944 $ 1,106,522 $ 904,871 Steam 75,213 77,624 69,346 G as . 43,102 37,568 31,009 1,307,259 1,221,714 1,005,226 Operating Espenses and Tases Fuel (Note 2) . 446,521 481,285 378,794 Purchased power (Notes 2 and 6) . 182,106 150,463 136,261 Other operations 151,660 133,647 111,928 M aintenance . 65,321 70,867 57,155 Depreciation and amortization . 89,291 78,194 73,422 income taxc3 Federal (Note 3) 52,M47 32,187 43,872 State 3,314 2,933 299 Other taxes . 45,790 41,845 34,636 1,036,850 991,421 836,367 Operating Income . 270,409 230,293 168,859 Other income and Deductions Allowance for equity funds used during construction . 56,141 40,741 40,590 Non-utility subsidiary operations. (206) 11,498 (1,398) Other - net . 2,581 1,996 (3,621) Income liefore Interest Charges . 328,925 284,528 204,430 Interest Charges 1.ong-term debt 181,985 151,427 99,198 Other . I4,398 17,698 20,954 Allowance for borrowed funds used during construction (33,437) (35,528) (32,911) 162,946 133,597 87,241 Net Income (Note 2) 165,979 150,931 117,189 Dividends on Preferred and Preference Stock 38,949 30,381 24,880 Income Applicable to Common Stock $ 127,030 $ 120,550 $ 92,309 Average Shares of Common Stock Outstanding . 65,056 53,851 44,987 Earnings Per Share of Common Stock (Note 2) Hased on average shares outstanding $1,95 $2.24 $2.05
, Assuming conversion of convertible debentures . I.95 2.20 1.96 The accompanying notes are an integral part of the fmancial statements.
27
~
" _.-. .. . _~ s, ..
~_
-- , 70 9_.
Statement of S0urces of Funds invested in Utility and Other Plant i for the years ended December 31 tiz thousands) I 19N2 1981 19MO Proiided From Operations < Net income . $165,979 $150,931 $117,189 Principal income items not requiring current funds l Depreciation and amortiration. 89,291 78,194 73,422 Deferred income taxes - net 32,684 (6,252) 16,000 investment tax credits - net . 14,020 32,029 19,972 - Equity component of allowance for funds used during construction. (56,141) (40,741) (40,590) Non-utility subsidiary operations 206 (1I,498) 1,398 3 l Total provided from operations . 246,039 202,663 187,391 - Dividends Preferred and preference dividends . (38,949) (30,381) (24,880) Common dividends (101,223) (79,379) (62,299) Reinvested funds provided from operations . 105,867 92,903 100,212 Proiided From Financing Sales of securities Common stock . 164,820 132,762 71,422 Preferred stock subject to mandatory redemption . - - 100,000 Preference stock . IIH),000 - - First mortgage bonds (principal amount). 167,000 168,000 175,000 Guaranteed debentures - net . 36,000 60,000 - Pollution control bonds . 48,285 - - Net change in short-term borrowings . 52,162 (20,433) (39,579) Retirement of first mortgage bonds and convertible debentures . (26,507) (41,970) (17,133) Equipment purchase obligations (53,691) (16,181) 8,811 Nuclear fuel lease transaction 108,969 - - Net change in revolving credit agreement (120,000) 30,000 160,000 Term loan agreement 24,000 - - Total provided from financing . 501,038 312,178 458,521 Other Sources and Uses Investments in and advances to subsidiary companies (11,582) (1,123) 1,170 Retirement of Uranox Trust (27,216) - - Other - net (including changes in working capital) 5,246 (8,014) 43,655 Total other sources and uses (33,552) (9,137) 44,825 Espenditures for Utility and Other Plant . 573,353 395,944 603,558 d Equity component of allowance for funds used during construction. 56,141 40,741 40,590 imested in Utility and Other Plant $629,494 $436,685 $644,148 The accompanying notes are an integral part of the financial statements. 28
- - _ ,,- x , . : _ - - ~ 9 - amL5-..-.'~,_ w.~,-.a. a--- - .-I Balance Sheet December 31 On thousandu Assets 1
Utility and Other Plant, at original cost 151 ant in service (Note 6) ......
$ 2,760,434 $2,140,180 1.ess: Accumulated provision for depreciation 811.853 ___743,730 1,948,581 1,396,450 Construction work in progress (Notes 6 and 11) 1,574,925 1.595,005 Nuclear fuel (Note 51 --.
__ _ ___9 8.2 5 9 3,523,5_0_6 _
-_3 059,71_4 Other Property and Investments Non-utility subsidiary companies 43,850 32,474 Other 7,035 1,960 50,885 34,434 Current Assets Cash and temporary cash insestments . 6,230 4,50S Receivables Customers 102,188 73,794 Notes 30 13,333 Other ... ..
I I,533 14,967 Materials and supplies 16,111 17,545 l'uel stock . ...... 42,526 39,127 Prepayments and other . 6,560 11,425 185,178 174,699 Deferred Charges Unamortized debt expense. . 14.567 6,716 Unamortifed project cancellation costs 13,451 17,307 Other 18,524 20,549 46,542 44,572
$3,806.111 $3,343,419 Capitaliiation and I.iabilities Capitalization (See Statement of Capitalization)
Common shareholders' equity $ 1,128,991 $ 933,383 Preference stock 100,000 - Preferred stock Not subject to mandatory redemption 136,444 136,444 Subject to mandatory redemption. 175,553 175,553 1.ong-term debt 1,595,525 1,467,341 3,136,513 2,712,721 Current Liabilities I.ong-term debt due within one Scar (Note 9) 10,000 63,691 Notes payable (Note 10) Banks ... 69,000 - Commercial paper. 17,907 34,745 Accounts payable Trade . 88,456 65,384 Subsidiaries 2,350 761 Taxes accrued . . 15,073 16,770 Interest accrued. 55,221 33,127 Other 50.454 57,134 ' 308,461 271,612 Deferred Credits investment tax credits 151,696 145,389 Accumulated deferred income taxes. 199,842 175,444 Other 9,599 11,037 361,137 331,870 Proceeds from Sale of Nuclear Fuel (Note 5) - 2',216 Commitments and Contingencies (Notes 6 and 11) . - -
$_3,806,I l_1 $3,343,419 The accompanying notes are an integral part of the fmancial statements.
29
se,~-w~-~~~.: - . . ~ , -..a , , ...w- au-,---~.- - ,.-. . .,,.. ... ~ ,._.n-m
- ~~wn-..~,a Statement of Capitalization December 31 (in thousands of dollars) 19M2 1981 Common Shareholders' Equity (Note 7)
Common stock Authoriicd 100,000,000 shares without par value Outstanding 74,049,921 and 60,574,877 shares, respectively $ 767,125 $ 602,305 Premium and expense on capital stock 4,501 (2,088) Other paid.in capital 25,876 25,876 Retained earnings . 331.489 307,290 1,128,99! 933,383 Preference Stock (Note 7) Authorized 20,000,000 shares without par value, cumulative Outstanding 4,000,000 shares. Current Ibidend Shares Redemption Series Outstanding Price
$ 4.40 2,000,000 $ 31.90 50,000 -
3.85 2,000,000 31.35 50,000 - 100,000 - Preferred Stock (Notes 7 and 8) Authoriicd 6,000,000 shares, $100 par value, cumulative Outstanding 3,119,970 shares. Current Ibidend Shares Redemption Series Outstanding Price l Not subject to mandatory redemption I
$ 4.40 51,173 $ 108.00 5,117 5,117 4.50 .... 5,830 105.00 583 583 4.40-1949 1,655 103.00 166 166 4.20 9.745 102.818 975 975 4.44 14,804 103.75 1,480 1,480 5.00 10,993 104.25 1,099 1,099 5.08 26,845 104.63 2,685 2,685 4.52 10,564 103.57 1,056 1,056 6.08 32,829 103.34 3,283 3,283 7.56 350,000 103.80 35,000 35,000 8.52 500,000 106.43 50,000 50,000 9.96 350,000 111.60 35,000 35,000
[ 136,444 136,444 Subject to mandatory redemption 8.80 371,835 107.00 37,183 37,183 9.75 33,697 107.00 3,370 3,370 8.64 350,000 108 64 35,000 35,000 g 11.48 500,000 111.48 50,000 50,000
) ' 64 500,000 113.64 50,000 50,000 176,553 175,553
/
IStatement continued onfolh m ing page) 30
{n>, _ s _. M/FW M_ _N. wr_ _P_ __ _ - .ev%9 __ n. w N w ST W . W w. VW . wWz %, l i l 19N2 1981 Iong-Term Debt (Note 9) First mortgage bonds l Maturing 1983 through 1987 - l 3%% due December 1,1983. - 10,000 4%% due September I,1986 15,000 15,000 14%% due March I,1987 100,000 100,000 4%% due October 1,1987 ....... 17,000 17,000 r Maturing 1988 through 1992 - 4% through 17%%......... 255,000 215,000 Maturing 1993 through 1997 - 5% through 16.8% . 115,000 88,000 Maturing 1998 through 2002 - 6%% through 8%% . . . 210,000 210,000 Maturing 2003 through 2007 - 8%% through 10.15% . 270,000 270,000 Maturing 2008 through 2012 - 10% % through 15% 325,000 225,000 1,307,000 1,150,000 Pollution control and industrial development bonds 7% due 2006. 25,000 25,000 5.9% due 2007 . 23,000 23,000 10 %% d u e 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,285 - Guaranteed debentures 17%% and 16% due 1988 and 1990 - net . 96,000 60,000 Convertible debentures 7%% due 1992. 3,976 20,483 Term-loan agreement Variable rates (14%% at December 31,1982) due 1987 24,000 - Revolving credit agreement 70,000 190,000 1,597,261 1,468,483 Unamortized premium and discount on debt - net . (1,736) (1,142) 1,595,525 1,467,341 53,136,513 52,712,721 First mortgage bond sinking fund requirements and long-term debt maturities for each of the next five years are as follows: long-Term Sinking Fund Debt Requirements Maturities (In thousands) 1983 511,784 5 10,000 1984 11,664 - 1985 . I1,664 - 1986 11,484 15,000 1987 19,850 141,000 The accompanying notes are an integral part of the financial statements. ? I ( l l 31
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. www xw__,awww -
Statement of Changes in Capital Stock and Retained Earnings For the 3 ears ended Deccenber 31 (i2 thoessands of dollars) Preferred Stock Subject to Other Mandatory Preference Comemn Premium Paid-in Retained Redemption Stock Stock (Im Espensej Capital f arnings l Balance: January 1,1980 $ 75,553 5 - 5398,121 5(1,094) 525,847 5240,751 Net income - 1980 . . . . . . . . . . . . . .. I17,189 Preferred stock sold (1,000,000 shares) . 100,000 (1,045) Common stock sold: Public olTerings (5,000,000 siares) 57,400 Conversion of deben:ures < (253,054 shares) ... 3,701 Dividend reinvestment and stock... purchase plan (522,440 shares). 5,761 timployee benefit plans (410,456 shares) 4,560 Dividends declared: Preferred stock (24,880) Common stock. (62,299) Capital stock expense . (30) (786) Balance: December 31,1980 _175,553 - 469,543 (2,169) 25,847 269,975 Net income - 1981 150,931 Common stock sold: Public otTerings (8.000,000 shares) 92.375 Conversion of debentures (1,625.572 shares) ... 23,791 Dividend reinvestment and stock... purchase plan (570,428 shares) . 6,648 limployee benefit plans (883,053 shares).. 9,936 Acquisition of subsidiary (588,000 shares) 12 29 ( Dividends declared: Preferred stock (30,381) Common stock. (79,379) Capital stock expense . 81 (3,856) Balance: December 31,1981 175,553 - 602,305 (2,088) 25,876 307,290 Net income - 1982. . . ... 165,979 Preference stock sold (4,000,000 shares) . 100,000 5,840 , Common stock sold: Y 121,250 Public ofTerings (10,000,000 shares) Conversion of debentures (1,245,746 shares) ... 16,291 Dividend reinvestment and stock... purchase plan (1,636,481 shares) 20,056 Ilmployee benefit plans (592,817 shares) 7,223 Dividends declared: Preferred and preference stock (38,949) Common stock. (101,223) Capital stock expense . _ 749 (1,608) Balance: December 31,1982 5175,553 5100,000 $767,125 5 4,501 525,876 5331,489 The accompanying notes are an integral part of the financial statements. 32
pp%gNyagp%p g _n
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e..n M ,, _7 > _ _ w f Notes to Financial Statements
- 1. Suninsary of Significant Accounting December 31; 1930-8.0% from January I j Policies through December 31.
1 System ofifccounts. The accounting records of Revenue. Fuel and Purchased Power. The the Company are maintained in accordance with Ccmpany records revenue as billed to its customers the Uniform System of Accounts as prescribed by n a cycle bill ng basis. Revenue is not recorded 2 the Federal Energy Regulatory Commission f r energy dehvered and unbilled at the end of esch fiscal period. Rate schedules of the Company I (FERC) and adopted by the Louisiana Public pr vide for adjustments to substantially all rates i Service Commission (LPSC) and the Public Utilit>,
. for mcreases or decreases m the costs of fuel for l
Com m.issmn of Texas (PUCT). generation, purchased power, and gas distributed. , Utility Plant and Depreciation. Utility and Fuel and purchased power costs in excess of those other plant is stated at original cost when first included in base rates are deferred (or accrued) dedicated to public service and the amounts shown until such costs are billed (or credited) to do not represent reproduction costs or current customers. values. Costs of repairs and minor replacements Inventories. The Company's fuel inventories are charged to expense as incurred. The original are comprised of fuel oil, valued at average cost, i cost of depreciable utility plant retired and cost of and coal, valued at last in, first-out (LIFO) cost. i removal,less salvage, are charged to accumulated Materials and supplies inventories are valued at provision for depreciation. The provision for average cost. i depreciation is computed using the straight-line Income Taxes. The Company and its
- method at rates which will amortire the subsidiaries file a consolidated federal income tax unrecovered cost of depreciable plant over the return. Income taxes are allocated to the individual estimated remaining service life, companies based on their respective taxable income
! Composite depreciation rates were as or I ss nd investment tax credits.
follows: The Company follows a policy of comprehensive 1982 1981 19an interperiod income tax allocation where such Electric . 3.66 % 3.70% 3.72% treatment is permitted for ratemaking purposes by Steam . 2,44 2.80 2.77 regulatory bodies. Deferred income taxes result Gas . . . . 3,51 3.50 3.57 from timing ditTerences in the recognition of Total Company . 3.63 3.68 3.69 revenue and expenses for tax and accounting purposes. These deferred income taxes are charged
, illtowancefor Funds Used During Construction or credited to income and recorded in accumulated t
and Capitalization ofInterest. Allowance for deferred income taxes. 1 funds used during construction ( AFUDC) is a investment tax credits have been deferred and
- utility accounting practice calculated under are being amorti7ed ratably over the useful lives of guidelines prescribed by the FERC and capitalized the related property. The Company claims the
- as part of the cost of utility plant representmg the additional 1%% investment tax credit, as permitted cost of servicing the capital invested in construction by the Internal Revenue Code, as a result of the I work in progress. Such AFUDC has been provisions of the Employee Stock Ownership Plan.
segregated into two component parts - borrowed Non-Utility Subsidiarr Companiel The and equity funds. That portion allocated t Company has made inve'stments in and advances to , borrowed funds is reflected as an adjustment to non-utility subsidiary companies and accounts for l interest charges. Interest incurred by certain trusts its investments on the equity basis. The Company's ! (see Notes 5 and 9) is included in interest expense wholly-owned subsidiary, Prudential Drilling
- in the statement of income and a corresponding Company, is engaged primarily in the exploration l
amount is included as part of the borrowed funds for and development of oil and gas properties. The l component of AFUDC. Both the equity and the Company's other wholly-owned subsidiary, Varibus borrowed portions of AFUDC are non-cash items Corpcration (Varibus), operates pipelines and holds which have the clTect of increasing the Company's lignite reserves. reported net income by their full amounts. Retirement Plan. EITective January 1,1983, llowever, when the related utility plant is placed in the Company's pension plan, which covers all service, a return on and recovery of these costs is employees meeting certain age and service l permitted in det,trn ;aing the rates charged for requirements, was changed from a contributory to
- utility service. The Company computed AFUDC at a non-contributory plan. The Company's policy is the following rates compounded semiannually to fund accrued pension cost annually. Past and (net)
- 1932-9.5% from January I through prior service costs are being funded and amortized September 30 and 10.25% from October I through by the Company over a thirty-year period.
December 31; 1981 - 8.5 % from January 1 Earnings Per Sirare. Earnings per share are through March 31 and 9.0% from April I through based on the weighted average number of common 33
- mew m n . ,
~.--~w-_-- m. h -u -_o.--c.~-L-.-.--m-. ~ -u e .a.m m u - , .I shares outstanding during the period. Earnings per Amortuation or share assuming conversion of convertible debentures are based on the weighted average d" der"*c'n" Total rederal income ( i$ (ih 'kN l number of common shares outstanding plus the tases . 5 55.547 5 34.085 5 50.621 shares which would have been issued if the nrective rederal income outstanding convertible debentures had been tas rate 25.17 18 4 30 7; converted on the date of original issue, after giving The components of rederal income tases are as followv elTect to the climination of related interest expense, 1982 198 19xo amortization of bond discount, and expense of issue ilnthouundu (net of related income taxes). The number of charged to operating shares for the latter computation was P,*",',*'c ,
,t rederat income i approximately 65,356,000, 55,231,000 and tases . s 7,3 i 7 s 3,779 s 5.820 j 47,992,000, for the years 1982,1981, and 1980, Deferred rederal income i tases - net:
respectively' 21,468 9,255 Tas depreciation 14370
- 2. Change in Accounting for Fuel Carita'a'd construction costs 2,751 (4.392) 5,337 in June,1981, at the urging and authorization of Amortiica nuclear the I.PSC, the Company changed its method of ""',','"""I".
c g i,3 93 gi,339; 43,394, accounting for fuel and purchased power costs in ruel and pur6 sed Louisiana. The change, etTective January 1,1981, power costs deferred
" ( ' ~
results in the Company deferring or accruing on its di , knses books any under or over recovered fuel and aererred for tax purchased power costs in excess of those included y [3] (2.30g) 33 m base rates until such costs are reflected in , Total deferred billings to customers pursuant to its Louisiana fuel rederal income adjustment clause. The cumulative effect of the taies - net 31.510 (5.621) 18.oxo change on years prior to 1981 is immaterial and investment tas crc lits
- net 14.020 32.029 19.972 included in income for 1981. The elTect of the change for the year 1981 was to decrease net To re ie '
c ,gejeral, ,ns income by $4.8 million (5.09 per share). The pro expenses .. 52.x47 32,i x7 43.x72 forma effects of the change in accounting for fuel Charged to other income in 1980, assuming the new method was applied
- " ' ' ' 2" -
I*** **
- d retroactively to that Scar, would have been to To'n Ye tins 5 55.547 5 34.ox5 5 50.621 decrease net mcome by $3.6 million (5.08 per share). The Company was able to reduce its inccme tax
- 3. Federal Incoine Taxes liabi;ity for the years 1982,1981, and 1980, by utilizing investment tax credits. At December 31, The provisions for federal income taxes were less 1982, the Company had ace.imulated than the amounts computed by applying the carryforwards of investment tax credit of statutory federal income tax rate to net income $g9,'510,000. These carrsforwards expire through before federal income taxes. The reasons for these 1997, and will be used to reduce income taxes in dilTerences are as follows: future years. The investment tax credit utilization limit has increased progressively, from a maximum W 1982 1981 1989 of 70% of the income tax hability (before tin thou ando application of the investment tax credit) in 1980, 1
' to 80% in 1981, and 90c' in 1982. i nc mNase 5221.526 51 x 5.016 5167.x10 i ederal income tases at
$ M5,lo7
- 4. Retirement Plan statutory tax rate (461) $101,902 $ 77.193 Reductions in rederal The total costs of the Company's contributory
' " ' " ' ' ' "d ' '" 8 pension plan for the years ended December 31.
r I:sclusions from taxable 1982,1981, and 1980, wcre $3,698,000, income of Al UDc (40.875) (32.053) (26,704) $6,696,000, and $5,393,000, respectively. Of such P ' amounts, $2,472,000, 54,245,000, and $3,506,000,
"'"$urh t 'c's', but expensed for tax respectively, were charged to income with the pur es . (7.189) (3.034) ( 3.9x 5) balance of such costs for each period charged to depreciation construction and other accounts.
ditTerences 6.825 6.380 6.555 Adjustment for prior The valuation date of the latest pension years taxes and other information is January 1 of the subsequent years reFulatory adjustments (1,172) (13.159) (2.251) 1.quity in earnings or for each plan year ended December 31. The , non-utility subudiaries 95 (5.2x9) 643 information for the plan years 1981 and 1980, is 34
QQ ' W ' M N (Qm f ., _ n -. w _ ~ ~ _ , ,
%a shown below. Such valuation information is not yet during the quarter. During 1982, the Company available with respect to plan year 1982. sold nuclear fuel to the Lessor for proceeds of i,n i ,no approximately $109 million. At December 31, sin thousands escept 1982, the Lessor's investment in nuclear fuel was percentu approximately $115 million.
Actuarial present value of . accumulated plan benefits: In connection with the aforementioned vested 5 44,tx9 5 4 t.742 transaction, the Company repurchased and Nonsested . -2.912 2.573 subsequently sold to the Lessor, all of the uranium Preseni value or accumutaica plan oxide held by the Uranox Capital Trust. Interest beneritt 5 47. tot 5 44.315 charges on the trust were approximately Net awets available for benefits . 5 t>9.730
$1,345,000, $2,823,000, and $5,994,000 for the
-5 59.00s
) cars 1982,1981, and 1980, respectively.
Assumed rate of return in determinin actuarial present In accordance with the ratemaking treatment values of p an benefits . un 97 afforded its leases by regulatory agencies, the Company does not capitalire those leases which
- 5. Leases mect the criteria for capital leases under the i The Company has existing agreements for the guidelines of Statement of Financial Accounting leasing of certain vehicles, coal rail cars and other Standards (SFAS) No.13. Ilowever, had such l equipment, and buildings. Lease rental payments leases been accounted for as capital leases, the were $12,799,000, $6,830,000 and $6,628,000 balance sheet would have included leased assets i during 1982,1981, and 1980, respectively. Of such and related liabilities of approximately $154.9 l amounts, $10,395,000, $5,679,000, and $5,315,000, million at December 31,1982, and $37.2 million at December 31,1981.
~ respectively, were charged to income, with the remainder charged to construction and other accounts. 6. Jointly-Owned Facilities Future minimum lease payments under non- The Company owns a 70% undivided interest in canceliable capital and operating leases (excluding the 540 N1W Roy S. Nelson Unit 6 coal-fired those payments to be due under the nuclear fuel generating unit which was placed in-service Niay lease as discussed below) for each of the next five 31,1982. The participants, Sam Rayburn years and in the aggregate at December 31,1982, N1unicipal Power Agency and Sam Rayburn G&T are estimated to be (in thousands): (SRG&T), have funded their proportionate 1983' $ 16,035 wnership shares of 20% and 107c, respectively. 15,830 The Company's share of utility plant in-service for 1984. this unit at December 31,1982, is $404,244,000, 1985. 15,728 with $7,684,000 of associated accumulated 1986. 12,984 depreciation. The Company's share of operations 1987. 12,984 and maintenance expense related to Nelson Unit 6 Remaining years _215,105 is included in operating expenses for 1982.
$288,666 The Company has agreements with the y participants in Nelson Unit 6 to purchase all or a
, During August,1982, the Company entered into portion of their share of the unit's capacity for a nuclear fuel financing agreement with a non. periods ranging from seven to fourteen years. affiliated third party fuel corporation (the During 1982, the Company purchased 100% of "I.essor"). Under the terms of the agreement, the such capacity from both participants. The fixed Lessor will prcAide financing for up to $300 million costs applicable to the buy-backs of power are of nuclear fuel which will eventually be leased-back based on gross plant investment and other factors l i to the Company for use at River Bend Unit I, a which are not currently determinable for years 940 N1W nuclear-fueled generating unit. The subsequent to 1982. The variable costs associated I.cssor will purchase nuclear fuel from the with such buy-backs are composed of fuel costs Company or its vendors and will make all and operations and maintenance expenses. For payments necessary for further processing of the 1982, the fixed costs applicable to the buy-backs fuel Once River Bend Unit I is placed into were $22,302,000, while fuel costs and operations commercial operation, the Company will make and maintenance expenses were $10,532,000 and quarterly payments to the Lessor for the cost $2,284,000, respectively. (including capitali7ed interest) of fuel consumed 35
m - Additionally, the Company ow ns undisided 7. Capital Stock and Retained Earnings interests in certain generating units currently under Certain limitations on the payment of cash construction as detailed below;
, disidends on common stock are contained in the N heduled ( om- Share of Company's Restated Articles of Incorporation, as in-sersk e pan, t spenditure' amended, and indentures. The most restrictise Generating Neation Date share at 12DliM2 i ds TmNmm dated as of September 1,1977. liased on such liig Cajun 2 l! nit 3 1983 42'; ,9 hmitations, the retained earm,ngs avadable for (Coal 540 MW)
Riser llend Unit i 1985 70 1,227,844 Pa) ment of dividends as of December 31,1982 and ( N uclea r 940 MW) 1981, amounted to approximately $234 million and
$212 million, respectively (see Note M for
'lhe Company is currently funding its share of restrictions on the payment of disidends on the costs of Ilig Cajun 2 Unit 3. Cajun lilectric common stock under the sinking fund provisions Power Cooperatise (CliPCO) is the project for preferred stock).
manager and will operate this unit. The Compans ~ At December 31,1982, the C,ompany had expects to utili/c all of the energy generated b> its ' rescrsed 3,168,799 shares of common stock to be share of the capacity at the time this unit is piaced issued in connection with its employee benefit plans in-sers ice' and Dividend Reinvestment and Stock Purchase Riser llend Unit I is jointly owned by the Plan. Company GO'? ) and Cl!PCO (30'? ). The I)uring 1982, the Company iwued 4,000,000 Company is actmg as project manager for shares of preference stock. Pasment of disidends ~ construction and operation of such unit liased on preference stock is subordinate to payment of upon the latest projections of the total cost of disidends on preferred stock and preferred stock Riser llend Unit I, Cl PCO's share will exceed its sinking fund obligations, but has priorits to l existing loan guarantee, and it will need additional payment of disidends on common stock.'There are loan guarantees from the Rural !!!ectrification no limitations en the issuance of preference stock. Administration (Ri!A) or other funds to fulhll its At December 31,1952, the (,ompany had obhpation. 'I he Company has been advised that authorized 10,000,000 shares of pref erred stock Cl!PCO ha tiled an application for an additional without par salue (nom iwued). The Company's loan guarantee; howeser, there can bc no assurance tad Aru,&s of inmporanon, as ann nded that the Rii A will grant such loan guarantee. If places limitations on the issuance of additional additional loan guarantees are not granted, preferred stock. l'or information with respect to the ( lil CO s share of construction expenditures, above amount of preferred stock currenth issuable current loan guarantees, estimated at subject to this limitation, see " Management's approximately $62 million and $112 million f.or I)iscussion and Anahsis of Results of Operations 1983 and 1984, respectisely, would hase to be and l'inancial Condition. borne by the Company. Under existing agreements, SRG&T had proposed to become owner of 7'; of At the Company's option, all or part of its Riser llend linit 1. Iloweser, SRG&T has preferred and preference stock may be redeemed at informed the Company that the RiiA has rejected stated prices. Certain issues are subject to SRG ATs application for a loan guarantee for restrictions w hich prohibit redemption for a period , such unit. Unicss and until other arranecments of time directly or indirectly out of the proceeds of acceptable to the RiiA are made, the Company or in anticipation of borrowings or issuance of will continue to bear SRG&Ts proposed share of additional preferred stock hasing a lower interest expendituret cost or dividend rate. The Compans has agreements with Cl!PCO and 8. Preferred Stock Subject to Mandatery SRG&T whereby, after River llend Unit I goes Redemption into commercial operation, the Company will The 58.80 and 59.75 Disidend Preferred Stock initially be obligated to purchase 100'3 of the are entitled to mandatory sinking funds sutiicient participants' share of the unit's capacity. to retire 3'i of the shares of each series beginning
~1 hereafter, the Company is obligated to purchase in 19x4. The SS.64, 511.48. and 513.64 Dividend declining amounts for periods ranging from two to Preferred Stock are entitled to mandatory sinking nine years. 'I he fixed costs applicable to the buy- funds sutlicient to retire 4'; of the shares of each backs of power are based in part on final unit costs series beginning in the sixth year after the date of and other factors and are not deternunable at this issuance. The aggregate sinking fund requirements, time. ~l he variable costs associated with such buy- which begin in 1984, are approximately $1,217,000 backs will be composed of fuel costs and operations in 1984, 52,617.000 in 19S5, and 56,617,000 in and maintenance expenses. 1986 and 19x7. Preferred stock sinking fund m
.n. x.A C_ A a.;. _
prm nions restrict the payment of disidends on At I)ecember 31,1982, the ,unount outstanding common and preference stock and the purchases of under the resohing credit agreement consis:cd of such stock by the Company unlev. the sinking fund $50 million bearing an mterest rate of 10'J, and reyturements are met 520 mdlion bearing an interest rate of II: ' 9 lamg-Term Debt 1)uring .luly,19s2, the Company and Gulf
. . States Os erseas I inance, N X (1 inance), a w holly
.I he (.ompany s Mortgage contains s.oking f und owned subsidiary of the (.ompany, entered into an prosisions w hich require, generall), that the escrow agreement, renewable annually, with
(,ompans make annual cash deposits equal to I._,,< certain financial institutiont L:nder the terms ut of. the greatest aggreyale principal amount of first
. . the agreement,1inance depmited with an escrow mortgage bonds outstanding or, in lieu thereof, to agent 524 million in certificates of.dermit which apph property additions or reacqmred h.rst were presieush purchased with the equits mortgage bonds f.or that purpose. T he C.ompans - -
contribution made to Iinance bs the (.om pa n s . has satished the mortgage requirements in past- . - Since the use of the deposit is restricted to - years and plans to meet current and future pay ment to the trustee f.or both series of requirements bs certifying ,'asailable net additions,, to the trustee. Ihose series of the
. guaranteed debentures in the esent of default, the
, depmit has been treated as an oth.et to such C.ompans s brst mortgage bonds which were .
debentures in the financial statements presented privatels pliced require cash sinking funds. . herein. Related interest income of 5 2,5 52,000, f. rom beginning in 1987. Accordingly, the 1987 sinking the 524 million insestment has been othet against fund requirements shown on the Statement of Capitalization include 58,570,000 of cash .. inking "E * *I" " * "* fund requirements related to such bonds. I)uring March,1981, and January,1982, the Compans liquidated the Tur-Gen and Gideon
.t he t,empans,s Mortgage Indenture contains an -
.I. rust obligations by payment of $27,583,000 and interest emerage emenant which firaits the amount -
553,760,000, rcspectisch. Interest on the trusts of first mortgage bonds which the (.ompans ma) - . totaled approximately 510,212,000 and 58,013,000 issue. I.or information with repect to the additional during 1981 and 1980, respectisch. amount of first mortgage bonds which the - Company is currently able to issue under this limitation, see ,, Management,s I)iscussion and 10. Notes Payable Analysis of Results of Operations and l'inancial As of I)ecember 31,1982, the Company had Condition? agreements with banks and banking institutions On March 12,1982, the Compans entered into which prmided for short-term lines of credit an agreement for an 5800 million relohing credit totaling approximately 5205 million. Interest rates agreement prosiding for intermediate-term loans in auociated with these lines range from the I.lllOR
+ to the prime rate or a nmtually agreeable principal amounts of at least $10 million to be made available until September 12,19x6, with the rate to be determined at the time of borrowing.
balance then outstanding being repayable mer a Conimitment fees range from % of I'< to ' of I';
"f;unount of asailable credit. In lieu of three-year period beginmng in 1987. On March 17 19x2, the Company retired the balance outstanding commitment fees, certain banks require a cash (5190 million) under the $200 mdlion resohing balance be maintained equal to 5'? to 10'; of the credit agreement with an equal amount from the conunit ment .
[ Sh00 million resoking credit agreement. 'T he new Information regardmg short term debt agreement requires certain lees and bears interest outstanding is detailed below: at the following rates: 39x inxi i9xn Lurodollar Loarn Y; + the 1 ondon lla 'h"u'andu Interbank Otfering Rate (1.lHOR) during the U",[i"""(,['"'a 'm Resohing Credit 'lerm and Y, & l.lHOR -ctme slC e si'9.o u si<m::s durmg the term loan period ' ' " r e d " b """' "' out st a mim p 91 #f. s t .712 l i t .9s4 Domestic thed Rate Loarn .;+
" cwb'ed a' crave Certificates of I)epmit Rate during the '"'$i [jij",M, ,o
,y Resohing Credit Term and '4'; + Certificates geend 9 w; 13 :c H.7v; of I)cposit Rate during the term loan perimi. "(("y%g ,, ,7 m ,,
Domestic Hase Rate Loarn Prime Rate as determined by Irsing Trust Compans during ~ W Cablated b dmdmp the sum of the cdedne interest the Resohinb* Credit Term and '.4'7 + Yrime
'"h' " h * '" ' W" #" b ou t st a nd"ing
'h"" *"" d' b' Rate as determined by Irsing Trust Company during the term loan period.
U
M I 'na h[Mdhh@ n ' NNbNkNNNd
~
1 e
- 11. Commitments and Contingencies Administration branch of the Department of Energy (DOE). The Order alleges that Varibus Construction. The 1983 construction program was subject to Mandatory Petroleum Price is currently estimated to be $620 million, mcluding Regulations and, therefore, overcharged the approximately $122 milh,on of AFUDC. In Company by approximately $7.5 million on fuel oil connection with the construction program, the sales made during the period from October,1973 Company has incurred substantial commitments, through January,1974, and seeks to have Varibus some prior to receipt of required governmental refund those charges. The Order also seeks' {
permits, which are related to 1984 and subsequent payment of interest on the alleged overcharges at years. No prov,ision is made m, the financial . varying rates from the time of the sale unta statements for possible losses which could occur if eventual settlement. The Company has estimated such permits should not be obtamed. that the interest on the alleged overcharges could I Construction of River Bend Unit 2, a 940 MW amount to approximately $11.4 million through # nuclear-fueled generating unit, has been deferred December 31,1982. Varibus' prior correspondence at ! cast until the completion of River Bend Unit 1. from the DOE concerning the fuel oil sales was in Total Company expenditures on this unit through February of 1981, when a Notice of Probable December 31,1982, were $94.5 million, including Violation was issued which alleged overcharges of
$28.4 million of AFUDC. approximately $1.1 million. No reason has been Purchase Power Agreement. In February, ofTered by the DOE as to why the alleged overcharges have been increased so substantially, 1982, the Company entered into an interchange Outside legal counsel has advised and management contract with the Southern Companics to purchase, believes that on the basis of applicable legislative, subject to approval by the FERC, at least 500 MW of electricity in 1984 and 1000 MW from regulatory, and judicial authorities, Varibus and the Company have meritorious defenses against 1985 through 1992. The contract requires the Company to build a 500 kilovolt line scheduled for issuance of a Final Remedial Order and that completion in 1984, that will tie the Company's precedents exist which support exemptbn from the Mandatory Petroleum Price Regulations of system with that of the Southern Companies. Varibus' fuel oil sales to the Company. The The fixed costs applicable to the purchases of Company and Varibus plan to contest the Order; power are based in part on existing unit costs and however, no assurances can be given at this time as future unit costs of generating units and other to the outcome of these proceedings.
factors and are not determmable at this time. The variable costs associated with such purchases will 12. Subsequent Esents be composed of fuel costs and operations and maintenance expenses. During February,1983, the PUCT adopted a new rule which changes purchased power and fuel Nuclear Fuel. In 1980, the Company sold a e st recovery procedures for electric companies portion of the uranium oxide imentory held by the peratinF n i Texas. Under the new procedures, Uranox Trust to SRGiT. In March,1982, the I ng r nge c st estimates will be reviewed by the Company and SRG&T signed an agreement, PUCT, and the fuel and purchased power cost which replaced an earlier agreement and called for factors will be fixed for a period not to exceed one the Company to purchase the uranium oxide ye r. Additionally, the new procedures provide for presently owned by SRG&T not earlier than May adjustments for over or undercollections and for < 28,1983 (at a price expected to approximate $12 emergency requests for changes m the factor m the million at that time). event of unforeseen circumstances. These new For additional information regarding the procedures may impact cost recoveries during the retirement of the Uranox Trust and the Company's thiid and fourth quarter of 1983; however, the ' nuclear fuel lease, see Note 5. Company believes that these procedures will not Proposed Remedial Order. During October, have a significant elTect upon its ability to recover 1982, Varibus received a Proposed Remedial Order such costs in a timely fashion. (Order) from the Economic Regulatory 38
5 N. w?. ? ?? ?? 2.3 ' ~ $25
- 13. Quarterly Financial Information (Unaudited)
(In thousands escept per share amount 4 l'.arnings Per Share of Common Stock
- Hased On Anuming Aterage Connersion Operating Operating Net Shares of Con,ertible 19M2 Reienue Income income Outstanding Debentures First Quarter $285,737 $51,728 $26,242 5.31 5.30 Second Quarter 309,758 61,939 34,464 .40 .40 Third Quarter. 375,816 85,277 56,885 .69 .69 Fourth Quarter. 335,948 71,465 48,388 .53 .53 19MI First Quarter 266,123 47,986 27,333 .40 .39 Second Quarter 320,607 53,023 32,994 .50 .49 Third Quarter 373,116 74,724 61,415 .97 .95 Fourth Quarter 261,868 54,560 29,189 .37 .37
- The individual quarters may not add to the yearly totals since the per share an.ounts are based upon the average number of shares outstanding during each quarter.
See " Management's I iscussion and Analysis of for depreciation on the constant dollar and current Results of Operations and Financial Condition" for cost amounts of utility and other plant was discussion concerning a non-recurring gain in the determined by applying the Company's third quarter of 1981, by a subsidiary as a result of depreciation rates to the indexed plant amounts. an exchange of lignite leases. See Note 2 for Fuel inventories, the cost of fuel used in information concerning a change during 1981 in generation, and gas purchased for resale have not the method of accounting for fuel costs. been restated from their historical cost in nominal d 11 rs. Regulation limits the recovery of fuel and
- 14. Su lemental Information purchased costs through the operation of on hanging Prices (Unaudited) adjustment clauses or adjustments in basic rate The following supplemen:ary information is schedules to actua' costs. For this reason fuel supplied in accordance with the requirements of inventories are etrectively monetary assets.
the SFAS No. 33 for the purpose of providing. As prescribed in SFAS No. 33, income taxes certam mformation about the elTects of chenging were n t adj.usted. prices. It should be viewed as an estimate of the approximate effect of inflation, rather than as a Other facters atrectmg the Statement of Income precise measure. Adjusted for Changing Prices are as follows: SFAS No. 33 attempts to measure the effects of 1. Increase in the current cost of net utility inflation in two ways: plant as a result of specific price changes experienced:
- 1. Constant dollar amounts represent historical I costs stated in terms of dollars of equal The increase in the current cost amount of net utility plant is shown before and after 2 purchasing power, as measured by the Consumers Price Index for all Urban climin ting the efTects of general inflation Consumers. as measured by the CPI-U.
- 2. Current cost amounts reflect the changes in 2. Reduction to net recoverable cost:
specific prices of plant from the date the Under the rate-making prescribed by the plant was acquired to the present, and ditTer regulatory commissions to which the l Company is subject, only the historical from constant dollar amwnts to the extent that specific prices have increased more or cost of plant is recoverable in revenue as 1:ss rapidly than prices in general. depreciation. Therefore, the excess of the The current cost of utility and other plant, which c st of plant, is not presently recoverable includes land, land rights, plant held for future use, in rates as depreciation, and is reflected as and construction work in progress, represents the a reduction to net recoverable cost. While estimated cost of replacing existing plant assets the rate-making process gives no and was determined by indexing surviving plant by recognition to the current cost of replacing the llandy-Whitman Index of Public Utility utility and other plant, the Company, Construction Costs. The current year's provision believes, based on past practices, it will be 39
4^ wy ey . -a ~.<. a. . ma n - a w:-.. ~ -
^
= a ~. .. ~ ,.n ~. .i u. w W-.- -
allowed to carn on the increased cost of its a loss of general purchasing power while net investment when replacement of holders of monetary liabilities experience a facilities actually occurs. gain. The gain from the decline in
- 3. Gain from decline in purchasing power of purchasing power of net amounts owed is net amounts owed: primarily attributable to the substantial To reflect properly the economics of rate amount of debt which has been used to regulation in the Statement of income finance utility and other plant. Since the Adjusted for Changing Prices, the depreciation on this plant is limited to the reduction of net utility and other plant recovery of historical costs, the Company should be ofTset by the gain from the does not have the opportunity to realize a decline in purchasing power of net holding gain on debt and is limited to amounts owed. During a period of recovery only of the embedded cost of inflation, holders of monetary assets suffer debt capital.
Statement of Income Adjusted for Changing Prices (Unaudited) Contentional Constant Dollar Current Cost llistorical Aterage Aterage l'or the year ended December 31,1982 Cost 1982 Dollars 1982 Dollars (In thousands) Operating revenue 51,307,259 51,307,259 51,307,259 l'uel 446,521 446,521 446,521 Purchased power. 182,106 182,106 182,106 Other operations and maintenance 216,981 216,981 216,981 Depreciation and amortization . 89,291 199,161 220,552 Taxes . 101,951 101,951 101,951 Other - net . (58,516) (58,516) (58,516) Interest charges 162,946 162,946 162,946 1,141,280 1,251,150 1,272,541 Net income (excluding reduction to net recoverable cost) . 5 165,979 5 56,109* 5 34,718 Increase in specific prices (current cost) of utility aml other plant held during the year" 5 5 551,924 Reduction to net reemerable cost (36,781) (335,961) tilfect of increase in general price level . (231,353) lixcess of increase in general price level over inc; ease ic specific prices after reduction to net recoverable cost (15,390) Gain from decline in purchasing power of net amounts owed 93,755 93,755 1 Net . 5 56,974 5 78.365
- Including the reduction to net recoverable cost, the gain on a constant dollar basis would have been 519,328 for 1982.
" At December 31,1982, current cost of utility and other plant, net of accumulated depreciation was SS 663,270 while historical cost or net cost recoverable through depreciation was 53,523,506.
40
_ _ _.- _ . . _ _ . _ . _ . _ _ . _.____.-_m ._m ( Five Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices (Unaudited) Years Ended December 31, 1982 1981 1980 1979 1978 tin thousands of aserace 1982 dollars Operating retenue . . ... ..... $ 1,307,259 $1,297,511 51,178,330 $1,150,198 51,062,975 llistorical cost information adjusted for general inf'a: ion: Net income (excluding reduction to net recoverable cost) .. ... ... 56,109 61,183 44,184 28,758 Net income per common share (after divi-dend requirements on preferred and preferer:ce stock) ... ... .26 .54 .33 .20 Net assets at year-end at net recoverable cost . . . ..... 1,341,783 1,092,897 1,006,801 1,006,662 Current Cost Information: Net income (excluding reduction to net recoverable cost) ... ..... 34,718 47,191 23,555 7,315 income (Loss) per common share (after dividend requirements on preferred and preference stock and excluding reduction to net recoverable cost) . . . ...... (.07) .28 (.12) (.34) Excess of increase in general price level over increase in specific prices after reduction to net recoverable cost ... (15,390) (149,907) (241,294) (227,679) Net assets at year-end at net recoverable cost . . . . . 1,341,783 1,092,897 1,006,801 1,006,662 General Information: Gain from decline in purchasing power of net amounts owed . . . ... 93,755 174,756 219,983 211,123 Cash dividends declared per common share $ 1.56 51.57 $ 1.63 $ 1.81 $ 1.84 N1arket price per common share at year-end 13.14 12.20 13.02 13.84 16.75 Average consumer price index . 289.3 272.4 246.8 217.4 195.4 Alf DITORS' REPORT To the Shareholders of Gulf States Utilities Company: We have examined the balance sheet and statement of capitalization of GULF STATES UTILITIES CON 1PANY as of December 31,1982 and 1981, and the related statements of income, sources of funds invested in utility and other plant and changes in capital stock and retained earnings for each of the three > cars in the period ended December 31,1982. Our examinations were made in accordance with generally accepted auditing standards and, accord-ingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly the financial position of GULF STATES UTILITIES CON 1PANY as of December 31,1982, and 1981, and the results of its operations and sources of its funds invested in utility and other plant for each of the three years in the period ended December 31, 1982, in conformity with general'y accepted accounting principles applied on a consistent basis except for the change, with which we concur, in the method of accounting for fuel costs (etTective January 1,1981) as described in Note 2 to the financial statements. COOPERS & LYHRAND llouston, Texas February 4,1983 41
r , e as V-of 4.. T$ , ff . %.
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Statistical Summary J For the years ended December 31 ELECTRIC 19H2 1981 1980 1979 1978 Number of customers at year end: Residential . 465,162 455,160 438,560 423,850 407,761 Commercial 55,265 52,955 52,731 50,807 48,892 Industrial . . . 4,165 3,852 3,414 3,386 3,392 Temporary Construction 3,132 2,871 3,354 3,279 4,304 Other, 1,985 _ 1,974 1,984 1,873 1,790 Total . 529,709 516,812 500,0 3 483,195 466,139 Sales - Kilowatt-hours (thousands): Residential . 5,991,578 5,717,715 5,682,016 5,147,436 5,198,421 Commercial 4,359,739 4,178,126 3,969,390 3,759,289 3,738,114 Industria1. . . . I3,728,469 15,066,330 14,870,419 14,961,211 14,447,417 Temporary Construction 48,170 50,306 37,691 44,059 42,358 Other. 2,261,350 2,797,761 3,098,910 2,638,490 2,452,228 Total Sales . 26,389,306 27,810,238 27,658.426 26,550,485 25,878,538 Revenue (thousands): Residential . $ 362,223 5 315,625 5 249,603 5 203,029 5 181,967 < Commercial 226,104 198,676 157,616 133,988 117,987 Industrial . . . . 495,461 494,388 413,265 364,797 291,259 Temporary Construction 2,786 2,723 1,728 1,673 1,367 Other. 102,370 95,110 82,659 65,928 53,319 Total Electric Revenue . 51,188,944 51,106,522 5 904,871 5 769,415 5 645,899 Average Annual KWil Use Per Customer: Residential . 13.015 12,786 13,173 12,374 13,009 Commercial 80,814 79.558 76,529 75,291 77.472 Industrial . . . . . . 3,451,098 4,095,224 4.340,461 4,402,946 4,221,922 Revenue Per KWil -(cents): Residential . 6.05 5.52 4.39 3.94 3.50 Commercial 5.19 4.76 3.97 3.56 3.16 Industrial .... ..... 3.61 3.28 2.78 2.44 2.02 Electric Energy Output - Thousands of....... KWil: Net Generated . . . . . . ... 25,523,512 28,115,700 27,775,374 25,381,996 28,299,011 Net Purchased and Interchanged... 5,160,731 4,411,795 4,507,245 5.871,615 1,985,508 30,684,243 32,527.495 32,282,619 31.253,611 30,284,519 System Peak 1.oad -Including Interruptible Load ( A1W) . ....... .... 5,164 5,542 5,604 5,229 5,138 Total Capability (including Contract Purchases)- At Time of System Peak I.oad (M W) . 7,208 6,745 6,602 6,169 5,620 ( Load Factor . 67,8 % 67.0 % 65.27r 68.2 % 67.3 % STEAM: Steam Revenue (thousands) . 5 75,213 5 77,624 5 69,346 5 68,278 5 50,513 I Steam Sales -- KWil (millions) . . 2,579 2,887 2,927 3,191 3,013 Steam Sales - millions of Pounds 9,447 12,209 14,906 14,796 15,787 4 GAS: Gas Revenue (thousands). 5 43,102 5 37,568 5 31,009 5 26,645 5 21,546 Number of Customers . . . .. 85,394 85,664 85,218 83,910 82,391 Output - MM cu. ft. of natural gas purchased . . .. 8,229 8,738 9,148 10,333 10,734 Saks - M M cu. ft. 8,535 8,599 9,097 9,892 10,207 Weather Data: Cwling degree days (Normal 2,726) . 2,883 2,775 2,910 2,502 3.017 Percentage change from normal . . . . 5.8 1.8 6.7 (8.2) 10.7 Ileating degree days (Normal 1.558) . 1,588 1,620 1,637 1,885 2,002 , Percentage change from normal 1.9 4.0 5.1 21.0 28.5 ! l 42
- : . - = - -
g- - x t _ _ _ . - .. _,. _ _ . _ _ _ _ _ - _. .
*
- John W. Ikuton lerene L. Rogers President-C. H. Enterprises, Inc. PresidentEmeritus The Baton Rouqc, lit. I1974)) Unis eraity ofli tas at Austin Au stin. Tt. Il97f>)
Edu in liiam
\' ice President-lucker Anthony *Nat S. Rogers
.\tanaecment Corp. Chairman v)ihe Hoard-First Cirv Hoston. .\ tass. (19591 Hancorporation of Tetas. Inc. and First City NationalBank ofHouston Dr. Frederie A. llolloway Houston. Tt. (197N)
Consultant Retired Euon \' ice President-Science *llismark A. Steinhagen and li chnology Partner-Steinhagen Oil Co. Haton Ronce, las. (1979) Heaumont. Tt. I197-1) William II. lxillanc, Jr. James E. Taussig 11 President-Haton Rouge Supply Co. , Inc. Real Estate Development Baron Rouge, In. I1971) Inte Charles, lat. I1975)
- Norman R. txe
- Etecutive Committee President and Chief Operating Ollicer ,,(paj,.rnan, Etc< utive Committee Beaumont. Tt. (1967) ( ; g.a, yfec,(g
- Paul W. MuiTill Chairman of the Hm:rd and Chief Ete claire Oficer Beaumont, Tt. I1973)
Als in T. Raeusch, Sr. Retired Assistant to the
\* ice President and tiencral
.tfanager- U.S. Chemical Division of PPG Industries, Inc.
loLe Charles, la. (1975) Monroe J. Rathtune. Jr.
.\ledicaldoctor andpartner-The SurgicalClinic Haton Rouge. la. t 1975) 43
ljed C. Repper (4 55
' \1umil(l)48 \ we I resident-Public Allairs Chairman of th< Hoard and Chu (Etccutis e 01licer lidward J. Serw an (4161 President Vice President-Pnninction Norman R. l.cc (34158 Aubres D. SprawIs(33154
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Prcsident and Chirl Operatine Ollicer Vice President-Consumer Senices Summa L Stelly (34157 lhecutise Vice Yresidents Vice President-hmisiana Operation 3 Joseph li. Ilondurant (25) 53 Etecutive Vice President-operations J. Gary Weigand (5) 47 Vice President-Nuclear Operations Joseph L Donnelly (4 > 53 faccutive Vice President-Finance Jasper V Worthy (27) 54 Vice President-(lencralServices tilward N1. leggins (24) 52 Etccutive Vice President-Adminntrative and Technical Disision Viec Yresidents SC"IC#* John W. Conley (25) 51 Division Vice rresident-Western Senior Vice Yresidents
'Ihomas 11. Ilurbank (4) 61 James li. N1oss (24) 47 Senior Via President-Etecutive Pn>jects Division Vice President-Haton Rouge William J. Cahill, Jr. (3) 59 Arden D. loughmiller (22145 Senior Vice President-River Hend Nuclear Group Division Vice President-Heaumont
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li. l. inn Draper t4141 J. Ted N1einscher (32) 50 Senior Vice President-Etternal Atfairs Division Vice President-hde Charles Ronald N1. .\leKenzie (15) 42 Vice Presidents Division Vice President-Port Arthur James R. Aldridye(3)52 Vice President-Human Resources Other Umcers William li. Ilarksdale (25) 51 Leshe D. Cobb (27) 48 Vice President-TechnicalScrvices Secretarv
- James C. Deddens to) 54 llobby J. Willis(21)47 Vice President -River Rcnd Nuclear ciroup controller James H. Dem Jr. (42162 Jack L Schenck (2)44 Vice President-Pon er Plant Engineering and Desixn licasurer Anti.ony V Gabrielle (3) 55 Roy E. Eyler (24) 58 Assistant Secretary Vice President - Computer Application s Charles D. Glass (33154 Jon Y. Tres elise (2i 37 Vice President-lhas Operations Assistant Controller Calsin J. lieben (20) 48 Cly de W. N1ellride (5) 31 Vice President-FinancialSenices Assistant freasurer Wilham J. JelTerson (3) 53
*Ellective Fchruan I,1Y83 Vice President-Rata and Reeularon Affairs u
mammm.>mymmy wcomm: a.- a a a. ~ .-a ~~ ~w~ .~:a -aw w x .. ~ - - - - . - - . - -~ ~- ~ Principal Ollices Form 10-K 350 Pme Street the I orm 10 K Annual Rep >rt to the Securities and Eu hange licaumont. lesas 77701 Comnusy. n and GSl"s 19X2 i uiancial and Statistical Report can be obt.uned w ithout tharge trom 14 she 1). Cobb. Secretary. P O I),iISloll% l ,, llos 2951. lleaumont. Tesas 777tL4. 2851.ibeny Asenut lleaumont. Texas 77701 Notice of Annual McCling 1540 Nmth Asenue 'lhe 1953 Annual N1ectmg of Shareholders will be held at 2 p m., Pon Anhur. lewas 77t40 ' thursday. Stay 5.1983 in the company \ headquarters. 350 Pine lhehaas 75 Nonh Street. lleaumont. Tesas. Ivrnul notices of the meeting, pros) state-Conroe. lesas 77301 inents and proues will be maiicd to the common shareholders on or a ut N1arth 3. M3. Mmboklers are insited to attend but it they 416 North floulesard cannot. thes are urged to fill out and retum their proxies. llaton Rouge. I ouisuna 70Xo2 114 Ilroad Street I ike Charles. l.ouisiana 70td ll Stockholder Information Stock Listing Guit' States l'tihues Company \ Common Stisk is traded under the sy mbol GSl' on the New York. N1 dwest and Pacific Stock 1.uhanges. Shtk Transler Agents leus Commerce Bank lleaumont. N A Ileaunhint. ICsas
\1 organ Gunanty trust Company New York. New York Iirst Nanonal Bank of Chicago Chicago. Ilhnois Registrars I trst Cits National llank of fleaumont itCaum410!. Iesas Niorgan Guaranty frust Company New York. New York l irst National llank of Chicago Ch:cago. Ilhnois Dnidend Reinsestment Plan Agent Golt States 1.'tih'ies Company l'O llosifUl lleaumont. lesas , e J u 1
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