ULNRC-03351, Union Electric 1995 Annual Rept
| ML20101G818 | |
| Person / Time | |
|---|---|
| Site: | Callaway  |
| Issue date: | 12/31/1995 |
| From: | Mueller C, Schnell D UNION ELECTRIC CO. |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| ULNRC-03351, ULNRC-3351, NUDOCS 9603280134 | |
| Download: ML20101G818 (46) | |
Text
- -. .. . . , . . - - . - . - . . . ~ . .. . _ . . ~ . -- -
" , 1901 Chouteau Avenue Post omce Box 149 1
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St Louis. Missouri 63166 314-554-2650 Uniou Norch 26, 1996 8 3In"g*$g pf,*g"*[nt l Etscraic uvac.c g U.S. Nuclear Regulatory Commission a
Attn: Document Control ~ Desk Mail Station P1-137 l Washington, D.C. 20555-0001 l
Gentlemen: ULNRC-03351 i
l l CALLAWAY PLANT DOCKET NUMBER 50-483 ANNUAL FINANCIAL REPORT Transmitted herewith are twenty-five (25) copies l l
of the Union Electric Company 1995 Annual Report. '
This information is submitted in accordance with j 10CFR50. 71 (b) .
Very truly yours, ;
i 8M Donald F. Schnell WEK/mlo Enlcosures I
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-1 9603280134 951231 PDR ADOCK 05000483 I PDR i
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l cc: T. A. Baxter, Esq.
l Shaw, Pittman, Potts & Trowbridge l 2300 N. Street, N.W. j Washington, D.C. 20037 i
M. H. Fletcher I Professional Nuclear Consulting, Inc.
19041 Raines Drive Derwood, MD 20855-2432 l L. Joe Callan Regional Administrator U.S. Nuclear Regulatory Commission Region IV 611 Ryan Plaza Drive Suite 400 Arlington, TX 76011-8064 j Senior Resident Inspector callaway Resident Office U.S. Nuclear Regulatory Commission 8201 NRC Road Steedman, MO 65077 Kristine M. Thomas (2)
Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission i 1 White Flint, North, Mail Stop 13E16 11555 Rockville Pike Rockville, MD 20852-2738 Manager, Electric Department Missouri Public Service Commission P.O. Box 360 Jefferson City, MO 65102 l
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TABLE OF CONTENTS Highlights 1 Letter to Our Owners 2 Focused on Growth 6 Responsibility for Financial Statements Report of Independent Accountants 17 Management's Discussion and Analysis 18 Statement of income 22 Statement of Cash Flows 23 Balance Sheet 24 Long-Term Debt 26 Preferred Stock 27 Wes to Financial Statements 29 Operating Statistics 37 Selected Financialinformation 38 Directors and Officers 40 investor Information 41 STATEMENT OF PURPOSE We are a business enterprise - dependent for success on the high quality and fair price of our senice; on the skill, courtesy, and loyalty of our employees; on the confidence of our investors; and on the ability of our management to forecast and provide for the energy requirements ofour area.
In the conduct of our business, we will render service of the highest quality to our customers - promptly, courteously and efficiently - at the lowest prices consistent with paying fair wages and affordir.g job satisfaction and security to our employees; providing modern facilities for our customers' expanding needs for energy service; and paying a fair return to our investors who have provided the funds to make such service possible.
As a private enterprise entrusted with an essential public senice, we recognize our chic responsibility in the communities we serve.
We shall strive to advance the growth and welfare of these communities and shall participate in civic activities which fulfill that goal...for we believe this is both good citizenship
, and good business.
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Year Ended December 31,1995 Current Year Change Earnings per,C,omm,o,n Share, , ,, , , , _ ,, ,, , _ , ,, , , _ , , , , ,,, , _ _ , , , _ _ , , ,, , ,, , _ , _ , , , ,52.95, _ _ , , , ,,, , , (2
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.Eamings on Common S.tock .
$300,8
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Iota! Re-es.Mayes_ .-- . . -- . _ _ _ -- _ _ . . _ . . . . _ _ $2.;_02mm _ ,, _ _ ,,,,,.. 2,2 _
Jot,a@ow@r, Sales , ,, , , _ , , , _ , , , , , , ,, , , , , , , , , , _ , _ _ _ , , , ,, _ , , , _ _3_3_,33 5,000,000_ __ _ ,, , , , , , , , , , ,43, L-ABouT U NIO N ELECTRIC WHO WE ARE WH AT'S AH E AD 1leadquartered in St. Louis, Union Electric Increased competition in the utility industry will STOCK.
(NYSE: UEP) supplies energy services to a bring challenges as well as opportunities. We're HOLDERS' RETURN diversified region in the heart of America - confident Union Electric will successfully meet 24,500 square miles that cover most of eastern these challenges and capitahze on the T0tal 9
Missouri and a small portion of Illinois. Our opportunities by keeping our costs and prices Common 5tock 6,190 employees provide dedicated service to low, expanding through merger and adding 1.1 million electric and 121,000 gas customers. more energy.related products and services to 16.6 % UE has reduced electric rates three times in the our growing business.
gg past six years, steadily improved customer satisfaction over our eight years of formal 12 3 %
measurement, and consistently paid cash dividends since 1506.
How WE Dio IN 1995 As our CEO discusses on the next four pages, 1995 wa.; a watershed year for UE. The Missouri Public Service Commission approved a new incentive rate agreement; our stockholders
~y-~gp~~gp' approved a merger with CIPSCO lacorporated:
500 our kilowatthour sales increased more than
.m tew 4 percent over 1994, and we raised our common inda stock dividend for the tenth time in 11 years.
UNION ELECNC 1995 Annual Report I
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t A-Charles W MueRet, President and Onief becutive OWKel To OUR OWNERS There's no doubt that the utility world is and expenses totaling 9 cents a share related to changing. Union Electric now operates under a our pending merger with CipSCO Incorporated.
new incentive electric rate agreement in Also significantly affecting ot' results, we Missouri, a pricing method that encourages refueled our Callaway nuclear plant, which efficiency, and a record number of states are increased expenses by 20 cents a share considering various proposals to allow electric compared to the previous year. Callaway supply competition. Our business customers schedules refuelings two out of three years.
make the same demands on us that they face Our 1995 earnings strength mainly resulted with their own customers, who want ever- from higher sales as UE's customers bought a better service at lower costs. record 33.3 billion kilowatthours of electricity, Given the results and events of 1995, I'm partly due *o a two-month stretch of well al m -
confident UE's competitive muscle is strong average temperatures last summer, but also .ae and getting stronger, based on our growth to a healthy local economy. That warm-weather possibilities, our proven ability to deliver stretch included a new peak electricity demand quality service at competitive prices and our for our system of 7,965 megawatts. (Peak demand financial vitality. is a term our industry uses to describe the maximum load on a system at a specific instant.)
1995 RESULTs Even better, our industrial sales improved more than 3 percent from the year before as all I'll start by simply saying that 1995 was one of three area automobile manuficturers put their our best years yet. UE pulled $2.95 a share to newly expanded plants back on line, oil the bottom line despite a credit to Missouri refineries raised their ekctricity use and electric customers equivalent to 18 cents a share, business at tiome aiea mining operations an electric rate reduction costing 8 cents a share improved. Our 20 largest industrial customers l
j 2 UNION EuCTRIC IWS Annual Heport
INCREASED PRODUCTIVITY Number of Customers Per Employee RISING SALES 198 191 Total Kilowatthour Sales (billions) pg 33.3 32.0 31.6 31.6 DIVIDEND GROWTH 30.9 1
Dividends Paid Per Common Share
$2.455
$2.335
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41 _92 '93 [ 45 $2.18 UEhas redxedemployee count nearly20percentsince 1987, f.nrough attntroot whileproviding
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'9l 52 55 54 N5 sernce to 9percentmore customers andprodvang We solda recordn3 billion iIpercent more kilowalthours-kilowatthoursin 1995 -
o 4percentincrease over 1994.
Ourresidendalcustomers h
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h .h usednearly 6percentmore electnaty, andour commercial
-51 % 43 44 15 andmdvstrialcustomers used Union Electrichaspaidcash divulends to common stock-holders everyyearsince 1906 andwe haveincreasedthe dividend 10 dmesin thepost iI years - on overage mcrease of more than 3 percent.
used almost 5 percent more electricity in 1995 system and handled a heat-filled summer with than they did the year before. minimal disruptions.
+ In the middle of the heat wave our customer 199 5 ACCOM PLISHM ENTS satisfaction index - a monthly measuranent we've taken since 1988 - hit its best mark yet.
UE's strength rests on the people who work here, and their 1995 accomplishments were GROWTH OPPORTUNITIES considerable.
- We signed a definitive merger agreement That brings me to the heart of my comments, with CIPSCO Incorporated, a financially-strong, UE's growth possibilities.
Iow-cost utility that borders our service area. We reached a milestone in August 1995,
- The Missouri Public Service Commission when we announced a definitive merger approved an innovative rate agreement, agreement with CIPSCO Incorporated. The
+ Our coal-fired labadie Plant broke a 20-year new holding company, Ameren Corporation, record by generating more than 13.6 million will be the parent of Union Electric in Missouri megawatthours of electricity, topping its 1975 and of Central Illinois Public Service, or CIPS, in record by 228,000 megawatthours. Illinois. Ilased on our numbers today, Ameren
+ Our Callaway nuclear plant earned the top will be the 15th largest electric utility in the ratings possible in every category in the latest country in terms of net generating capacity.
performance evaluation by the U.S. Nuclear The key to the merger is the opportunity it llegulatory Commission. Further, Callaway offers. Ameren will be able to operate more completed its refueling in a record 48 days. efliciently than the two separate companies, saving
+ UE's transmission and distribution system $590 million over 10 years. Our markets will be inaugurated an automated meter reading more diversified, our ability to buy and sell power UNION EdCTRIC 1995 Annual Report 3
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Union Sectnc's Aterger Steenng Committee inwn left Charles L Schukai Senior %ce President - Customer Senkes GaryL Rosnwater, Mce President Corporate Planning and DonaldE Brandt, Senior Mce President Finance and Corporate Sernces to other utilities will be expanded, and our systems includes incentive rates for our electricity and expertise will complement each other, business- a forward-thinking method that Ameren will be larger than UE, but we'll rewards stockholders and customers for our keep running the company accordinr, to the efficiency. Any amount we earn above 12.61 priorities you expect. For exam ale, we percent return on equity is split equally between anticipate the new company will adop UE's our customers and our stockholders, until we dividend payment level. And we will keep wr reach 14 percent return on equity. Earnings business focused on domestic energy services. above that level flow back to our customers.
Stockholders at both companies approved This return on equity (ROE) bandwidth the merger on December 20, and we're now p'ves us the opportunity to grow earnings and, awaiting approval from the Missouri Public at the same tirne, assures our customers of a Service Commission, the Illinois Commerce true economic partnership.
Commission, the Federal Energy Regulatory According to the same agreement, we reduced Commission and other regulatory agencies. Our our Missouri electric rates by 1.8 percent, or target is to complete the merger by early 1997. $30 million annually, and we returned $30 million to our customers in the form of a one-time credit, CoM PEilTIVE PRICE 5 based on our historic ability to control costs.
I can't say it enough: UE's prices are We also expect to see growth in our existing competitive, and they will stay competitive.
service territory, thanks to our competitive Our overall electric rates average 15 percent prices and our quality service. below national rates, and 5 percent below the One of our 1995 milestones involved our regional average. Just as important, our prices pricing, in July, the Missouri Public Service compete well against prices for alternative Commission approved a rate agreement that fuels and technologies.
4 UNON ELECTRIC 1993 Annuallleport
- C E.J PA N Y P R ~ F I L E S
- (AI December 31,1995)
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' Capitalization Ratios:
Common Stoc.k 54 % 54 %
QM.g ff W;pp yg. y, Preferred Stock 5% 7% - h. - W Sif
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. :. b "I'I?f!". .De,b,t, ,, _ ,, , , , _, ,,, ,,, _ _ ,, , ,,, _4_1,% , _ , _ , , _ , _ _ _ _ _ _ _ _ , , , _ , _}9 Electric Revenues: $2.0 billion $703 million if . . , . . . . . --
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Commercial 36% 26 % R x,. j
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. Eler'*ic
' Net Generating Capacity *. 8,307 MW 3,047 MW ! T ( j $. ."E.
EnergyMix 71% Coal;24% Nuclear;5% Hydro . 99% Cod
. ' f. ~, f Reserve Margin 14.2 % 22.1 %
_'I_nclu_d_e.s_o_wn.e. d p.or.ti.on.of E.l.ec.tric_E_n.e. _rgy I.n.c_. c_a_ pac _ity. . . _ . _ _ . _ . . . _ _ _ . . _ _ _ ... ,_... Q g
- _ _ _ _ _ _ _ . _ _ _ _ _. Uv. '.,' O Gas Revenues .
$88 million $130 million 5. G u; 16,441 *~ C 3' Dekatherm Sales (000) 37,156 G
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QU AllTY SERVICE 7.1 percent; our long-term debt is just 41 percent of our capitalization, down from Our large commercial and industrial customers, almost 47 percent five years ago; and last year the first sought-after prizes in any energy Duff & Phelps Credit Rating Co. raised our market competition, want more than credit rating to AA., comparable to the ranking competitive prices. They've told us they need we've been assigned by Standard & Poor's, reliable energy service and more energy-related We also raised the dividend on common products. Our Energy Saving Partnership stock in 1995 to an annual rate of $2.50 a share, programs, our technical assistance with the tenth increase in 11 years. In addition, our advanced electrotechnologies and our recently cash flow was 2.1 times earnings and 2.5 times implemented Key Account Management the dividend paid in 1995.
Program are the beginnings of a growing menu of services designed to build our current business. THE FUTURE FIN ANCI AL VITALITY We know the future will be a challenge, but a challenge that's ripe with opportunity. Please if you're a long-term stockholder, you've been keep reading to get more details about our reading for years about how we control costs, company and our business.
and I'm sure you'll keep reading about this subject as long as you get our annual reports.
No matter how much we grow, cost control will always be a critical part of our business. C.W. Mueller As a result, UE's financial health has never President and Chief Executive Officer been better. The embedded cost of debt is just February 9,1996 UNION ELECTRIC 1995 Annual Report 5
$ A L E 5 ' G lt O WTH (Ima359AIMP"""*"""" eg.3m3y t 4;,.%' .g. a MWh sales (000): Actual 1995 Projected 19% Projected 1997 1
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Residen 11,229 217 11, ym WW,) 3. ~ . . o ]gh
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Total.._............_.____.._____5 33 33 33,736 34,455 e , .; . O ~ g
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FOCUSED ON GROWTH Union Electric's customers reached a new peak low-income housing. The Fund has created demand for electricity of 7,965 megawatts on nearly 1,000 homes for low-income families in August 18,1995. The record reflects both our service territory, and in 1995, UE's Fund unusually warm weather, which triggers investment generated tax benefits of more maximum air conditioning use, and the region's than $.150,000 for the company.
underlying economic vitality. But our most important method of fostering Tangible proof includes 1995 plant economic growth consists of keeping our energy expansions by all three area automakers that rates low, totaled more than $2 billion. Another positive indicator is the area's unemployment rate, 5TRENGTHEN1NG OUR C 0 M P E T111V E which averaged 4.5 percent in 1995, well below POSITION the national average.
UE works to build on this existing strength In recent years, UE has operated as though through economic development that translates competition already existed. As a result, we do into new,long-term sales opportunities. not have to take catch-up actions, but can focus in 1995, UE continued to invest in economic on systematic improvements that further development projects. The payoff? Our strengthen our long-term ability to compete.
investment helped attract five companies that An important example is the electric rate invested millions of dollars in Missouri plants, agreement approved by the Missouri public creating about 1,500 jobs. Service Commissi +. in 1995. This innovative UE also supported the community- and agreement makes our pricing even more benefited stockholders - with investments in competitive and provides new incentives to the St. Louis Equity Fund which offers further increase our already high productivity.
corporations tax credits for investing in omrinued on nwe to 6 UMON EucmC 1995 Annual Report
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BOC Cases' decision to build a plant in Urs IHinois sernce territory was partfy based on our low <ostpower and our help acquiring land for the plant They niR supply oxygen to our largest customer, Shen Oil and win generate about $5 minion of additionciannualrevenue for Union Electric BOC's Dean Butler and Alske OToole show Urs District Manager Jim Bess (right) progress on plant construction, which is expected to be completed mid 1996.
UN!ON Et.ECTRIC 1995 Annual Report 11
a f g) i; Union inc's [conomic Devcfopment I me; Rider ([DR) attracts new businesses to our Q:./
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area and helps our existing customers t expand.theirlauhties Customers adding 2(X) kilowatts or more of load con quahly for ,
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St. Louis'Rourching economy indudes some of the nation's leadinydge healthcare prowlers At Bames Hospital one of UEs largest customers lkologK Surgeons RO&h V Gayma 1 (r@bt) Ond Uspeth M AkDwgcMuse wtualreality glasses to get a dear, h# color udeo image of a miaoscopicprocedure os they operate. Barnes Hospitalranks os one of the no00n's top 10 hospetok occardung to U.S. News & World Report's annualsurvey of U.S hospitals.
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8 UNON ELECTRIC 1995 Annual Report
l \ l(H Git'clIll the lH 'Gl( of Antern a, ijilu>il UE INTERCONNECTIONS O AP&L(Entergy) .
/ /t '( l/I( (//f t '( l/)' l/d//st u ls LV///l 18 Ulht >r O Associated Electric Cooperative O Centrallilinois Public Service O City of Columbia (Mo) e vn ytjy /Jrocujt ys ( jut ;)t 11()ituj iin ,icit v O Electric Energy,Inc.
O lES Utilities O lilinois Powe' willl ( II's( () n1ll pr m II a filitwal O Interstate Power O Kansas City Power & Light
@ Kentucky Utilities
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@ Mid American Energy Ulh1((VUH lHVh f Yld/)/Uh/ //U'((#N/)UH'd
@ Missouri Public Service (Utificorp)
@ Northern States Power Q Public Service of Oklahoma ( UIHf)dIIV bO h 'It 'll IU hH} Ulh l \t 'lll)Ull'f 1 (Central and South West)
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@ Southwestern Power Administration ' -
O St. Joseph Light & Power /// elet y/ /7n>re //ultkels
@ Tennessee Valley Authority Q Western Resources lll 'b IHf H ' (Joll't 7 j)lGl1(b har t '-H ( af10(Ily American Electric Power , -
ty t L ht & Power (Springfield) ( ,
UN /d U Uh/f)U/
Commonwealth Edison
- Illinois Municipal Electric Agency Indiana Municipal Power Agency (DDlbu5lh J// lU/bl/les (#~l(/ (JU/ 4f) /XV( t '//l Northem Indiana Public Service PSI Energy (CINergy) -
Southern Illinois Power Cooperative .
. Uly/l(yshtt) o/ lle(tru / /n t</y, /n( (jlt't >s Us Soyland Electric Cooperative
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Wabash Valley Power Association E Union Electric Service Area
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Overall(ultimate consumer) 6.14 6.48 7.24 7, ae uwm '
- 1) At December 31, I995 with revenues reduced to annualize eMect of 1.8 percent rate reduction TlMG;f T '
actuallyimplementedin August The revenues do NOTindude the effect of the company's &<,A%i one-time customer credit, also issuedin August M, l*; c
- 2) At December 31, I994: I7 neighboring investor owned utilities.
- 3) At June 30 1995 (Edison Electric Institute).
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s If F o C U S E D O N G R O W T H continualfrom puge 6 The new rate agreement called for a PROVEN ABlWTY TO DRIVE DOWN COSTS 1.8 percent, or $30 million, rate reduction and a one-time $30 million credit to Missouri electric UE can afford to reduce rates to strengthen our customers. This is UE's third rate decrease since long-term competitive position due to our 1990 and, as a result, our overall retail rates are proven ability to drive down costs.
15 percent below the national average. We have cut fuel costs - UE's single largest Our residential customers pay 17 percent less non-tax expense - by 23 percent since 1990, than the U.S. average, our commercial customers as we aggressively renegotiated coal and pay 22 percent less, and our industrial customers transportation contracts, trimmed expenses pay 11 percent less. for nuclear fuel and maximized the use of our The rate agreement reduced 1995 carmngs hydro plants.
approximately 26 cents a share - la cents We also take advantage of our experience, related to the one-time credit and the transmission facilities and strategic location to remainder due to the rate decrease which buy and sell electricity throughout the region.
became effective August 1. For example, we frequently purchase power The agreement also provides incentive for from companies that burn inexpensive, low-future productivity increases. It divides UE sulfur coal and sell power to those that do not -
earnings above a 12.61 percent return on equity in effect, marketing " coal by wire." Working with (ROE) equally between customers and utilities in more than 20 states UE has become stockholders. Earnings that exceed 14 percent many utilities' preferred interchange partner ROE will be returned to customers. and, in 1995, achieved $140 million in I This innovative incentive agreement benefits interchange sales.
customers and stockholders by rewarding both Our impending merger with CIPSCO for UE's increased efficiency. continunion inge t v 10 UNION Et.rcTRk 1995 AnnualReport
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INTERCHANGE BUSINESS gg
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__...ou. ,..... ...._..... .___ ..__1995 i Ic*
Interchange Received a' ,
Megawatthours 7,820 d Energy Charges $118,016 M Ca
- pagijy Charges , _ , , ,, , , , , , , , , , , , , , $3,2,q74 Total Charges ~ $150,990
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. In~terd'a~n ge deliver ~e'd$ ~ " ~ ~ ~ ~ ~ " ~ ~ " s Megawatthours 6,534 ;
kj Energy Proceeds $110,625 ,
_ ,Capagit( Prpieeds _ , , , , , , , , , , ,, , ,$2,9f M P ygc,ee_d,s, , ,, , ,, ,, _ _ , ,, ,, , ,, , , , _ p 3,9f 56
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A F0CusEo ON G R O W T H continuedfrom page 10 Incorporated will increase our number of direct Commission again gave Callaway its highest interchange partners 60 percent. possible ratings in all categories of the More savings came from sales of what Systematic Assessment of Licensee traditionally have been considered waste Performance report.
products. Selling fly ash (for ready-mix concrete), boiler slag (for roofing shingles) and PROVID1NG BETTER S E RVIC E - A KEY bottom ash (for cement) not only generated COMPETITIVE STRENGTH additional revenue, but more importantly benefited Ihe environment and avoided UE took important steps to improve service for disposal costs. all categories of customers in 1995 - and it With the same innovative management shows. Our monthly opinion survey of our practices, we marketed contract coal and residential customers indicates more than replaced it with less costly coal, in 1995, we 85 percent of them are satisfied with Union realized savings of more than $4 million. Electric - the highest rating ever.
UE also has significantly reduced another To strengthen our partnership with our major expense - labor. Since 1987, one in 30 largest industrial and commercial five UE positions has been eliminated customers, we developed a system that through attrition. assigns a Key Account Executive to each Continued superior performance at company. This gives these customers a Callaway nuclear plant also held down costs in single, knowledgeable point of contact with 1995. For example, the plant completed its dedicated back-up support from a team of l 1995 refueling outage in a plant record of 48 UE professionals.
days, versus the 55-day national average. And To better serve our residential customers, we in June, the U.S. Nuclear Regulatory continued on nage ls 18 UNION ELLCTRIC 1995 Annual Report
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Union Electric norks with other companies and organizations in our area to attract new businesses and newjobs to our region.
For example, we helped bnng a $20 million, 435,000 square foot Huffy Bicyles plant to formington Mo., creatung almost 700 jobs.
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Brod-Dugan a St Louis-basedretailpaint and wallpaper chain enbusiastically signed up nine of their area stores for our energy ef5ciency auditprogram.
Brod-Dugan's Vice-Presodent of facilstres Jack Bergen, pictured with UE's Rick Wytas (left) and Rich McCartney (right), said they were " extremely pleased with the program" and that it was "a great opportunity to identsfy energy sawyt "
UNION EucrRtc 1995 Annual Report 15
FUEL 1995 1994 1993 hh QkQN!$h yW ~
Yotal Fuel Expense (000) $336,963 $334,740 $366,866
~ ~ ~
~ " ' ~ ~ ~ ~ " ~ ~ ~ " " " ~ " ' ~ ~ 4d Ci>stMr~kWii 5e~n~e~ rite'd? ~ ~ ~ ~ " ~ yh lotal 1.016c 1.010c 1.243c j Fossil 1.233c 1.282c 1.613c s
Nudear .508C .523c .597c
~ ~~ ~ ~ ~ ' ~ " ~ ~ ~ ~ ~ ~ ~ ~ " ~ ~
i5 tis ~bfCb5f8u'r$1e[(Obb):~ ~ ~~" j Powder River Basin Coal- 8,595 6,260 4,686 !
lilinois Coal 3,734 4,515 4,622
, _Ot.her.
. . . . . . . . . . .................. 385..........6.69..........495 . .
3
.. Tot.a.l. .......... . . . . . . .. . . . . .. . . . 12,714. . . . . - . .1 1,444.
. . ~ . 9.,803 -
m
- ,3;nw" Average Overall Price per To.n................................$.22.59. - . . . . . . .$24.49. . . . . . . . . . . .$.31.66 .... ,
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e Focused 0N G R O W T H continuedfrom page 14 used communications technology to integrate Our focus is to continue doing what we have three customer service centers so they work as done so well for solong:
one to speed our response during storms and
+ Grow by expanding the business we know, hold down costs by halancing workloads across our territory. + lloid down customer prices.
We expanded our energy efficiency audit
- C,ontrol costs.
program in 1995 to include small commercial customers along with large commercial and + 1mprove service continually.
industrial accounts. During the year, we
- Reward stocklmlders fairly.
conducted nearly 400 audits to help customers maximize their energy efiiciency. We've proven it works.
Also last year, UE became one of the few U.S. utilities to install automated meter-reading technology. When completed in two years, our wireless data network will bring customers a range of new services, including early warning of service problems and eliminating estimated bills. The new meters i
will reduce our operating costs and will make possible new revenue-producing services.
In summary, UE's 1995 achievements reflect our history of solid, conservative, consistent performance and superior results for our owners.
I 16 UNION EactRIC 1995 AnnualReport
r 3
RESPONSIBILITY FOR FIN ANCI AL STATEMENTS l The management of Union Electric Company is Written policies and procedures have been developed responsible for the information and representations and are revised as necessary. The Company maintains contained in the financial statements and in other and supports an extensive program ofinternal audits sections of this Annual Report. The fina icial with appropriate management follow up.
statements have been prepared .in conformity with The Board of Directors, through its Auditing generally accepted accounting principles. Other Committee comprised of outside directors, is information included in this report is consistent, where responsible for ensuring that both management and applicable, with the financial statements. the independent accountants fulfill their respective The Company maintains a system of internal responsibilities relative to the financial statements.
accounting controls designed to provide reasonable Moreover, the independent accountants have full and assurance as to the integrity of the financial records free access to meet with the Auditing Committee, with and the protection of assets. Qualified personnel are or without management present, to discuss auditing or selected and an organization structure is maintained financial reporting matters.
that provides for appropriate functional re:ponsibility.
1 REPORT OF INDEPENDENT ACCOUNTANTS ,
Price Waterhouse LLP a l
One Boatmen's Plaza {
Telephone 314-425-0500 t St. Louis, MO 63101 February 1,1996 l
I To the Stockholders and Board of Directors I of Union Electric Company l l
In our opinion, the accompanying balance sheet and audits. We conducted our audits of these statements in !
the related statements of income, long-term debt, accordance with generally accepted auditing standards !
preferred stock, retained earnings, other paid-in capital, which require that we plan and perform the audit to !
and cash flows appearing on pages 22-36 of this report obtain reasonable assurance about whether the present fairly, in all material respects, the financial financial statements are free of material misstatement. !
position of Union Electric Company at December 31, An audit includes examining, on a test basis, evidence 1995 and 1994, and the results of its operations and its supporting the amounts and disclosures in the financial cash flows for each of the three years in the period statements, assessing the accounting principles used ended December 31,1995, in conformity with generally and significant estimates made by management, and accepted accounting principles. These financial evaluating the overall financial statement presentation. )
statements are the responsibility of the Company's We believe that our audits provide a reasonable basis for l management; our responsibility is to express an the opinion expressed above.
opinion on these financial statements based on our w N M VW UNION ELECTRIC 1995 AnnualReport 17
M AN AGEMENT'S DISCUSSION AND AN ALYSIS Union Electric and CIPSCO Incorporated entered into a economy. Weather-sensitive residential and commercial Merger Agreement dated August 11,1995, which was sales increased 6% and 3%, respectively, over 1994 while later approved by the shareholders of both companies in industrial sales rose 3%. These revenue increases were December 1995. The merged entity is expected to partially offset by the one-time $30 million credit and realize $590 million in savings over 10 years from the 1.8% rate decrease for Missouri electric customers.
combining certain operations of the two companies and See Note 3 - Regulatory Matters under Notes to is expected to adopt Union Electric's dividend payment Financial Statements for further information.
level. Ilowever, the merger is conditioned upon, among The increase in 1994 electric revenues reflects growth other things, receipt of certain regulatory and in sales to commercial and industrial customers of 4%
governmental approvals. The merger is expected to be and 2%, respectively, offset by reduced sales to residential consummated in early 1997. See Note 2 - Merger customers of 2%, primarily due to milder weather in the Agre%ent under Notes to Financial Statements for first and third quarters of 1994 compared to 1993.
furtherinformation- The increase in 1993 electric revenues primarily RESULTS OF OPER ATIONS weather in the first quarter 1993 followed by warmer Common stock earnings and earnings Earnings Spring and summer weather when compared to 1992.
per share for 1995,1994 and 1993 were Per Share These increased revenues were partially offset by the
$301 million ($2.95 per share), $3.ol "'
$2.9,5
$308 million ($3.01 per share) and $2R January 1,1993, which decreased rates for all Missouri l
$283 million (52.77 per share), electric customers and reduced annual revenues by respectively. Earnings and earnings approximately $42 million.
per share fluctuated due to many The variation in electric revenues attributable to conditions, the primary ones being: growth and other factors in 1993,1994 and 1995 largely I weather variations, electric rate reflects the differences in economic growth in the reductions, credits to electric Company's service territory for these periods. In 1993, customers, sales growth, fluctuating normalized kilowarthour sales decreased approximately l operating costs including Callaway 1% reflecting the loss of sales from disposition of our lowa nuclear refueling outages, merger gg and northem Illinois sersice territory, partially offset by an transaction costs, new accounting requirements, changes in interest gg improved economy in other parts of our service territory.
In 1995 and 1994, normalized kilowatthours increased 2%
expense and changes in income and and 3%, respectively, over the prior year, demonstrating a property taxes. growing local economy. Other less significant factors The impacts of the more significant items affecting contributing to variations in electric sales are revenues, costs and earnings during the past several conservation, installation of energy-efficient appliances, years are analyzed and discussed below, and changes to and from alternate fuels.
ELECrRic OPER ATING REVENUES OPE R ATING EXPE NSEs Electric Vanation from Pnor Year Fuel and Purchased Power Vanation from Prior Year (Muons of Dollars) 1995 1994 1993
~~~ ~ ~
1994 1993 I6te'variatio' ns ~. ~ ~ ~ ~ " ~ ~$(i3.'7) " ~ ~ ~~ " $~"-~ "$ (ii9) M *"SA D 9'52. __ _.. 1995 . , _ _ _ ,,,_,
Fuel:
Credit to customers (30.0) - - -
Variation in generation $ 1.2 $ 52.6 $(18.3)
Effect of abnormal weather 52.8 (33.9) 74.9 Price (.8) (76.9) (.4)
Growth and other 35.8 37.5 4.5 Generation efficiencies 1.9 (3.6) 6.7 assessment (.1) 1.6 .4 The increase in 1995 electric revenues is due to Net interchange sales increased sales of 4% over 1994, mainly due to q pachased pows unusually hot weather in the third quarter and to sales - **"'3 "- - - - - - - - - - - - - - - !!d- - - - - f 53,2} , , _ , , ,g,6, growth reflecting the Company's healthy service area $35 6 $(83.5) $ 6.0 18 UNION ELECTRIC 1995 AnnualReport
i l
l l
! i The increased 1995 Fuel and Purchased Power costs $24 million, mainly due to a $28 million increase in reflect increased net purchased power costs due to greater power plant maintenance, partially offset by reduced electric sales during the hot 1995 summer and the need distribution system maintenance. Callaway Plant's for replacement power during Callaway's spring refueling maintenance expenses increased $17 million primarily outage. The decreased 1994 Fuel and Purchased Power due to the Spring 1995 nuclear refueling outage.
- costs reflect kswer fuel prices resulting from increased use hiaintenance at other power plants increased of low-sulfur coal at our fossil fuel power plants and $11 million primarily due to scheduled maintenance greater generation at our nuclear plant due to the absence outages. In 1994, maintenance expenses increased of a refueling outage in 1994. liigher generation, resulting $8 million, mainly caused by additional maintenance in greater fuel costs, was more than offset by reduced net expenses at our fossil fuel power plants and greater purchased power costs. The increased 1993 Fuel and tree-trimming expense, partly offset by lower Callaway Purchased Power costs reflect a rise in purchased power Plant maintenance (no refueling outage in 1994) and and lower generating efficiencies, partly offset by more reduced labor costs. In 1993, maintenance expenses l hydro generation and reduced fossil-fueled generation. increased $3 million primarily due to flood-related j increased power purchases from other utilities were labor expenses.
l required in 1993 when flooding in the hildwest Depreciation increased $7 million in 1995 and j interrupted coal deliveries to several of the Company's $6 million in 1994 and 1993, respectively, due to power plants. increased depreciable property.
I Other operating expenses variations in 1993 through 1995 reflect recurring conditions such as growth, inflation, taxes and wage and benefit increases. In 1995, operations expenses, other than fuel and purchased Income taxes from operations increased $3 million in power costs, decreased $17 million, OMXPeas 1995 primarily due to a higher effective income tax mainly due to a $9 million reduction in rate, partially offset by lower pre tax income. The natural gas purchased for resale, a p. $27 million increase in 1994 income taxes resulted
$6 million decrease in employee benefits (u no,woag from higher pre-tax income and a higher effective expense, a $9 million decrease in injuries, g $6e hilssouriincome tax rate.1993 income taxes from l damagec and insurance premiums operations reflected a higher federal income tax rate partially offset by a $5 million increase in offset bylower pre tax income.
labor costs and increased material and In 1995, other taxes charged to operating expenses supplies costs. In 1994, operations increased $2 million due to increased gross receipts
[ expenses, other than fuel and purchased taxes from greater electric sales and increased real l power costs, decreased $10 million, estate taxes. In 1994, other taxes charged to operating l primarily due to a $7 million reduction in expenses rose $4 million due to increased real estate l natural gas purchased for resale, a taxes and greater corporate franchise taxes. In 1993,
$5 million decrease in labor costs, and a other taxes charged to operating expenses increased
$3 million decrease in employee benefit $6 million from higher gross receipts and real estate taxes.
expenses, partially offset by increased l provision for injuries and damages and OTHER INCOME AND DEDUCTIONS higher consulting and communications expenses.
In 1993, operations expenses, other than fuel and htiscellaneous other net income and deductions purchased power costs increased $64 million, primarily decreased $6 million for 1995, primarily due to due to a $32 million increase in employee postretirement $9 million of merger-related expenses. See Note 2 -
benefits expense pursuant to Statement of Financial hierger Agreement under Notes to Financial Statements.
. Accounting Standards (SFAS) No.106, " Employers' Accounting for Postretirement Benefits other than INTEREST Pensions," a $14 million increase in natural gas purchased l for resale, a $5 million increase in labor costs, and higher In 1995, interest expense declined $6 million as l pensions, professional and computer services, regulatory decreases in other interest expense were partly offset by I fees and provision for injuries and damages. higher interest rates on variable rate long-term debt. In
[- In 1995, maintenance expenses increased 1994, interest expense increased $12 million generally UNON ELECTRIC 1995 Annual Report 19 j
l 1 t j
M AN AGEMENT'S DISCUSSION AND AN ALYSIS
' due to a greater amount of total debt outstanding and The Company completed Callaway Plant
, overall higher interest rates on variable rate debt. In construction in late 1984. The need for additional base 1993, interest expenses decreased $6 million primarily . load electric generation capacity is not anticipated due to the refinancing of high cost debt with lower cost until after the year 2013. Under the Clean Air Act issues, lower interest rates on variable rate debt and a Amendments of 1990, the Company is required to reduction in total debt outstanding. reduce total annual sulfur dioxide emissions by approximately two-thirds by 2000. Significant B ALANCE SHEET reductions in nitrogen oxide are also required. By switching to low sulfur coal and using early banking of ,
The $37.5 million increase (16%) in accounts receivable emission credits, the Company anticipates that no 4 and unbilled revenues at December 31,1995 is due significant revenue increases will be required. The primarily to increased revenues of 8% for the months of related capital costs, currently estimated at about
' November and December 1995, compared to the corres- $300 million, are largely offset by lower fuel costs. At ponding period in 1994, coupled with increased budget December 31,1995, about 75% of the Clean Air Act- >
billing accounts receivable balances resulting from the related capital costs had been spent.
J- hot summer weather in 1995.
See Note 14 Callaway Nuclear Plant under Notes to Changes in the accounts payable, income taxes Financial Statements for a discussion of Callaway Plant
. accrued and other taxes accrued balances are related decommissioning costs.
. largely to the timing of various payments to taxing Cash flows used in fleancing activities were authorities and suppliers- $299 million for 1995 compared to $211 million and
$336 million during 1994 and 1993, respectively. The R ATE M ATTERS Company's principal financing activities during 1995 were the redemption of $38 million of First Mortgage See Note 3 Regulatory Matters under Notes to Financial Bonds and the payment of dividends.
Statements for further information. Ratings on the Company's First Mortgage Bonds are j as follows: l 1.lQUIDITY AND C APITAL RESOURCES l Cash provided by operating activities totaled Duff & Phej{, _ ,_,
,,,,_, AA;
$640 million for 1995, compared to $544 million and Moody's -~~ - Al i
^ ^" ~ ~ ~~~ ~ ~ ~ ~
$627 million during 1994 and 1993, respectively. Sta'n5r'd'& P5oYs' AA Cash flows used in investing activities totaled ..
$341 million, $333 million and $292 million for the The Company plans to continue utilizing short term l years ended December 31,1995,1994 and 1993, debt to support normal operations and other respectively.1995 expenditures for constructing new temporary requirements. _The Company is authorized or improving existing facilities, purchasing rail cars and by the Federal Energy Regulatory Commission to have expenditures for complying with the Clean Air Act were up to $600 million of short term unsecured debt
$311 million, in addition, the Company spent $42 instruments outstanding at any one time. Short term i
, million to acquire nuclear fuel. borrowings of the Company consist of bank loans
_. __. (maturities generally on an overnight basis) i Actual ~~ ~ Forecast (Wiionsof Dollars)__ .. .
.1
'.99 _5 ... 9_9_6 5 ._..lbb_7'_"_ __..i99_6_'_"_.".
iD5_5~ ~ ~ ~2ddg a n d c o m m e r c i a !
paper (maturities Power Plants $118- $127 $ 78 $ 75 $ 98 $ 77 generally within 10 to 45 Transmission & ' days). The Company has Distribution 150 138 147 160 168 150 committed bank lines of General Plant : 29 c 39 30 40 36 18 credit aggregating $184
-%( y -~"'
n
' ~ ~~~~
~ ~ ~ ~E8 -- ---- g milli n which make available interim Construction Requirements financing at various rates Generated intemally 122 % 5 83 % 118 % 99 % 92 % 114 %
of interest based on
- 20 UNION El.ECrRic 1995 Annual Report
- -~ - , - - - -- - - . - -- A
LlBOR, the bank certificate of deposit rate, or other Although no one can accurately predict the timing or options, and in support of which the Company pays to precise nature of this competition, the Company its lending banks annual fees up to 0.10E At operates its business assuming this competition will December 31,1995, $20 million of bank loans were occur. Union Electric's basic business strategy is 1) to outstanding. The lines of credit are renewable annually improve our competitive position by continually at various dates through the year. The Company also enhancing customer service: 2) to maintain has bank credit agreements due 1998 and 1999 which competitive electric rates and 3) to reduce costs to the permit the Company to borrow up to $300 million and lowest levels possible without compromising
$200 million, respectively, on a long-term basis. customer service, employee safety, environmental The Company has a lease agreement which provides stewardship, fair returns to stockholders and fair for the financing of nuclear fuel. At December 31,1995, rewards to employees.
the maximum amount which may be financed under the agreement is $120 million. Cash provided from ACCOUNTING MATTERS financing for 1995 included issuances for nuclear fuel of $49 million offset by $70 million of redemptions. At in March 1995, the Financial Accounting Standards December 31,1995, $97 million was financed under the Board (FASB) issued SFAS No.121, Accounting for the lease. See Note 6 - Nuclear Fuel Lease under Notes to Impairment of Long. Lived Assets and for Long-Lived Financial Statements for further information. Assets to be Disposed Of (FAS 121). This statement establishes standards for determining the impairment CoNTINGENC1Es of jong. lived assets and certain identifiable intangible ,
assets. In addition, FAS 121 requires that regulatory l See Note 13 - Contingencies under Notes t assets that are no longer probable of recovery through Financial Statements for material issues existing at future revenues be charged to earnings. FAS 121 is 1 December 31,1995, effective January 1,1996 and is not expected to have a DIVIDENDS results of operations upon adoption.
On October 13,1995, UE's Board of Directors increased in October 1995, the FASB issued SFAS No.123, the quarterly common stock dividend to 62.5 cents per " Accounting for Stock-Based Compensation" (FAS 123).
share from 61 cents, raising the indicated annualized FAS 123 permits companies to adopt a new method of common stock dividend to $2.50 per share. Common accounting for stock compensation awards based on stock dividends paid for the year ended December 31, their estimated fair value at the date the awards are 1995, resulted in a pay out rate of 83% of the granted, or for companies to continue their current Company's earnings to common stockholders. method of accounting for stock compensation awards.
Dividends paid to the Company's common The Company will utilize its current method of stockholders in relation to net cash provided by accounting for stock compensation awards.
operating activities for the same period were 39%.
The Board of Directors does not set specific targets EFFECTS oF INFLATION AND CHANGING PRICES or payout parameters for dividend payments. In its annual review of dividend payments, however, the The current replacement cost of the Company's utility Board considers various issues: the Company's historic plant substantially exceeds its recorded historical cost.
earnings and cash flow, including the Company's Under existing regulatory practice, only the historical projected earnings, cash flow and potential cash flow c st of plant is recoverable from customers. As a result, requirements; dividend increases at other utilities; cash flows designed to provide recovery of historical return on investments with similar risk characteristics Pl ant costs through depreciation may not be adequate and overall business considerations. to replace plant in future years. However, past practice indicates the Company will be allowed to earn on and OuR STR ATEGy to recover the increased cost of replacing facilities when this occurs. The impact on common The Company's management and Board of Directors stockholders is mitigated to the extent depreciable recognize the increasing probability of more intense property is financed with debt that is repaid with 7
competition in the utility industry in the future. dollars ofless purchasing power.
I UNION ELECrRIC 1995 AnnualReport 21
l STATEMENT OF INCOME (Thousands of Dollars Except Shares and Per Share Amounts)
Year Ended December 31, 1995 1994 1993
. Operating Revenues:
Gas 87,814 86,109 99,552 Steam 44 4
...-__. ............. . .__.... ....___..... . ._. ._.. 1 _____.. 474...__._..__.72.. .
Total operating revenues 2,102,707 ' 2,056,116 2,066,004 Operating Expenses:
~
Operations:
Fuel and purchased power '365,158 329,562 413,054 Other 419,121 ...435,666 445,535
. . . . _ . . . . . _ , . . . . . . . ~ . . . _ . . . . _ . - . . . . _ _ . _ _ . . . __._ __
Maintenance 221,609 197,760 190,097 Depreciation and nuclear decommissioning 233,237. 226,045 219,633 Income taxes 209,541 206,421 179,475 Othu taxes 212,145 210,476 206,913
- 3 Opera 6ng Incme ,
441,896 ,,,,,__,_,,,,,,,_,,jg7, 450,186 411 2 Other income and Deductions:
Allowance for equity funds used during construction 6,827 5,767 6,418 ,
%sceHaneous, net,,,,_,,___,,,,,,_,_,,,_,_,,,__,,_,,,,,,,{5,981)
, , , , , , ,, , , , _403_ _ , , , , , _ ,3 j, y l 9,
__ Total other income and dedu
_ _ . . . . . . . _ _ _ _ _ _ . _ _ . . .ctions, net 846 6,170 10,337
!"_'"* ..* Intmst Charges,,,,,,,,,,,,,,,_,,,,,_,,,,,,,,,,2,32, 44 _ , , , 356,356,,,,,,,,-,,,j 421 634 ,
l interest Charges.:. _ _ _ _ . _ _ . . . . . _ . . . . . . . . . . . . . . . . . . . . . _ _ . . _ _ _ _ _ _ _ _ . . _ . . . . .
Interest 134,741 141,112 129,600
._._.____..___...........__,............_....__.06).._...
Allowance for borrowed funds used during construction (6,1 (5,S
'3)....._ ..._.(5,126)
.Net
. _ _interest
_ _ . . .charges
. _ . _ . . . . _ . . . . _ . _ _ . . _ _ _ . . . . . _ _ . . . . . . 2 8,63 1 5 . _ . . . _13 5,5 5 9____ .-........__
124,474 Net income
____......___..__.........._...........__.._.314,107.. .__.. __..__ _.._____...._
320,757 297,160 Preferred Stock Dividends 13,250 13,252 14,087
..._...~ ...._...... .... __ .. ........._. .__ __..... . . .___ ...__._....._.
EARNINGS ON COMMON STOCK
.................................................$.300,857. . . . . . . . . .$. 307,505. . . . . . . 5. . .M 3,073 EARNINGS PER SHARE OF COMMON STOCK )
(based on average shares outstanding)
......................................................$.2.95. . . . . . . . . . 53.01. . . . . . . . . 52.77 ....
OfVIDENDS PER SHARE OF COMMON STOCK
.....................................................$.2.455. . . . . . . . . . 52.3 9 5. . . . . . . . . 52.33 5 .....
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 102,123,834 102,123,834 102,123,834 See Notes to Financial Statements on pages 29 thrnof %
i 22 UNION ELECTRIC 1995 Annual Report l
1
l ju I
i l STATEMENT OF C ASH Flows l
l l
l (Thousands of Dollars) ~~
l .Y ear Ended December 31,.............. _...._....__.................__....___.19 95._..___... 1 994 . . . . _ . ,
1993 1
l j Cashfimsfmn_ Ope [ating: ,,,,,,,,,__ ,,,,,,,,,,,,,,__,__,,,,,_,,,,,_,,,,__, ,_,, ,,,_, )
Net income : 5 314,107 5 320,757 5297,160 l Adjustments to reconcile net income to net cash l provided by operating activities:
Depreciation and amortization 223,705 216,731 210,341 J l Amortization of nuclear fuel 35,140 , 44,267 46,441 !
Allowance for funds used during construction -- (12,933) (11,280) (11,544) )
Postretirement benefit accrual 11,923 24,680 31,970 l Deferred income taxes, net . (5,528) (18,430) 51,154 l l
Deferred investment tax credits, net (6,181) (6,182) (7,626)
Changes in assets and liabilities:
Receivables, net M1.40%) -- 2?.020 (23,568)
Materials and suppies 11,914 - (It ,643) 46,741 Accounts and wages payable 108,997 (04,180) (8,258)
Taxes accrued (5,722) . 10,710 (5,762)
Interest and dividends accrued or declared (9,654) 14,657 2,351
. . _ @er, get_ _ _ _ _ _ _ , , , _ ,, , _ _ _ _ , , , , , ,, , , , , , , , , , , , , , , ,,, ,1,5,2{g , , , ,, , , _2,9,@gg , ,, , _ , , (2,}?8)
.'*_h., .h M dn5_ @ ,,,,,,,,,,,,,,,_,,_639,{2,,,,,,,,544,g,,,,,,627q22_,_ -, , , ,
l _ Cash fles f,mn,lp,qng:, , , , , , , , , , , , , , , , , , , , , , , , _ , , , , , , , , , , , , , ,, , , , , ,, ,, , , _ , , , , ,, , , , , , , , l Construction expenditures (311,253) (314,050) (266,433)
Allowance for funds used during construction 12,933 11,280 11,544 Nydeaf fuel expep,dityres,,,, _ , _ ,,, _ ,,,,,,,,,,,, ,,,,,,,,,,(4,2,443{ ,,_ _ , {30J}8)_, _ , {37,494)
Not cash used in investing activities
__ - ... _-_..... -_._____ ______________ ._____ (340,764)
..... .. ...(333,228) .... ...___.(292,38. .... 3)
Cashflesf,mn Fi_nancing: , , , , , , _ , , , , _ _ , , , _ , , , , , , , , , , , , , , , , , _ _ , , , , , , , , , _ , _ , , _ , , , , , _ , , , , , , , ,
Dividends on preferred and common stock (263,964) (257,838) (252,546)
Environmental bond funds 4,443' - 12,583 30,474 Redemptions -
Nuclear fuellease (70,420) (32,137) (52,907)
Short-term debt - (59,600) -
i.ong-term debt (38,000) (25,000) (605,500)
Preferred stock ~(26) (26) (73,751)
Issuances -
Nudear fuellease -49,134 51,386 51,593 Short-term debt 19,600 - 37,600 Long-term debt - 100,000 455,000
_ _ _ Preferred stock _ , _ _ _ _ _ , _ _ _ ,, _ , _ ,, _ _ _ , _ ,, _ ,- , _ _7,4,438
_ _N_et_cas,hy_ sed,ip_gnancipg_ah,, _ _ ,,,,, _ , _ ,, ,,,,,,,,, f232), _ ,,, f21,g,632{ , ,, {3_3_5Jp?) _ Net , change in _ cash apd,ca_s_h,eggalyyts _ , _ _ _ , , _ , , , , ,, , , ,,,,,, jg8})_ , ,, , , , , , _2} } _ _ _ , ,,, f?60) l Cash ,apd_cas,h equhral,epts a, t _begi,nn_i_ng p,yeaf _ , , , ,, , , ,, , , _ , ,, , _ ,1J!g, ,, , , , _ , ,1,2p? , , , , , , _2,257 l .C.A.S.H.A. N. .D.C. A. SH. ..E.Q.U. IV.A.L.E.N.T.S.A.T.
.EN.D.O. .F.Y.E.A.R. . . . . . . . . . . . . .$. . 1.,025. . . . . 5. .
. 1.,510. . . . 5. . 1.,297
' Cash and cash equivalents include cash on hand and temporary
. !n.*5t.mf.a.t5.P.u'ch.*d.%th, a rna,tur[t{ of,three months, or,less., , , , , ,, , , , ,, , , , , , , , , , , , , , , , , , , , , , ,, , , , , ,, , ,
Cash paid during the periods: letarest (net of amount capitalized) 5131,635 5 108,319 5 112,296 income taxes 5226,458 5 217,417 5 145,129 See Notes to Financial Statements on pages 29 through 36. UNON ELECTRIC 1995 AnnualReport 23 l
B ALANCE SHEET I Assets (Thousands of Dollars) December 31, 1995 1994 t l P*@ ,aq ,g,agat qnal Q , , , , , , , , , _ , , _ _ , , , , , , , , , , , , , , ,, , , , , ,, , ,, _ _ _ , , , , , , , , , , , , _ , _ Electric 5 8,473,501 58,200,094 Gas 174,231 160,729 Other
... ...._...._...... ...__..._._- _...._........ -.. _ . _.. 33. .... __.._.._35,033 35,0 8,682,765 8,395,856 i
- ...Less ac
... cumulated depreciation and amortization._...____,...__........_.........._____.....3,494,722.__. .......... 3,305,582 5,188,0/3 5,090,274 l Construction work in progress:
( Nuclear fuelin process 121,460 134,815 t Other
. - _ . . . . _ . . . . . . . . . _ _ . . . . . . _ . . . . . . . . _ . _ _ . _ . . _ _ . _ . . . . . . . . 1_2 5.,9 34 _ _ _ . . . . . _ . 1 1_9.,473_ ._
Total property and plant, not -5,435,437.. 5,344,562 I l ( [ Regulatory Asset - Deferred Income Taxes (Note 9) 732,580 ._ ...... 732,478....__
)
l '"N.W!EIS*N. f.A***I8I ... ,... ...... ..__. .. _.._______ l Unamortized debt expense _ .._..._ ...... .... 44,496 49,432 l Nuclear decommissioning trust fund 73,838 53,906 i ' Other 20,101 22,508 Total deferred charges and other assets 138,435 125,846 l t l l l Current Assets: 1 Accounts receivable - trade (less allowance for doubtful i l accounts of 56,925 and 56,277, at respective dates) 191,520 - 164,803 ! Unbilied rNenue 82,098 71,321 Other accou.?s and notes receivable 21,602 17,691 Materials and supplies, at average cost - Fossil fuel 46,381 61,533 Construction and maintenance 92,921' 89,683 Other._............_......._.__._-.___....._.12,470.. . ....._.. __. -_ _15,274 j TOTAL ASSETS 56,754,469 5 6,624,701
)
i See Notes to Financial Statements on pages 29 through 36. l i 24 UNION ELECTRIC 1995 Annuallleport
I l l B AL ANCE SHEET , l I i I i Capital and Liabilities (Thousands of Dollars) December 31, 1994 l i __________.-_. _________ __,____...___________.-.. ____...1_995_ ..__... ......__.__ Capitalization:
~ ~ ~~~~~ ~~ ~ ~~
l "Co'rnrrio~n's't'o cli,"$5 par vaiu~e~, ~a~uthoriz~e'd iS0,655,~00U~ ~ " ~ " ~ ~ ~ ~ ~ " ~ ~ ~ ~ " ~" ~ " ~ " " ~ " ~ ~ " l shares - outstanding 102,123,834 shares (excluding l 42,990 shares at par value in treasury) $ 510,619 = 5 510,619 Other paid-in capital, principally premium on common I stock (see accompanying statement) 717,669 - 717,669 I
. _Retai
,, , ged eap,iggs {see accompanying statement) 1,090,909, _ 3 040,766, Total common stockholders' equity , . 2,319,197 2,269,054 l
Preference stock, $1 par value, authorized 7,500,000 shares none outstanding I Preferred stock not subject to mandatory redemption ] (see accompanying statement) 218,497 218,497 i j Preferred stock subject to mandsory redemption j j (see accompanyinh statement) . 650 676 i l Long-term debt (see accompanying statement) 1,773,192 1,833,623 j
.__ Unamortized_ discount and premium on debt.-____..__________._______._-
_____.____ (9,579) '_ _. _ _ _ _ _ _ _ _(10,134) __ -
)
1,357, 1,349,239
.. ....____..Deferred Acc.umulated _______........_.__..._--__..___............
income Taxes ..689 .._,._____..___. ....
.Accumulated
. _ _ - _ _ _ . - Deferred
- . _ _ _ _ .Investment
. _ . - - _ - _ _Tax___ Credits
_ _ _ . . . _ . . _ _ _ _ _ . . . . . . . _ .1_66,5_2
- 4. ' _ _ . . . . . . . 172,70 5....._
.__-..___........__.........___.._........__....._-_.216,502......._._..............
Regulatory Liability (Note 9) 229,333 A""""_W_W5I'"_I.Np, ear Decommission {ng,, , , , _ _ , , , , , , _ , , , ,.,75,51,1 ,., , , , , , , , , , , ,5 5g,9, j Other Deferred Credits and Liabilities 150,600 131,543 l Construction Commitments and Contingencies (Notes 12,13 and 14) , I I Current Liabilities: i l Currerit maturity of long-term debt 69,462 : 68,318 l Accounts payable 169,012 61,575 Wages payable 36,605 35,045 Bank loans 19,600 - Accumulated deferred income taxes 27,429 28,574 ( Income taxes accrued 29,986 36,481 Other taxes accrued 17,727 16,954 i Interest accrued 46,244 55,909 Dividends declared 3,312 3,301 I Other 66,309 68,429 Total current liabilities 485,686 374,586 TOTAL CAPITAL AND LIABILITIES $ 6,754,469 56,624,701 l l l i UNION ELECTRIC 1995 Annual Report 25 I
LO N G-T E R M DEBT (Thousands of Dollars) _U'C'*D*! _3,1,,,,,,__,,,,,,,,,,,,,__,,,,,,,,,,,,,,,_,,,,,,,__,_,,,,[Q5,,,,,,,,,,,,,__{??4,
@_ Mage % _5eries ,not,e,(a) _ , , , , _ , , _ , , _ , _ , , , , , , , , , , , , , , _ _ _ , , , , , _ , , , _ _ , , ,, ,, _ _ , _ ,
51/2% Due 1996 5' - 5 30,000 5 5/s% Due 1996 . 5,000 51/2% Due 1997 40,000 40,000 5 Va % Due 1997 5,000 - 5,000 6 V4 % Due 1999 100,000: 100,000 8.33% Due 2002 75,000 75,000 7.65% Due 2003 100,000 - 100,000 6 7/a% Due 2004 188,000 ~ 188,000 7 Ve % Due 2004 85,000 85,000 6 V4 % Due 2008 148,000 148,000 7.40% Due 2020 - note (b) 60,000 60,000 8 V4% Due 2021 125,000 ' 125,000 8% Due 2022 85,000 85,000 8 V4 % Due 2022 - 104,000 104,000 7.15% Due 2023 75,000 75,000 7% Due 2024 100,000- 100,00) 5.45% Due 2028 - note (b) 44,000 44,000 Unsecured Loans - notes (c)(d)
~
NEriE[nvirhe%in{-]{))]}{][ ] ~ ~ _~ ] ~ ~ ][_ ~ ] ~ _] 80,000 , 80 000 Revenue bonds 1984 Series A due 2014 - note (e) 1 1984 Series B due 2014 - note (e) 80,000'. 80,000 1985 Series A due 2015 - note (f) 70,000 - 70,000 1985 Series B due 2015 - note (f) 56,500 - 56,500 1991 Series due 2020 - note (f) '42,585 - 42,585 1992 Series due 2022 - note (f) 47,500 47,500 _N,@,M _ Lease _ ,not,e_(p , _ , _ _ , _ _ , , , , _ , , , , , , _ , , , , ,, , , , _ , , , , , _62,607, , , , _ _ , , ,8_8M38 Long-Term Debt 51,773,192-- 51,833,623 (a) At December 31,1995, substantially all of the property and plant was mortgaged under, and subject to liens of, the respective indentures pursuant to which the bonds were issued. (b) Environmental improvement Series. (c) A bank credit agreement due 1999 permits the Company to borrow up to $200 million. Interest rates will vary depending on market conditions and the Companys selection of various options under the agreement. At December 31,1995, no such borrowings were otdstanding. (d) A bank credit agreement due 1998 permits the Company to borrow or to support commercial paper borrowings up to
$300 million. Interest rates will vary depending on market conditions. At December 31,1995, no such borrowings were outstanding.
(e) On June 1 of each year, the interest rate is established for the following year, or attematively at the option of the Company, may be fixed until maturity. A per annum rate of 4% is effective for the year ending May 31,19%.Thereafter, the interest rates will depend on market conditions and the selection of an annual versus remaining life rate by the Company. The average interest rate for the twelve months ended December 31,1995 was 3.90% (f) Interest rates, and the periods during which such rates apply, vary depending on the Company's selection of certain defined rate rnodes. The average interest rates for the twelve months ended December 31,1995, for 1985 Series A, 1985 Series B,1991 Series and 1992 Series bonds were 3.94%,3.87%,4.10% and 4.19%, respectively. (g) At December 31,1995 and 1994, $34 million and $30 million, respectively, were included under current maturity of long-term debt. See Notes to Financial Statements on pages 29 through 36. i i , I 26 UNION ELECTRIC 1995 Annual Report
PREFERRED STOCK (Thousands of Dollars) Deceynbe,y,3,1,_,,,,,___,_,,,__,,,_,,_,,,_____,,,,,,,,,,,,,,,_,,,,,,,,,1,99_5,,,,,,,_,,,,,,,,,19q4 r _Prdened Stak Not @ ,ty ,M@, $p{ , f,q.j , ,, _ , , _ , , , , , ,, , , _ , ,, , ,, , _ ,, ,, , _ ,, ,, ,, _ _ _ , , , Preferred stock outstanding without par value (entitled to cumulative dividends) - note (a) Redemption Price (per share) Stated value of $100 per share -
$7.64 Series - 330,000 shares $103.82 - note (b) $ . 33,000 $ 33,000 $7.44 Series - 330,001 shares 101.00 - 33,000' 33,000 $6.40 Series - 300,000 shares 101.50 30,000 30,000 $5.50 Series A- 14,000 shares 110.00 1,400 - 1,400 $5.50 Series B - 3,000 shares 103.50 300- 300 $4.75 Series - 20,000 shares 102.176 2,000 : 2,000 $4.56 Series - 200,000 shares 102.47 ' 20,000 20,000 $4.50 Series - 213,595 shares 110.00 - note (c) 21,359 21,359 $4.30 Series - 40,000 shares 105.00 4,000 4,000 $4.00 Series - 150,000 shares 105.625 15,000 15,000 $3.70 Series - 40,000 shares 104.75 4,000 ; 4,000 $3.50 Series - 130,000 shares 110.00 13,000 13,000 Stated value of $25.00 per share - !
_ _I_l'735 Spries ,},657,500 shares , , _ _ ,, , _ ,, , ,, ,25 _ ,, _ , ,,,,, , _ _ ;00 ,ng_e (Q , ,,, ,,,41 43,8, 3 , , , _ _ _ _ ,, , , _ , , , ,41,438 TOTAL PREFERRED STOCK NOT SUBJECT
.......................................................$.218,497-TO MANDATORY REDEMPTION
.. .......... ......$ 218,497 Preferred Stock Subject to Mandatory Redemption:
~ ~~ ~~~~~ ~ ~~ ~ ~ " ' " ~ ~ ~ ~ ~ ~ " " ~ ~
~ Pre
~ ~ ferr7d' stock'out'standin~ gilt'hout par vafu~e~ ~ ~ ~ ~ ~ ~ ~ ~
j (entitled to cumulative dividends) - note (a) i Stated value of $100 per share -
$6.30 Series - 6,500 and 6,760
. . . _ , Shares at rpspective dates, due 2020,1 ,, ,,, _ _ _ goo -. note (e), ,_ _ _ $,650___
$676 TOTAL PREFERRED STOCK SUBJECT j TO MANDATORY REDEMPTION $ 650 $676 (a) Authorized Union Electric Cornpany total preferred stock - 25,000,000 shares.
(b) Beginning February 15,2003, eventually declining to 1100 per share. (c) in the event of voluntary liquidation,5105.50. (d) On or after August 1,1998. (e) The Company is required to retire 260 shares at $100 per share on June 1 of each year. See Notes to Financial Statements on pages 29 through 36. UNION EttctRIC 1995 Annual Report 27
STATEMENT OF RETAINED EARNINGS (Thousands of Dollars) Year 1995 1994 1993 Bal,a_n,ce a,t, Begi p, n,ing of Pepod , , , , , ,, , , , , _ _ ,, , , , ,, , ,, , , _ , , , , ,$,1,,040,7,66, , ,$, , p77,,880, , _$ ,9,3_4,91_9, Add: ! _N t in_ _c.ome. . . _ ._ . _ _ . . _ _ . . . _ _ _ _ . . _ _ _ _ _ _ _ . . . _ _ _ _ _ . 314,107 _ . _320,757_ . . . . _297,1_60 _ .e_ . -_. _ _. ._ . 1,354,873 1,298,637 1,232,079 Preferred stock dividends
- 13,250 13,252 14,087 Common stock cash dividends - $2.455, $2.395 and $2.335 250,714 : 244,586 238,459 Per share, respectmh
_ Capital stock expense _ _ . _ _ .- . _ . . . _ _ _ _ . . . _ _ _ . _ _ _ _ _ _ _ _ _ . ___.. . 33 _ . . _ _ , . _ _ _1,653 (Under mortgage indentures as amended, free and unrestncted retained eamings at December 31,1995 amounted to $1,056,474.)
- Preferred stock dividends include dividends dedared, applicable to subsequent penods.
STATEMENT OF OTHER PAID IN CAPITAL (thousands of Dollars) Year
~ ~~
~~
1995- 1994 1993 BaIa'n~ce'at'B'eginning 'of er ii lo[" ~ ' " ~ ~ " ""$7ii,555" " $75i,559 ' " '$'il'85482
._ Capp,a,l stod, ,egnse , _ n , , , , , , _ ,, , , , , , ,, , , ,, _ _ _ , ,, , , , , _ , ,,, , , , , , ,-
,_ ,1_,,,,,,,,7,,_,,_,,@
BALANCE AT CLOSE OF PERIOD $717,669 ' $717,669 $717,669 S E L E C T E D Q U A R T E R LY I N F O R M AT I O N (Unaudited) (Thousands of Dollars Except Per Share Amounts) Operating Operating Net Eamings on Eamings Per Revenues income Income Common Stock Share of Stock QUARTER ENDED: Outstanding [lWia'r~cb'3'13955' ~ ~ " $45Y,ii5 ' " ~$' 53,'305- ~$ 55,~2'2I" ~ f 34,'91i ~ $",N March 31,1994 438,900 65,151 38,226 34,913 .34
~ June 30,1995 513,575 107,160 76,035 72,722. .71 June 30,1994 532,944 127,806 97,392 94,078 .92 15eptember 30,1995 713,678' l 213,523 172,607- 169,295_ 1.66 September 30,1994 677,240 205,473 166,475 163,163 1.60 December 31,1995 428,339 53,907' 27,241 23,929' '.24 December 31,1994 407,032 51,756 18,664 15,351 .15 Net income and Earnings on Common Stock for the second quarter of 1995 reflect the Callaway Plant refueling, the effect of which decreased eamings on common stock approximately $20 million, or 20e per share. Net income and Eamings on Common Stock for the third quarter of 1995 reflect a ore-time credit to Missouri electnc customers, the effect of which reduced earnings on common stock approximately 518 million, or 18e per share. In addition, a 1.8 percent rate decrease in 1995 for Missoun electnc customers reduced Net income and Eamings oa Common Stock for the third and fourth quarters by 54 million, or 4a per share in each of the quarters. Also, merger transaction costs of 59 million, which are classified in Otter income and Deductions, reduced Net income and Earnings on Common Stock approximately 9c per share in the third quarter of 1995. Other changes in quarterly eamings are due to the effect of weather on sales and other factors which are characteristic of public utility operations.
See Notes to Financial Statements on pages 29 through 36. 28 UNION ELECTRIC 1995 Annual Report
NOTES To FIN ANCI AL STATEMENTS l l Nort I -
SUMMARY
OF ACCOUNTING POLICIES of borrowed funds and the cost of equity funds (preferred and common stockholders
- equity)
The Company is regulated by the Missouri Public applicable to the Company's construction program are Service Commission (MoPSC), Illinois Commerce i capitalized as a cost of construction. This accounting l Commission (ICC), and the Federal Energy Regulatory practice offsets the effect on earnings of the cost of Commission (FERC). The accounting policies of the financing current construction, and treats such Company are in accordance with the ratemaking financing costs in the same manner as construction practices of the regulatory authorities having charges for tabor and materials. Jurisdiction and, as such, conform to generally Under accepted rate making practice, cash recovery accepted accounting principles as applied to regulated I of AFC, as well as other construction costs, occurs public utilities. Following is a description of the when completed projects are placed in service and Company's significant accounting policies: reflected in customer rates. Property and Plant AFC rates are determined by the Company l consistent with the methodology prescribed by the The cost of additions to and betterments of units of FERC. Average annual AFC rates were 9.3% in 1995, ( 1 property and plant is capitalized. Cost includes labor, 8.9% in 1994 and 7.8% in 1993. l material, applicable taxes, and overheads, plus an { allowance for funds used during construction. Unamortized Debt Expense Maintenance expenditures and the renewal ofitems not considered units of property are charged to income Discount, premium and expense associated with long-as incurred. When umts of depreciable property are retired, the original cost and removal cost, less salvage' term debt are amortized over the lives of the related are charged to accumulated depreciation. issues. Gains or losses related to refunded debt are l amortized over the lives of the related new debt issues l Depreciation or the remaining life of the old debt issues if no new l debt is issued. Depreciation is provided over the estimated lives of the various classes of depreciable property by applying Revenue l composite rates on a straight line basis. The provision ; for depreciation in 1995,1994 and 1993 was approximately l The Company accrues en its books estimated, but 3% of the average depreciable cost. unbilled, revenue. ' Nuclear Fuel Operating Revenues include excise taxes of
$99.2 million, $97.9 million and $97.8 million for the The cost of nuclear fuel is amortized to fuel expense on a years 1995,1994 and 1993, respectively.
unit-of-production basis. Spent fuel disposal cost is charged to expense based on kilowatthours sold. NOTE 2 - MERGER AcREEMENT income Taxes On August 11,1995, the Company entered into an Deferred tax assets and liabilities are recognized for the Agreement and Plan of Merger (the Merger tax consequences of transactions that have been Agreement) with CIPSCO Incorporated (CIPSCO) treated differently for financial reporting and tax return and Ameren Corporation (Ameren), a newly formed purposes, measured using statutory tax rates, entity,50% owned by the Company and 50% owned Investment tax credits utilized in prior years were by CIPSCO, pursuant to which, among other things, deferred and are being amortized over the usefullives of the Company and CIPSCO will be merged with the properties to which they relate. Ameren (the Merger). Subsequent to the Merger, the Company and Central Illinois Public Service Allowance for Funds used Company and CIPSCO Investment Company During Construction (wholly owned subsidiaries of CIPSCO), will continue as wholly owned operating subsidiaries of Allowance for funds used during construction (AFC) is Ameren. As a result of the Merger, each outstanding a utility industry accounting practice whereby the cost share of the Company's common stock will be UNION ERCTmc 1995 AnnualReport 29
. _ _ _ __ __ _ . _ _ . . __ . _. _ _m.___ _ _ . _ _ . _ _ ,
NOTES To FIN ANCI AL STATEMENTS i converted into the right to receive one share of Nors 3 - REGULATORY M ATTERS common stock of Ameren (Ameren Common Stock), each outstanding share of the Company's preferred The Company has filed an application for approval of stock will remain outstanding and unchanged and the Merger with the MoPSC, and CIPSCO and the , each outstanding share of CIPSCO's common stock Company have filed joint applications for approval of l the merger with the ICC and the FERC. In those
~
will be converted into the right to receive 1.03 shares of Ameren Common Stock (or cash in applications, the Company and CIPSCO are requesting . lieu of fractional shares). The Merger is expected to a sharing of merger savings, net of merger premium be tax-free for income tax purposes and will be and transaction costs, between ratepayers and accounted for under the " pooling of interests" shareholders for the first 10 years subsequent to the ; method of accounting. Merger. With their execution and delivery of the Merger On July 21,1995, the MoPSC approved an Agreement, the Company and CIPSCO entered into agreement involving the Company's Missouri > stock option agreements, pursuant to one of which the electric rates. The agreement decreased rates 1.8% ! Company granted CIPSCO the right, upon the terms for all classes of Missouri retail electric customers, ! and subject to the conditions set forth therein, to effective August 1,1995, reducing annual revenues purchase up to 6,983,233 shares of the Company's by about $30 million. In addition, a one-time !
' common stock at a price of $35.94 per share. Pursuant $30 million credit to current Missouri electric to the other agreements, CIPSCO granted the customers reduced 1995 earnings approximately ,
Company the right, upon the terms and subject to the 18 cents per share. Also included is a three-year plan !
. conditions set forth therein, to purchase up to which provides that earnings in any future years in 6,779,838 shares of CIPSCO common stock at a price excess of a 12.61% return on equity (determined on a of $37.02 per share. These options will expire upon regulatory basis) will be shared equally between consummation of the Merger, customers and stockholders and earnings above a '
After the Merger, Ameren will become a 14% return on equity will be credited to customers. registered public utility holding company under the Also, the agreement provides that no party shall file Public Utility Holding Company Act of 1935, as for a general increase or decrease in the Company's amended. in December 1995, the Merger was Missouri retail electric rates prior to July 1,1998, ' approved by the shareholders of Union Electric and except that the Company may file for an increase if CIPSCO. flowever, the Merger is still conditioned certain adverse events occur. At this time, the - upon, among other things, receipt of certain Company is unable to determine whether it will be 4 regulatory and governmentd epprovals (See Note 3 - required to make any future credits to its customers , Regulatory Matters), under the agreement. The following unaudited pro forma financial At December 31,1995, the Company had recorded : information reflects the effects of combining Union the following regulatory assets and regulatory liabYes: Electric and CIPSCO into Ameren under the pooling of interests method of accounting. R:7Ty Assets: (InThousands)' . . . 1995
~
. . . . - -(Unaudited)
.. . ... ------ .(in Thousands Exces Per Share Amounts)-----.-
In~corrEt'axd"~ ~ $ ~550
~'f52
~ ~
e T5tafr~hrIu~e " ~ 5,l23,556
$ ~ 5,i46,liU~~[$,i58',9dd
$ 30taiie'gu aEiry 5s~s~e $i65,iE3 Net income ; $ : 372,872 ' $ 391,459 5 368,571 Earnings per share . $2.72 $2.85 $2.69 RegiLy Liability income taxes 5216,502 The pro forma financial information consolidates the financial results of Electric Energy Inc. (EEI), The Company continually assesses the recoverability .
which effectively will be 60% owned by Ameren of its regulatory assets. Under current accounting l subsequent to the merger as a result of the at standards, regulatory assets are written-off to earnings ownership interests in eel by Union c when it is probable that such amounts will not be and CIPS. recovered through future revenues. 30 UNION ELECTRIC 1995 Annual Report
l l The Company is currently involved in proceedings commercial banks, the necessary funds to purchase the with the FERC related to various accounting matters. fuel and make interest payments when due. The Company believes that the final disposition of The Company is obligated to reimburse the lessor these proceedings will not have a material adverse for all expenditures for nuclear fuel, interest and l effect on its financial position, results e perations related costs. Obligations under this lease become due 1 orilquidity, as the nuclear fuelis consumed at the Company's Callaway nuclear plant. The Company reimbursed the ' l r NOTE 4 - DEBT RETIREMENT PROVISION 5 lessor $34.1 million during 1995, $34.5 million during 1994 and $55.0 million during 1993. During the five years from December 31,1995, the The Company has capitalized the cost, including amounts of debt maturities totaling Cl4 million are: certain interest costs, of the leased nuclear fuel and has
$69 million in 1996; $45 million in 1997: and recorded the related lease obligation. During the years '
$100 million in 1999. Amounts for years subsequent 1995,1994 and 1993, the total interest charges under the to 1996 do not include nuclear fuel lease payments lease were $5.8 million, $5.2 million and $3.1 million since the amounts of such payments are not (based on average interest rates of 6.1%,4.7% and 3.6%,
currently determinable, respectively) of which $2.5 million, $2.7 million and Debt retirement provisions in some mortgage bond $1.4 million, respectively, were capitalized. Indentures of the Company require, subject to etrtain alternatives, the annual redemption of 1% of the Nots 7 - PREFERRED STOCK principal amount (as defined) of each series of bonds. In substantially all instances, as permitted by the During the three years ended December 31,1995, indentures, the Company has pledged property preferred stock, without par value, was issued or additions in lieu of such redemptions. redeemed as follows: issued 1,657,500 shares, $1.735 Series and 330,000 shares, $7.64 Series in 1993;
~ N ots 5 - S HO RT-TE R M BO R R OWIN GS redeemed 350,000 shares, $8.00 Series and 425,000 Short-term borrowings of the Company consist of bank shares, $8.00 Series of 1971 in 1993. The Company loans (maturities generally on an overnight basis) and retired 260 shares, $6.30 Series in 1995,1994 and 1993.
commercial paper (maturities generally within 10-45 days). At December 31,1995, $19,600,000 of bank loans Note 8 - PREFERRED STOCK M AN D ATO RY were outstanding. The weighted average interest rate REDEMPTloN PROVl5 IONS on borrowings outstanding for the year ended December 31,1995 was 6.1%. During each of the years 1996 through 2000, the Company will be required to redeem $26,000 of the $6.30 Series of At December 31,1995, the Company had committed preferred stock outstanding at December 31,1995. bank lines of credit aggr gating $184 million (of which
$164 million y cre un used) which make available interim
- Nots 9 - INCOME TAXES financing at various rates ofinterest based on IJBOR, the bank certificate of deposit rate, or other options, and in Total income tax expense for 1995 resulted in an support of which the Company pays to its lending banks effective tax rate of 40% on earnings before income annual fees up to 0.10E These lines of credit are taxes (39% in 1994 and 38% in 1993). The principal renewable annually at various dates throughout the year. reasons such rates differ from the statutory Federal rate are as follows:
_ Nots 5 - NUCLE AR FuEt LEASE 1995 1994 1993 The Company has a lease agreement which provides for ------------------------------------------- - the fmancing of nuclear fuel. The maximum amount 5 tutoryFederalincome x which may be financed under the agreement is increases (Decreases) from:
$120 million. Pursuant to the terms of the lease, the Depreciation differences 2 1 2 Company has assigned to the lessor certain contracts for l Sute m 4 4 2 purchase of nuclear fuel. The lessor obtains, through the issuance of commercial paper or from direct loans under --- - 'Ne us, net, _ _ , _ _ _ _ _ _ , , _ _ _@ , , _ , J, _ , , , , ,@ _
a committed revolving credit agreement from Effective income tax rate 40% 39 % 38 % l UNION ELECTRIC 1995 Annual Report 31
NOTES To FIN ANCI AL STATEMENTS Income tax expense components for the years shown of the current statutory rate, reductions in the deferred are as follows (in thousands): tax liability were credited to the Regtdatory Liability. Temporary differences gave rise to deferred tax assets 199_5_,,_,jpp4,,,,,993 1 and deferred tax liabilities at year-end 1995 and 1994 as Taxes currently payable follows (in millions): (principally Federal): Induded in operating 1995 1994
$222,492 $232,811 $147,062 - ~
expenses gee ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~i '87 9~ ~ ~ ~ ~ l' ~8$~ Induded in other income - Regulatory asset, net 516 503 Miscellaneous, net (2,949)__ (4,373)__ (7,874)
..g Capitalized taxes and expenses 113 117
]8 Deferred taxes Deferred benefit costs (52)' (41)
(principally Federal): Disallowed plant costs __ ,_,__(11)_ , _ _ j( 0) Induded in operating Total accumulated deferred expenses - income tax liabilities $1,385 $1,378 Depreciation differences 4,767 (1,485) 49,566 (9,022) (9,928) (11,921) NOTE 10 - R ETIREM ENT B E NE FlT5 Postretirement benefits Other (2,515) (8,795) 2,394
- E "Y "" " " # " " ' " "
induded in other income - retirement plans covering substantially all of its Depreciation differences 752- 816 9,638 employees. Benefits are based on the employees' years Othe_,,,,,,_,,,,_,,,,,,,{90_, _ _ _ _ ppp _ ,,]f_77,_ of service and compensation. The Company's funding (5,628) (18,429) 51,154 policy s to contribute annually at least the minimum Deferred investment tax amount required by government funding standards, but credd amortization not more than can be deducted for Federal income induded in operatin8 taxes. Plan assets consist principally of common stocks
, _ _p,62
_--**P""_ses, _ _ _ _ _ _ _ _ , _ , _ , j6,181)_ _ _ , _( , , g,] 82) _ _ 9)_ and fixed income securities. Totalincome tax expense $207,734 $203,827 $182,716 Pension costs for the years 1995,1994 and 1993, were
$26 million, $31 million and $27 million, respectively, of The Company recognizes the income tax effects which 20% was charged to construction accounts in of temporary differences. Prior to 1993, in 1995 and approximately 18% in each of the years 1994 accordance with accepted ratemaking practice, and 1993.
deferred income taxes were not provided fot ,
, funded status follows (in millions):
certain temporary differences flowed through to customers and the equity component of AFC. In accordance with SFAS No.109, " Accounting for At Decenter 33,,_,,_______,,_1995,,,1994_ _ _ _ 199
, , ,{
Income Taxes," a Regulatory Asset, representing ._ Actuarial preser.t value f benefit obligation: the probable recovery from customers of future income taxes which is expected to occur when vested benefi* obligation ,J67 6 $552mJ_6;07, temporary differences reverse, has been recorded Accumulatet benefit obligation _ J756 5622 J686_ l along with a corresponding deferred tax liability. Projected berafit abligation Also, a Regulatory Liability recognizing the lower for service reldered to date $913 $779 $820 expected revenue resulting from reduced income 847 706 738 Less{ Plan assets at fair value taxes associated with amortizing accumulated Deficiency of plan assets versus deferred investment tax credits, has been recorded. Projected benefit obligation 66 73 82 The deferred tax asset corresponding to this Unrecognized net gain 22 18 4 Regulatory Liability has been combined with the Prior service cost not yet deferred tax liabilities, recognized in net periodic Pension cost (82) (89) (93) The Company adjusts its deferred tax liabilities for Unrec gnized net assets changes enacted in tax laws or rates. Recognizing that regulators will probably reduce future revenues for _3 a {ransition,,,,____,____,,_,,,,,_,,,,,,_,_J], 9 10 deferred tax liabilities initially recorded at rates in excess Accrued pension cost $ 15 5 12 5 4 32 UNION El.ECTRK' 1995 Annual Report
l l l l Pension costs include the following components The plans' status follows (in millions): 1 (in millions): At December 31,
~ ~~~ '~~~ ~ ~
1995 1994 1993 1995 1994 1993 ccur'n'uiaied 'po tretItemen't'be'nefE ~ ~ " ~ ~ ~ ' " ~ ~ ~ ~ ' biigation: seiviie Josi -Ye~neiiis~eime3 ~ ~ ~ "" - ~ ~ - ~ ~ ~ ~ ~ ~ ~ ~ _ during the period $ 19 $ 21 5 18 Active employees eligible for benefits 5 74 5 42 5 47 Interest cost on prc,jected Retired employees 211 188 169 benefrt obligation 66 60 59 Other active employees 32 60 109
~
Actual retum on plan assets (166) 8 (89) ~T ~ btaibe'r$efit f bblig'atlon~ ~ ~ ' ~ "3I7 "295 325' Net amortization _a_nd deferral-.__ _____.-_07 1 ___ _(58)._ 3 __9_ Less: Plan assets at fair market value 14 - obligation in excess of plan assets 303 290 325 Unrecognized - transition obligation (213) (225) (265) Assumptions for actuarial present value of projected _ _ _ _ gain /(loss)____(7),,___,(21)_ 4 benefit obligations are as follows: Postretirement benefit liability $ 83 $ 69 5 39 1995 1994 1993 Components of net periodic postretirement benefit cost are as follows (in millions): measurement date 7.25 % 8.5% 7.25 % i increasein. future compensation 4.25 % 5.5% 4.25 % -------------------------------------_~-~-- 1995 1994 1993 I Service cost - benefits eamed l Plan assets long-term rate of retum 8.5% 8.5% B5% during the period 5 10 $ 11 $9 ; Interest cost on proj. ected benefit obligstion 24 21 28 in addition to providing pension benefh toe Amortizatiort-transition obli ation 12 13 16 Company provides certain health care and : le _ _ ----- _ _ --~" _"!ec gnized ainMoss,,, , {2), , _ , , _ _ _i , , , , - _ Insurance benefits for retired employees. Net periodic cost $ 44 5 46 $ 53 Substantially all of the Company's employees may Assumptions for the obligation measurements are become eligible for those benefits if they reach as follows: retirement age while working for the Company. For 1995,1994 and 1993, the actual claims paid were 1995 1994 1993 $15.4 million, $15.6 million and $14.6 million, ~ - ~ ~
- ~~~ Discount rate ai'm'e'as'ure~rhent dite"~7I2'5W '8.55 3.255 mpectMy.
Plan assets long-term rate of retum B.5% - - The Company accrues the expected postretirement benefit costs during employees' years of service. e cal c s e rate - Mal R25% H.0% H.25% Postretirement benefit costs for the years 1995,1994 - ultimate 5.25 % 6.0 % 5.25% and 1993 were $44 million,546 million and $53
,y,7ny r 2000 2000 2000 million, respectively, of which 19% was charged to construction accounts in 1995 and approximately A 1% increase in the medical cost trend rate is 18% was charged to construction accounts in each of estimated to increase the net periodic cost and the the years 1994 and 1993. The Company's transition accumulated postretirement benefit obligation by obligation at December 31,1995 is being amortized approximately $3 million and $21 million, respectively.
over the next 17 years. In August 1994, the MoPSC authorized the Nots 11 - STOCK OPTION PLANS recovery of postretirement benefit costs in rates to the extent that such costs are funded. In 1995, the In April,1995, the Company's shareholders approved Company established two external trust funds for a Long-Term incentive Plan (the Plan) for eligible retiree healthcare and life insurance benefits. Assets employees, as determined by the Human Resources in these trusts amounted to $14.2 million at Committee of the Board. The Plan provides for the December 31,1995 and were invested primarily in grant of options, performance awards, restricted stock, short-term instruments, dividend equivalents and stock appreciation rights. UNION ELECTRIC 1995 AnnualReport 33
N OTES To FIN ANCI AL STATEM ENTS : Under the terms of the Plan, options may be granted e Nota 13 - CONTlNGENCIEs at a price not less than the fair market value of the shares at the date of grant. Granted options vest over a The Company's insurance coverage for its Callaway period of five years, beginning at the date of grant and Plant is as follows: provide for acceleration of exercisability of the options upon the occurrence of certain events, including we ad som Wmane i retirement. At December 31,1995, a total of 2,500,000 (Wons) n m j shares were reserved for future issuance under the for Single Plan; however, the Company expects to make open _ _ _ _ _ _ _ _ _ Incidents, market purchases ofits common stock to meet the Public Liability-requirements of the Plan. American Nudear Insurers - $ 200.0' $ - Pool Participation - 8,720.3
~79.3(a)
Presented below is a summary of activity for the Plan for the year ended December 31,1995:
"""~~"~~~~~~~i8$525.5h""~"~~$iE.5" "" ""
Nudear Worker Liability-
= American NuclearInsurers $ 200.0(c) $ 3.1, Options outstanding at beginning of year -
Property Damage: Opbons granted during the year 142,500 American Nudear Insurers $ 500.0 - ?$ t Options exercised during the year - Nudear Electricinsurance Ltd. l 2,250.0(d)
~~
. 19.0 I Opbons expired / cancelled during the year .. ..- " ~ " " ~ " " - " "$2,i5d.U"~~ " "$39.6"
~ " " ""
~idiodio~u~tst5nc5ng'$t7rIdcTthdy~eaI~))42,h O ReplacementPower:
. Oppons,exerdsa@ at end of the year 9,800 Nudear Electricinsurance Ltd. $ 419.1(e). $ 3.2 Option price range per share . , ,,,;,,,,,,,, _ ,,,,
$351/r$357/8 (a) Retrospective premium under the Price-Anderson liability provisions of the Atomic Energy Act of 1954, as amended, Nots 12 - COMMITMENTS (Price-Anderson). Subject to retrospective assessment with respect to loss from an incident at any U.S. reactor, The Company is engaged in a construction program payable at $10 million per year.
under which expenditures averaging approximately (b) Limit of liability for each incident under Price-Anderson.
$288 million, including AFC, are anticipated during each (c) Total industry potential liability from workers daiming of the next five years.
exposure to the hazard of nudear radiation. The policy in addition, the Company has commitments for the purchase of coal under long term contracts. Coal indudes an automatic reinstatement thereby providing total contract commitments for 1996 through 2000 are coverage of $400 million. estimated to be $871 million (excluding contract (d) lndudes premature decommissioning costs. ) escalation provisions). Total coal purchases for 1995, (e) Weekly indemnity of $3.1 million, for 52 weeks which 1994 and 1993 were $293 million, $268 million and commences after the first 21 weeks of an outage, plus
$367 million, respectively. The Company also has $2.5 million per week for 104 weeks thereafter.
existing contracts with pipeline and natural gas suppliers to provide natural gas for distribution and Price-Anderson limits the liability for claims from an electric generation. Total delivered natural gas costs for incident invohing any licensed U.S. nuclear facility. The 1995,1994 and 1993 were $60 million, $63 million and limit is based on the number of licensed reactors and is
$80 million, respectively. Gas related contracted cost adjusted at least every five years based on the Consumer commitments for 1996 through 2000 are estimated to Price Index. Utilities owning a nuclear reactor cover this be $98 million. The Company's nuclear fuel exposure through a combination of private insurance commitments for 1996 through 2000, including and mandatory participation in a financial protection uranium concentrates, conversion, enrichment and pool as established by Price-Anderson.
fabrication, are expected to total $134 million, which is iflosses from a nuclear incident at Callaway Plant expected to be financed under the nuclear fuellease. exceed the limits of, or are not subject to, insurance, or if j Nuclear fuel expenditures for 1995,1994 and 1993 were coverage is not available, the Company will self-insure i i
$42 million, $30 million and $37 million, respectively. the risk. Although the Company has no reason to 34 UNION ELECTRtc 1995 Annual Report
anticipate a serious nuclear Incident,if one did occur it Electric rates charged to customers provide for could have a material but undeterminable adverse effect recovery of Callaway Plant decommissioning costs over on the Company's financial position, results of the life of the plant, based on an assumed 40-year life, operations and liquidity, ending with expiration of the plant's operating license Under the Clean Air Act Amendments of 1990, the in 2024. The Cnlleway site is assumed to be Company ls required to reduce total annual sulfur dioxide decommissioned using the DECON (immediate emissions significantly by the year 2000. Significant dismantlement) method. Decommissioning costs, reductions in nitrogen oxide will also be required. By including decontamination, dismantling and site switching to low-sulfur coal and early banking of restoration, are estimated to be $433 million in current emission credits, the Company anticipates that it can year dollars and are expected to escalate approximately comply with the requirements of the law with no 4% per year through the end of decommissioning significant revenue increases because the related capital activity !n 2033. The Co m p any's previous costs, estimated at about $300 million, are largely offset by decommissioning cost estimate, which was completed lower fuel costs. At year-end 1995, about 75 percent of the in 1993, estimated decommissioning costs to be Clean Air Act related capital costs had been expended. $383 million in 1993 dollars. Decommissioning costs As of December 31,1995, the Company was are charged to depreciation expense over Callaway's designated a potentially responsible party (PRP) by service life and amounted to $6.7 million in each of the federal and state environmental protection agencies at years 1995,1994 and 1993. Every three years, the five hazardous waste sites. Other hazardous waste sites MoPSC requires the Company to file updated cost have been identified for which the Company may be studies for decommissioning Callaway, and electric responsible but has not been designated a PRP. The rates may be adjusted at such times to reflect changed Company continually reviews the remediation costs estimates. Costs collected from customers are that will be required for all of these sites. Ilowever, deposited in an external trust fund to provide for such costs are not expected to have a material adverse Callaway's decommissioning. Fund earnings are effect on the Company's financial position, results of expected to average 9.25% annually through the date of operations and liquidity. decommissioning. If the assumed return on trust The Company is involved in legal and administrative assets is not earned, the Company believes it is proceedings before various courts and agencies with probable that such earnings deficiency will be respect to matters arising in the ordinary course of recovered in rates. Trust fund earnings, net of business, some of which involve substantial amounts. expenses, appear on the balance sheet as increases in The Company believes that the final disposition of these Nuclear decommissioning trust fund and in the proceedings will not have a material adverse effect on its Accumulated Provision for Nuclear Decommissioning. financial position, results of operations or liquidity. The staff of the Securities and Exchange Commission has questioned certain of the current accounting NoT 14 - C ALL AW AY N UCt.E A R PLANT practices of the electric utility industry, including the Company, regarding the recognition, measurement and Under the Nuclear W.ste Policy Act of 1982, the U.S. classification of decommissioning costs for nuclear Department of Energy (DOE) is responsible for the generating stations in the financial statements of electric permanent storage and disposal of spent nuclear fuel. utilities, in response to these questions, the Financial DOE currently charges one mill per nuclear generated Accounting Standards Board (FASil) has agreed to review kilowatthour sold for future disposal of spent fuel. Electric the accounting for removal costs, including rates charged to customers provide for n=covery of such decommissioning. If current electric utility industry costs. DOE is not expected to have its permanent storage accounting practices for such decommissioning are facility for spent fuel available until at least 2015. The changed (1) the annual provisions for decommissioning Company has sufficient storage capacity at the Callaway could increase and (2) trust fund income from the Plant site until 2005 and has viable storage alternatives external decommissioning trusts could be reported as under consideration. Each alternative willlikely require investment incorne rather than as a reduction to Nuclear Regulatory Commission approval and may decommissioning expense. The Company does not require other regulatory approvals. The delayed expect that changes in the accounting for nuclear availability of DOE's disposal facility is not expected to decommissioning costs will have a material effect on its adversely affect the continued operation of Callaway Plant. results of operations. UNION ELECTRIC 1995 Annual Report 35
NOTES To FIN ANCI AL STATEMENTS NOTE 15 - FAIR VALUE OF FIN ANCIAL for sale and has recorded all such investments at INSTRUMENTS their fair market value at December 31,1995 and 1994. In 1995,1994 and 1993, the proceeds from the The following methods and assumptions were used to sale of investments were $9.4 million, $22.2 million estimate the fair value of cach class of financiat instruments and $68.9 million, respectively. Using the specific for which it is practicable to estimate that value. identification method to determine cost, the gross realized gains on those sales were 5.4 million, $.6 Cash and Temporary Investments / million and $1.7 million, respectively, for 1995,1994 Short-Term Borrowings and 1993. Net realized and unrealized gains and The carrying amounts approximate fair value because of losses are reflected in Accumulated Provision for the short-term maturity of these instruments. Nuclear Decommissioning on the Balance Sheet, which is consistent with the method used by the Nuclear Decommissioning Trust Fund Company to account for the decommissioning costs The fair value of the Company's Nuclear recovered in rates. The recorded fair values and cost decommissioning trust fund is estimated based on basis of the Company's debt and equity investments quoted market prices for securities. shown in the Nuclear decommissioning trust fund are as follows: Preferred Stock The fair value of the Company's preferred stock At December 31,1995: outstanding is estimated based on the quoted market prices for the same or similar issues. On Thousands)_ _ , _ _ _ _ , , Gross Unrealized,,_ _ _ Security type ~ Cost ~~~Gain ~ ~ ~ Eos~s) ( Fair Value Long-Term Debt
~ ~~~
~
pe' ids ~e~c~uiities" $22,l35"~$ E642 ""["-""$EdjEd The fair value of the Company's long-term debt is Equity securities 37,936 9,170 - 47,106 estimated based on the quoted market prices for the Cash equivalents 1,952 - - 1,952 same or similar issues or on the current rates offered to
--------- gg53g-- g, j;gj2~ ~ ~$ T "$fi,535 the Company for debt of comparable maturities.
At December 31,1994: The estimated fair value of the Company's (in rnousands) Preferred Stock and Long-Term Debt as of December - - - - - - - - - - - - - - - - - - ~ g gg - - - - - - - - - 31,is shown below: Seo Gain , ,, , (,gs) air yaye,
-___-__.-___--,,,,[
At December 31,1995: Debt{g.securities type ,,,,,, $19,479 Cost,_,,,,__$1,037 $-
$20,516 Equity secudties 31,085 -
(8) 31,077
-On_ Thou
_ . - _ sands)_ .____... .__.. ._ ___... __ _ . Cash e@ivalg 3313 ,_2,313, __-.--____ .._____ ___.__. fyg $52,877 _$1,037 _$ (8) $53,906 Long-term debt ____ .. _______..__.__ _________________....
$1,773,192 $1,876,424 The contractual maturitles of the Company's investments in debt securities are as follows:
At December 31,1994: 0"3_msands)____,,_,,,,,,,_,,,,,,,,,,,,,,,,,,,,,,, At December 31,1995:
. _ . _ ,. _ _ . _ _ _ _ _ . .Cagng Amount, _ ,,,,[a,k ya,@
_, , , gn Thousands),,,__,,,__,,,,,,,,_,,,,,,,,_,,,,,,,, Preferred stock $ 219,173 $ 161,950 Cost Fair Value
~ ~ ~ ~~ ~
Loniteir$~de[E ~ ~" " $l~Bi3[625 $1j28$3d5 l ~y' e ~ar~toTye~a~rs~ ~ ~ "i ~2$fd' 0 ~ "" i'3$U95 5 years to 10 years 1,249 1,427 l The Company's investments in debt and equity Due after 10 years 18,189 20,259 l securities are held in trust funds for the purpose of - - - - - - - - - - i2'2358- ~~~"~lidj50 l funding the nuclear decommissioning of the Callaway nuclear plant. See Note 14 - Callaway This report and thefinancialstatements contained herein are l Nuclear Plant. The ComIaanY has classified all '"#""'""#1 and are not intended "h' '"/"""""" to induce,I'h' orforuse
'9 'd"8 l'h' C with m connection '",P""7any I investments in debt and equity securities as available sale or purchase afany securities of the company 36 UNION ELECTRIC 1995 AnnualReport l l
i)PER ATlNG STATlSTICS Year Ended December 31,
. . . ...__.........._..994 1995 1 1993
..___...... .... ________ 1992
___._. 991... 1 Commercial 725,438 705,505 684 446 676,761 685,799 Industrial 379,363 368,450 373,353 410,370 395,116 ' Other electric utilities 64,847- 61,985 59,160 57,226 65,317 Miscellaneous 31,761' 33,476 31,308 30,444 28,920.
~
..,Creg 3o cystome,rs, , ,, , _ , , , (2, , , , , _ , , , p,,y,5),,,,,,,,,,7,,,,,,,,,,7,,,,,,,_,,,7,,_,,,,,,,7 I'I*lpectq, Operating Rmnues,,,,$2,014,452,,,,,,,,$,1,yppfy,,,$,1gg5,p80,_ _$1g29
. , _ , ,, , ,, , , .j 468,,f,2,006 j258 ,_
...Kilowatthout Sales (000,000):
Commercial 11,757 ' 11,393 10,989 10,553 10,678 Industrial 8,486 8,203 8,003 9,030 8,524 Other electric utilities 1,726 . 1,623 1,580 1,488 1,623 Miscell 137- 139
._. _..aneous....._......................._..._._..._37 1
.....__..... .......144 ...._...__...
139 _.._.___...._-_...-__.......____..._..1,975 Total Kilowatthout Sales 33,335 ~ 3 . . . . . _ _ _ . 31,578 30,905 31,610 Electric Customers (End of year): Commercial 130,557 128,505 126,542 125,196 122,152 Industrial 6,276 6,228 C,605 6,530 6,778 Other electric utilities 17 17 17 19 20
.._____........__....___.............____.1,628 Miscellaneous 1,628 1,630
...............__....._.... ..... 1,5. 1,599 99 Total ' ._1,121,987_ . . . . . . . . 1,.111,184 1,105,497 1,093,178
__....._Electric __....._. Customers.......... .1,130,269 . .. . . .......... ._..__...... _. _N.D. Data (Agap)[ , , , , , , , , , , , , , , , , , , , , , , , , , , ,, , _ , , , _ , , , , _ ,, , , , _ , , , , , , _ , , , , Kilowatthours used 11,352 10,833 11,151 9,864 11,106 Annual electric bill $852.27 $816.25 $839.11 $768.20 $867.00 _.,,Reveme per qowatthogr, , _ , , , , , , , , , , , Jp,1f, , , , , , , J.54f_ , , , , , , ?.52 g , , , , , , ,7]9c , , ,, , , ,731 c Cross instantaneous Peak Demand (Kilowatts) 7,965,000 7,430,000 7,540,000 7,135,000 7,365,000 Capability at Time of Peak,
. _including
- . . _ . Not
. . . Purchases
........_ . . _ _ _ _ _ _8,7 (Kilowatts) _14,000 8,469,000 8,597,000 8,407,000 8,285,000 Generating Capability at
. ?*? Y.D*.Yb_*."*_"'_b. .. . . . . . . _ O'184,000_, _ _8,O
_ f],_000_ _ _ 7_ Q93,000 _ _ _78 _3_68,000-_____ 7,868j o00 Coal Bumed _ _ . . . . . . . _ _ _ _ _12,7 _ . . . _...
. _14,000 . 1 1,444,000.... 9,803,000......___10,314,000 10,732,000
. . . . _ _ .. _ . _G.ons)
Price per Ton of Coal $22.59 $24.49 $31.66 $31.96 $32.26 UNION El.ECTRIC 1995 Annual Report 37
-l i
l l SELECTED FlN ANCI AL lNFORM ATION l l l (Thousands of Dollars Except Shares and Per Share Arnounts and Ratios) l l 1995 1994 1993 1992 P
!?' W . D b .".5N D D _32'b;. ...... _..; ..___..... . ._ . ._ ._...--. .___ ...__. __
Operating revenues - $2,102,707 ; $2,056,116 $2,066,004 $2,015,121 1,660,811' 1,605,930 1,603,104
]
Operating expenses 1,654,707 i
' Operating income 441,896" 450,186 411,297 412,017
{' Callaway rate phase-in plans .-- - - 60 Deferred costs disallowed . Callaway Unit No. I costs disallowed, net - - - -
]
Loss on cancellation of Callaway Unit No. 2, net -- - - - Allowance for all funds used during construction '12,933 11,280 11,544 8,022 Gain on sales of electric property, net s - - - 18,099 Miscellaneous, net (5,981) ' 403 3,919 (131) Interest . (134,741) (141,112) (129,600) (135,319) ] Net income 314,107 ' 320,757 297,160 302,748 j Preferred stock dividends 13,250 13,252 14,087 14,058 Earnings on commun stock 300,857 - 307,505 ~ 283,073 288,690
. . Average common sh. ares outstanding. _ _ . ..... . _..._. . . _ . - _ . . . . _ . . ,. . _ _ _ _ _ _ _ _.L102,123,834 102,123,834 102,123,834 _ . . 102,123,834 I Assets,
.. Obilgelions_and_
. .__ ___ __ .Equity Capital (Year E.nd):
Long-term debt obligations 1,763,613- 1,823,489 1,766,655 1,659,553 Preferred stock subject to mandatory redemption 650> 676 702 728 Preferred stock not subject to mandatory redemption 218,497 218,497 218,497 217,784 Common equity,_, , ,___,,___,,,,,,,,,,___,,,,,2,3 ,gy,,,,,,,,,___,,,2,269,054_,,, 97 _2,206,168 ,,, 2,164,020 rinancialIndices (Year Ended):
~~ ^ "E'afn~irisler share oTc~oiririlon stock (based on average shares outstanding) $2.95 $3.01 $2.77 $2.83 Cash dividends per share of common stock $2.455 $2.395 $2.335 $2.26 Return on average common stock equity ~ 13.23% . 13.84 % 13.01 % 13.70 %
Ratio of earnings to fixed charges (a) 4.78- 4.68 4.66 4.66 i
) ._._..._..._....-._.._____......$.22.71..
Book value per common share 522.22
.........._-.__._____..._____$_21.60- - . .. . - - _ . . . . . _ _$_21.19. . . _ ,
W"" $_ _'_ .._pj,,_,,__,,_,,,,,,,,,_,,,,,,,,___n,,,,,,,, n
. Common equity ,,_,,53.5 %
53.9 % 52.6 % 52.6 % Preferred stock not subject to mandatory redemption . 5.1 ' 5.1 5.2 5.4 Preferred stock subject to mandatory redemption '-- - - - Long t 41.1 _., erm de.bt_____._-..______.______......_41_.0....._.._._.42.3___.____..___42.2__. 100.0 % . 100.0 % 100.0 % ._ . ___ . ____100.0 % (a) Eamings used in computing the ratio of eamings to fixed charges consist of net income plus fixed charges (interest on debt, amortization of debt discount, premium and expense and a portion of rentals representatnie of the interest factor) and income taxes. I 38 UNION ELECMC 1995 Annual Report ; J
l I i 1991 1990 1989 1988 1987 1986 1985 52,096,940 $2,023,017 $2,010,306 $2,029,107 $1,946,411 $1,807,182 $1,591,763 1,614,127 1,565,477 1,543,838 1,544,953 1,457,957 1,287,572 1,173,187 482,813 457,540 466,468 484,154 488,454 519,610 418,576 , 107 237 227 2,408 92,791 59,861 74,631 l - - - - (23,169) - - (234,780) (30,196) - - - - 8,519 14,145 17,908 14,885 20,477 15,812 106,754 (2,718) 9,881 7,769 (10,648) (15,714) 3,947 (1,709) (167,209) (187,584) (176,571) (199,241) (228,961) (247,409) (254,320) 321,512 294,219 285,605 291,558 333,878 351,821 109,152 14,059 14,693 19,134 30,425 36,522 49,245 49,836 307,453 279,526 266,471 261,133 297,356 302,5'76 59,316 102,123,834 102,123,834 102,123,834 102,123,834 102,123,834 102,123,834 100 403
._____...._____._....._______.....___________.________________._____.___________._.,.___,016___
~ ~ ~~ ~ ~ ~
~ 55,Y55,~43'9 "$5,~7'O'2[541' " ~ ~ ~ $5,565,~32'2' ~ ~ ~ ~ "$5,~82'7,2'4'6~~~~ $5,55i,5ii ' ~ ~ ~ ~ $5',555,~2'1'1" ~ ~ ~ ~ "$5$7'38l625 1,730,277 1,948,024 2,106,776 2,188,614 2,357,615 2,436,092 2,454,687 754 780 806 60,832 64,608 165,384 173,160 217,784 218,004 227,582 279,784 354,784 354,784 354,784 2,106,155 2,021,299 1,954,481 1,895,360 1,837,156 1,630,466
____.._.___._______..______..._...__.____________.____,.________..._,743_,189 1
$3.01 $2.74 $2.61 $2.56 $2.91 $2.96 $0.59
$2.18 $2.10 $2.02 $1.94 $1.92 $1.86 $1.78 14.99 % 14.16 % 14.03 % 14.08 % 16.79 % 18.16% 3.81 %
4.21 3.57 3.63 3.35 3.30 2.79 1.14
$20.62 $19.79 $19.14 $18.56 517.99
__.______..__ __________________. ____ __ .__ ._... ____ .-________ ____$_17.07_ _ _ _ _ _ _ _ . _ _ _ $_15.97___. 5.4 5.2 5.3 6.3 7.7 7.6 7.7 1.4 1.4 3.5 3.8 42.7 46.5 49.1 49.5 51.1 51.8 5
.. .. ____ ____ _______ _ __..____ _ __________ _ __ ____. ____...____ 3.2 UNION EdCTRIC 1995 Annual Report 39
DIRECTORS AND OrrlCERS I l BOARD OF DIRECTORS OFFICERS f WILuAM E. CORNEuus
- CHARLES W. MUELLER Retired Chairman and Chief Executive Officer President and Chief Executive Officer THOMAS A. Hays
- DONALD E. BRANDT Deputy Chairman - The May Department Stores Company, Senior Vice President - Finance and Corporate Services a nationwide retailing organization. ROsERT O. PENING THOMAS H. JAC085EN *
- Senior Vice President - Power Operations Chairman, President and Chief Executive Officer - Mercantile DONALD F. SCHNELL Bancorporation Inc., a bank holding company. Senior Vice President - Nudear RICHARD A. LIDDy ~
CHARLES J. ScHUMAl Chairman, President and Chief Executive Officer - Senior Vice President - Customer Services General American Life insurance Company, which provides insurance proJnts and services. JOHN PETERS MAcCARTHY
- PAUL A. AGATHEN Retired Chairman and Chief Executive Officer - Vice President - Environmental and Safety Boatmen's Trust Company.
M. PATRsoA BARRETT PAut L MILLER, JR. " Vice President - Corporate Communications Presid Assoa,ent ates, aand Chief Executive management consulting Officer firm. - P. L Miller & CHARLES A. BREMER Vice President - Information Services CHARLES W. MUELLER
- DONALD W. CAPONE President and Chief Executive Officer Vice President - Engineering and Construction ROeERT H. QUENON Retired Chairman of the Board - Peabody Holding
"^ "
Company, Inc. eP s e - Customer Services - Regional HARvry SAuGMAN " ^" '"^""'$ Vice President - Human Resources Retired Chairman of the Board -INTERCO INCORPORATED. JANET McArEE WEAKLEY * " President - Janet McAfee, Inc., a residential real estate Vice President and General Counsel company. R. ALAN KELLEY Vice President - Energy Supply
- Member of Executive Committee
- Member of Auditing Committee MICHAEL J. MONTANA Vice President- Supply Services GARY L RAINWATER Vice President - Corporate Planning ADVI5ERs TO THE BOARD GARRY L RANDOLPH Vice President - Nuclear Operations CHARLES J. DOUGHERTY ROBERT J. SCHUKAl Retired Chairman and Chief Executive Officer Vice President - Power Plants isaac B. GRAINGER WILLIAM C. SHORES Retired President - Chem.ical Bank Vice President - Customer Services - Metropolitan SAMUEL E.WILus Vice President - Industrial Relations RONALD C. ZDELLAR Vice President - Customer Services - Division Support JOSEPH M. PrEIFER Controller JAMES C. THOMPSON Secretary JERRE E. BIRDsONG Treasurer WARNER L BAxTER Assistant Controller 40 UNION ELECTRIC 1995 AnnualReport
INVESTOR IN FORM ATION ANNUAt MEETING DRPLUS The Annual Meeting of Stockholders will Through DRPlus - UE's dh'idend reinvestment convene at 9 a.ra. Tbesday, April 23,1996 at The and stock purchase plan - the company's Saint Louis Art Museum,1 Fine Arts Drive, stockholders, customers and employees can: Forest Park, St. Louis, Missouri. . make cash investments by check or automatic cash payment, totaling up to $60,000 in UE C0MMON $TOCK AND DIVIDEND common stock annually lN F0R M ATION
- TelHvest their dividends in UE common stock- or receive UE dividends in cash The company's common stock is listed on the
. place UE certificates in safekeeping and New York Stock Exchange (ticker symbol: UEP). receive regular account statements Common stockholders of record totaled i15,278
...all without paying any fees.
at December 31,1995. Union Electric has paid This is not an offer to sell, or a solicitation ofan oger to cash dividends on common stock for buy. anysecurities. 90 consecutive years, since 1906. Under the company's amended mortgage indentures, INVESTOR SERVICES
$34,435,000 of total retained earnings was restricted against payment of common The company's lrwestor Services representatives dividends - except those payable in common are available to help you cach business day from stock: retained earnings totaled $1,090,909,000 7:30 a.m. to 4:30 p.m. (Central Time),
at December 31,1995. Please write or call: The following includes the high and low sales Union Electric Company prices and the dividends paid per common InvestorServices Department share during the past two years: 20. Box 66887 St. imuis, MO 63166-6887 1995 Price Range St. Imuis area 554-3502
~
Quarter Ended High
~
low Dividends Paid ida'r'd5 '3'1' ' "$3U/[ ' / ' "6'1'c' '"
'554'i[ OFFICE June 30 377/a 35 61 September 30 375/, 345/. 61 1901 Chouteau Avenue December 31 42 373/s 621/2 St. Imuis, MO 63103 314-621-3222 1994 Pnce Range Quarter Ended High Low Dividends Paid STOCK AND RRST MORTG AGE BOND
- - - --- ---- g - }-[j - - - - 5'9'Ih - TR ANSFER AGENT AND REGISTRAR June 30 357/8 30 % 591/2 Union Electric Company September 30 357/e 12 593/2 December 31 363/7 341/2 61 TRUSTEES FOR FIRST MORTGAGE BONDS DIRECT DEPOSIT OF DIVIDENDS St. Loms, MO All registered UE stockholders can have their liarr N l rust and Savings Bank and D.G. Donovan, cash dividends automatically credited to their Co4_tstees bank accounts. This service gives stockholders Chicago, It immediate access to their dividend on the dividend payment date and eliminates the LaSalle NationalTrust, N.A.
possibility oflost or stolen dividend checks. Chicago, IL
& This Annuallleymrtis printedon myrkipxqm:
UNION ELECTRIC 1995 Annua! Report 41
Eu{c.lNION cnuc l
'3 8
I?O. Ilox 149 St.inuis, MO 63166}}